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8/13/2019 Social Media Marketing u.s. 2011 Foresee
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The ForeSee Results Report on Social Media Marketing
(U.S. Edition)
Social Media Marketing:Do Retail Results Justify Investment?
February 3, 2011
by Larry Freed
President and CEO of ForeSee Results
2011 ForeSee Results
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Recently I heard the following question posed at a trade show: if you had to choose (with the
proverbial gun to your head), would you put money into a Facebook e-commerce site or a tra-
ditional e-commerce site?
Its a bit of a false dichotomy; most of us can do both. Anyway, the answer depends on a lot of fac-
tors, including product line, company size, existing Facebook presence and more. Still the question is
getting at something were all dealing with. Despite the exponential, widespread, and breathlessly-
documented rise in social media activity and usage, many of us dont have a great way to quantify the
value of social media marketing to bottom-line business results.
As part of our annual ForeSee Results E-Retail Sasfacon Index(U.S. Holiday Edition), we asked more
than 10,000 online shoppers what most inluenced their visit to a retail website. For three years now,
weve asked about a full range of trafic and sales inluencers, from intangibles like brand familiarity
and word-of-mouth to more traditional marketing tools like advertising and promotional emails. We
then used the scientiic methodology of the American Customer Satisfaction Index (ACSI) to analyzewhich sources drove the best quality trafic. The sources that drive the greatest numbers of people
are not always the same as the sources that drive people who are the most likely to purchase. As we
all struggle to understand the impact of social networks and other online marketing initiatives on our
brands, its helpful to have some hard data.
Our data shows that in terms of pure volume, social media still trails traditional customer acquisition
sources (like promotional emails) signiicantly. However, customers who come to a website because
of a social media interaction (either with a friend or a company) are highly likely to purchase. Now,
that could be because social media is inluencing them to purchase, or it could be because the custom-
ers who are interacting with us on social sites are the ones who were more likely to purchase in the
irst place. The point is that the marketing mix for every company will vary, but understanding the
patterns can help guide further research and investment.
Social Media Research Findings
FINDING #1: Look for quantity andquality of trafic.
Social Media: Only about 5% of online holiday shoppers report being primarily inluenced to visit
top retailer sites by social media, yet retailers continue to devote considerable attention to this chan-
nel based on the promise of potential big results. Meanwhile, 19% of website visitors came to the
website primarily as a result of a promotional email and 8% visited as a result of search engine re-
sults, suggesting that we shouldnt give short shrift to tried-and-true online marketing tactics in favorof newer media.
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Familiarity with Brand
Promotional Emails
Search Engine Results
TV, Newspaper, Radio or Magazine Ads
Word-of-Mouth Recommendation
Internet Advertising
Interaction on Social Network
Blogs or Discussion Forums
Shopping Comparison Website
Product Review Website
% of Respondents (U.S.)
Private Sectr Websites 2009/2010
0% 10% 20% 30% 40% 50%
Primary Influence On Website Visit
38%
19%
8%
8%
8%
7%
5%
3%
2%
2%
Traditional marketing
techniques still
drive more traffic.
MARKETING MIX: IS SOCIAL MEDIA WORTH THE COST?
In the preceding chart, interaction on social network includes getting a message or recommendation from a friend or family member
(2%), an interaction or message from a company on a social network (2%), or watching a relevant YouTube video (1%). Internet advertis-
ing includes advertising on all websites, including social media sites. See the following chart for further breakdown and speciicity.
However, looking only at the volume of trafic from any given source can be misleading; we also need
to look at the quality of the trafic. In the following chart, we see all the trafic acquisition sources
broken out individually and assigned scores on our methodologys 100-point scale for satisfaction,
likelihood to buy online, and likelihood to buy ofline.
Some of the most satisied site visitors arrived at the site because of previous familiarity with a
brand, promotional emails, word-of-mouth, product review websites, advertising on social net-
works, and instant messages from a friend or colleague.
Consumers whose site visits were most inluenced by advertising on social networks, messages
directly from the company on social networks, or mobile phone text messages or alerts are highly
likely to buy ofline.
Site visitors who arrived because of product review websites or word-of-mouth recommenda-
tions are highly likely to buy online.
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What most inuenced your visit to the website? % ofRespondents SatisfactionLikelihood
to PurchaseOine
Likelihoodto Purchase
Online
Familiarity with site/company/brand 38% 80 71 75
Promotional e-mail(s) from the company 19% 79 71 75
Search engine results 8% 75 65 71
TV, radio, newspaper, or magazine advertising 8% 77 72 76
Word-of-mouth/recommendation from someone I know 8% 79 70 78
Internet advertising 5% 77 71 74
Internet blogs or discussion forums 3% 73 73 74
Link from a shopping comparison website 2% 76 66 72
Message/recommendation from a friend on a social network 2% 77 72 76
Product review website 2% 79 73 78
Advertising on social networks 2% 79 76 75
Message directly from the company on a social network 2% 78 76 75
Video I saw on YouTube 1% 75 74 76
Instant Message from a friend or colleague 1% 79 75 77
Mobile phone text messages or alerts 1% 76 76 75
The groups most likely to purchase ofline come from some of the acquisition sources that drive the LEAST trafic: advertising on social
networks, messages from the retailer on social networks, text messages or alerts, and instant messages from friends or colleagues.
These scores represent average indings from recent visitors to the top 40 online retailers websites
(by sales volume, as measured by Internet Retailer). Each retailer is likely to have a different picture
of which acquisition sources drive the most trafic and which drive the best trafic. But if were only
looking at what drives the most trafic, were missing key information that could serve as a huge com-
petitive advantage, since success is often found at the margins. Were missing some opportunities for
real volume.
When I look at this chart, what I see is that promotional emails are delivering tremendous bang for
the buck. Emails are driving a large proportion of people that are relatively high-quality trafic. Based
solely on this data, I would be tempted to put my resources into really understanding what can be
done to make promotional emails more effective.
Social media has yet to blow me away as a driver of website trafic, store trafic or sales. That doesntmean we should ignore it; that means we should keep it in perspective as one of many tools at our
disposal. Yes, the data shows that some of the people who are most likely to buy come to our sites be-
cause of social media. But that doesnt necessarily mean that it was participation in social media that
made this group more likely to buy. It is likely that social media-inluenced visitors are already some
of the best, most loyal customers to begin with.
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FINDING #2: Our customers want to hear from us!
We asked people how they wanted to hear from retailers, and traditional channels win again. Only10% of our customers dont want to hear from us; the other 90% have deinite opinions on what
channel they like best. Are you asking your customers how they want to hear from you? Once you
know the answers, are you digging deeper to ind out if you are effectively communicating through
those preferred channels and driving the sales and loyalty you want?
How do you prefer to hear about sales and promotions? % ofRespondents
Promotional emails 64%
This companys website 21%
Postal mail 25%
Dont want communications 10%
Television 11%
Social media websites (Facebook, Twitter, YouTube) 8%
Mobile phone text messages or alerts 5%
Radio 3%
Other 2%
I think as retailers, we sometimes assume that since everyone is using social media these days, ev-
eryone wants to hear from us on Facebook. In fact, only 8% of all of our site visitors prefer to hear
from us on social media. Most prefer emails, our websites, and even snail mail.
Though only 8% said social media was their preferred way to hear from us, more than half seem to
be willing to connect with us in some way on social media. When we asked all of the survey respon-
dents which social media site would be their irst choice, 40% chose Facebook. Twitter, an industry
darling in the last few years, especially for technical and product support, registered only 4%.
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Which social media website would be your rst choice forreceiving communications from this company?
% ofRespondents
None 47%
Facebook 40%
Twitter 4%
A website not listed here 2%
YouTube 2%
LinkedIn 2%
MySpace 2%
Flickr 1%
FINDING#3: Facebook still rules, but is not as big a factor as we might think. Yet.
We already know Facebook is becoming the number one website in the world in terms of trafic; this
research shows that it is also the social network preferenceby farof the shoppers at the Top 40
retail websites. Two-thirds (66%) of online shoppers are regularly visiting Facebook this year (com-
pared to 56% last year), and only one-quarter of online shoppers report that they dont use any social
websites (down from one-third of respondents last year). These numbers are growing so fast that
while we dont see social media (and Facebook in particular) as a huge driver of sales and trafic yet,
it could soon be a game-changer.
Which social media websites do you use regularly? 2010 2011
Facebook 56% 66% 18% increase
YouTube 22% 23%
Twitter 11% 13%
LinkedIn 8% 11%
MySpace 15% 10% 33% decrease
Flickr 5% 5%Yelp 2% 3%
A social website not listed here 2% 3%
I dont use social websites 31% 24% 22% decrease
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Heres an interesting twist. Ask people how they rate Facebook itself, and they give it, on average, a
64, according to a report from the ACSI last July. Thats a terrible score; people are not very satisied
with Facebook itself. Ask people how they rate the top 40 retail websites, and they give them, on av-erage, a 78. Ask people how they rate Top 40 retailers presence on Facebook, and it averages an 80!
This is a bit confusing, but basically, people are more satisied with retailers Facebook pages than
they are with the retail websites themselves or with Facebook itself. This information could mean
that while Facebook stumbles as a website, it provides retailers with a valuable customer touchpoint
that can actually be very satisfying.
FINDING#4: Let the customers be your guide.
This research represents aggregate indings for the Top 40 retailers. All of us should know how many
of our own customers are inluenced by promotional emails or advertising on Facebook or word-of-
mouth recommendations, and furthermore, we should know which group is most likely to buy. We
should also know how people want to hear from us and how well were doing when it comes to com-
municating through those channels. We need to ask ourselves if social media is worth the investment.
If we discover that the answer is yes, we need to make the most of it by making sure that everything
about our interactions on social media meets the needs and expectations of our customers. Other-
wise, the effort is wasted, and could even be detrimental.
About the Author
As President and CEO of ForeSee Results, Larry Freed is an expert on customer satisfaction and au-
thors dozens of research papers and reports on the subject every year. Larry speaks extensively on
the topic at private and public sector industry events and has been quoted in numerous publications
and media, including CNN, Wall Street Journal, Washington Post, New York Times, Investors BusinessDaily, Internet Retailer, Internet Retailing, Multichannel Merchant, DM News, Computerworld, Federal
Computer Weekand Government Executive, among many others.
Facebook.com
Top 40 Retailers Presence on Facebook
Top 40 Retail Websites
Satisfaction Score
Private Sectr Websites 2009/2010
50 60 65 70 75 80
Customer Touchpoints
64
80
78
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About the Research Team
Rhonda Berg, Research Manager at ForeSee Results, led the research team that worked on the 2010ForeSee Results E-Retail Satisfaction Index (U.S. Holiday Edition). Rhonda manages many research
initiatives, such as the annual Top 100 and Top 40 Retail Satisfaction Indices (both U.S. and U.K.) and
the quarterly E-Government Satisfaction and Transparency Indices. She also serves as an internal
consultant regarding statistics, methodology, and survey design. Rhonda has been a research profes-
sional for 20 years in a number of industries and holds advanced degrees in business and sociology.
About the Research Methodology
The social media indings reported in this paper are based on a survey of almost 12,000 visitors to
the Top 40 e-retail websites (determined according to sales revenue as reported by Internet Retailers
2010 Top 500 Guide). Survey responses were collected by FGI Researchs Smart Panel. The studymeasured satisfaction among shoppers who visited the site, regardless of whether they ultimately
executed a purchase online, providing insight into the performance of retail websites as research and
purchase channels. ForeSee Results used the methodology of the American Customer Satisfaction In-
dex (ACSI), developed at the University of Michigan, to determine the scores. The ACSI is the national
standard for customer satisfaction and has been proven to have a direct link with stock prices and
other measures of inancial performance.
About ForeSee Results
As the leader in customer satisfaction measurement, ForeSee Results captures and analyzes voice ofcustomer data to help organizations increase loyalty, recommendations and marketing value. Using
a patented, scientiic methodology developed at the University of Michigan, ForeSee Results identi-
ies improvements across all channels and touch points that drive customer satisfaction. With more
than 58 million survey responses collected to date and benchmarks across dozens of industries,
ForeSee Results offers unparalleled expertise in customer satisfaction measurement and manage-
ment around the globe.
ForeSee Results, a privately held company, is located in Ann Arbor, Michigan and at www.ForeSeeRe-
sults.com. Connect with ForeSee Results at http://www.foreseeresults.com/blogs-community/
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