Social ROI: Isn't A Loyal Shopper <i>Already</i> Going To Buy From You?

The indirect nature of social media marketing for retail makes for a lot of frustration. IT execs are desperate for any concrete examples of ROI and pollsters (working for vendors) are only too happy to try and accommodate, even if those stats are meaningless. This unhappy thought bubbled up again this week when survey results were released that proclaimed in the headline: 31 percent of online Canadians are more likely to purchase after following a brand on Twitter.

Let's start with the basics on this one. Setting aside for the moment the counter-conclusion ("Why is it that 69 percent of online Canadians are not apparently more likely to purchase after following a brand on Twitter?"), the implication of this stat is to suggest a connection between the Twitter efforts and an increase in purchases/conversions. But isn't a shopper who chooses to follow a retail brand almost certainly already a fan of that brand and, as such, already someone who is quite likely to make purchases?

If true, is Twitter in this case acting as an influencer (something that makes the shopper much more open to making a specific purchase) or merely as a facilitator/enabler (something that makes it a lot easier for a shopper to do something that they already want to do). To be fair, that would suggest some level of ROI either way, but it's a very different ROI that needs to be handled very differently.

Unlike the fictional chief marketing officer depicted in the TV commercials who slaps around a social media consultant until he says what the CMO wants to hear (the 30-second ad is really funny, but unrealistic. For realism, it should have been the retail CIO who was slapped around), it makes little sense to look at social media and try and extrapolate what impact it had as opposed to talking with shoppers to understand the why behind their actions. (Note: there is a nice companion commercial to the ROI slapping one, with a BS-detector and electric shocks. This is a good one for the sadists out there.)

One of the counter-intuitive realities of social media is that, as it's become more popular, it has become much less effective at influencing (rather than facilitating) actions.One of the counter-intuitive realities of social media is that, as it's become more popular, it has become much less effective at influencing (rather than facilitating) actions. In the early days of Facebook or Twitter, for example, a shopper would have a limited number of friends/followers, but they would truly be friends or people the shopper either respects or at least has reason to trust. With some people today following sometimes tens of thousands of people on Twitter (or having a similarly absurd more-than-one-thousand Facebook friends), someone in those huge circles saying a product or service is really wonderful has much less impact. There are celebrity or famous politician exceptions (where an endorsement is indeed worth a lot to that person's loyal fans), but the influence factor today is overrated.

But the facilitation factor isn't. That doesn't generally come from another person on the social media forum as much as it does from the retailer or consumer goods manufacturer directly. If a shopper was already in the market for a new gas grill, using social media to send out a 40 percent off coupon to "buy now" at a local retailer could be quite worthwhile.

Let's take a closer look at the survey mentioned. It came from a marketing vendor called ExactTarget. Some of their Canadian conclusions: 44 percent of consumers that subscribe to a brand’s E-mail program have made a purchase after receiving an E-mail marketing message; 24 percent of consumers (ages 25-34) on Facebook have made a purchase after receiving a marketing message on Facebook; 47 percent of Canadian Twitter users follow brands to keep up with a company’s products, services or offerings; and 5 percent of consumers on Twitter have made a purchase after receiving a marketing message on Twitter.

First, let's clarify that surveys never show what shoppers did. At best, assuming the questions are clear, assuming the shoppers are answering honestly, assuming the results are being analyzed correctly, it shows what shoppers told a survey that they did. Did the shoppers remember their actions accurately? Did they even think the question through fully, to deliver an accurate reply? One doesn't need to get to "the shopper is lying" when "the shopper doesn't care enough to think their answer through" is a more likely explanation. Let's remember that apathy is still the greatest export from both the U.S. and Canada.

For the moment, though, let's assume that all of the answers were fully in context and correct. What do those stats really mean? Almost half of shoppers who subscribe to a brand's E-mail made a purchase after receiving an E-mail marketing message. But if someone knowingly signs up for the E-mail messages from, let's say, Walgreens, isn't it reasonable to conclude that the shopper is quite likely a regular Walgreens customer? The question had no time limit so the question was really asking "Over the course of your lifetime, have you ever made a purchase after receiving an E-mail pitch?" Given that context, it's more interesting that 56 percent apparently said "no."

Two other of those stats demand a comment. "47 percent of Canadian Twitter users follow brands to keep up with a company’s products, services or offerings." As opposed to what? Presumably, "coupons" would be within "offerings," so what other reason would there be to follow a chain's Twitter account? To track the movements of a competitor? To try to get a job with that chain? For shoppers, those seem minor issues.

The most interesting of the stats referenced was the last one: "5 percent of consumers on Twitter have made a purchase after receiving a marketing message on Twitter." This stat would seem to suggest that Twitter blasts have an impact, but a very limited one. But this is likely muddied by shopper perceptions.

Most Twitter interactions are not the kind mentioned earlier (click here to get 40 percent off and to buy now). They are merely the first step and they plant the idea of the purchase. If a Twitter message begins the process and the shopper ends up buying the item 10 days later on Amazon—and inbetween Twitter and Amazon there were a lot of reviews read, demos watched and other e-tailers visited—is that shopper likely to even associate that long-forgotten Twitter message with the eventual purchase? Asking a shopper that question may not deliver the accurate information sought.

Social media could be—and in fact is—a very powerful retail tool. If we could only find a way to get shoppers out of the equation—where their presence just mucks up otherwise clean ROI stats—we'd really have something.

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.