Why is it important for brands to have a Facebook e-commerce capability? Mike Fauscette, an Analyst at IDC Consulting says, “In three to five years, 10 percent to 15 percent of total consumer spending in developed countries may go through sites such as Facebook.”

Why might Fauscette make this prediction? Facebook users spend 700 billion minutes per month in an active, relaxed environment. The average Facebook user is connected to 130 friends. They belong to 80 interest groups. Through their detailed profiles and by posting on average 90 pieces of content per month, Facebook users make their preferences known. Word-of-mouth (WOM) recommendations or buyer-beware messages are prevalent.

Today’s social customer is not shy about posting their thoughts about a brand, its products and services, or the experiences they have with the brand. The unique selling opportunities Facebook can offer has gotten the attention of digital marketer’s and PR professionals. As social media plays an increasingly more important role in purchasing decisions, brands are allocating larger parts of their marketing budgets to engage with their consumers on platforms like Facebook and Twitter.

Many brands, big and small, are wondering if they should go down this path. How is this different than the e-commerce they already offer? And does f-commerce mean that you have to get rid of your traditional e-commerce platform? Are there pitfalls to social commerce or commerce on Facebook? It’s these and other questions we will address in this e-book.

Be Where Your Customers Are

For many brands, Facebook is where their customers are online. And the mantra in social media? A brand needs to be where their customers are within the social net. A brand can’t expect that their customers will come to them (or their site.) The theory of f-commerce is that customers should be able to buy wherever and whenever they like. If they are on Facebook then they should be able, among many other things, to purchase products while they interact with their friends and family.

Some people have questioned whether it’s even possible to sell customer products in the midst of them using Facebook to catch up with their friends and family. Perhaps that’s all people want to do while on Facebook, i.e., they don’t want their social network to sell them stuff while they are socializing. And if that is the case, then perhaps brands should keep their commerce offerings on their e-commerce sites.

However, while some people are of the opinion that people visit Facebook just to catch up with their friends and family, a  JWT (James Walter Thompson) study showed that 48 percent of millennials (aged 20–33) would like to buy directly on Facebook from the places they shop. In a another study industry study, 25 percent of customers aged 18–34 years old stated they use Facebook to interact with merchants. How many companies are planning to increase their funding for social commerce according to this study? Ninety percent will increase funding for social commerce initiatives by 8 percent.

There is a trend, and that trend is the blending of social networks with e-commerce. The skill with which brands do this will directly affect the success not only for their own individual brand, but for the industry as a whole. If social networking shopping sites are not delivered in the spirit of what the customer wants, it will fail. If not for this point alone, brands need to pay attention to f-commerce as an example of how shopping can be integrated within a social network.

The Future of One-Stop Facebook Shopping

So let’s say you have a vacation coming up. You want to look for good rates on airline tickets. What’s the difference between logging onto an airline website vs. being able to research and purchase tickets inside of an already established social network? First, you may want to ask your friends what airline they flew on, how the service and food was, and what to watch out for. You might find that information on a travel site, but you may not be able to ask your friends their opinions.

So the point is that when you are on a regular e-commerce site you may be just getting the “take” from people you don’t actually know. This input is important, because you aren’t just trusting the brand’s marketing spin. You are getting the take of other human beings. But on a social networking site you are connected to your friends and your friends know you and the things you care about the most. You also might want to make plans with a group of people and instead of sending a bunch of e-mails, you might want one place for everyone who is going on the trip to chime in, to plan, and to orchestrate the festivities. Doing so could make coordinating lots of people easier and fuel the enthusiasm for the trip.

If you went the traditional route, you’d think about which airline you think you’d like to travel on. You might also think about your favorite travel site, knowing that there are a number of them that aggregate fares and try to provide the best possible deal. So you make your choice and log onto the airline or travel website.

Hopefully you’ve saved your log-in name on the computer you are on or you can remember it. It might depend on whether you’ve been to that site before or not. That might also depend on whether you have an account with them or not. If you can’t remember your log-in name then you have to either ask for a password reset or log in as a guest. The first option takes time. Not a lot of time, but it can “feel” like a hassle with all the sites and passwords we all have these days.

Once you’ve chosen that path, then you start your search for dates and times for your destination. Once you’ve researched that, you choose a flight and pay for it. Then there’s the step of entering the payment information. That entails your credit card or PayPal-type account information, your billing address and TSA information. If you are renting a hotel and/or a car, that same payment scenario might have to be repeated for each of those transactions unless it’s integrated.

In this short scenario, using Facebook could help to lessen the hassles of the travel transactions. With Facebook’s f-commerce tools, you could get the opinion of your friends about each travel item: airline, hotel, car rental, even restaurants in the area. Then you could just hit a Facebook button for each—either while on your laptop, desktop, tablet, or phone and be on your way.

Why? Because you are already logged into Facebook, and so have a community of like-minded people to help. Then, since your identity and payment details are already authenticated within Facebook, completing the transaction is as simple as pushing a few appropriate buttons.

If your business could take advantage of f-commerce to make your customer’s experience as quick and easy as possible, think about the spike in revenue you’d get.

Social Network Fatigue and Opting for F-commerce

The business decision to use Facebook as part of your e-commerce strategy depends on where you think your customers are going to be online. With more potential consumers on Facebook than there are people logging into eBay and Amazon combined, many companies are betting on the fact that once customers are in Facebook they won’t want to leave to shop. With the number of sites people log into each day, this may well be the trend of the future—meaning that people are starting to suffer from social network fatigue.

The reasons for this fatigue include how time consuming it is to log into a bunch of different sites as well as to remember your passwords. Another contributing factor is time allocation. One of the things that most people don’t talk about is the amount of time out of their life social networking takes. While it may be easier to keep in touch with more people and see what is happening with them via Facebook, Twitter, Google+, and LinkedIn, it does takes time out of one’s day.

Having too many social networks means that people may not want to go to a bunch of different sites or URLs. If people have the choice to log into one place to interact with their friends and family and then are required to go to other places to shop, they may opt to participate in a social network that includes not only their favorite brands, but also the ability to buy products and services from them.

How Facebook Could Provide Better CRM

Knowing who the people are and details about them allows Facebook to provide customers with an interesting and entertaining online experience, but also provides businesses with information on likes, dislikes, and preferences in the context of their personal and professional relationships. This is different than the data businesses have gathered from traditional Customer Relationship Management or CRM systems.

CRM is an acronym that stands for the relationships companies build with their customers during and through the process of marketing, sales, and service. Having social data augment the CRM system could constitute what many call social CRM. While there isn’t any one vendor that truly provides best-in-class social sales, social marketing, and social customer service all in one suite, the concept of combining social data with traditional CRM data could be the missing link to driving more customers through the marketing funnel and getting a return on investment for social media.

Facebook Social CRM
Social networking sites like Facebook have massive amounts of individual and social crowd data. That data means something because people have signed up using their real identity. In forums or other crowd-oriented communities, people sometimes remain anonymous. So one of the first advantages of f-commerce is that people are using their real identities.

In addition, Facebook started as a site to connect with other people and part of finding people to connect with is to see what they have in common other people. Most people who put up a Facebook page include some personal preference information. This initial data can be very important to companies in understanding their customer’s behavior through knowing about their hobbies, what they like in music, food, travel, and a wide variety of other interests.

Companies using Facebook as a marketplace not only have people who have identified themselves, but also user data and analytics that reveals what people talk about, and with the right analytics a business could extract even more data about them as potential customers.

Many businesses have just focused on using that data to display hyper-targeted ads. And while there is value for this, the idea that Facebook could be an online virtual mall where friends ask friends what to buy, share what they bought, and thereby influence word of mouth is a reality for many brands.

Facebook’s Potential for One-to-One Marketing

One-to-one marketing has long been the dream of many marketers. In fact two of my favorite authors, Don Peppers and Martha Rogers, wrote several books about it, including The One-to-One Future: Building Relationships One Customer at a Time, and The One-to-One Fieldbook: The Complete Toolkit for Implementing a 1-to-1 Marketing Program. The theory was that with competition for customers fiercer than ever, with products and services only a mouse click away, with so many choices, and with many products becoming commodities, customers’ loyalty changed. As a result, the way a brand could attract and keep customers would be to personalize how they marketed and sold to a customer. That field of endeavor became known as one-to-one marketing.

While most brands bragged about how customer-centric they were, in reality many were at a loss for identifying and attracting a loyal and profitable customer base. CRM (Customer Relationship Management) systems back in the late 1990s were supposed to provide the infrastructure necessary to support one-to-one marketing. There was a lot of marketing hype around the features, functions, and benefits of CRM software.

The issue with CRM systems then was that they were more like a CTM, or customer transaction management system. They didn’t have all the rational database information that marketers could readily use to provide personalized relationship marketing and certainly not enough of the personalized, one-to-one marketing data.

Most companies implemented operational CRM, meaning they had a database of contact information about their customers. And that information definitely helped with marketing. But most companies didn’t deploy analytical CRM, meaning the type of CRM that would provide the analytical wisdom about your customers to enable one-to-one marketing and sales. Out of the frustration for the lack of that data developed the field of business intelligence or BI. Separate BI point vendors began to specialize in gathering and mining data about customers to be used to drive customers through the marketing funnel. An industry that was successful at this was the Las Vegas casino system. They developed loyalty programs that could measure the offers sent to customers and subsequent behaviors. Studying these patterns allowed marketers to direct their one-to-one marketing efforts very effectively. But most industries failed to excel in one-to-one marketing.

Fast forward to today, where we now have Web 2.0-type technologies that allow interactions between brands and customers. With the enhanced Facebook Open Graph API and supporting tools that it announced in April 2010, Facebook can be seen as a social CRM system. This is especially true if you define CRM as the opportunity to do personalized, one-to-one marketing, sales, and service. What has been missing in CRM is the relationship between the customer, their likes, dislikes, and their friends and family in a context where their reactions and comments are honest, authentic, and updated daily.

Facebook API: A Graph of What People Care About

Imagine that Facebook is a graphical representation of connections between people, photos, liking, sharing, commenting, shopping, and the interrelatedness between them and their friend and family relationships liking, sharing, commenting, and shopping. If you took a picture of each of those things and pasted it on a piece of poster board, you’d have a visual representation of that person’s life and what’s important to them as well as poster boards of their friends and families and what is important to each of them as well as the overlaps in interests. This is called a “social graph.”

Facebook offers businesses a way to connect to that information via an API. An API is an acronym for application programming interface. Instead of having to write a bunch of complicated code to connect to the data, you just have to connect to the API. The API provides a much simpler way to access the information.

The Facebook Open Graph API allows you to easily access all public information about a person. This means that it can retrieve the likes and interests of your customers, and your customer’s Facebook connections. And thus the social graph data provides marketers new ways to understand a customer’s preferences, passions, and connections and by doing so allows a brand to create a personalized experience with each and every customer.

For instance, a customer might live in Los Angeles, listen to Sting, work at Citibank, ride bikes along the Santa Monica Pier, eat at the Cheesecake Factory in Marina Del Rey as well as connect with their network of friends and family. With the Facebook Open Graph API, brands can make personalized offers to that individual based on the information he or she has shared on their page.

Deals that might interest this customer are mortgages or refinancing information from Citibank, coupons for free drinks at Cheesecake factory, a sale on bikes or bike accessories, and a special appearance by Sting on the Santa Monica Pier. With contextualized data like this, brands can customize their marketing campaigns based on the information customers share about themselves.

Another example is that a brand might show the upcoming birthdays of Facebook Friends as well as their gift Wish List. How would a brand populate this list? The brand can access that friend’s profile data, which might include a list of their favorite electronics, clothes, food, and music as gift suggestions. Normally, it would have to create a system that would ask the customer directly about their favorite items, then get permission to use this information. The Social Plug-ins, mentioned earlier in this chapter, allow a brand to build the social graph by seeing what the customer “Liked” on Facebook. That is assuming the customer opts to share this information publicly among their own individual group of friends. Brands seeking to use this information would need to ask the Facebook member to share this information with them as well.

The downfall to getting data is the individual Facebook privacy setting. Each Facebook page’s privacy settings are handled and decided upon by the customer who owns the page. Customers are asked to provide permission to allow their page to be seen by the brand. This determines who can see what. I’ve included some screenshots in the case studies in the following chapters so you can see how brands ask for permission to see what a customer is talking about.

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