Once upon a time, most companies’ websites were little more than online replicas of their print brochures, branding exercises delegated to an intern in the marketing department. Then along came Amazon and eBay and the world changed overnight (okay, within one year, but what a year 1995 was). Suddenly, the internet wasn’t just a place to market products, it was a place to sell them.
Fast forward almost 20 years and exactly the same thing is happening right now in social. What most people perceive to be an adjunct of marketing is actually being used for much, much more by a number of pioneers. Pioneers who, just like the eCommerce giants did to traditional retailers, are threatening to leave their competition light-years behind. Our analysis shows that these pioneers are at Stage Three of Social; they’re building a social sales channel. To understand what that means, we have to explore the first two stages.
Let’s step back for a moment. The average large company sinks an astronomical £11.5m into social media every year. Theoretically, that’s a good thing: they’re keeping up with the times, staking their territory, fishing where the fish are. In practice, though, much of this money is being squandered on worryingly ephemeral ‘content marketing’. NatWest, for example, recently tweeted a photograph of a dog and a cat enjoying an anthropomorphised ‘cuddle’, captioned with the phrase “Say thanks with an awkward man-hug”. NatWest’s declaration that it’s “all about giving our customers #littlethankyous” didn’t sit well with disgruntled customers who really weren’t in the mood for cute animal pictures, being rather more concerned with bigger issues like high standing charges and interest rates, and poor customer service.
What this demonstrates is that many companies – even large national banks – are still at Stage One of Social: collecting your audience. This may involve trawling social networks with heavily hashtagged content (often supported by heavyweight ad budgets) in the hope of scooping up a big net full of fans of followers. In these cases there’s rarely a strategy for what to do with those fans and followers when they get them. They just want numbers. It’s a numbers game, and they want to be the winners.
Some brands are more sophisticated, and they’re at Stage Two of Social: engaging your community. They understand that there’s no point spending vast amounts of money collecting and maintaining audiences if you never do anything with those audiences, and they’re aware that the endgame always has to be sales. With that in mind, they’re developing their fans’ and followers’ muscles and on-ramping them so that the transition from brand-awareness to sales is seamless and organic.
That might involve encouraging conversation about products. It might involve the crowd-sourcing of marketing assets, such as posters, adverts or packaging. Or it might be something even more integral to a business, such as the social co-creation of an entirely new product line, such as the beer-maker Brewdog famously (and brilliantly) did with their socially-designed #Mashtag ale. It’s not selling via social, but it’s a great start.
And then, there’s Stage Three of Social, where the pioneers I referenced up at the top of this article are currently developing an entirely new sales channel. "Social," people often naively say, "is like a party - and no one wants to be sold anything at a party." But, if you're selling the right products in the right way, then parties - and social - are the perfect environment: a defined customer-base, with shared interests, who operate communally and exert incredible influence over their wider networks? It’s every retailer's dream.
These Stage Three pioneers understand this, but they also understand that how their businesses sell in social is every bit as important as what they sell or who they sell to. It's not enough just to mirror your catalogue site on Facebook and expect a billion customers to start rushing through your virtual doors. And it’s not enough just to use social to point to your traditional eCommerce platform, as many less sophisticated brands are doing via Pinterest campaigns and social advertising.
To really make a success of Stage Three of Social, you need to bake social into your business's retail experience, not just bolt it on - and that’s done by using techniques like gamification, dynamic pricing and co-operative buying. Suddenly, shopping becomes something you can win, something where the price you pay depends on what you give back to the brand, something where you’re incentivised to become a marketer in addition to simply being a customer.
These techniques are already being used by the likes of Tesco, Argos, Sony, PepsiCo, Johnson & Johnson and many more. Because of them, they’re making money via social, not just spending money. But this didn’t happen overnight. These brands acted early, progressing from Stage One to Stage Two and, now, onto Stage Three. And they’re examples to every other company out there that’s wondering how they can turn those millions of pounds spent into millions of pounds earned. My hope is that, unlike Amazon and eBay did 20 years ago, they don’t leave everyone else for dead.
By Gideon Lask, Founder and CEO of buyapowa.
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