September 25, 2009, 12:00 AM

Marketers engage consumers on Facebook, but rely on reviews for sales

A survey by The E-tailing Group finds most retailers and consumer goods manufacturers have invested in social marketing. At least half of the surveyed companies have adopted five of the 10 social marketing tools studied, and more investment is coming.

Facebook, Twitter and YouTube were terms that meant nothing to most marketers just a few years ago. But today they’re part of the everyday conversation in marketing departments at most retailers and consumer goods manufacturers, a new study by The E-tailing Group suggests.

The research and consulting firm surveyed 117 companies-including multichannel retailers, manufacturers, web-only merchants and catalogers-and found significant adoption of several social marketing tools, a somewhat surprising finding given how new online social networks are. The study was commissioned by Powerreviews, a provider of customer review and engagement technology.

Of the 10 social marketing tools studied, five are already in use by at least half of the companies surveyed. Leading the way is the Facebook fan page, which 86% of respondents say they have and 10% more plan to launch in the next 12 months. 65% are communicating via Twitter, 55% publish customer product reviews, 55% have their own blogs, and 50% produce their own video or display videos submitted by consumers.

“The integration of community and social networking within e-commerce has reached critical mass and as such is now a benchmark that we will be tracking annually,” says Lauren Freedman, president of The E-tailing Group. “Customer engagement has become a metric to be reckoned with, where failing to engage consumers via community and social media will have brand and bottom-line implications. All merchants must test and understand how to effectively deploy it, for their brands to retain customers, encourage sales and avoid abandonment to competitors who’ve better embraced its marketing potential.”

The study also found:

  • Marketers’ main fear related to online social networks is that “people can trash my products in front of a large audience,” followed by worries that their marketing and merchandising techniques are outdated and that online shoppers will defect to more socially engaging sites.
  • Besides growing sales, the primary goals of social marketing are to engage consumers, mobilize brand advocates to spread the word about products, and increase brand loyalty.
  • Top social media priorities for the next 12 months include using the Facebook Connect service that lets Facebook users pass on company information to their friends; monitoring online discussions; and adding customer reviews and ways for consumers to make suggestions about products.
  • Customer reviews are the most effective social tactic for driving sales, followed by question-and-answer features and a Facebook fan page where companies post information.
  • Facebook, blogs, Twitter and customer reviews are considered the most effective tactics for mobilizing consumers to talk up products online.

Of the companies surveyed, 44% were multichannel retailers, 26% manufacturers, 12% web-only merchants, 9% catalogers, and 9% suppliers or agencies. In terms of company size, 29% have annual sales of $20 million or less and 30% revenue of at least $500 million.

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