Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Backcountry built its on-site social community internally, but vendors have emerged to fill the demand for social features and on-site networks. For example, e-commerce technology vendor Awareness Inc. recently launched “Best Practice Communities”-templates for communities organized around such purposes as a shared passion for a topic or brand, which can be quickly deployed on a retailer’s site.
Flickr versus Twitter
While a retailer can corral some of the consumer discussion about its brand and products by building social features on its own site, a lot more talking is going on in the labyrinth of social networks beyond e-commerce sites, one reason Backcountry also participates in Facebook, Flickr, Twitter and YouTube. Retailers must learn the lay of the land to get the most out of their efforts in this new arena.
For example, photo-sharing community Flickr’s members tend to be frequent posters, but they don’t tend to click off of Flickr, so it’s not going to be a powerful source of traffic to a retail site, says Dayna Bateman, senior strategic analyst at e-commerce consultancy Fry Inc. Twitter’s users tend to click all around the web, making it a better venue to engage with users and drive them to a web site, she says.
The demographics and habits of different social networks can be researched easily enough. But online merchants are just starting to learn how they can be used to drive traffic and sales within the culture and rules of each network.
Susan McKenna, vice president of e-commerce at health and vitamin supplement company Nature Trade Network, also advises other retailers. She identifies three types of marketing applications in the online social realm. They include those that allow consumers to share existing web content with each other, such as peer recommendation engine StumbleUpon; those that allow them to publish content, such as blog publishing systems WordPress or Google’s Blogger; and those that allow consumers to network with friends, such as Facebook and MySpace.
McKenna notes that for businesses, social marketing can have many purposes ranging from brand awareness to expanding market share to sales, and that campaign particulars should differ accordingly. In pursuing a social marketing strategy directed at creating traffic and sales, marketers should start by creating a personality for the brand in the form of a profile, and then look for a way to share it by using publishing tools such as Twitter or blogs, she says.
One of McKenna’s sites, vitamin supplement seller Vitaminrx.com, offers an example of how content that isn’t sales-oriented but has been spread across social networks can lead traffic back to a site, and potentially result in sales.
McKenna created a Facebook profile for one of the physicians on Vitaminrx.com’s advisory panel, under his own name. The profile includes a group page called Ask the Vitamin Doctor, organized around a community of people interested in vitamin supplements and health. Subscribers to the group can ask the physician a question as well as communicate with each other on the page; questions are answered by trained reps who engage with group members on behalf of the brand. McKenna says reps discuss and answer questions about supplements but do not diagnose.
“As the discussion grows and as trust and credibility grows, just like with a brand, we start peppering in promotions,” she says. “The content posted is contextual to what we are selling and mention promotions that are specific to the group we are speaking with.” Repeating this same procedure-publishing credible profiles in key social venues, then pushing them out directly to other social venues as well as enabling them to be captured and forwarded by other consumers-will, over time, build traffic to sites, according to McKenna.
But this is a process that may take as long as six to 12 months to produce a significant return, a timeframe comparable to realizing returns on search engine optimization. So she advises retailers looking for quick sales to look to traditional online channels like affiliate marketing and pay-per-click advertising, with an eye toward the future.
“Build revenue stream there,” she says, “and use some of the profits from those efforts to build out what I consider a longer-term strategy, and that’s social.”