As more and more individuals use social media to stay in touch with friends, organizations, and their interests, it makes sense that businesses use it as well. Consumers use social media to talk about the brands and products they like—and those they don’t. In turn, retailers can use it to find out how people are talking about them and to create more engagement and better customer experiences.

This guide is for online marketers who want to integrate e-commerce with social media to strengthen their brands, engage customers, and generate sales. The Aberdeen Research Group has been collecting data about social media for years—even before companies were ramping up their programs—focusing on how retailers are using social media for online merchandising and digital marketing. This guide describes some of their key findings and how Active Network has successfully used social media to increase revenue.

Social media: Still in infancy among retailers

Although social media is pervasive, many companies aren’t reaping the full benefit. According to Aberdeen’s research, 85% of retailers have a social media initiative in place, but only 44% are able to quantify their efforts with hard data. In many cases, this is because it’s still new territory for many businesses: Over 50% of retailers have embraced social media just in the last two to three years. And many of them are doing so without a plan; 26% are using their intuition, and 24% have no plan at all. It turns out that only 6% of retailers have a wellcrafted social media strategy.

But the lack of know-how hasn’t tempered the willingness to dive in. Retailers understand the value of social media, even if they can’t quantify its results. So they’re using it for softer metrics, such as engaging customers and developing customer relationships. Retailers know that they have to start using hard data over the long term, but for now they’re happy with what they can get from it. Here are a couple of examples:

• Timberland has an e-boot configurator that consumers can use to create the boot they want. They can choose their own stitching, design, and size, and they can post a picture of the boot on Facebook for their friends to comment on.
• Virgin America allows site visitors to talk about the destinations that interest them, and then the company measures how many people are responding to each idea, which has increased their bottom line by 1%.

However, those companies that are quantifying the results are able to accurately calculate their ROI from social media, and they know which areas of the business are improving, whether it’s customer service, gross margins, or sales levels. This information helps them make the changes necessary to increase engagement and sales.

Taking advantage of customer affinity

In many cases, this investment is based on customer affinity, and 28% of retailers are adopting social media for that very reason. It’s hard not to see the ubiquity of sites like Facebook and Twitter. Some companies are using this to their advantage:

• Target posted a video on YouTube about a new band called The Like. The video showed the band modeling different clothes from Target. As the video went viral, viewers became interested in the clothes worn by the band and started to look for them in Target stores, which happened to feature them on their floors.
• Home Depot has over 22,000 followers on Twitter who receive deals and offers from the site.

But followers can also monitor complaints from other customers and drive them toward issue resolution, essentially acting as advocates for the store. But those affinities can also change over time and, in a year or two, another site might be the social media hub. Retailers need to be able to track these changes and follow their consumers no matter where they go.

The way retailers use social media depends on their size. Smaller organizations, those with less than $1 billion in revenue, are more focused on social media monitoring. Consumer sentiment is a top priority for them, so they take the information they collect and tailor their offerings around it. On the other hand, organizations with more than a $1 billion in revenue use social media across the enterprise. They recognize the benefits of social media for marketing, sales, and customer support, so they use it to sell more products and communicate with customers.

Building internal support for social commerce

A successful social media strategy relies on internal support, particularly from top executives and a dedicated resource team. Without hard data, retailers are struggling to justify their efforts in the social space. The best place to start is with the management team, which has a broader view of the organization and can see how social media would fit in.

This buy-in also helps when it comes time for disparate areas of the organization to work together. Studies show that 47% of retailers are trying to establish a dedicated social media team, which means they need people to focus on monitoring, issue resolution, coordination of sales results, and responding to customer feedback.

Three keys for establishing a strong social media program

Use analytics to collect information

Only 26% of retailers are using analytics, so most companies aren’t seeing the full impact of social media on their bottom line. Moreover, they aren’t able to coordinate their efforts with the rest of the enterprise. Vendors should make social media efforts as visible and transparent as other business strategies.

Embrace nontraditional social media tools to increase competitive advantage

Companies often turn to Facebook and Twitter, but they overlook less traditional tools like document sharing and podcasts. In fact, only 17% of retailers use document sharing, which equates to a lost opportunity. For instance, an electronics retailer could use document sharing to offer instruction books or warranty information to increase sales, which would be a great value to consumers who research products before buying them.

Monitor potential threats to mitigate any negative impact on the brand

Companies need to monitor social media to understand how the marketplace responds to the brand and whether the overall perception is positive or negative. If it’s negative, the company must be able to respond to mitigate the effects on the brand. However, 78% of retailers aren’t monitoring social media, which means they’re not opening themselves up to opportunities to create a better reputation among social media users.

Active Network: Using social media analytics to gain ROI

Active Network provides registration technology that allows event organizers to reach potential participants. It also hosts event calendars that help visitors find information on the activities that interest them. Active Network has 75,000 B2B clients and generates 50 million transactions a year, while its media properties get about one billion page views a year.

Since Active Network launched its social media initiative, it has learned a few things along the way. Its marketing team is responsible for promoting the brand and events through social media. Active Network has increased revenue by making social media a key marketing strategy.

When Active Network began its social media push in 2010, it initially didn’t want to spend a lot of money. Instead, it wanted cost-effective, high-ROI ways to drive people to its properties and then push relevant content to those users to drive incremental visits and conversions. Social media, in essence, became its consumer media vehicle. For one, social media is a great way to find new customers.

Social media is also a great way to reengage existing customers as often as you want. Unlike emails, which can only be sent every few days or weeks, Facebook pages can be updated several times a day, which brings people back to the website over and over again at no additional cost. Moreover, it keeps those customers from staying away too long. Active Network tries to encourage new customers to go to its Facebook page so that they can see the constant stream of news and updates. Previously, after someone registered for an event, they might not come back to the Active Network website for another year, if at all. But Facebook makes it possible to constantly deliver relevant content that drives incremental visits and conversions.

Track results with analytics

Any initiative needs to be tracked with analytics, especially a new program like social media. To understand its impact on your business, you must be able to monitor your efforts to see what works and what doesn’t. That, in turn, can be used to make the business case that leads to more funding and support from your leadership. It can also help pinpoint which efforts are most successful or explain sudden changes in activity or consumer behavior.

Unfortunately, up to 84% of retailers don’t measure social media ROI, and 40% don’t know how to measure it. Some of this lack of awareness might be due to peer pressure—companies are adopting social media because everyone else is, but they don’t really know what they’re doing. But if you’re not measuring it, you’re missing a chance to make improvements or take actions that could have a significant effect on your brand and your business.

Social media challenges and solutions

Active Network started its social media strategy with three goals in mind:

• Grow the network size or the subscriber base
• Drive incremental visits back to the website
• Drive incremental conversions

Active Network had no historical analysis or case studies to prove the worth of social media to upper management, so they had to find other ways to get buy-in. Active Network also had to deal with a few other challenges:

• Show the value of social media almost immediately
• Prove that it was scalable and could work at any scope
• Defend a budget that didn’t exist—even with a little money to start, more was needed to ramp it up and get more value
• Understand what resonates with audiences by testing and targeting every message to see what worked
• Demonstrate the bottom-line ROI benefit

A lot of buzzwords crowd around social media ROI, like engagement, sentiment, and reputation. While those things matter, they’re not as crucial as page views, transactions, sales, and revenue. To measure these metrics, Active Network started measuring everything it did. It added a unique tracking code to every post and measured the results. At the end of the month, it reviewed all the campaigns to see which were most successful, and then made adjustments to build on those successes.

The unique tracking codes measure visits, clicks, page views, and orders. When combined with Facebook analytics, the company could also see how many new fans it acquired each day, and how much it cost to acquire them. Demographic data and subscriber numbers from Facebook are combined with click numbers from Adobe® SiteCatalyst®, powered by Omniture®, to calculate revenue per fan base. If this number is high enough, the company can justify the ongoing costs.

SiteCatalyst makes this case because it tracks social media traffic on a granular level. It measures results from different social media channels, and it can measure newer technologies like social sharing (adding a Like button). In fact, when Active Network first started doing this, SiteCatalyst was able to show the impact in a matter of days, which gave the company enough confidence to move on with its social sharing efforts.

Right now, social media is bringing in 9% of Active Network traffic. That percentage goes up each month, and soon it might compete with email and search engine traffic. Here’s what else the company was able to accomplish with social media:

• Illustrate the positive impact of its efforts
• Get a bigger budget from management
• Evaluate each channel individually
• Understand what resonates among audiences
• Know where to allocate resources
• Try anything as long as the results can be measured
• Impress Facebook with its results

Because of this success, Facebook is planning to add more analytics tools to its site to make social media even easier to measure.

Active Network started with a social media strategy and ended up with a great business case for using it in the future.

Key takeaways

• Social media has great benefits.
• When possible, track and monitor your efforts.
• Don’t forget nontraditional venues like podcasts and file sharing.
• Take steps quickly to address negative feedback and respond to consumers’ issues.
• Use a sophisticated measurement platform like the Adobe Online Marketing Suite to measure, track, and optimize your social media efforts on an ongoing basis.