CONNECTING WITH CONSUMERS

To content | To menu | To search

Social Media › Social Media Impact

Entries feed - Comments feed

Thursday, November 18 2010

Customer Product Reviews: Undeniably Influential

"For many purchases, shoppers find the best advice comes not from family and close friends but from strangers who have similar interests or who embody a lifestyle the shopper aspires to achieve."  So says eMarketer principal analyst Jeffrey Grau in a recent article at eMarketer about some new evidence attesting to the significant impact of customer product reviews.  This is not new news, just more of it attesting to the influence of online reviews.

In this most recent study, ChannelAdvisor surveyed US Internet users this past summer and found that a staggering 92% claimed to read product reviews, of which a nearly equal percentage were either influenced to purchase (46%) or dissuaded from making a purchase (43%).  Only 3% revealed that their decisions were unaffected by online reviews.

As stated in the eMarketer article, product reviews now represent a significant part of the shopper's pre-purchase search ritual, and the tendency for consumers to search out reviews for products they are considering has continued to rise, both in terms of number of reviews they consult and the amount of time they spend perusing them.  Back in 2006, in a widely-cited academic study that appeared in the Journal of Marketing Research, authors Chevalier and Mayzlin found that consumers who consult user reviews at book-selling sites, such as amazon.com and barnesandnoble.com, prefer to read the actual reviews themselves to mere summary statistics, such as average number of starred ratings.  Here is a summary of some other findings from that study:

Here are some findings from a 2007 e-tailing group study (published in 2008) regarding average frequency that consumers consult online reviews prior to a purchase and the average number of reviews consulted prior to a decision:

In their just-released follow-up report, the e-tailing group, in conjunction with PowerReviews, revealed that shoppers' embrace of online customer reviews has strengthened since the 2007 analysis revealed that 64% of shoppers read reviews always or most of the time before making a purchase decision.  That percentage apparently hasn't changed, but what has is the degree of immersion in the reviews:

  • 64% of shoppers took 10 minutes or more to read reviews, vs. 50% in 2007
  • 33% took a half hour or more to read reviews, vs. 18% in 2007
  • 39% read eight or more reviews before buying, vs. 22% in 2007 
  • 12% read 16 or more reviews before buying, vs. 5% in 2007
Despite this growing immersion, the e-tailing study also revealed that consumers who consult customer reviews for assistance in making a purchase decision, are not wholly convinced about the credibility of the reviews, with 35% of the study's respondents expressing mixed feelings about the reviews' authenticity.



The authenticity issue has been an ongoing problem with the widely-popular hotel/restaurant user review site, tripadvisor.com.  Consumers often express concerns that glowing reviews are posted by proprieters themselves, a possibility tripadvisor spokespersons have acknowledged that they are very sensitive about and that they have taken steps to monitor.  Meanwhile, venue proprietors recently have attacked tripadvisor for continuing to post dated critiques that do not acknowledge more recent upgrades in service.  And yours truly is wondering why some of my Paris restaurant reviews mysteriously disappear from the site, with no explanation forthcoming from tripadvisor.  Just the other day I posted a comment about a fine little bistrot within walking distance of the Beaubourg Pompidou Center, Pramil.  At tripadvisor, Pramil is ranked as the number 6 best restaurant in Paris, out of several hundred.  I pointed out that while Pramil is a pretty good restaurant, and one that I recommended at my Paris Restaurants and Beyond blog, there are many better venues in the French capital and the number six rating makes no sense.  Perhaps it was the reference to my blog that killed the post, but within 24 hours of its appearance, it was gone.  Why?

Friday, October 29 2010

Bursting Social Media Myths: Zombies or Gadflies?

I ride the Paris metro on a daily basis, and lately I have been having the distinct impression that Paris is slowly but surely being taken over by zombies. Forget about eye contact, there are growing indications that the text-induced multitudes that I see frantically texting, scrolling, tweeting, and squinting are completely devoid of any iota of recognition that they are actually in the physical presence of other living organisms, and that includes the mice. That can get very tedious when one needs to squeeze past a couple text-crazed passengers to reach a free window seat. 'Hello, anybody home?' The logical conclusion is that all this portable technology is undermining our capacity to be human, to acknowledge the social world around us. Yet, aha, here is the paradox, because after all, while the hordes of apparent texting, tweeting, etc. automatons are ignoring us in favor of their portable devices, they are connecting with somebody. All this leading up to that timeless question that people have been asking since day 1, Internet age: 'Do social media make us more or less social?'

No less than Malcolm Gladwell, in his article, 'Small Change: Why the Revolution Will Not be Tweeted,' and Mark W. Schaeffer, in his blog post 'Is Social Media Creating a Generation of Cowards' have argued that social media inhibit human interaction and make people less sociable.  On the research side, a widely-cited, early study by Robert Kraut and his colleagues at Carnegie Mellon University famously found a variety of negative effects associated with Internet use on a measures of social involvement and psychological well-being among Pittsburgh (USA) families in 1995-1996.  This, they contended, supported their fears that Internet usage replaces close social interaction and thereby increases isolation.  Just around the time that social scientists began to rush out of their cubicles screaming, 'We're all doomed!', some nitpickers started to identify some methodological flaws in the Internet=loneliness study (e.g., the nature of the recruitment process led to the selection of research participants who were very likely to experience a decrease in social contacts and community involvement during the course of the study, even without Internet access).  Lo and behold, in a follow-up paper published three years later, Kraut et al. (2001) reported that the negative effects identified in their earlier study actually dissipated over time and that another of their studies revealed a variety of positive effects of Internet use on communication, social involvement, and personal well-being, regardless of age.

Now added to the mix is research just released by ExactTarget and CoTweet.  Based on an assessment of data accrued from ExactTarget's subscribers, followers, and fans, consumers’ increased usage of social media directly corresponds to more face-to-face interactions.  As illustrated in the following graph, the study revealed that Internet users 'who are becoming more active on Facebook and Twitter are also interacting with friends in “real” (not virtual) settings more often', which flies in the face of the popularly held contention that social media use makes people less social.



Well, contrary to ExtraTarget's claim, one study does not make a myth bust in my personal opinion, especially given that ExtraTarget has kept the detail of its methodology and sample largely under wraps.  However, the evidence is building.  People won't be putting away their portable devices, so the impact of our growing synergy/singularity with technology on an individual level certainly warrants continued analysis.  In the meantime, my hat goes off to Apple for its new Type n Walk iPhone app.  If only there was something we could do about those metro zombies.

(And more French mass transit strikes is not exactly what I have in mind.)



Friday, October 1 2010

The Future of Social Media: The Magic Number 5

With attention spans reduced to 140 characters or less in the contemporary, high-tech era, it's no surprise that lists have shortened.  It won't be long before end-of-the-year 'top 10 lists are reduced to 9, then 8, then 7, ... until they disappear altogether.  However much I may enjoy the Village Voice's 'Year-End Film Poll' and Pazz and Jop Poll, once you get to 'The Last House on the Left' 'and Nine' on the former, and Abe Vigoda's 'Reviver' on the latter, I think it is safe to say that it's time to start cutting.  Getting to the point, in this installment I begin a two-part series (how's that for short?) on 'top 5s for social media' - with a look to future social media trends.  Next up, a look to the present (I know that sounds backwards), with some advice on how to advance a social campaign today.  Conveniently enough, both topics come in the form of simple five-point bullet lists.

FIVE TRENDS THAT WILL SHAPE SOCIAL MEDIA 

Some intriguing insight into the near future vis-a-vis evolving technologies and social media provided at The Next Web.  Let's face it, however smart we may be, predicting the future is still pretty tricky business, and Marshall McLuhan's much-quoted future-thinking acumen, still applies: '. . . we tend always to attach ourswelves to the objects, to the flavor of the most recent past.  We look at the present through a rear-view mirror. We march backwards into the future' (Ray Kurzweil's The Singularity is Near notwithstanding).  Given that caveat, TNW's list, with useful commentary provided by PSFK and Paul Marsden, is more than interesting, and I believe their predictions fall within the timespan of plausibility.  Here are the trends, with verbatim commentary lifted from the aforementioned sources:

1.  Identity will become embedded in devices
Imagine this: your social media identities (Twitter username, Facebook profile, etc.) will be entered as part of the initial process of setting up your new devices, and will be propagated into all applications. You no longer will need to enter your Twitter or Facebook credentials to access related functionality on mobile applications – instead, they will seamlessly access your profile. The recently rumored Facebook phone offers an example application.  Paul Marsden suggests that this possibility will provide an opportunity for smart app-based loyalty programs and deal feeds that use social media identities to personalize communications.  Of course, the transition from paper to electronic couponing is well underway and the conversion of the portable device into a credit card reader has become a reality, but embedding identities, albeit threatening from a privacy perspective, takes these developments to a logical next level.  PSFK illustrates this first trend by envisioning a typical product thusly:




2.  Online sharing will become embedded in media life

With social identity embedded into the devices we use daily, social sharing will become an integral part of the way we enjoy media on our regular TV’s, DVD players and music players. These devices will evolve towards all being Internet enabled and allow us to share likes, links and personal commentary. Remote controls and store shelves may include “like” buttons which autopost to Facebook, while music players will sync preferences to preferred identity.  Disney's buggy ABC.com Full Episode Player (FEP) is a start in concretizing this trend, providing greater intimacy for the TV viewing experience. 

3.  Location will be embedded in all activities

Location aware devices will employ pre-emptive use of location to alert the user to things or people nearby that may be of interest. Four-square writ large.  Users won’t have to check in to a place to see if their friends are nearby, as their device will automatically alert them. This trend bears particular implications for marketers, enabling them to provide consumers with value in that message and offer – and not just another annoying discount offer that they will eventually tune out if it becomes an onslaught.  Individual targeting is clearly a trend I think we can all agree on for marketers, for whom broadcasting no longer makes sense.  From a personal perspective, we can only hope there is a clear opt-in aspect to this trend, so that consumers can decide where, when, and for whom they willingly can be located.  In more cases than not, more than I need to know is not always better and persistent targeted messages from marketers can get annoying pretty quickly.  But these personal tics aside, Paul Marsden intriguingly inquires about this potential scenario:  'Opportunity for a new breed of tuangou group buy offers, bringing together real time flash mobs to buy in bulk in store?'

4.  Smart devices and web apps will automatically check in and post updates

Identity aware devices, empowered by embeddable RFID tags, will allow this type of technology to spread beyond the mobile phone. A smart coffee thermos, for example, could enable automatic check-ins and send coupons to your phone as you enter your favorite coffee shop.  This is going to be the nuclear explosion in the coupon business. 

5.  Social networking will redefine how large organizations communicate

Large organizations have always struggled to share knowledge across multiple teams, divisions and geographies.
Social media inspired design patterns applied to existing enterprise software and/or intranets opens up opportunities for collaboration on an unprecedented scale. Employees in large organizations will finally be able to find colleagues with knowledge or experience they could benefit from. Collaboration will no longer mean simply sharing documents and version control, but the ability to find colleagues by shared interest and collaborate seamlessly in a multi-channel environment.  To some extent, this echoes, but also advances Tapscott and Williams' Wikinomics ideas.  As TNW points out, at present, current examples of this fifth trend include disruptive innovators like SocialText, Yammer, Podio and SocialWok.

In summing up, TNW suggests that what links these five trends into the big picture is convergence, as in traditional media (TVs, radios, etc.) becoming social media devices, corporate intranets becoming private social networks, and so on.  All of this, of course, is being powered by ongoing developments in consumer generated content and content creating tools.  No question, the future is now.

Friday, September 24 2010

Participating in Social Media: Risks and Rewards

I refer to some of Silicon Valley industrial analyst Jeremiah Owyang's ideas about social media at several points in Connecting With Consumers, so it stands to reason that I'd be mentioning them here as well. His most recent Web Strategy blog installment includes another in a long line of 2X2 matrixes, this time clearly identifying some of the key costs and benefits of participating in social media.



                   Like all investments, there are risks and rewards, use this matrix to help
                   decision makers understand the downsides and upsides by participating.

This is not exactly groundbreaking stuff, but I like 2X2 classification schemes - they simplify and highlight and conform to our growing tendency to devote no more than 5 seconds to process material.  (In fact, if you've made it this far, I 'm pretty satisfied.)  But Owyang's matrix accomplishes something other than simplification - it reminds us that participation and engagement in social media isn't for everybody.  Unfortunately, as soon as the media and corporate communications departments glom onto the big new thing (and for many companies, as surprising as it may sound, social media is definitely something new), corporate decision makers start to think they have to spend on it, regardless of objectives and ability, just to say, 'we're there.'

Of course, not participating, while it may have its benefits at least from the firm's point of view, is business as usual.  And I wrote Connecting With Consumers in large part to convince how business as usual just doesn't work anymore in marketing.  And then there is last year's Engagementdb's analysis showing how corporate mavens (i.e., companies high in engagement and social media presence) financially outperform companies characterized by other engagement/presence profiles - results that certainly argue for participating in social media.






It goes without saying that any new business venture bears some risk, so perhaps the moral to this story is not so much that gun shy companies should opt out of the Marketing 2.0 party, but rather, must consider the risks beforehand, proceed slowly, rely heavily on social marketing metrics, and adjust strategy accordingly - a moral succinctly summed up by Wetpaint/Engagement db founder Charlene Li:

Doing it all may not be for you — but you must do something.

The optimal social media marketing strategy will depend on a variety of factors, including your industry. If your most valuable customers do not depend on or trust social media as a communication medium, or if your organization is resistant to engagement in some channels, you will have to start smaller and slower. But start you must, or risk falling far behind other brands, not only in your industry, but across your customers’ general online experience. 

Tuesday, August 17 2010

Use of Social Marketing Tactics

MarketingSherpa has just issued the results of their latest benchmark survey of the social marketing tactics most frequently used by organizations for marketing purposes. Based on an assessment of more than 2300 companies, the results are summarized in the chart below, which shows the average percentage of companies using each social platform for tactical purposes.  And the winner is . . . drum roll please . .. participating on company branded or managed social networks, like Facebook, Twitter, and LinkedIn (78%).



Not surprisingly, organizations are increasingly making an effort to engage with customers across the channels through which those customers are communicating with each other.  All of these figures represent an evolution of the stats provided in Connecting With Consumers.  Of course, what the chart doesn't tell us is the extent to which managers are simply going through the motions of channeling part of their marketing budget into social media because it's what everyone else is doing and so they can say, 'and we are, too.'  But it's one thing to have an intern managing the company's YouTube and Twitter content, and quite another to have a team working from a coherent strategic framework, one oriented towards true engagement.  Sherpa's takeaway point clearly zones in on this point:

Keeping in mind that your strategy must outlast the revolving door of leading social media technologies, tactics should be social brand agnostic when creating your organization’s plan.  In other words, an enduring tactic would be to "build and participate in a network populated by our targeted audience," not "build and participate in a Facebook fan page."

And it would also be helpful to know the extent to which companies are monitoring and tracking the impact of their social media activity.  Maintaining a serious, expert social media team requires money, and as we all know, budgets are dependent upon results.

Note:  Speaking of MarketingSherpa, a great online resource for social (and other) marketing information . . . keep your eyes peeled to their site because it won't be long before you'll have a chance to win a free copy of Connecting With Consumers (check out their 'Book Giveaway' link in a couple weeks). 

Thursday, August 12 2010

Who Do You Trust on Social Media?

With attractive bar patrons serving as undercover buzz agents for liquor firms, friends chatting us up about certain products or forwarding online recommendations so as to earn a few extra dollars from the companies that enlisted them as paid advocates, and email scammers co-opting the logos and web designs of previously trusted companies, who can you trust anymore?  Case in point - if amazon.co.uk hadn't run their algorithms and put my past purchasing behavior to work in creating their targeted email promotional messages, I probably wouldn't have just ordered a couple new cyberpunk books by authors I had never heard of. Who says advertising no longer works? Yet, of late, I have begun receiving email messages from amazon regarding purchases I had never made, which turned out not to have been sent by amazon at all, but were likely part of an online phishing scheme. Quickly jettisoned to my spam box, will I ever again regard legitimate emails from amazon without a bit of trepidation as to their legitimacy? Without a clearly identifiable and relevant 'subject' line, probably not.

These musings are just a lead-in to the results of a new study carried out by market research firm Invoke Solutions on 'what makes social media trustworthy?' and which was just summarized at eMarketer.com.  Bearing in mind that as the study looked solely at US 'frequent social media users,' and thus pertains only to 5% of the world's total population, the results nonetheless conform to all I wrote about trust in Connecting With Consumers.  As illustrated in eMarketer's table, when it comes to information sources most likely to be trusted by consumers on social media, blog posts by 'people we know' - friends, relatives, and other online peers - emerged as most trustworthy, along with friends who post on Facebook (with the former more likely to be 'completely trusted' than the latter).  Interestingly, both blogs by friends and posts on Facebook emerged as much more trustworthy than friends' posts on Twitter, with brand, product, or company fairing much worse in terms of credibility, albeit within the comme si, comme ca range.  Scoring highest on the 'don't trust at all' rating were independent bloggers' Twitter streams.  No surprise there - who are these weird people who keep revealing their mundane thoughts and petty behaviors to us? Personally speaking, I think I'd put more faith in an intercom announcement about how much longer my plane will be delayed.




So, clearly, consumer companies have a long way to go before consumers are ready to swallow their apparently non-promotional connected marketing messages on social network sites.  As Josh Bernoff and Charlene Li revealed in their 2008 book Groundswell, American consumers held relatively decent levels of trust for corporate messages through other media channels, yet still faring poorly compared to WOM received from friends or acquaintances who had experience with the recommended offering.

 

Returning to the Invoke Solutions study, some additional insight about trust comes from the participants' views on the factors that are important in making social sites trustworthy.  Scoring highest here were, in order, (1) keeping the dialogue open to both positive and negative comments (are you listening Nestle?), (2) quality of the comments and content, and (3) responsiveness of the content creator.  You would have to think that once companies start to incorporate these features into their social media channels, the more likely they'll be capturing consumers' trust.


 



Tuesday, June 22 2010

The Internet Can Be Bad For You


A couple of interesting stories recently crossed my desk, suggesting that the Internet (and by extension, social media) can have some serious unanticipated effects on  heavy users. The first story (another to follow a future entry) pertains to the recent mainstream media love affair with Nicholas Carr, author of the recently published ''The Shallows: What the Internet is Doing to Our Brains''  (W. W. Norton, 2010) Carr's compelling argument, in a nutshell, is that the emergence of the Internet is causing the human brain to change. As people become more efficient at multitasking and searching for information, they 'become less creative in their thinking.' In Carr's view, 'even if people get better at hopping from page to page, they will still be losing their abilities to employ a slower, more contemplative mode of thought. He elaborated on the root of this evolutionary trend in a Q&A that appeared in the book blog of The New York Times, Paper Cuts, earlier this month:

What changes our brains is, on the one hand, repetition and, on the other hand, neglect. That’s why I believe the Net is having such far-reaching intellectual consequences. When we’re online, we tend to perform the same physical and mental actions over and over again, at a high rate of speed and in a state of perpetual distractedness. The more we go through those motions, the more we train ourselves to be skimmers and scanners and surfers. But the Net provides no opportunity or encouragement for more placid, attentive thought. What we’re losing, through neglect, is our capacity for contemplation, introspection, reflection — all those ways of thinking that require attentiveness and deep concentration. 

What struck me most in Carr's comments is that phrase, 'state of perpetual distractedness.'  And what Internet user would argue that attention span hasn't diminished as a result of having so much information at our fingertips, available both instantaneously and simultaneously?  As Richard Saul Wurman pointedly observed in his 1989 book Information Anxiety, 'a weekday edition of The New York Times contains more information than the average person was likely to come across in a lifetime in 17th C. England.' As I write this installment, I notice that I have 9 Firefox tabs opened.  With a click of the mouse, I can temporarily put my writing on hold to find out how Mexico is faring against Uruguay in the World Cup, consult my Hotmail, check out how many visitors have been to my restaurant blog since the last time I checked 15 minutes ago, see what's up at Facebook and Twitter, and be back before you knew I was gone.  That means that at the same time I was collecting my thoughts for this installment and trying to organize and write them coherently, I managed to mentally ingest several disparate types of additional pieces of information.  Exactly what Carr is getting at, I think.  In short, as I write this installment I am probably damaging my brain via cognitive overload - a very discomforting thought.  I say 'damaging' because I firmly believe that diminishing one's capacity for 'contemplation, introspection, and reflection' is a really bad thing.  Are we 'evolving' into a race of super multitaskers who lack the capacity for contemplation?  Are human beings spiralling backwards to a pre-conscious state?

These questions got me thinking about some of the ideas I recall from a fascinating book I read several years ago by Julian Jaynes entitled, The Origins of Consciousness in the Breakdown of the Bicameral Mind (Houghton Mifflin, 1976).  Drawing on split-brain laboratory studies and archaeological evidence, Jaynes compellingly argued that ancient peoples, ranging from Mesopotamia to Peru, could not 'think' as we do today (or at least before the Internet) and thus were not conscious.  Lacking the ability to introspect, they experienced auditory hallucinations attributed to the voices of the gods, which told a person what to do in novel or stressful situations.  Humanity essentially had to learn consciousness as a result of catastrophe and cataclysm, as recently as 3000 years ago.  So getting back to Carr's treatise, contemplate this, if you can still contemplate anything: if ancient societies were preconscious, are we heading to a future society that is, in essence, post-conscious