Apr 302009

Social Media and Retail Marketing

I'm not a Social Media expert, by any stretch of the imagination. So, if this doesn't make any sense, please forgive me.

Social media is clearly valuable as a mechanism for customer relationship management: responding to negative feedback on the social media "wires" can be a great way to manage brand image. Social media can be a material source of new customers for niche businesses. Tea fanatics are friends with other tea fanatics and can introduce each other to their favorite brands through Facebook, MySpace, Twitter, etc.

But most commodity retailers, those who sell merchandise made by others and who compete with firms selling exactly the same goods, have had a hard time using social media to drive meaningful sales. Brand affinity has less meaning for Target and WalMart than it does for Victoria's Secret.

Last week I wrote a post on Lifetime Value in which I argued that an often overlooked value comes from happy customers telling their friends how great Acme is. The question struck me then: is there a way for retailers to use social media to encourage word of mouth marketing?

Here's the idea: The Customer places an order on your website. On the order confirmation page is a link to Twitter, Facebook and MySpace and text to the effect: "Thanks for buying from Acme! If you Tweet "I just got a great deal at Acme!" we'll send you a coupon for $5 off your next order!"

This requires either a human, or some software to fire off some sort of single use offer code to the person, but that doesn't strike me as impossible. Acme could put a limit of one code per order on the offer to prevent abuse. Pretty clearly, there's no way for Acme to know whether the person Tweeting that actually placed an order, but "paying" folks with a small coupon applying to a subsequent purchase isn't exactly cash out of pocket, and if the person didn't really place an order, but just wants the discount and is willing to say nice things about your brand to their network of friends that may not be so bad.

To me this is much more compelling than asking customers follow Acme on Twitter or be Facebook friends. The idea is to get the message out to their friends, not to the customer...you already have their email and mailing address. Seems to me that you'd also ask for the referral at the right time (they just placed the order and are feeling the love for you) with the right level of incentive and the link to Twitter (or Facebook perhaps, as Twitter may not have long term legs) just makes it that much easier.

Has anyone tried something like this? Is this old-hat? Am I nuts?


15 Responses to "Social Media and Retail Marketing"
Chris says:
A large value to these retailers is that Twitter is the new 800 number. Consumers merely tweet, and the retailer finds it (no need for consumer to call, email, etc). That's value to the customer. For the retailer, who should answer the tweet? If not the retailer, then someone who might not have complete information (so better the retailer). See http://twitter.com/KmartDealsnNews for example. The real value of Twitter might be building that lacking brand affinity. If brands develop personalities through Twitter, people will like them more.
Mark T. says:
An intriguing idea, but I see high potential for backfire. I think Twitter users are already developing a high suspicion level of Twitter as a spam channel. In the same way that most of us have filters on our email so that we never see 99% of the spam emails sent to us, Twitter users will want to filter out the spam. Right now there is no equivalent of the email spam detector for Twitter (of which I'm aware), so most people self-filter by unfollowing anyone they even suspect of transmitting spam. I've been following the backlash at a couple of companies that have been paying Twitter users to allow tweet ads (that look as if they are personal messages from the user)from the user's account. It doesn't take much sophistication to sniff these out, resulting in instant unfollow. Your coupon scheme, I fear, would result in the same.
Mark T. says:
I'd also like to comment to the value of Twitter for retailers. When I advise my retail clients who want to get on Twitter, I tell them to forget about direct sails. That's not what social media is going to bring them. I believe the value is in store reputation and/or establishing one's brand as the authority for the given product line or service. Twitter, Facebook et al are places to shine as a "giver" and "listener." You're building impressions for the long term, so that when the audience is ready to buy they are already pleasantly predisposed to your store/brand.
Chris and Mark, thanks so much for the comments. Mark, I'm sure you're right about alienating followers, but would the retailer really care if half my followers bolted? Seems like a disincentive for me, but not one for the retailer. I agree with you that Social Media can be a powerful CRM aid, and you're probably right that efforts to turn it into a marketing vehicle will ultimately fail. The question then becomes, who's going to pay for the operating expenses of these services? It burns me up when I hear people refer to all advertising as unwanted junk, contaminating a "pure" thing. The reality is that these cool services aren't free to produce, and if folks want to have them (The NBA Playoffs, The Masters, 30 Rock, Google, Twitter, whatever) they either need to pay directly, or deal with advertisements which pay for them. But, venting aside, it is what it is. The "free content" will disappear sooner or later if advertising doesn't work and that will be bad for all of us.
Marc Adelman says:
George, Love the idea!!! How can we integrate Social Media into the actual business instead of keeping it secluded to the un-trackable social media - o - sphere??? Is it spamy in nature? A bit, but not over the top. There is a difference between someone twitting after they purchased that they got a great deal then just forwarding pre-purchase advertising. Will the Twitter user realize that difference - not sure. A slight twist to your idea is to have the person just say what they purchased, "Hey look what I just got - a Canon Rebel at Acme Camera Company". 1. It stays aways from words like deals, sales, great prices and keeps it product oriented. This may curb some of the spamy undertones of the tweet. 2. This will increase the message from a broad tag line to a product oriented highly targeted message.
Thanks Marc, I like your twist better than the original. And the retailer should be able to supply the text so the customer can just cut and paste. Could even add a cutesy tag like: "Feel free to buy me accessories :-)" Let us know how it works!
David says:
Twitter seems to have caught on to spam tactics used on the site that they have instituted a 1000 follow per day limit and they have also been quite vigorous in their use of the "ban hammer". i.e: banning accounts suspected of spam.
Simple enough idea from regular marketing. It sounds much better than creating followers and a more direct and honest way of working.
What if you would ask a consumer about his experience with the product some days/weeks/months after the sale via twitter. This might be a more subtle way of getting consumers to tweet about your brand and products. They would get a fair change of expressing their experience with the product and sharing it with their network. All you are doing is stimulating the online word-of-mouth about the product and gaining valuable and qualitative info about your customers. What do you think?
Interesting idea, Mark. The question might be: would advertisers know someone's Twitter handle? Most require an email, but I don't know if folks can connect the dots between their Twitter followers and their buyer file.
Deepak says:
Well, the best way of getting to know your customer better would be by mining user generated content around your brand on the web. Prompting your customer, will have the same challenges that the traditional market research faces with it's questionnaire model. On the use of Social Media, I believe its just an additional channel and perhaps the best way to reach closer to your consumer. Though the incentive model works best for now (that's why people will search for your twitter handle for instance) but l also feel this is due to the lack of inherent value that we can show to the consumer of being on these platforms.
Lori Witzel says:
Hi George - found you via Kevin Hillstrom of Mine that Data fame. Speaking of Twitter...I've been looking all over this site for your Twitter handle (yes, I'd like to follow you) but can't find it. Can you share it? Thanks in advance, and sorry the coffee's not working on me this morning.
Hi Lori, I don't have a personal Twitter account -- crazy, I know. RKG tweets via @rimmkaufman Most of my thoughts end up on RKG Blog. I find I can't say much of interest in 140 characters :-)
Elizabeth says:
Great article on the power of social media for retailers. For more information on social media marketing and the industry, check out: http://venpop.com/2011/interview-with-clay-mcdaniel/


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