The days when companies could afford to ignore Facebook are over. It has become the norm for businesses, small and large alike, to invest resources in building a presence on the social network to engage with fans and customers. The next step is converting all those "likes" into solid revenue.
In her new book, Like My Stuff, Natalie Petouhoff, Ph.D., an adjunct professor of marketing and public relations at the University of Southern California and a former Forrester Research analyst, explains how brands can use social commerce on Facebook (f-commerce) to increase sales and promotion. Associate Editor Judith Aquino spoke with Petouhoff about what companies need to know about f-commerce.
CRM: How does f-commerce work and why should businesses consider using it?
Natalie Petouhoff: When customers like something on Facebook, they can click on a buy button that takes them to your brand's main e-commerce site, or they can do the whole transaction, including entering their payment information, on Facebook. Companies like Delta, Land's End, and 1-800 Flowers already accept credit card info on their Facebook pages.
There are a couple different ways to set up a storefront on Facebook. A brand can use iframes [Web coding that lets users display content] or a Facebook app. In my book I've included descriptions of several vendors, such as 8thBridge and BigCommerce, that can help you implement your app. These vendors will help you populate your store or put what's on your e-commerce store into Facebook.
A brand needs to be where its customers are. When I was writing this book, Facebook had about 750 million users, and now it's up to 800 million users. Many people on Facebook are already following brands for coupons and deals, and it can make sense for those companies to allow customers to also do their shopping on Facebook.
CRM: What are the immediate and long-term benefits of f-commerce?
Petouhoff: We know that people are spending more time on Facebook, which can lead to social network fatigue, and they may not want to go to other sites or URLs. F-commerce makes it easy for people to shop without having to leave your Facebook page.
[In terms of long-term benefits] Facebook could be the first true social CRM system. When you consider that many people identify themselves on Facebook, what you're seeing is what customers care about, their preferences, and their sentiment toward your brand. The key to social media is to know your audience. With all this information, Facebook is giving brands an opportunity to do one-to-one marketing with their customers by customizing their offers and really engaging their audience.
We also know that on Facebook, people often share information about what they bought, or they ask their friends for their opinions. Turning Facebook into an online mall through f-commerce can greatly contribute to word-of-mouth marketing, which is often more powerful than a brand's direct messages.
CRM: What are some best practice tips for running a store on Facebook?
Petouhoff: Security is a major concern, so if you're going to have a store on Facebook, make sure people's credit information is safe and let them know about your security policy. Also, it's not enough to just have a store on Facebook. Drive awareness and buzz by giving your customers incentives to talk about your brand with their friends.
A good example is Jennifer Lopez's Facebook site, which has several activities, such as letting fans share songs on their walls. Instead of just saying "buy my album" she told her fans that if enough people "liked" a clip of one of her songs on Facebook, she would release the song early. When enough people [more than 13,000] "liked" the song, she released it with a link that allowed customers to buy it on iTunes, driving up the site's likes and cashing out early on just one song.
CRM: Will f-commerce replace traditional e-commerce tools like Web sites?
Petouhoff: A lot of brands can have both: a Web site and a Facebook store. Brands do need to use social commerce, and the skill with which they approach f-commerce will directly affect the success of not only their individual brand, but also the industry as a whole. We're at the turning point, where marketers need to be educated on how to do it well. Over the long run, companies that don't use social commerce will be at a loss.