by Nicky Senyard - CEO, ShareResults.com
As the current state of the economy tightens consumer budgets, shoppers are researching products, comparing prices, and looking for savings online. Although this is good news for ecommerce merchants, there's a catch: the ecommerce space is about to become ferociously competitive.
There are many strategies you can pursue to boost traffic and the profile of your online brand - e.g. SEO, PPC, etc. These alone, however, will not necessarily increase conversions. Online consumers have reached a level of web savvy where they are not necessarily going to make a purchase just because they have landed on your website. Rather, they look for other indicators of whether or not to buy from you.
The New ROI: Return on Influence
One of the factors that consumers are influenced by when making a purchasing decision is trust. They might find that trust in a word-of-mouth referral or in product reviews. But consumers trust those reviews because they are independent third parties.
Just because your brand is not an independent, third party, however, that doesn't mean you can't build trust and gain influence with consumers. In fact, trust is at the heart of all business transactions: I sell trusting that I'll be paid, and you buy trusting that you'll receive what you paid for.
The way you can gain added influence with consumers over your online competitors, then, is by building relationships with them. And you can do that by treating your market as a community of consumers with some shared interest rather than just a target demographic.
In fact, some of the largest, most respected brands online have reaped the benefits of participating in or building a community of their consumers:
- Community users remain customers 50% longer than non-community users (AT&T, 2002).
- Community users spend 54% more than non-community users (EBay, 2006).
- Community users visit nine times more often than non-community users (McKinsey, 2000).
- 56% percent of online community members log in once a day or more (Annenberg, 2007).
The equation is simple: Trust + Community = ROI.
There are a plethora of social media tools out there that are both bringing consumers together in entirely new ways and making it possible for brands to build relationships with them. After all, when members of any demographic (market or otherwise) are able to interact, they become a community, and when anyone interacts with that community (brand or otherwise), they become a member of it.
Markets vs. Communities
So your consumers comprise both your target market and a separate, standalone community. If you want to engage them on both terms, then, you need to understand that a community is about interaction. Whereas you target a market, you participate in a community. Consequently, there are different rules of conduct.
In a community, relationships come before sales. Business, in other words, is not the first order of business. Leveraging communities is a great way to boost sales, but you actually have to become a respected and trusted member before you can tap into that potential.
There are two general ways you can participate in existing communities and start building trust with their members: direct engagement which is more longtail, and indirect engagement which is more immediate.
Direct community engagement entails having a kind of brand ambassador who identifies the online communities where your target market hangs out, and reaches out to them by sharing their expertise and insight about related products and services in that vertical. This approach takes time and is more of a longtail strategy.
Indirect community engagement is more targeted and yields results more quickly. It entails building relationships with the influencers - community members who already have a reputation and are trusted. By offering these influencers a heads-up or "sneak peaks" into your products or promotions, you can often spread the word quickly.
Many of these influencers, moreover, have learned to monetize their reputation through affiliate marketing. This means that they have a model in place through which they make commissions off of the sales they refer.
That being said, it is imperative that you never ask them to abuse their reputation or mislead them into doing so. These influencers have spent years building their relationship and trust within the community, and they are unlikely to jeopardize it for a quick buck. And if they grow to distrust you, they will pass that sentiment on to the community.
Of course, an effective community strategy requires both a direct and indirect approach. After all, indirect participation might yield results more quickly, but it will also make your participation in the community reliant on an arbiter. It's important, then, that once you engage influencers, you also work to build your brand's own reputation within that community.