Many customer-facing executives look toward social networking as a means for attracting new customers, improving sales and building more intimate (and valuable) relationships with their customers. The concept is quite simple: bring the customer closer to you, and in turn they will become more frequent buyers, help you improve your products and even attract new customers for you. But a recent study by ecommerce personalisation specialist Baynote noted that social networks had very little influence on how US consumers shopped during the 2011 Christmas shopping season. So, what is it that marketers really want to achieve from a social network?
A few weeks ago, I attended my neighbor’s “BunBun Bag” party. For those of you asking, a “BunBun Bag” party is an event where a host invites friends to their home for a social gathering, generally complemented with snacks and drinks, while showcasing a selection of products – in this case customisable hand bags and related accessories. During the party, guests enjoy a ‘hands on’ demonstration or viewing of products, then place an order with the party host. The host is generally entitled to a commission or payback in the form of product credits. First launched by Tupperware in the 1950s, this type of party is quite common in the US. Similar companies practicing this form of direct selling include Silpada (jewelry), Pampered Chef (kitchen products), and PartyLite(candles), while the best known example in the UK are Ann Summers parties.
Anyway, back to the BunBun Bag party …. as I listened to this group of loosely connected individuals rave about a certain product, or help each other find the perfect fabric for a bag, I could not help but wonder, “Isn’t this the social network companies are trying to achieve in the digital world?” The parallels were plentiful:
- Our ‘social network’ consisted of a group of people with a commonality – we all had a connection to my neighbor. It was less about having an interest in the product, and more about our social connection.
- There was significant ‘customer to customer dialog’– and I’m talking specifically about the kind of dialog that is useful from the sales & marketing perspective. Product recommendations from past customers were frequent, as were positive responses to questions like “do you think I could take this bag to the gym?”
- Although spread by word of mouth, we truly experienced ‘viral marketing’. Only one person had to say “These purse hooks are great! Imagine not having to set your purse down on the floor of <insert name of your local drinking establishment here>.” And the sentiment spread like wild fire; even after the original purse hook promoter left, the recommendation was often repeated, making this item a popular purchase, typically an ‘add on’ sale in addition to the standard handbag (or two) that most guests ordered.
- ‘Gamification’ is also a common element of the in-home sales party. For example, guests can win prizes by answering questions about products, or earn a ticket for a product raffle for each additional guest they bring with them to the party.
- Let me ‘try on’ your product: Some components of the BunBun experience can’t be fully replicated online. Actually being able to ‘hold’ and ‘feel’ the handbags is a critical part of the buying process for some products. But companies like Endless.com have creatively addressed such challenges. Originally created by Amazon (read my prior blog to learn about my love affair with that company!), Endless.com sells shoes and accessories strictly online. Endless.com has broken through the barrier that no one would want to buy shoes without first “trying them on” by offering free, two day shipping on all products, with free returns, for example, if they don’t look or feel quite right. A superior visual search also enables this new buying habit. Asos, the UK fashion company, offers a similar service by providing returns labels and re-sealable packaging.
- Show me the money. Many companies that sell via parties practice “multi-level marketing” whereby the sales people are not only rewarded for their own sales, but also for the sales of people that they recruit to host such parties. In the digital world, it is already quite commonplace for companies to reward their customers for referrals with discounts on future purchases or product credits. But the power of the referral has become so evident that companies like Vouchfor now exist with a primary service to simplify or outsource the referral reward process.
- Make me your friend. And this isn’t just about getting me to ‘Like’ your Facebook page, though that could be a start. Consider the BunBun Bag party – would anyone really want to say “No” when asked if a certain purse looked good with an outfit, potentially hurting that person’s feelings, while also decreasing the likelihood of a sale for the party host (their friend)? The more a customer gets to know and like a company (or its people), the more likely they are to make you their preferred supplier. Over Christmas, I purchased 16 ‘Life is Good‘ tee shirts as presents, after becoming a big fan of the company’s corporate spirit (“Spreading the Power of Optimism”), its customer-friendly policies (such as free shipping on all purchases, returns, and exchanges, and its social conscience (donating portions of all proceeds to help kids with life-threatening challenges). Knowing the company, I felt as if I wasn’t just giving a tee shirt, but rather a shirt with a story.