By adaptive - January 18th, 2012
Once considered commercial suicide, commerce on Facebook is becoming well established and could be your company’s most lucrative sales channel It’s a cliché, of course, but the speed with w...
Once considered commercial suicide, commerce on Facebook is becoming well established and could be your company’s most lucrative sales channel
It’s a cliché, of course, but the speed with which Facebook has developed is astonishing, with over 800 million members signing up since February 2004. However, this pace seems relatively sedate compared with the speed with which Facebook selling has developed. It’s less than three years since the pioneer Facebook shop was established: the first sale was of a bunch of flowers in July 2009. Since then, Facebook selling has become a way to market for businesses as diverse as clothing retailers and travel companies. And it’s not just consumer brands that use the medium: Caterpillar construction equipment [www.cat.com], Hyster forklifts, Adobe software, and Staples office products are among hundreds of major B2B marketers promoting on Facebook.
So, how to go about it? Are there any rules for selling goods and services on the social networking site? To some extent, answers to this question must be provisional, because the environment is changing so rapidly. A fundamental requirement (to state the obvious) is the creation of a Facebook store, although some brands make do simply with a Facebook page. In truth a simple page cannot be used for selling on Facebook, although it can help drive potential customers to a regular commercial website.
Building the Facebook storefront
A fully featured Facebook storefront can be overlaid on the fan page, and the better ones have a high degree of customisation to suit the brand, products and offers. Kevin Galen is President of ShopTab, a leading supplier of Facebook storefronts whose customers include Coca-Cola, Coleman Outdoor and Barneys New York. He says that "Facebook is wide open for the selling of many different types of products and services"
” but at the same time, stresses that it’s important to couple the store with a comprehensive social marketing plan.
At the heart of this coupling is a recognition of the changes that social media has brought to the marketplace. Consumers have recognised that they now have a voice of their own, and an audience for their views. They readily share information with their peers about the benefits (or otherwise) of the products they buy, through online product reviews. Empirical evidence suggests that this peer information carries more weight than conventional marketing communications.
In this context, brand advocacy becomes an important element in social marketing, and can be even more important than pure product sales. Getting products into the hands of people most likely to recommend them – through fan-gates, “closed” fan-stores and fan-first exclusives - will help improve this advocacy.
For this reason, among others, Kevin Gralen says that aggressive selling on Facebook doesn’t really work: “We recommend that the best approach is a softer selling approach coupled with giving their followers special value in terms of exclusive products, uniquely packaged offerings, discounts or rewards.”
So what can be sold to the Facebook community? Tim O’Brien, President of custom publishers High Velocity Communications says that, in theory, anything can be sold as long as it carries the right offer. However, he points out that in general, Facebook is more relevant for consumer than industrial products because of its fundamental nature as a constant communication tool. “That said,” he continues, “our client Caterpillar maintains a Facebook page, and some Cat dealers also have pages which they use for retail offers.”
Success or failure?
Facebook selling is not guaranteed to succeed. ShopTab’s Kevin Gralen says that most Facebook shop failures result when “a client launches the store without a clear strategy on how they will engage their followers and promote their store.” Tim O’Brien agrees, saying that the fundamental rule is to “plan it well, then follow-up and use it.”
However, success stories are more common than failures: Proctor & Gamble, Benefit Cosmetics, Unilever and Ticketmaster have all reported success directly as a result of Facebook storefronts. Added to this, there is significant business to be had through referrals to a commercial site rather than selling through Facebook stores.
Would it matter if Facebook disappeared?
These referral sales are perhaps a pointer to a paradox about Facebook selling. Some industry experts predict that the social commerce market (which is more than Facebook, of course) will be worth $30bn in annual sales by the end of this decade. Others think that more business will be done on Facebook than Amazon within five years.
And yet, according to a study for shop.org by Forrester Research many US businesses put the importance of Facebook way behind other forms of online marketing, and a staggering 68% said that if there were no Facebook, it would have no effect on their business. On the other hand, that study was published in May 2011 – and as noted above, things have changed, and continue to change, at an exponential rate.
Follower marketing
It’s also important to remember that – as things stand – Facebook is as much about brand advocacy and support than simply ringing up sales. As noted previously, the concept of “follower marketing”, with campaigns, products and online stores designed solely for those who sign up to a particular brand is one which is rapidly being refined and implemented.
Of course, it’s possible to have all this within a dedicated e-commerce website: but how much better to put it in the middle of 800 million-plus consumers. Speaking about Facebook ads, Kevin Gralen notes, “We really like Facebook’s ability to provide hyper-targeted users (eg, by age, sex, education, interests, work), which makes advertising worth testing for most clients.” He goes on to explain that “Facebook advertising conversion rates are much higher if the user is kept within Facebook – ie, in a store – to review your product or service, instead of immediately moving them off to a website.”
It’s probably safest to say that Facebook selling will form, particularly for FMCG brands, an increasing part of the sales environment. Some critics see it as a fad, but some critics also saw Facebook as a fad. The site has shown itself to be very nimble in adapting to the needs of its own market, so we should not be surprised if Facebook selling, and follower marketing, become even more popular in the future.
______________________________________________
To learn more about social reviews and other essential social commerce strategies, check out the Social Commerce Summit, taking place on the 13th and 14th March in Boston. The conference features expert insight and best practice from companies like Disney, Macy’s, Staples, Nieman Marcus and H&R Block. Find out more here.
________________________________________________