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The three stages of social

By Retail Technology | Friday March 28 2014

Social sales and marketing expert Gideon Lask takes a look at who's who in terms of using social networking to increase brand engagement, customer advocacy and profits from online

On the launch of a new Social Maturity Index by Buyapowa, the social commerce company’s founder and chief executive, Gideon Lask, said a number of pioneers are taking social commerce to a whole new level – and leaving everyone else behind.

“The average large company sinks an astronomical £11.5 million into social media every year,” he said. “Theoretically, that’s a good thing: they’re keeping up with the times, staking their territory, fishing where the fish are. In practice, though, much of this money is being squandered on worryingly ephemeral ‘content marketing’.

“We call this Stage One of Social: collecting your audience. This may involve trawling social networks with heavily hashtagged content in the hope of scooping up a big net full of fans of followers. In these cases there’s rarely a strategy for what to do with those fans and followers when they get them. They just want numbers. It’s a numbers game, and they want to be the winners.”

Taking social to next level

Lask said some brands are more sophisticated, which means they are at ‘Stage Two of Social’ by engaging their community. “They understand that there’s no point spending vast amounts of money collecting and maintaining audiences if you never do anything with those audiences, and they’re aware that the endgame always has to be sales,” he explained. 

That might involve encouraging conversation about products, or the crowdsourcing of marketing assets, such as posters, adverts or packaging. Or it might be something even more integral to a business, such as the social co-creation of an entirely new product line, such as the beer-maker Brewdog famously (and brilliantly, according to Lask) did with their socially-designed #Mashtag ale. “It’s not selling via social, but it’s a great start,” he said.

It follows then that there is ‘Stage Three of Social,’ according to the Maturity Index, attracting pioneers who want to develop an entirely new sales channel. “’Social,’ people often naively say, ‘is like a party – and no one wants to be sold anything at a party,’” continued Lask. “But, if you're selling the right products in the right way, then parties – and social – are the perfect environment: a defined customer-base, with shared interests, who operate communally and exert incredible influence over their wider networks? It’s every retailer's dream.

Stage three of social: Tesco

Lask cited its customer, Tesco as a classic Stage Three pioneer, having understood that its highly engaged Facebook page, Google+ Hangouts and customer service on Twitter only scratches the surface of social’s potential. 

“Far from just using social to link to existing e-commerce platforms, Tesco is using co-buying to help people shop where they socialise, and help them influence the price and nature of products they buy by coming together with other shoppers,” Lask said.

Co-buys begin with customers telling Tesco which products they’d like to see featured in an upcoming deal. “So far it’s been focused on wine, but the scope is broadening to encompass a wider variety of Tesco products and services,” he added. Then customers use built-in social sharing tools to rally their friends behind those requests – the most popular of which get turned into co-buys. 

Co-buys only last a short time and the stock is always limited, so customers are urged to sign up for alerts to ensure they don’t miss out, and to encourage their networks of friends to do the same. The greater the social buzz and the more people who sign up for alerts, the bigger and better the co-buys become.

“Essentially, co-buys expose economies of scale to the end consumer: the more people who buy, the better the price becomes for everyone. So there’s a built-in incentive for shoppers to share our deals with their friends to drive the price down, and they do that via Facebook, Twitter, LinkedIn, email and the widgets provided, which are brilliant for promoting co-buys on blogs and Tumblr pages.”

Making social commerce pay

Lask reported Tesco is now seeing over 50% peer-to-peer referral rates, meaning that half of the people taking part in Tesco co-buys have not been brought in by expensive marketing, but by their friends. It now generates hundreds of thousands of pounds in sales revenue through its co-buy channel.

“As a Stage Three pioneer, Tesco understands that you need to bake social into your business's retail experience, not just bolt it on – and that’s done by using techniques like gamification, dynamic pricing and co-operative buying,” concluded Lask. 

“Suddenly, shopping becomes something you can win, something where the price you pay depends on what you give back to the brand, something where you’re incentivised to become a marketer in addition to simply being a customer.

“By acting early and powering through the stages, Tesco is safe in the knowledge that it’s making money through social media, not just spending it.” 

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