The Triple Bottom Line of Social Commerce: A Focus on Sales & TrafficPosted: February 9, 2010
About a month ago I wrote a post about our framework for measuring the success of Social Commerce efforts called The Triple Bottom Line of Social Commerce. The first and most important aspect of The Triple Bottom Line is traffic and sales, and to put an even finer point on it, incremental traffic and profitable sales.
We encourage (and help!) our clients to build a "Community Growth Model" that projects what percentage of their customers are likely to engage and how much and what type of content those engaged customers are likely to create. Then the fun begins!
Incremental traffic from organic search and social sharing
Once you have estimated your projected rate of engagement the next step is to estimate how much traffic you are likely to receive from each review, discussion post, blog post and other forms of customer and staff created content. There are some well established benchmark metrics in this regard that we are happy to share with you to help you build your Community Growth Model. This will help you determine what type of incremental traffic you are likely to receive.
You should set up your analytics software to measure how much organic search traffic is coming directly to the user and staff content on your site. You should also measure the referral traffic coming from your contributors and readers who are sharing the content with their friends across the social web. Now that you have properly tagged, segmented and attributed this traffic, you should also be able to now measure conversion to sales directly from this incremental and organic traffic.
Profitable sales from conversion improvements and incremental traffic
When it comes to measuring direct sales, there are several types of sales increases that are important to track. First, and potentially most important is the lift in conversion rates that your reviews and other forms of content will have on your existing site traffic. Second is the sales bump that you will receive directly from the organic traffic discussed above. And third, the reduction in returns as a result of having great reviews and helpful discussions and answers at the product level that help people put their recent purchase to good use rather than return them due to a perceived default or frustration.
The implications of linking engagement and content to traffic, sales and profits
There are exciting implications for any marketer or e-commerce manager who makes the direct connection between user engagement, content, traffic, sales and profits. This allows smart marketers to build a very strong ROI case based on some very hard metrics that your CFO will relate to. Here is a question that may challenge your thinking. If a customer makes a purchase and then writes a review of that purchase, which action was more profitable for your company? If you can attribute traffic and sales to content and the engage customer, that will start to open up a whole new way of thinking about how to prioritize your touch points with customers and related technology projects. (And of course, which technology vendor you might choose!)
In the next two posts in this series, you will see that in addition to sales and traffic benefits you will also get "softer" but incredibly important benefits from a well executed Social Commerce strategy such as actionable customer insight and ways to measure and improve customer loyalty and advocacy.