Amazon is growing on-demand services after reporting a 20% sales increase in 2015.
E-retailers start to solve the puzzle of how to measure the success of social marketing.
Social media is where blender manufacturer Blendtec connects with consumers. The company's YouTube channel has more than 440,000 subscribers and its videos have been viewed more than 182 million times. That's thanks to the manufacturer's strangely addictive Will It Blend? videos that feature the white lab coat-clad Blendtec founder and CEO Tom Dickson testing whether Blendtec's blenders can turn items like an iPhone 4S into dust. More than 1.1 million consumers have watched that video alone.
In addition, more than 85,000 shoppers Like the retailer's Facebook page, which provides a large enough audience that conversations regularly flow from the retailer's posts, such as "Did you know the blender can actually heat the hot chocolate with the friction of the blades?" And more than 7,300 consumers read Blendtec's tips and recipes on Twitter.
That kind of attention is nice, but it doesn't pay the rent. So Blendtec looks more deeply to determine whether social media buzz is translating into sales.
"We're in the business of making and selling blenders," says Nate Hirst, global marketing analyst. "If people are regularly using their blenders they're more likely to either want to upgrade the blender they have or recommend their Blendtec blender to a friend." Because the first step to getting people to buy a blender is getting them to click from YouTube, Facebook or Twitter to Blendtec.com, that's one of the primary measures the manufacturer tracks to gauge its social marketing success.
In addition to using Google Analytics to track its traffic from social sites, the retailer also analyzes other metrics, such as the conversion rate of shoppers who click through and the percentage of shoppers who use coupon codes shared on a social network, to get a sense of whether its social media efforts lead to sales. "It's not complicated, but it works for us," Hirst says.
As social media evolves from novelty to mainstream marketing platform, retailers have to define their social marketing goals, as well as figure out how those goals can be measured, says Zach Hofer-Shall, a Forrester Research Inc. analyst. While merchants like Blendtec have made a stab at that, many others have not. Only 59% of respondents in a recent Econsultancy.com Ltd. survey said they can attach some return-on-investment metric to the money they spend on social marketing. Part of the reason 41% of respondents said they had no gauge of social ROI is there's no established formula that all businesses can use, says Graham Charlton, an Econsultancy.com editor.
But that doesn't mean there aren't several ways retailers can figure out whether their social efforts are working.
Time is money
A big reason that many retailers are investing in social marketing, even if they don't know how to measure results, is that it is relatively inexpensive to reach consumers via social networks.
Blendtec provides a good example. The manufacturer has five staff members work a few hours a day on social marketing, but each of those employees has another primary role. The Will It Blend? YouTube videos, for example, are crafted by the retailer's in-house producer who also produces video demos for commercial products. The company's CEO stars in the Will It Blend videos, and the demos feature staff blending experts. So, Hirst says, the videos only cost the personnel time and the iPhone 4S, laser pointer, life-size skeleton Halloween decoration and the other assorted goods the manufacturer pulverizes in its videos.
Apart from employee time and the cost of the blenders it gives away, the manufacturer's Facebook efforts cost about $30 a month. That covers what it pays to use social marketing vendor GroSocial Inc.'s sweepstakes platform. The campaign aims to garner Facebook Likes by offering a chance to win a free blender to consumers who Like its page, provide their e-mail address and share their entry into the giveaway on their Wall, the section of a Facebook member's page where she and her friends can post messages.
"We wanted to have something where, when someone comes to our page, they have an immediate reason to Like us," Hirst says. Working with GroSocial, the manufacturer created the giveaway landing page on Facebook so that everyone who doesn't already Like the manufacturer's Facebook page is greeted with the entry form for the sweepstakes. The promotion, launched in April, has roughly doubled the retailer's average number of new Likes each month.
A clear link
Since launching the giveaway, an average of 2,857 consumers Like Blendtec's Facebook page each month. And those Likes quickly add up to a much larger number of consumers viewing information about Blendtec's giveaway. Here's why: Anything a Facebook member posts on her Wall appears on her friends' Facebook Ticker, which features updates on what a Facebook user's friends are doing at that moment, and most of those posts also show up on their news feeds. And because the average Facebook user has 130 friends on the social network, Blendtec's gaining 2,857 new Likes translates into 371,410 consumers viewing posts related to its giveaway. While Blendtec doesn't rely on this metric, the retailer could consider a post equivalent to a consumer seeing an online banner ad—and even at $1 per 1,000 impressions, the low end of online display advertising rates—so Blendtec would be getting nearly $400 worth of advertising from its Facebook promotion.
But Blendtec focuses on measuring sales that result from its exchanges on Facebook. After that initial Like the manufacturer engages with consumers by providing information, such as a Thanksgiving recipe for cranberry sauce, and by highlighting features of its new products. To track the sales generated by its contests, the retailer presents shoppers with a unique coupon code that it can track when it is redeemed. While Hirst won't say how many of those codes have been redeemed, he says the figure was nearly double his expectations.
Blendtec's social marketing campaign fits with the manufacturer's other marketing efforts, which are largely focused around branding, Hirst says. When people are familiar with the brand, that awareness leads to sales, he says.