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Social Media ROI

created by Simon Vatareck on 2011-10-28
What are likes, fans, and followers actually worth? There is no clear answer to that. Quantitative evaluation criteria such as impressions or referrals can only map parts of the range of benefits of Social Media. Qualitative criteria such as ‘brand loyalty’ or ‘customer retention’ in turn, are barely measurable.

Now Social Commerce promises to deliver additional and tangibly-measurable benefits: using Social Media as a distribution channel or to support established distribution channels. Similar to traditional online and offline trading, special conditions still apply. We have prepared 5 tips to support beginners in launching their first campaigns and laying the foundation for a higher ROI on Social Media:


1. Fans want offers
The answer to the question “What do my fans, followers, and subscribers want?” can be answered quite easily, according to a study by IBM - at least in terms of Facebook fans: It says that most fans hope to receive exclusive discounts and offers when “liking” a corporate page.

2. Focus on single products

The focal point of Social Commerce is postings on social networks. As a result, offers can be quickly communicated to a large number of brand-aware users, who then can spread the word easily. This way, the offer will eventually gain a broad reach without the company having to intervene much. Tweets and wall posts have one thing in common regarding E-Commerce: They are limited when it comes to representing a larger number of products.

A link to a page with several products is no alternative. This would limit the reach too much, because if a link is to be shared, it has to be opened first to begin with.

Significantly better separability, reach, and ultimately more sales can be achieved when focusing on individual products. When posting a link on Facebook, for example, there can be a title (1), a four-line description (2) and a picture with 90 x 90 pixels (3): Predestined to represent a single product with all relevant information, making the decision on “sharing or not” very easy on users.


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3. 10% discount on the MSRP is not an offer
The well-known E-Commerce wisdom that the competition is just a click away also applies to Social Commerce. On price comparison sites one can quickly find out where a price ranges on the scale between “bargain” and “rip off”. If an offer tends to be the latter, nothing will keep a disappointed social web user from expressing his displeasure - preferably via the comment function of blogs or Facebook. That will only succeed in scaring off other users and lowering the barrier to further negative comments. Congratulations, you’ve started a death spiral. Don’t do that.
The easiest way to avoid this in the first place is to compare prices beforehand yourself. A genuine offer ranges at the level of the best hits on price comparison sites. Anything else isn’t an offer. Period.

4. You cannot make everyone happy
It’s not always a high price that causes negative feedback. Focusing on individual products also means that they’re not always for everyone. A few negative comments can’t be avoided. It is important to react appropriately. It’s more likely for unsatisfied users to complain about something rather than for satisfied users write down how great they find something. Thus, it is more likely that for each negative comment there are probably more people who do like the product. Here, Facebook provides here a good reference value with “likes”. A response is only advisable when the relationship between likes and negative comments is not good

5. Always keep legal regulations in mind
As a seller, you constantly run a risk of getting caught in a warning trap. This is no different with Social Commerce. A tweet is quickly set up and price regulations are violated just as fast. Therefore any applicable shipping costs and VAT should always be noted. A glance at the terms of the media you are using for social commerce campaigns is also advisable. In Facebook´s advertising guidelines, for example, there are special provisions for advertising (links to online stores are advertisement!) dietary supplements, software, and some other product categories.

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