Excerpt from my book “Like My Stuff”: Driving Sales with F-commerce

Excerpt from my book Like My Stuff Driving Sales with F-commerce

Driving Sales with F-commerce

The key to f-commerce ROI is to make sure incentives resonate with ambassadors, influencers, and customers so that they drive sales on the brand’s behalf. That’s why I recommend as one of the first steps in social media strategy is to put yourself back into the mindset of being in school. Go and study some brands that are doing it.

Brands that are in the midst of social commerce have found that when they use some of the same techniques as in regular sales processes, there is an increase in interaction. Those techniques can be:


  • Specific calls to action
  • Creating a sense of urgency through limited availability or blackout dates
  • Incentivizing social actions by offering discounts or special access


Here’s an example of how this can work. Let’s say you offer a coupon for your product. The catch is that 500 coupons have to be redeemed before I can get my deal. If the brand creates a way for the customer to share the deal with their Facebook connections, then more people will see the deal. If you have targeted the right demographic with the right offer, within hours or days the 500 coupons will be redeemed. It’s the action of one customer sending the deal within Facebook to hundreds of their connections that makes the f-commerce recommendation distribution process profitable.

Brands can increase their return on their investment by integrating e-commerce functionality with the word-of-mouth strategies we talked about in Chapter 13. What’s great about the social networking software is that the tools to implement those strategies are there. Some tactics are:


  • Offer contests where when the customer clicks on the Like button, they land on the Facebook store
  • Post ads, promotions, flash sales, pop-up offers to Wall and link those to the Facebook Shop
  • Combine “deals of the day” or product announcements with links to product details in the f-commerce shop


The Value of a Facebook Fan

There have been a couple of companies that have calculated the value of a Facebook Fan. In part, the reason why this had not been calculated before is because we needed more data to understand what dynamics affect other dynamics. It takes a while for a social network to get set up before it can be monetized. That is something that has stumped many business people who look at the investments that have been made in social networks. Millions and billions get poured into it, with the rest of the world wondering when they will begin to make money. In addition, to have enough data to watch for patterns also requires that the social network have some legs under it.

A company called ChompOn released a study on the calculations they did on the value of shares, Tweets, likes, and follows in the context of e-commerce. ChompOn works with 50 partners including Blackbook Magazine, JDeal,and Beyondtherack to offer Groupon-like crowdsourced coupons.

They used data from these daily deals to examine the conversion rate and action for deals they shared on Facebook and Twitter. They found the value of a Facebook share is $14 and the value of a tweet is $5.

For shares and tweets, ChompOn was able to directly attribute sales to the original action and took the total revenue attributed to each action and divided it by the total number of shares/tweets.

By comparison, ChompOn says the value of a Facebook “Like” is $8 and the value of a Twitter Follow is $2. For likes and follows, ChompOn estimated attribution by looking at traffic references and subtracting out purchases made through shares/tweets as well as purchases made through direct traffic. Of course this data is a bit tenuous and anecdotal. And it’s important to note that this analysis does not capture the long-term value of customers over time or the customer lifetime value we were talking about early in this chapter.

Syncapse is another company that calculated the value of a Facebook Fan. They looked at the differences in behavior and motivation between fans and non-fans to understand the true value of a fan. They looked at:


  • Product Spending: The ability to understand the methodology of increasing product spending
  • Loyalty: The ability to understand the available means to influence and promote brand loyalty within a target audience
  • Propensity to Recommend: Probability and propensity for word-of-mouth recommendations leading to sales
  • Brand Affinity: The impact on brand perception and recall
  • Media Value: Efficiencies of earned reach and frequency via the Facebook platform
  • Acquisition Cost: Efficiency of fans in enticing others to participate and drive organic membership



They polled 4,000 people who were self-identified as fans or non-fans of Nokia, BlackBerry, Motorola, Secret, Gillette, Axe, Dove, Victoria’s Secret, Adidas, Nike, Coca-Cola, Oreo, Skittles, Nutella, Red Bull, Pringles, PlayStation, Xbox, Starbucks, and McDonald’s.

The results were that consumers who are fans are more valuable to organizations across all variables than those who are not fans:

  • On average, fans spend an additional $71.84 on products for which they are fans compared to those who are not fans.
  • Fans are 28 percent more likely than non-fans to continue using the brand.
  • Fans are 41 percent more likely than non-fans to recommend a fanned product to their friends.


They also found that no two brands fan values are the same. But what is reassuring is that because they were able to track behavior, they could see the trends that make a fan more valuable than not.

They noted that fan value can vary widely by company and product. Factors influencing this variability include product purchase price, purchase frequency, product purchase cycle, product category, brand equity, and underlying brand strength.

A fan base is unique and comprises different levels of influencers and customers. Syncapse observed that how much a fan participates with a brand can change the value. For instance, an average fan may participate with a brand ten times a year and will make one recommendation. But, an active fan may participate thirty times and make ten recommendations. The impact this has on fan value can be quite dramatic.

In the case of Coca-Cola, the best-case scenario for fan value reaches $316.78. But it is $137.84 for an average fan. This degree of variability in the value of a fan must be a major consideration in determining how brands address different types of fans in efforts to move them up the value ladder. The strategy needs to be focused on how to reduce fan variability while moving the average fan value to the active end of the range.


Facebook Can Be the Decisive Factor for  Commercial Success


The Social Commerce IQ™ Genius Index was created with analytics data and the accompanying survey findings. Facebook figured prominently in the results. The social commerce index was broken down into four levels of social commerce maturity. Genius level included brands that represent the most socially-advanced on Facebook, typically having the highest engagement rates and offering shopping offers that were relevant to their customers in the brand’s news feed. In next lower category, Superior Level, the brands typically had fewer status updates and moderate engagement on their Facebook pages. The next category Challenged The brands in this category typically had few status updates, low engagement and little to no shopping status updates or applications/ tabs on their Facebook page. And the lowest category, the Deficient brands had no engagement, new fans and rarely sent updates to their fans. The top-scoring retail brands with Social Commerce IQ™ scores according to this study are: GameStop, Victoria’s Secret, Walmart, Sephora and Clinique.


All the top scorers in this study were shown to maintain a high level social currency for their brands through Facebook. Based on the data collected, here are three of most significant takeaways:

  • Status Updates Increase Sales– publish news about sales events, not coupons as a primary driver of fan engagement on Facebook. This is especially true for luxury retailers.
  • Ask Customers to “Like” After Buying—People buy then “Like”, not “Like” then buy – most Likes come from people who have already bought the product, i.e. liking is a post-purchase activity.
  • Likes Drive Sales— Facebook has driven at least 22 million sales transactions in the U.S. as a result of customers “liking” their products.  In general, 35 percent of consumers on Facebook tend to buy a product if it has been Liked by other members.


The power of keeping engaged with your customers is key to social commerce success.  Facebook is clearly the leading platform for managing a productive dialogue with customers. With its newly empowered f-commerce tools and platforms, it not only affords brands a wide variety of the opportunities to stay connected to the marketplace but also to collect and incorporate customer information to make the conversation even richer and more profitable for all concerned.


Want more? You can get my book here: http://www.amazon.com/Like-My-Stuff-Products-Facebook-ebook/dp/B005Y23KLK

Dr. Natalie: voted Top 20 In Social Media HuffPo
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Click here to watch my videos on Social Media ROI:
Video 1: Building the Business Case for Social Media
Video 2: How to Measure the ROI of Social Media
Video 3: How Social Media Benefits the Whole Company

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