MKT 380

Week 9 Introduction to Social Media Marketing

Chapter Objectives• Describe the relationship between social commerce and e-

commerce• Discuss the value of ratings and reviews to both online

consumers and e-retailers• Explain how social shopping applications and tools affect the

consumer decision-making process• Describe the psychological factors that influence social

shopping

The Zone of Social Commerce

Social commerce is a subset of e-commerce (i.e., the practice of buying and selling products and services via the Internet).

Social shopping refers to situations where consumers interact with others during a shopping event.

Social Commerce: The Digital Shopping Experience

A shopper’s motivation influences the type of shopping environment that will be attractive or annoying

Hedonic shopping motives include social experiences, opportunities to share common interests with like-minded others, the sense of importance we experience when others wait on us, and the thrill of the hunt.

Social Shopping

Social Commerce and the Shopping Process

• At the end of the day, shopping online is still shopping. • Important shopping decisions require five steps; we move

from problem recognition to information search to alternative evaluation to purchase, and finally to post-purchase evaluation.

Ratings and Reviews

Ratings are scores that people, acting in the role of critics, assign to something as an indicator.

Reviews are assessments with detailed comments about the object in question.

Click here to see the power of ratings and reviews

Ratings and ReviewsThe Value of a Review

• Ratings and reviews are not always useful.

• Ratings are a heuristic; a mental shortcut consumers use to help them with decision making.

• Reviews provide more detailed information for those who want to evaluate the choice at a deeper level.

Ratings and ReviewsBenefits to E-retailers

• Online reviews generate increased sales by bringing in new customers.

• People who write reviews tend to shop more frequently and spend more online than others.

Ratings and Reviews

So, what does this all mean for marketers?

1.Marketers must ensure high standards when it come to product quality and service.

2.Brands should embrace consumer options and not try to hide from them.

3.Organizations should engage in word-of-mouth marketing by actively giving people reasons to talk about the brand.

Ratings and Reviews

Why Don’t All E-retailers Offer Reviews and Ratings on Their Sites?

Fear that dissatisfied customers will use the review feature as a venue to flame a brand is the most commonly cited reason.

Ratings and ReviewsBest Practices to Leverage Social Reviews and Ratings

• Authenticity: Accept organic word of mouth.• Transparency: Acknowledge opinions that were invited,

incentivized, or facilitated by the brand,• Advocacy: Enable consumers to rate the value of opinions

offered on the site.• Participatory: Encourage consumers to contribute posts.• Reciprocity: Acknowledge the value of the opinions

customers offer.• Infectiousness: Make it easy for users to share reviews on

blogs and social networking platforms.• Sustainability: Online opinions are influential because

they live on in perpetuity.

Social Shopping Applications and Tools

Social commerce includes tools and applications that aid in evaluation of alternatives and purchase, and also enhance the social value of the online shopping experience.

Social Shopping Applications and Tools

Recommendations and Referrals are personalized product endorsements.

• Recommendations and referrals originate from the recipient’s social graph, thus making them more influential.

• Recommendations and referrals can be simple or integrated in their execution.

• Best Facebook Storefronts

Social Shopping Applications and Tools

• Pick lists• Popularity filters• Share your story• User forums• Deal directories• Deal feeds• Group buy• News feeds• Geo-location

promotions

• Social media storefronts• Ask your network tools• Shop together• User galleries• Social shopping portals

Other Referral Tools Marketers Can Use

The Psychology of Social ShoppingCognitive biases – the shortcuts our brains take when we process information.

Examples included:

• Bounded rationality – the limits of our cognitive capacity• Information overload – too much data for us to handle• Satisfying – expending just enough effort to make an

acceptable decision• Heuristics – the “rules of thumb” we use in decision making

The Psychology of Social Shopping

Social Proof is the belief that when a lot of people select one option, then it must be the right option.

• Herding behavior occurs when people follow the behavior of others

• Conformity is a change in beliefs or actions as a reaction to group pressure (real or imagined)

The Psychology of Social Shopping

We don’t mimic others’ behaviors all the time, so what makes it more likely we will conform?

• Cultural pressures• Fear of deviance• Commitment• Group unanimity, size and expertise• Susceptibility to interpersonal influence

The Psychology of Social Shopping

• Authority persuades with the opinion or recommendation of an expert in the field.

• Affinity (liking) means that people tend to follow and emulate those people whom they find attractive or otherwise desirable.

• Whenever we perceive something as scarce, we increase our efforts to acquire it.

• Reciprocity means we have an embedded urge to repay a debt or favor.

• People strive to be Consistent with their beliefs and behaviors.

The Benefits of Social Commerce1. It enables the marketer to monetize the social media

investment by boosting site and store traffic, converting browsers to buyers, and increasing average order value.

2. It solves the dilemma of social media ROI.

3. Social commerce applications results in more data about customer behavior as it relates to the brand.

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The Benefits of Social Commerce -continued

4. Social shopping applications enhance the customer experience.

5. Social shopping makes sharing brand impressions easy.

6. Brands can keep up with the competition, and maybe differentiate themselves from others in the e-commerce space.

And because…