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TechnologyDec 23, 2010

Social Media: Nouns have Become Verbs…But is There Action?

Emily Schulhoff

Nouns becoming verbs: it’s how I know that something once unique and new has become unbelievably common in my life.  For instance, I’ve said “just Google it” (instead of “look it up on Google”) for quite a while.   As of late, I say “I’ll Facebook you” or “are they going to YouTube this?”  In a world that’s communication happy, social media continues to add new avenues to reach your friends…and consumers.  This has evolved into a call for action.

In the Beginning…

f-Commerce: How Can I Engage My Customers? discussed how you can sell ON Facebook (i.e. purchase without leaving facebook.com), and today I’m going to review keys to leveraging social media and then look at a sampling of companies who have done well selling THROUGH social media sites and their results.  In essence, what action creates a result? In many cases, the companies’ results are the exceptions and not the rule….but increasing sales through social media is absolutely possible.  Just make sure you have a solid strategy before taking the plunge.

How to Win Customers and Influence Buyers

Did you know that only 14% of consumers trust advertisements?  However, 78% of consumers trust peer recommendations.  While these statistics surprised me initially, I thought back to my major decisions in the last year, including: a job, where I perform community service, and major purchases for my home.  I can’t think of one decision I made based on advertising alone.  In fact, peer recommendations influenced my final choice in each case.

The illustration above shows the importance of becoming a thought leader, and social media is a perfect avenue.   By spreading your message—whether for a new product, non-profit, or company—and encouraging your followers and fans to pass the message along virally, your word becomes increasingly valuable. It’s personalized.  If a friend on Twitter re-tweets how great Nordstrom’s shoe sale is, I’m much more likely to shop and buy than if I only received the sale email.   Being a thought leader, whose views and opinions are not only valuable but shared, helps drive sales.

Ready, Set, Action

There are several ways to spread your message through social media and create a viral campaign.  You can use the following nouns (i.e. places in cyber space) to create action:

•    Create a fan page on Facebook

•     Build a custom YouTube channel for your organization

•    Increase dialogue with consumers through Twitter rather than just pushing corporate messages

Wondering if these nouns actually create verbs?  Based on Facebook fan pages, they do!  Fans spend almost $72 more annually on consumer products than non-fans.

BarnRaisers notes several businesses which have seen great returns from social media:

•    Burberry: increased same-store sales by 10% after securing 1 million fans through social microsites

•    IKEA: created a 15% lift in sales through photo tagging on Facebook and allowing consumers to create recommendations

•    Dell: recorded $3 million in annual revenue through their “Dell Outlet” on Twitter

•    LIVESTRONG: raised $10.8 million in 2009 through various social media channels during their Livestrong Challenge

•    TurboTax: discovered 71% of their customers were more likely to recommend TurboTax because of their Twitter interaction

•    Dr. Vaksman, DDS: attracted 320 new clients into a 5 month old dentistry through the social media presence on YouTube, Twitter, Facebook and LinkedIn

•    Cisco: saved $100,000s and hit revenue goals by promoting a new router only through social media

Social media is here to stay—at least for the foreseeable future.  While the long-term implications of social media on revenue remain largely unknown, the power of persuasion and education are evident.  Inform your users so they can inform their friends.  Be a verb; show action and create a reaction.