Category Archives: Business

The key to success with Facebook commerce? Shared smiles!

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I liked the analysis in my Social Commerce e-newsletter which I received this morning, as it accords with my approach I picked up at Shopping.com to strive to make folks happy first and foremost:

“What f-commerce will become has yet to be determined, in my view. It’s an evolutionary process fraught with experimentation. Each of the people mentioned in this post – Mulpuru, Gerten, Marsden and Taylor – have their own distinct views of Facebook, its impact on commerce (or lack thereof), and the business model that’s best suited to take advantage of what the social network has to offer.

“Whether or not you buy the view of SCT Editor, Dr. Paul Marsden that f-commerce is only likely to thrive as fan-commerce in the context of Facebook as a fan-loyalty platform, he perhaps draws a useful conclusion for all involved with Facebook commerce: ”There are no cookie cutter recipes for setting up successful Facebook stores for your brand fans; f-commerce is too new and experimental for that.”

“His advice is to retailers is simple: make customers smile. “Ultimately, f-commerce for consumer brands will not succeed or fail based on processes, but on the ability to act on the insight that making your fans smile is smart for business,” Dr. Marsden said. “So the best advice for embarking on an f-commerce journey is to ask yourself how you can make your customers smile with a privileged and personal point of purchase on Facebook, and work back from there.”

In that same opinion piece Marsden says he’s not so convinced by the Facebook commerce concept which revolves around getting people to share recommendations with their (average of 130) friends. But perhaps only time and customer validation will tell. Certainly it’s great to see peer-to-peer ‘recommendations & relevancy’ based f-commerce startup Shopcade in action, as outlined by their CEO Nathalie Gaveau. And both the ‘recommender’ and the buyer get cash-back with Shopcade:

So perhaps the synthesis of these approaches is ‘shared smiles’, that is creating a great Facebook community for fans which is more likely to recommend relevant products to their network? What do you think?

 

What’s the ROI of social media?

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My first look at ROI for social media focuses on revenue conversion, not surprisingly having recently worked in the online price comparison marketplace within eBay Inc this is an obvious starting point for me:

To explain that tweet (inspired by the holy grail of social media which is figuring out the return on investment (ROI) – it started with a good simple equation suggestion in the Hubspot webinar – slide 45:

How to Master B2B Social Media Marketing
View more presentations from HubSpot Internet Marketing
I then found a LTV calculator online. There it is, complete with LTV calculation examples. Use the equation with the LTV calculator and you can derive %ROI.
Ooh, one last thing you need to agree for cost of acquisition itself to determine whether the cost is determined by first action acquisition (eg came across you via  blog post, which is where you determine COA) or last action (see slide 48) acquisition (they went away, but came back via PPC Ad before buying). Up to you. Of course, there is no single ROI for social media. Above is just one way to do it around customer acquisition and retention, if that is a key overall business goal.
The gaming apporach to ROI
In a sector which uses metrics to guide day to day development this is another approach:
  • Exposed Persons (EP) = The number of persons exposed to the social media campaign.
  • Acquisition Rate (AR) = The percentage of EP that become new customers.
  • ARPU_monthly (ARPUm) = The average revenue per user/customer per month.
  • Churn_monthly (Cm) = The percentage chance of losing a customer at the end of each month.
  • We can then calculate revenue from the social media campaign as = (EP*AR*ARPUm) / Cm
Facebook engagement
For Facebook a neat example of a measure of ROI for your Facebook Page would be % feedback. Facebook handily tells you how this is calculated – and what is not included – though of course you can cover off links by only using bit.ly which comes with built-in metrics of its own:

FANS      

Average ER
0 –10k 0,96 %
10k – 20k 0,29 %
20k – 50k 0,21 %
50k – 100k 0,19 %
100k – 200k 0,16 %
200k – 500k 0,13 %
500k – 1 000 k 0,11 %
1 000 – ~ 0,09

It only measures comments and likes, and no other actions (such as video plays and link clicks). The feedback percentage is computed as (comments + likes)/Impressions. Facebook analytics specialists Socialbakers have even given an estimate from their clients depending on the Facebook Page size which is useful too (see table above).

When you are ready you can also try checking out FB Insight stats on fans vs active users to find out who to better target to improve engagement. Ultimately, to reiterate, it’s a question of taking is step by step, aligning with business objectives.