Welcome To The Customer Economy

Consumer adoption of social media has been nothing short of breathtaking, increasing a full 356% since 2006, according to Forrester Research. Ninety-one percent of U.S. online adults use social media regularly — three times more than blogs and email. And they’re not just cooing over baby pictures on Facebook — they’re shopping.  

Social media is changing consumers — not just how they purchase, but why they purchase. This shift signals an end to the “the product economy,” where brands competed by delivering differentiated products and services, in favor of the “customer economy,” where brands compete on the relationships they cultivate with customers.

We now have an empowered, influential consumer force that has taken a bite out of more than one major brand. Today’s social customers are connected, collaborative, exclusive and demanding. How do you successfully turn them into your customers?


The 4 C’s Of Social Commerce

Social commerce is much more than bolting customer reviews into the checkout experience. In a world where 79% of online shoppers spend half their time researching products, success with social commerce means recognizing that the customer journey starts long before pressing the checkout button.

Your social commerce solution needs to holistically consider the entire customer experience in order to succeed. Rather than building your social commerce strategy one widget or app at a time, build it on four key pillars, then consider the technology you’ll need. These pillars include:

  1. Trusted content: 90% of consumers trust their peers, while just 14% trust brands. Easy, searchable access to trusted user-generated content (UGC) is a social commerce must-have.

  2. On-domain community: Just 2% of Facebook fans ever return to brand pages after “liking” them. You need an owned hub where customers can gather around their shared interest in your products and where you can engage them.

  3. Peer-to-peer connection: 63% of consumers search online to garner feedback from like-minded peers. Social isn’t social unless your customers can talk to each other.

  4. Two-way conversation: Listen to what your customers are saying. Just 9% of customers report hearing from a brand after “tweeting” about them.

Many brands make the mistake of using social media just like any other broadcast media — as a push channel. Without engaging in two-way conversations on your own domain, the power of social media will forever remain untapped. Those conversations must be between your brand and your customers, but also among customers. If your customers aren’t talking to each other, there is nothing social about your strategy.

Your first job is to give them the experiences they want — make sure they have easy access to trusted content from their peers. Your second job is to make sure these conversations around your brand and products are happening on your own domain. Housing trusted UGC on your own web site boosts search results and brings in more potential customers. If what you call your “social hub” is a Facebook page for posting broadcast corporate messages, all the benefit of that social content will be lost on you.

Measuring Social Commerce Success

Social commerce is dangerously undervalued. It impacts the bottom line in a number of ways:

  1. Profitability: The math showing how social commerce boosts profit can be handled on the back of a napkin. Growth in conversion rates, cart size and purchase frequency equals greater customer lifetime value and profitability.

  1. Loyalty: Loyal customers are our most prized — there is little doubt about that. What many brands have yet to discover is that unique social customer experiences drive loyalty in a big way — including the experience of social commerce.

  1. Acquisition: Enabling peer-to-peer interactions is the only real way to scale when it comes to any social endeavor. If your strategy stops at connecting your employees with social customers, the true power of the crowd is left unused. But when your solution includes fostering interactions among customers, that’s when the real magic starts.

Social customer experiences, by definition, involve peer-to-peer interactions — customers helping customers. On the “helpee” side, customers who get served by other customers tend to have greater trust in the answers they receive. On the “helper” side, by enlisting your customers to help others, you are offering them the deepest form of engagement: Co-creating value with you. Customers are far more loyal to brands they co-create with than those they simply buy from — turning the social customer into your customer.

As SVP and Chief Customer Officer, Misha Logvinov is responsible for leading Lithium’s strategic programs to ensure long-term customer success. Logvinov is responsible for continually enhancing and solidifying Lithium’s customer-centric culture by orchestrating the entire customer value chain across functions and geographies, and has direct responsibility for Lithium’s Support and Business Systems, IT and Customer Operations organizations.

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