CHAPTER 7 Social Commerce

Learning Objectives Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Understand the Web 2.0 revolution, its characteristics and the context of social media. 2. Describe the fundamentals of social commerce, its drivers and landscape. 3. Describe the major models of social shopping. 4. Understand how market research is conducted in social networking environments. 5. Describe how customer service, customer support, and CRM can be facilitated by social networking.

WORD OF MOUTH HAS ALWAYS BEEN ONE OF THE MOST POWERFUL MARKETING METHODS 7-2

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-3 Social Graph Social Capital Social Commerce relationships between users of social networking benefit of a social graph is taking advantage of the relationships between individuals The core idea of social networks is they have value just like physical capital or human capital. Social contacts affect the productivity of individuals and groups The delivery of e-commerce activities and transactions through social networks

Social Media Marketing (SMM)Media Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-4 A term that describes use of social media platforms for marketing, market research, sales, CRM; Digital Strategy McDonalds Kodak

CUSTOMER BENEFITS OF SOCIAL COMMERCE Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Pay less for products and services (group buy) 2. Unhappy customers can reach millions through crowdsourcing 3. Develop relationships with vendors 4. Customers can assist other customers 5. Vendors response to complaints is better

7.6 Social Customer Service 7-6  Example: Musical Instruments not allowed as carry on with an airline…. 8,700 people on Facebook got together and complained about damaged instruments….result the company allows musical instruments as carry-ons.

7.6 Social Customer Service 7-7  In the past customers complaints usually received low attention (or no attention) but today when a customer says “I will organize a campaign against you on FB or Twitter you can be sure someone will listen

VENDOR BENEFITS OF SOCIAL COMMERCE Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Save money on Customer service 2. Can test new products quickly 3. Identify problems quickly 4. Learn from customer experience feedback

Social Advertising Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-9  Viral marketing  WOM, Blogs  Location Based Advertisement 10MINAdvertisement  You Tube You Tube  Twittter- staying in touch with customers in real-time- Twitter launched its first ad product –promoted tweets in 2010 and netted 45 million in ad dollars

7.5 Market Research and Strategy in Social Networks 7-10

Market Research and Strategy in Social Networks 7-11  Traditionally marketers used demographics to identify target customers.  With Social media allows for a new opportunity to assess markets in real time

Market Research and Strategy in Social Networks 7-12  FEEDBACK FROM CUSTOMERS:  47% consult reviews before making an online purchase  63% of shoppers are more likely to purchase from a site if it has ratings and reviews  Negative reviews help the retailer address a defect

SOCIAL ANALYTICS 7-13  Social Analytics- process of measuring, analyzing, and interpreting the results of interactions and associations amount people  Companies want to find the hidden value and meaning of social data and generate actionable insights that impact the business strategy

SOCIAL ANALYTICS 7-14 Twitter, FB, Wikis, RSS, and Blogs Generate a considerable amount of data that needs to be analyzed so that management can conduct better marketing campaigns, product design and service offerings

Tools to Monitor Social Media 7-15  NetBase NetBase

7.7 Enterprise Applications 7-16  57% of U.S., companies implemented enterprise social media for business purposes by 2010.

Corporate Social Networks 7-17  In-house, private social networks for their employees.  “Behind the firewall” 1. Community building 2. Crowdsourcing 3. Social views and feedback 4. Socialcast.com

Example -Enterasys Networks 7-18  The Problem- hundreds of employees stationed around the globe. Needed a social networking tool that would eliminate geographical boundaries and let its employees communicate in real time.  The Solution- deploy salesforce.com’s Chatter application. The company experienced improved service performance

Example –Pepperdine University 7-19  The Problem- looking for a better way to encourage collaboration among students, staff and faculty  The Solution- partnered with Yammer Inc. to create a Twitter-like environment where users can interact and communicate in real-time and with more transparency.

Social Human Resources Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-20  Large companies are using social networks to find in-house talents for vacant positions  73% of all US. Companies use social networks to recruit and hire new employees  80% use LinkedIn  55% Facebook  45% Twitter

Social Human Resources 7-21  Example: A companies HRM employees could embed an announcement about an open position with their Facebook pages and then use their social connections to search out new employees for the company.

7.8 Crowdsourcing 7-22  Harnesses crowds to solve problems, and innovate and get work done.  Open Call for Solutions  Models  Collective intelligence  Crowd creation  Crowd voting  Crowd funding

Future of Social Commerce Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-23  Watson Watson  Matchmaking- match sellers and buyers, products and markets, job seekers and jobs, partners to bartering, P2P lending participants. Watson can find your soul mate.

Watson Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-24  Personal shopping aid. A combination of sales engine, e-commerce, and decision making,. Watson can look at what is in your closet, learn what colors flatter your skin tone, and make recommendations on what clothes to buy.