The Big Idea Behind Social Commerce

It's easy to get cynical about Web 2.0, the most over-used buzzword of the moment and one that is ambiguously defined. Definitions for most buzzwords are elusive, if not evolutionary. Consider some of these "new marketing" terms:

  • viral
  • long tail
  • folksonomy
  • crowdsourcing
  • prosumerism
  • P2P marketing
  • C2C marketing
  • social media
  • social computing
  • social networking
  • social shopping
  • citizen marketing
  • open-source marketing
  • user-generated content
  • word-of-mouth marketing
  • customer-created content
  • consumer-generated media

Notwithstanding the ambiguity of these terms -- or the authoritative positions from Wikipedia contributors -- the productive purpose of evolving definitions is to illuminate important marketing principles and strategies. Even the words themselves shed light on what marketers should think about and do, such as "Listenomics" and "C2C Marketing."

Some terms more than others capture important characteristics of today's customer and marketing opportunities.

"Word-of-mouth," for example, is a term that may have some authoritative foundation with the Word-of-Mouth Marketing Association (in full disclosure, to which I'm a board member). WOMMA defines word-of-mouth as "The act of consumers providing information to other consumers." They define word-of-mouth marketing as "Giving people a reason to talk about your products and services, and making it easier for that conversation to take place."

That's helpful because it reminds marketers that the purpose of word-of-mouth marketing is to create a reason for customers to talk about your products. 

There's another term I'd like to help define, or at least evolve, and that is "social commerce."

Social commerce is not a new term. Its brothers and sisters include social media, social networking and social shopping. I don't know or care which sibling was born first. Each has a slightly different meaning, but they all share that prefix in common. However, social commerce, more than the others, helps underscore two important centers of gravity that CMOs and marketing professionals should orbit themselves around.

The term "social" reminds us that these new marketing strategies are about customer-to-customer interactions. Said another way, it's not about us! The beating heart in the definition of "social" is a relational connection that motivates customers to participate, contribute and create experiences. And the output of these interactions is the relevance, credibility and authority that the next customer is yearning for, or else they'll run away from traditional marketing.

When marketers develop a social strategy, they should consider the depth and degree of "socialness," which determines the level of participation. Freedom of expression, opportunities for relevant connections and utility of an interactive experience will accelerate usage and content. Examples of these experiences include users connecting on a MySpace page, interacting with users and brands in Second Life and sharing and reading customer reviews. Conceptually, you can grade the social connection opportunity on a scale of 1-10. The more interesting and useful the interaction, the more often users will participate.

Social is the key motivation that drives user-generated content, customer-created content and consumer-generated media (pick your term). And these are digital marketing assets that we as marketers want to use to let our customers speak for our product (word-of-mouth marketing).

This leads us to the second part of this term: "commerce"

Social commerce is an appropriate term for the strategy of connecting customers to customers online and leveraging those connections for commercial purpose. Why? Commerce broadly reminds us of both our objective and methods for extracting value from this new strategy. We're not after social networking, media, computing or shopping. Nor do any of these suffixes remind us that measurement is important.

These new marketing terms listed at the top of this article can confuse us into non-productive strategies. But commerce reminds us that the CFO sits around the corner. We should remember the CMO is a high turnover job lest he or she prove the impact of their strategies. Measurement and operational rigor cannot be forgotten or blinded by hype. Commerce, in my humble opinion, captures and reminds us that any social strategy must fit into the business and be for the business. It should be measurable, operationalized and optimized. Otherwise the strategy is as short lived as some of these terms will be.

Clients ask us if they should start a blog, an RSS feed, a MySpace page or get a Second Life character. As with anything, it depends. However, "commerce" reminds us that any social strategy should aim to meet the customer somewhere along the purchase path. Does your blog help customers in awareness, consideration or purchase decision? How many prospects and customers will actually see your blog? As there are degrees of socialness, there are degrees to its commerce. Put another way, there are degrees of proximity of user-generated content to customers' purchase process, its salience to their needs, its reach, and its measurability of impact.

At a recent tradeshow for online commerce, four panelists pointed to ratings and reviews as one of the top priorities of Web 2.0 strategies because of its impact on purchase behavior and measurability. While some have called this social shopping, it falls short and shallow of a broader strategy. As a former retailer at Dell.com, I'd suggest online businesses are not interested in driving shopping, but rather traffic, conversion, average order value, loyalty, satisfaction and competitive differentiation. Social commerce allows us to have a broader perspective of evolving our marketing strategy by leveraging our brand advocates and the content they create as digital marketing assets.

In the end, if you're still cynical about defining a term like this, forget the term and remember these two simple principles:

  1. The online customer wants to control, connect and contribute. Our goal should be to let them do just that and connect ourselves to our advocates.
  2. Ensure this strategy makes an impact to the P&L in the biggest and broadest way possible. To me, that's "social commerce."

Sam Decker is VP Marketing and Products for Bazaarvoice. Read full bio.

 

Comments

Paul Marsden
Paul Marsden November 18, 2009 at 12:34 PM

Hi Sam, this is a great post, and one of the first on social commerce - we've taken your definition of social commerce here and added it to the Social Commerce time line and word cloud over at social commerce today http://www.socialcommercetoday.com/?p=1121