Selling Over Social Media

Written by: Charlie Lawhorn, senior VP business development at Stibo Systems

Social media has caused an explosion in new ways to market and sell products. But these new channels have introduced new complexities in managing product information — and new ways for it all to go wrong.

Many businesses have been quick to jump on the social media bandwagon, starting to promote products to their online followers. According to Nielsen, Twitter's footprint has expanded in the first half of 2009, reaching 10.7 per cent of all active Internet users in June.  Businesses are wising up to the benefits of Facebook groups, video content on YouTube and the power of bloggers. There is great potential for marketing through these channels, helping significantly increase online sales by targeting a large user group.

The popularity of social media channels can be a blessing, but marketers should also be aware of the dangers or providing so much product information over so many different channels. If keeping data consistent between catalog, Web and store causes problems, how do you even begin to deal with Facebook, Twitter and YouTube as well?

Making The Most Of Social Media
An example of a company that's getting social media sales right is Dell, which has successfully made over $3 million in sales via Twitter alone. Consumers follow the brand and actively look for its latest tweets on new promotions. This targets a totally different demographic and is a great way of conducting 'passive' sales, as consumers have already expressed an interest in following the brand. The same approach can be seen on Facebook, as groups are created for fans that are updated on the latest news. The rapid, instantaneous nature of social media also means messages reach a vast amount of consumers within seconds.

Another example of social media sales success comes from the US. Retailer GEMaffair.com recently held a contest on Twitter, asking followers to enter by re-tweeting a promotional message, which contained a coupon. A viral bonanza of re-tweets ensued. One lucky tweeter won a $100 jewellery set. The online jeweller received 18 orders that day associated with the contest that more than covered its costs. Retailer Sears in Canada is another example of a retailer making the most of these channels. The company regularly tweets promotional offers and offers rewards for new followers and those who retweet messages. For such a large retailer online reputation management is key, but by keeping information consistent and making Twitter followers feel special, it's reaping the rewards.

The Dangers Of Social Media Marketing
With the increase in opportunities for sales, comes an increase in the complex task of keeping product data consistent across the board. There's no point tweeting a link to a product, or posting a fan group on Facebook, if that same product is available at a lower price in store or via a catalog.

As well as causing a product information management headache for those advertising over multiple channels, social networks also exacerbate any mistakes by spreading the news faster than ever before.

According to research, 23 percent of mobile web users in the UK visit a social network through their handset, and the numbers of people doing so have increased since last year to 249 percent in the UK, so people can update anywhere, anytime, which doesn't bode well for bad customer experiences.  This means if a negative story leaks via social media, people sitting on trains or out shopping can just as quickly spread the news at a touch of a button. We've seen this can be disastrous for online retailers, companies like Best Buy and Amazon have really felt the damage of bad product information management when selling online, due to the rapid spread of news via social media.

You may recall Best Buy mistakenly advertised a Samsung flat screen TV for under $10 back in August. Before they knew it, word had spread through the online retail community via social media at an alarming rate. But disappointed customers later discovered the online retailer refused to honour the incorrect price. As a result, Best Buy's reputation was seriously tarnished.

Such misfortunes have also been reported in tourism. Bargain hunting holiday-markers thought they had struck lucky when the Crowne Plaza Quarto D'Altino hotel in Venice, offered a romantic four-star weekend for one cent online. As a tiny fraction of the normal rate of  $ 210 a night, it was quickly removed much to the disappointment of tourists worldwide. The mistake cost the hotel over $126,000, as 1,400 nights had been quickly snapped up via the online booking system. But the consequences stretch further than the financial loss, as the damage to the Hotel's reputation will be long lasting.

Multichannel Mix
We have all noticed the shift in shopping habits of late. Many consumers that look for products in store often buy it later and sometimes cheaper online to save money. There is also the convenience factor. Large or heavy items are far easier to be delivered directly to your home. And when shopping for friends and family, gifts can to be sent to their addresses, which saves time and simplifies the process.

But the opposite is also true, when shoppers see something online they want, which encourages them to make their way to the store to see it in 'real life' before parting with their cash — customers need to be sure they are getting what they asked for. In this way, the store is treated more like a show room, and less of a revenue generator in its own right.

So people fluctuate between online, catalog and in store shopping. There is no longer a 'channel of choice', so marketers can't just isolate one particular channel. For this reason, it's important to make sure all channels provide accurate and consistent information, so confusing details does not put off the customer.

Retailers need to be crystal clear when it comes to product information, to stop mistakes from happening, especially as multi-channel marketing is ever increasing the ways in which people can spend their money. When selling online, retailers must be extra cautious about the information they are broadcasting to the virtual world. Internet shoppers can't touch an item they're buying, so the details need to be accurate, and only then will consumer confidence help drive sales.

Organizations are also becoming far more strategic in their data management processes. Many are setting up data governance teams to interact with all departments, which are led by business staff rather than those in IT. IT departments can unfortunately often lead an isolated existence, as other employees don't fully understand their requirements. Business leaders can ease the situation by explaining how new IT investments into data management will make everyone's lives easier, providing the bigger picture. This is a positive step as it's only when senior business people start to take ownership for master data issues that a genuine improvement in the field will occur.

Business leaders are recognizing the importance of centralizing data and following a standardized process when it comes to their data. Putting product information in one place, where all departments can easily access it is essential. You probably always leave your house keys in the same place at home, so you and your family know exactly where they are when required. The theory behind data management is no different. The process saves time and money, as it avoids costly mistakes being made as a result of inaccurate data.

Organizations also need to establish precise rules on how and where to store the data, along with guidelines on how to access the information. Supply chain, marketing and sales departments all need to make sure their product information is accurate and easily accessible. Only then will true coherence be achieved across multiple retailing channels.

It's important for organizations to get the basics right, before launching themselves into the world of social media. Companies like Best Buy and Amazon would have really benefited from forward thinking and preparing for the worst to save their reputation. Social media is always evolving, but its potential for driving sales will stay with us, so marketers need to be 100 per cent on the mark when it comes to what they are saying about their products — wherever they happen to be saying it.