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Owning Your Brand’s Social Community Drives More Shoppers and Sales
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lithium.com | © Lithium Technologies, Inc. All Rights Reserved.
We make software that helps you better connect with your customers. Our social software helps companies respond on social networks and build trusted content on a community they own:
Contents
1 Executive Summary
3 Introduction
5 Research Scope & Methodology
6 Why They Come
7 Comprehensive Findings
9 Retail
11 Communication Service Providers
13 Conclusion
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Executive Summary
In today’s social marketing world, proving the ROI and
impact of social marketing can be challenging. Consumer
usage of social communities has grown to the point where
they are now major brand touchpoints and, in some form,
building a social community has become standard for most
brands. With this growth in scale, the question marketers are
asking is: is my investment in community driving sales and
improving critical branding objectives like NPS (Net Promoter
Score) as well as purchase intent (PI)? They are also asking
which type of brand community should be prioritized: social
media communities, such as Facebook and Twitter or on-
domain branded communities like Lithium?
A major research study conducted by Millward Brown Digital
has found that the value of a Lithium customer community
is unequalled in terms of sales conversion, frequency in
purchases, and attracting customers that have higher NPS
and PI scores, trust, and loyalty among brand’s owned/earned
social media audiences (the study did not cover brands’ paid
social reach). According to the study, branded on-domain
communities drive the majority of e-commerce sales, attract
more shoppers and have higher conversion rates than the
brand’s other social media communities.
The study, commissioned by Lithium, included a large
sample of leading consumer brands in Communication
Service Provider, Technology, Financial Services, and Retail
that use Lithium and social media extensively. The sample
represented more than 30% of Lithium’s monthly usage and
a combined market capitalization of more than $740 billion.
During a 13-month period, it observed 60,000 US consumers’
social community usage and their e-commerce activity and
resulting e-commerce sales on Lithium communities and
their social media communities. In addition, a survey of
4,000 US consumers evaluated the brand impact on
users that engaged in Lithium communites, social media
communities, or who had not engaged at all in any of the
brand’s social communities.
The research results highlight that brands need to make
branded, on-domain communities a priority, and if they are not
already doing so, they would do well to improve their approach
to social marketing. Branded, on-domain communities are
a powerful, untapped consumer touch point that influence
consumer behavior and generate improved revenue.
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Specifically, the study found that in comparison to the brand’s
other social communities, their Lithium community drove the:
Most traffic: 52% of all social traffic, more total reach than
their other social media communites combined.
Most shopping: 7.8 times more shoppers than the brand’s
other social media communities combined.
Most sales: 65% of all social e-commerce sales or 12
times more sales than all other social media communities
combined.
Most incremental sales: Same session e-commerce sales
conversion rates doubled within 30-days after a customer’s
first visit to a brand’s Lithium community. Visiting the
community continued to influence up to four times as many
shoppers as other social media communities combined
within 30 days of a first visit. Lithium community users were
also more likely to purchase again, with 79% saying they
would spend more per sale.
Best customers: The study included surveys of 4,000
consumers and underscored the importance of building
trusted relationships with customers. It revealed that Lithium
communities have a strong positive impact on perceptions of
trust and loyalty. The brand’s Lithium community attracted
the brands’ best customers as evidenced by the highest NPS
and PI scores for the most customers.
52%
65%
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Introduction
If you’re like most brand marketers, you understand that,
today, “social” is interchangeable with “relevant.” Your brand
has an online and mobile presence composed of a website,
e-commerce and customer support features, and social
pages on third-party sites like Facebook, Twitter, Pinterest,
YouTube and Google+.
Social networking sites like Facebook generate a sense of
community, foster brand awareness, and allow brands and
consumers to interact in real time. However, many brands
are discovering that third-party sites have disadvantages. You
can’t control the end-user or privacy agreements (Facebook
owns your page, after all), you can’t make changes to the
interface, and perhaps, most serious of all, people simply
don’t go to Facebook to find your brand. They go there to
connect with friends and family. They “liked” your page at
some point and now your posts stream through hundreds of
others that flow through their timelines. It’s easy for brands
to get lost in that crowd and hard (dare we say, impossible?)
to keep consumers’ attention.
That’s why smart brands are looking at the value of
prioritizing their own social communities. The advantages are
many, one of the chief being that you control, well, everything
about it. You create a “social hub” for your customers to
gather, interact, hang out, get help, discuss product/service
recommendations, be notified of sales/discounts, and belong
to a community of like-minded brand enthusiasts. Brands
quickly find that branded, on-domain customer communities
reduce service costs, accelerate innovation, and grow brand
advocacy. All of which are great and wonderful, right? But the key
question digital marketers and e-commerce executives ponder
is: do customer communities actually drive sales? What is the
business value in prioritizing your own customer community?
Lithium software helps companies reinvent how they connect
with their customers via brand communities. We work with
more than 300 of the world’s best brands— including AT&T,
Best Buy, Indosat, Sephora, Skype and Telstra —to respond
on social networks and build trusted content on a community
they own. We have been asking the same questions. And
we’re happy to report that we have some answers for you.
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A research study conducted by Millward Brown Digital has
found that Lithium communities (owned and branded by
our clients) drive 12 times more sales than all other social
channels combined. Additionally, the brand’s Lithium
community attracted the brands’ best customers as
evidenced by the highest NPS and PI scores for the most
customers. Our analysis indicates that these communities
impacted more than $500 million in e-commerce sales in a
single year—a particularly significant finding since the study
represented a sample of only about a third of Lithium’s total
community users, and the communites were designed to
increase the brands’ social presence not e-commerce sales.
The study tracked desktop e-commerce sales, but did not
track mobile, in-store or sales outside the US, indicating that
the overall sales and brand impact of the brands’ Lithium
communities could be far more substantial.
Additionally, the study findings revealed that Lithium
communities powerfully convert shoppers into buyers and
continue to influence consumers long after a visit to the
community. Sales conversion rates doubled and continued to
influence up to four times as many shoppers as other social
channels within 30 days of a first visit. Community users are
also more likely to purchase again, spend more per purchase,
be brand loyalists, and associate “trust and honesty” with
the brands studied. All are strong indicators that brands that
leverage owned customer communities experience significant
benefits, including increased sales revenue.
Lithium communities drive 12x more traffic than all other social channels combinedMillward Brown Digital study
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Research Scope & Methodology
The study focused on a cross-section of U.S. Lithium
customers over a 13-month period from October 2012 to
October 2013. It included surveys and tracked user behavior
on desktop computers only (no mobile devices, in-store sales
or non-US sales) across all social properties operated by
Lithium customers, and it represented one-third of Lithium’s
user base among major U.S. retail, communication service
provider, financial services, and technology brands. Traffic,
conversion rates, sales revenue, purchase influence, and
brand affinity were studied after consumers visited a Lithium
(branded) community, and after consumers visited other
social media properties operated by the same brand. These
other social channels were Facebook, Twitter, YouTube
and Pinterest. Google+ was not included, as it did not have
sufficient shopping activity to be measured by this study. At
times, a specific social media brand of the brand’s studied
was not included if it did not have sufficient traffic.
In the study, a “same session” was defined as 20 minutes
after a branded site visit. Activity was tracked within “30 days”
after a branded site visit and a “first Lithium community visit”
was tracked at pre/post 30 and 60 days, respectively. The
terms “shopping activity” (add to cart), “sales activity” (check
out) and “conversion” are used consistently throughout.
The study also included interviews with 4,000 additional
customers who had purchased from the brand with the intent
to gauge the importance of trust, brand reputation, and the
value of community to consumers. These were segmented as
“Lithium” (had visited the brand’s Lithium community); “Other
social” (had visited the brand’s other social communities,
i.e., Facebook, Twitter) and “General purchaser” (had
purchased from the brand, but not visited the brand’s Lithium
community or other social communities).
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When asked why users had visited a community
or social page, their response was...
These results provide solid
evidence of the value that
consumers attribute to
communities, as well as the
financial value experienced by
brands when they leverage an
owned customer community.
24% to find out about other products
and services I can buy from the brand
38% researching brand’s product
or service before purchasing
36% seeking customer support/help
33% to hear more about promotions,
sales and new products
26% came across it while
exploring the brand online
Why They Come
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Comprehensive Findings
Sales impact
• Traffic: Nearly twice as many people who visited a Lithium
community performed a shopping activity within 20
minutes of their visit, compared to Facebook brand visitors
(0.7% and 0.4%, respectively).
• Sales: Lithium communities brought in 7.8 times more
shoppers and 11.8 times more sales than other social sites.
• Incremental sales: Lithium communities brought in more
than twice as many users who performed a checkout
30 days after their visit to a branded site compared to
Facebook users.
• Best customers: Lift in sales went up 133% in the 30 days
after a first visit to a Lithium community: 3% of visitors to
a Lithium community added to cart within 30 days of their
first visit, compared to 1.6% who shopped on a branded site
in the 30 days before their first community visit.
Net Promoter Scores
Trust & loyalty
• Lithium users in every industry studied ranked
“Trustworthy/Honest” as the No. 1 descriptor of the
brand, followed closely by “Friendly”, “Innovative”, “Smart”,
“Responsive”, “Cool/Trendy” and “Real”.
• 88% said they “purchased from brands they trust”.
• 79% reported that “brand reputation is part of the
decision process”.
• 72% said they “enjoy knowing that the brand
provides a community for engaging with those that
have similar interests”.
Percentage of consumers who strongly agreed they were
likely to purchase from the brand again.
Percentage of consumers
who considered themselves
“extremely
satisfied” with
the brands.
Lithium
35%Other Social
26%
General Purchasers
21%
Lithium
79%Other Social
76%
General Purchasers
72%
Lithium
39%Other Social
34%
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Percentage in lift of how likely consumers who had
recommended the brand in the past were to recommend it in
the future.
Percentage of consumers who considered themselves
loyal to the brand.
Percentage who said they would or already had signed up for
a rewards program.
Percentage who responded they would “defend the brand”
and be brand advocates.
Lithium
23%Other Social
10%
General Purchasers
15%
Lithium
66%Other Social
62%
General Purchasers
56%
Lithium
60%Other Social
54%
General Purchasers
48%
Lithium
65%Other Social
62%
General Purchasers
56%
These results demonstrate that branded communities drive shopping activity, direct sales and critical brand metrics. They are also valuable to purchasers and can lead to greater sales revenue than other social media alternatives or general purchasers, creating a significantly more loyal and evangelical consumer base that fuels future revenue.
what do the results say?
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Retail
Retailers are experiencing an evolution as they move toward
omnichannel marketing — where customers experience a
seamless shopping experience across every touchpoint with
the brand, in-store, online, and on mobile. Communities provide
a unique opportunity for retail brands to harness the power of
consumer advocacy and allow customers to define how the
brand can be shaped to respond to their expectations and needs.
Within the broader study, we examined top retail companies
with both an ecommerce and brick and mortar presence,
which combined reach over $120 billion in revenue (based on
2013 annual reports from each company studied).
Sales impact
• Lithium communities attributed to $45.8 million over a
12-month period for same-session online sales, and they
may have influenced $143.7M based on users who visited
the community within 30 days of sale.
• Lithium community users spend 8% more compared to
other social visitors and the general purchaser, with 23% of
Lithium users spending between $100-$200 compared to
20% of other social, and 18% of general purchasers; 14%
of Lithium users will spend $200+, compared to 12% other
social, and 11% general purchasers.
• After a first Lithium community visit, the incremental lift in
sales went up 100% in the 30-day period after.
• 3.5% of Lithium community users performed a shopping
activity within 20 minutes of their visit compared to 2.4%
of Facebook, 1.5% of Twitter, 1.7% of Pinterest, and 0.5% of
YouTube visitors.
• 9.6% of Lithium community users performed a shopping
activity within 30 days of their visit compared to 8.5%
of Facebook, 4.6% of Twitter, 6.9% of Pinterest, 3.0% of
YouTube visitors.
• 56% of online sales volume was driven by Lithium
community users; compared to 32% of Facebook, 7% of
YouTube, 4% of Twitter, and 1% of Pinterest.
• 50% of online sales volume within 30 days of a visit to a
branded site was driven by Lithium, compared to 27% by
Facebook, 16% by YouTube, 5% by Twitter, and 2% by Pinterest.
• Percentage of consumers who strongly agreed they would
buy from the brand again:
Net Promoter Score
Lithium
50%Other Social
44%
General Purchasers
32%
Lithium
87%Other Social
85%
General Purchasers
80%
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Trust & Loyalty
• 67% of Lithium community users considered themselves
loyal to the brand, compared to 63% of other social, and
57% of general purchasers.
• 70% of Lithium users had or would sign up for a loyalty
program, compared to 63% of other social, and 58% of
general purchasers.
• 61% of Lithium community users consider themselves
brand advocates, compared to 52% of other social, and 46%
of general purchasers.
• Consumers who reported that they “trust the brand online”:
• Consumers who reported that the brand “makes it easy to find
information or get customer support if I have a problem”:
• Consumers who reported that the brand “allows me to see
what others think about their products or services in order
to make the right purchase decision”:
• Percentage of those who reported they were “extremely
satisfied” with the brand:
• 72% of Lithium and other social visitors have
recommended the brands in the past, compared to 62% of
general purchasers
• Lithium communities will gain a 22% lift in future
recommendations
Lithium
84%Other Social
80%
General Purchasers
74%
Lithium
81%Other Social
78%
General Purchasers
76%
Lithium
78%Other Social
76%
General Purchasers
68%
Lithium
48%Other Social
42%
General Purchasers
40%
The impact of communities on retailers is significant in both sales conversion and trust/loyalty.
what is the impact?
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Communication Service Providers
Communication service provider brands fight a fierce,
continuous battle for customer acquisition, retention, and
loyalty. Owned customer communities clearly win over other
social channels for driving online sales and generating loyalty
among customers.
With over 160 million customers combined, the brands in
the study include the top communication service providers
(CSPs) in the US (based on 2013 annual reports from each
company studied).
Sales Impact
• Lithium communities attributed to $40.7 million over a
12-month period for same-session online sales, and may
have influenced $150.7M based on users who visited the
community within 30 days of sale.
• 0.3% of Lithium community users and Twitter users
performed a shopping activity within 20 minutes of
their visit compared to 0.1% of Facebook, and 0.2% of
YouTube visitors.
• 0.9% of Lithium users performed a shopping activity within
30 days of their visit, compared to 0.5% of Facebook visitors,
0.7% of Twitter, and 0.7% of YouTube visitors.
• Lithium communities brought in 6.7 times more shoppers
and 26 times more sales than social media alternatives.
• 53% of online sales volume within 30 days of a branded
site visit was driven by Lithium users, compared to 18% of
Facebook, 27% of Twitter, and 2% of YouTube visitors.
• Percentage of consumers who strongly agreed they would
buy again from the brand:
Net Promoter Score
Trust & Loyalty
• 50% of Lithium users had or would sign up for a loyalty
program, compared to 45% other social, and 42% general
purchasers.
• 50% of Lithium community users consider themselves
brand advocates, compared to 48% of other social and 45%
of general purchasers.
Lithium
71%Other Social
67%
General Purchasers
70%
Lithium
16%Other Social
10%
General Purchasers
13%
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• Consumers who reported that they “trust the brand online”:
• Consumers who reported that the brand “makes it easy to find
information or get customer support if I have a problem”:
• Consumers who reported that the brand “allows me to see
what others think about their products or services in order to
make the right purchase decision”:
• Percentage of those who reported they were “extremely
satisfied” with the brand:
• 62% of Lithium and general purchasers have
recommended the brands in the past, compared to 58%
of other social.
• Lithium communities will gain a 31% lift in future
recommendations.
Lithium
72%Other Social
74%
General Purchasers
71%
Lithium
74%Other Social
73%
General Purchasers
73%
Lithium
67%Other Social
66%
General Purchasers
60%
Lithium
28%Other Social
27%
General Purchasers
30%
Communication service provider brands have the opportunity to significantly increase online sales and tap into opportunities for crowd sourcing brand innovation by fostering customer communities that allow customers to have a voice, and advocate for the brand.
what is the opportunity?
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Lithium social helps the world’s best brands build trusted relationships with customers. Lithium helps more than 300 iconic brands — including AT&T, Best Buy, Indosat, Sephora, Skype and Telstra — respond on social networks and build trusted content on a community they own. The 100% SaaS-based Lithium Social Customer Experience™ platform enables brands to build and engage vibrant customer communities to drive sales, reduce service costs, accelerate innovation and grow brand advocacy. For more information, visit lithium.com, or connect with us on Twitter, Facebook and our own community. Lithium is privately held with corporate headquarters in San Francisco and offices across Europe, Asia and Australia.
The Lithium® logo is a registered Service Mark of Lithium Technologies. All trademarks and product names are the property of their respective owners.
Conclusion
These research findings indicate the power of a Lithium
customer community and demonstrate that branded
communities drive shopping activity, direct sales and critical
brand metrics. Not only do owned customer communities
allow brands to maintain full control over their social media
platform, they also provide more effective metrics and
customization. Consumers want to belong to a community
and value interacting with brands they love. They reward
brands that provide a community with trusted content; that
listen, respond, offer peer-to-peer interaction and problem
solve; and a fantastic community experience. Lithium
community users purchase significantly more and advocate
for the brand among their trusted networks.
The opportunity to create your own customer community is
now. The benefits are long-lasting and exponential.
