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Five Types of Social Influence

Apr 4th, 2012 by Shopper Approved

If you’re a digital startup, building and highlighting your brand is the best way for new users to learn about you. Engineering your product to generate social influence through social networks like Facebook, Twitter, Google+, Tumblr, YouTube, Pinterest and others can multiply the discovery of your product and its ability to sell. Think of it as building the foundation for massively scalable word-of-mouth.

Here’s a break down on various forms of social proof, and how some savvy digital companies are starting to measure its impact.

1) Expert social proof – Approval from a credible expert, like a magazine or blogger, can have incredible digital influence. Examples:
• Visitors referred by a fashion magazine or blogger to designer fashion rentals online received a 200% higher conversion rate than visitors driven by paid search.
• Mom-commerce daily offer site Plum District found that customers referred by influential digital moms shop at 2x the rate of customers from all other marketing channels.

2) Celebrity social proof – Up to 25% of U.S. TV commercials have used celebrities to great effect, but only a handful of web startups have to date. Some results:
• In 1997, Priceline.com was one of the first web startups to use a celebrity endorser – William Shatner – not a travel expert, but seemingly obsessed with saving consumers money. It has been a huge win; Priceline now has a $23 billion market cap, and the fee Shatner took in shares is estimated to be worth $600 million.
• ShoeDazzle launched with celebrity Kim Kardashian as chief stylist. Her involvement helped leapfrog the company to an estimated $25m in 2010 and $70 million in 2011 sales, plus a recent $40m financing.
• Celebrity endorsement by Jessica Simpson and aesthetician Nerida Joy recently helped Beautymint attract 500,000 visitors in the first 24 hours of its launch.
• The most authentic (and cost-effective) celebrity social proof is unpaid. Celebrity use on Turntable.fm by Sir Mix-A-Lot and producer Diplo generated viral buzz, helping the company skyrocket to 140,000 users in just 4 weeks.

3) User social proof – Direct TV marketers are masters at sharing user success stories. Companies mastering this digitally include:
• More than 61 million people visit Yelp each month to read user reviews. Reviews drive revenue. A recent HBS study showed that a 1-star increase in Yelp rating leads to 5-9% growth in sales.
• User-generated videos (UGVs) are a growing and important social proof phenomenon. Early visitors to Shoedazzle watched more than 9 UGVs on average, helping catapult sales; and user testimonials on YouTube drove a 3x conversion rate vs. organic visitors for Beachbody, the makers of P90x fitness.
• Negative user social proof is also important to track. The first negative user review on eBay has been shown to reverse a seller’s weekly growth rate from 5% to -8%. It also hurts pricing; a 1% increase in negative feedback has been shown to lead to a 7.5% decrease in sale price realized.

4) Wisdom of the crowds social proof – Ray Kroc started using social proof in 1955 by hanging an “Over 1 Million Served” sign at the first McDonald’s. Highlighting popularity or large numbers of users implies “a million people can’t be wrong.” Some digital examples:
• Fashion e-tailer Modcloth enables its community to “Be the Buyer” by voting on which styles they think it should sell in the future. Shoppers take strong cues from the community; styles with the “Be the Buyer” badge sell at 2x the velocity of un-badged styles.
• Ratings and Review genius software Shopper Approved allows customers to rate and review companies allowing 70x more ratings than their nearest competitor. That means more that there are crowds of happy customers telling new visitors that buying from a Shopper Approved website is a good idea.

5) Wisdom of your friends social proof – Learning from friends thru the social web is likely the killer app of social proof in terms of 1:1 impact, and the potential to grow virally. Some examples:
• Friends inviting friends to play through Facebook and other social networks helped Zynga grow from 3 million to 41 million average daily users in just one year, from 2008 to 2009.
• Moms, arguably the most valuable demographic on the social web, rely heavily on friends and family recommendations. A recent Babycenter study showed moms rely on the wisdom of their friends 67% more than average shoppers; and they rely on social media 243% more than the general population.
• Friends referred by friends make better customers. They spend more (a 2x higher estimated lifetime value than customers from all other channels at One Kings Lane); convert better (75% higher conversion than renters from other marketing channels at Rent the Runway); and shop faster (they make their first purchase after joining twice as quickly than referrals from other channels at Trendyol)
• They also make better contributors. People who see content from their friends on Trip Advisor contribute personal content to the site at 2x the rate of others, and are 20% more engaged than other users.

Now that you know the five types of social influences, choose which one(s) will work best for your product and industry.

Tags: Shopper Approved, Social Commerce, social proof

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What is Social Proof

Apr 3rd, 2012 by Shopper Approved

One never-ending challenge for business owners everywhere is the battle for consumer attention. I’m increasingly convinced the best way to cost-effectively attract valuable users is by harnessing social proof, a relatively untapped gold mine in the age of the social web.

What is social proof? Put simply, it’s the positive influence created when someone finds out that others are doing something. It’s also known as informational social influence.

Wikipedia describes social proof as “a psychological phenomenon where people assume the actions of others reflect the correct behavior for a given situation… driven by the assumption that the surrounding people possess more information about the situation.” In other words, people are wired to learn from the actions of others, and this can be a huge driver of consumer behavior.

Consider the social proof of a line of people standing behind a velvet rope, waiting to get into a night club. The clubs could let people in faster, but then there wouldn’t be a line. The line makes most people walking by want to find out what’s worth the wait. It breeds interest. Professor Robert Cialdini, a thought leader in social psychology, has many more such examples.

In one study, his team tested messages to influence reusing towels in hotel rooms. The social proof message – “Almost 75% of other guests help by using their towels more than once” had 25% better results than all other messages. And adding the words “of other guests that stayed in this room” had even more impact (also an example of how A/B testing of small details matters).

In another study, a restaurant increased sales of specific dishes by 13-20% just by highlighting them as “our most popular items”. Social Proof also works on your subconscious – it’s the reason why comedy shows often use a laugh track or audience; people actually laugh more when they can hear other people laughing.

Because of social proof and despite a shaky economy, many web companies are in hyper growth. This is reminiscent of the five-year period over a decade ago when companies like Amazon, Netscape, eBay, Yahoo, Google and PayPal were built.

There are several types of social proof. To get the word out to the masses, you need to know about all of them – and then chose those strategies that work best for your industry and product. Many companies have found that a “mixed salad” of various types of social proof is most effective. The beauty of the web is you can test, learn and retest quickly to find what works best.

Tags: Social Commerce, social proof

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The Best Examples of Online Social Proof

Apr 2nd, 2012 by Shopper Approved

The internet has leveled the playing field, allowing for upstarts to play ball with the big boys by moving us to ask what other consumers think of the product instead of blindly buying based solely because of a company banner, commercial or advertisement.

If you think about it, we’ve always looked to our friends and family for advice on trusted and knowledgeable mechanics, experienced and caring dentists, and understanding and inexpensive teachers for dance or piano lessons for our children.

But the internet has taken it to a new level. Here are five examples of how online social proof is winning the marketing battle.

Facebook Sponsored Stories

Last year Facebook rolled out its Sponsored Story feature. It allows advertisers to elevate likes, check-ins, posts and actions within custom applications to a sponsored status, seen on the right-hand side of your friend’s Facebook screen.

The story is only shared with friends you know. But then Amazon grabs the post and makes it a “Sponsored Story” that shows up your feeds. One Facebook engineer said that the feature increased brand lift, namely ad recall and likeness to recommend, among their pilot partners, again proving that recommendations for products that come from friends are worth more than those that come straight from the company itself.

Klout

The social app KLOUT went head-long into the expert social proof space by creating a tool that measures people’s relative influence. I say relative because Klout cannot measure those who are not a member, so it really becomes a game among those inside. Furthermore, it only measures those social sites in which you share information.

As inaccurate as Klout may be, you have to give it to them: their appeal to our vanity makes adoption of the product easy. Who doesn’t want to know how he or she measures up to Jeffrey R. Holland, Lady Gaga or Arianna Huffington?

Your Klout score also serves as a feedback loop. When you see your Klout score drop, you are motivated to use social media more.

Yelp

The user site Yelp is designed to help people living in cities to find interesting and fun places to eat, shop and drink as well as lame and awful places to avoid. The premise is simple: users leave reviews and check these reviews before they go somewhere.

If it sounds like Facebook for the food junkie, that’s because it is, kind of. But it’s also a place where people go to make decisions about where they want to eat, drink or shop…so it’s social proof at its core.

Subscribers

Social proof is all about the wisdom of the crowds, so it’s no surprise that bloggers started picking up on the value of promoting the number of subscribers they have. The more you have the better.

Prospects will look at your site, evaluate whether they should subscribe or not based upon many factors, one of them being how many other subscribers you have.

Endorsements

Imagine you are deeply in debt. Hate your job. And are freaking tired of skimpy. You jump on the internet, and read about a guy how has a “I can make you rich” site. It is endorsed by all the leading TV news programs, Oprah, Mitt Romney, and even the Pope. Everybody who is anybody is singing this guy’s praises.

So here’s my question: Are you going to use this guy’s system? Of course you are. That is because people who you respect respect him. That is social proof on steroids.

Testimonials

Positive comments about you, your company or product are social proof. While it’s not from a friend or family member, it’s another endorsement that says this person or product is trustworthy.

Stick a picture of the person, or better yet a video of the person giving the testimonial with his or her full name and address on your testimonials page, and you’ve got social proof.

Business Verifications

One day you go to a site to buy something you really want. But you have never used the site before and neither have any of your friends. You see a small “Business Verified” image from a third-party security company that you know and trust.

You click on the seal to find that the company is a legitimate business and that if there are any issues, you have many ways to get in contact with them. Because trust seals come from another business, they aren’t as powerful, perhaps, as other types of validation, but several blind studies have shown that they are much stronger than doing nothing at all.

Five Star Ratings

Customers who have already experienced the benefits of a particular product or service have the opportunity, through social proof businesses like Shopper Approved, to rate the level of service they received. When website owners display these ratings, consumers visiting the site for the first time can see exactly how others have been treated by this company. Testimonials included as part of these ratings and reviews often persuade new visitors into taking the final step towards purchasing a product.

Social proof is here to stay. We can be certain that TV programs will still have commercials and that billboards will still display advertisements, but more and more of us are turning towards the internet where friends, family and other like-minded consumers can help us make informed, educated buying decisions.

But the internet has taken it to a new level. Here are five examples of how online social proof is winning the marketing battle.

Facebook Sponsored Stories

Klout

Your Klout score also serves as a feedback loop. When you see your Klout score drop, you are motivated to use social media more.

Yelp

Subscribers

Social proof is all about the wisdom of the crowds, so it’s no surprise that bloggers started picking up on the value of promoting the number of subscribers they have. The more you have the better.

Prospects will look at your site, evaluate whether they should subscribe or not based upon many factors, one of them being how many other subscribers you have.

Endorsements

So here’s my question: Are you going to use this guy’s system? Of course you are. That is because people who you respect respect him. That is social proof on steroids.

Testimonials

Positive comments about you, your company or product are social proof. While it’s not from a friend or family member, it’s another endorsement that says this person or product is trustworthy.

Stick a picture of the person, or better yet a video of the person giving the testimonial with his or her full name and address on your testimonials page, and you’ve got social proof.

Business Verifications

Five Star Ratings

Tags: social proof

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How to Make Every Negative Customer Interaction Positive

Mar 29th, 2012 by Shopper Approved

Customer feedback is a “gift,” says Ann Thomas, a senior consultant at Performance Research Associates, a consulting firm in South Bloomington, Minnesota, that deals with customer service-related issues. “I can’t fix the problem unless I know about it.”

Programs like Shopper Approved, give customers the opportunity to resolve issues and rate the online company. Programs like Rhino Support give customers the ability to communicate effectively with customer support agents who have hopefully been trained in the following recommendations:

When Handling Customer Complaints, Ditch the Formalities

The last thing unsatisfied customers want to hear is a line-by-line recitation of your company’s return policies. After they have spilled their guts, the three words they don’t want to hear are “I’m sorry but…” In contrast, the seven words they do want to hear are “So what you’re telling me is that …” The truth is that “today’s customer expects to be treated as an individual, not as just another number who’s complaining,” Thomas says.

Consider the case of a department store with a 90-day deadline for returning an item. If there’s a customer who just got married, returned from her honeymoon and, at day 100, realized that a gravy plate adorned with doves is actually not her style, it’s worth looking into alternative options rather than sending her home right away.

Your company should know that occasionally bending the rules will ultimately cost less it than it would to lose the customer or, worse, if the customer leaves and relays a negative story to the gift giver about your company. Wouldn’t an exchange be a viable option?

When Handling Customer Complaints, Avoid Overcompensating

A particular four-letter word usually does the trick when seeking a solution to a customer’s complaint: fair. One of the key phrases, which not a lot of people use, (and which more customer service representatives should use) is: “What would you think would be fair?”

My brother’s customer service manager bends over backwards to “make it right” with unhappy customers. He offers them the world before asking what the customer thinks might be fair. The idea here is, what is fair to one customer, is more than fair to the other, and not fair enough to still another.

When customer service representatives give the decision of resolution over to the customer, the customer will more than likely finish the conversation in a much better place than where he or she started it. For customers that don’t like to make the decision, the customer service representative can start with some suggestions. For example, ‘Mr. Smith, we offered one customer who had a similar issue an additional month’s worth of service for free. Would that resolve this issue for you?”

If you ask the customer to propose a “fair and reasonable” solution, acting as a partnership with you to find a resolution, chances are that the resolution will often consist of less than what you would have thought to offer. In my experience, some people don’t even want to be repaid or reimbursed. Some people just want to be heard.

Tags: Customer Relationships, Measuring Customer Satisfaction

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Making the Best Out of Customer Complaints

Mar 29th, 2012 by Shopper Approved

With one Tweet or one ‘Post’, a complaint from one of your unsatisfied customers can make your solid, economically sound company feel as if it is standing in quicksand.

“Don’t underestimate the power of a disgruntled customer,” says Rebecca Morgan, an executive advisor and customer-service expert who wrote the book Calming Upset Customers. “They wreak havoc in your organization because [complaints] upset everybody and, with these tools of Twitter and Facebook and Yelp, they can get the word out quickly.”

The truth is, the customer isn’t always right. It’s tempting to engage in heated arguments, especially when it comes to defending your business, employees, and even yourself – and even more especially if you feel you are right.

But if customer retention is the end goal, which it should be, listening intently and sticking with a calm, collected approach will help troubleshoot even the toughest complaint. So, what should you do once a complaint is brought to your attention? That depends largely on the nature of the customer’s complaint – and the severity with which it is brought.

But here are two thoughts that seem to always help peacefully solve most issues:

Don’t Take Their Unhappiness Personally

As frustrating as it is to be the customer with a complaint, it’s no delight being the business representative who gets yelled at for a problem likely caused by something or someone else. But, Morgan cautions, don’t take it personally. “People say stuff, and they call us names, and they say we’re incompetent. Listen to them fully without interrupting, if possible, and then help them.”

Further, don’t respond to accusations or offensive complaining in a way that perpetuates the argument. Comments like “You did it wrong! That’s why you’re having a problem!” will only escalate the issue rather than deflate anger. Don’t get defensive.

Instead, try a tactic Morgan advises: Point some of the blame on an inanimate object, such as an entry form or confusing instruction manual – problem-causing devices that, most importantly, can’t yell at you. This way, Morgan says, you acknowledge there’s a problem and, without finger pointing or putting anyone on the defensive, can work with the customer to agree on a mutually satisfactory solution.

Shut Up and Listen

As simple as it sounds, the most important step to take when dealing with a complaining customer is to shut up and listen to them. Customers often feel the need to vent their frustrations with a product or service before even considering a proactive solution. Try to acknowledge the customer’s emotional and volatile state. Remember that a good empathy statement does not imply ownership of the problem. As they talk, listen – and try to come up with ways that might help resolve the issue.

Another key communication tip involves asking open-ended questions that involve the customer. This technique will not only divert focus from emotional frustration but also generate a generous amount of information about the problem and potentially help you arrive at the appropriate solution. “Rather than getting defensive … I need to simply listen to the customer, accept the feedback, thank the person, and then decide what to do,” Morgan adds.

The goal is to make the best of customer complaints by helping them feel validated, and their business appreciated. This will alleviate some of their emotional frustration and when all is resolved, turn them 180 degrees from a tweet that says “Don’t” to a like, and maybe even a complementary and socially promotional comment.

Tags: customer interaction, Customer Satisfaction, customer service

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The Advantages of Social Commerce

Mar 5th, 2012 by Shopper Approved

With recent economic tightening and uncertainty, many businesses are looking to cut corners and find less expensive ways to reach their customer base. In today’s world, where much of our business seems to be more and more online, the rise of social commerce is meeting many of these companies needs. Social proof companies like Shopper Approved can give online businesses a open look as to their business’ online effectiveness.

For the most part, online advertising is much less expensive than advertising on television, radios, newspapers and magazines. In fact, businesses are able to build virtual store fronts on social media sites like Facebook, Twitter, YouTube, MySpace, and others without any monthly rent or lease program. Just build the page or profile and you can stay for free.

Of course, to advertise on these sites and search engines, there are fees. But most are relatively inexpensive. Placing ads on social media sites is a cheap alternative to standard advertising and it’s growing more popular as more and more people realize the popularity and easy access to social commerce consumers. Since there are millions of consumers online daily, it makes sense to use a percentage of your business’ marketing dollars for online networking and advertising.

The advantage of advertising on social media sites is that ads can be assigned to show up based on a user’s profile preferences. Basically, social commerce is a form of indirect social media marketing that allows you to make more money online, without having to waste money purchasing television time, or a spot in the New York Times. But it is also a good location to build upon advertising money spent on TV commercials, for example. A TV commercial placed online has the potential of being seen millions of times for free.

Social commerce rating and review programs like Shopper Approved are also advantageous because they give businesses insightful information on their consumers’ responses to products, service, and overall buying experience. So if you’re business doesn’t have an online presence yet, it’s time to get with the twenty-first century and start taking advantage of all the financial benefits e-commerce has to offer.

Tags: Social Commerce, social proof

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The Purpose of Website Reviews

Mar 4th, 2012 by Shopper Approved

Do you have an online business up and running? If you already have your website set up, that is great! However, you want to be sure that your website is user-friendly and that it is doing what it needs to do to attract and keep customers on your website.

Website reviews provided by previous customers give you the opportunity to find out what your customers think about your website and see how many of them are planning on purchasing even more of your products. It also gives you the opportunity to display favorable reviews on your website for new visitors to evaluate.

Did you know that the average customer is only on a website for about 33 seconds? That usually isn’t enough time to buy a product or even look at many offers, unless the page is taking the customer to the exact page they need to be to make the purchase.

You can find out how long customers stay on your site by using software like Google Analytics. Software programs like these can tell you where your visitors live, what pages they visited, and even if they purchased your product. They can tell you who many people visited your site this month vs. last month and even what day was your most visited.

What these analytical software programs can’t tell you is if the visitors who became customers were happy with the purchase or not. Only website review and rating software like Shopper Approved can do that.

The purpose of a website review from current or previous customers is to help you, the business owner, be even more successful online. Website reviews are a great way to allow customers to rate and review your website, letting you know what they like and dislike. With information from the reviews, you are then able to edit your webpage, improve your product and fine tune your service department.

Tags: e-commerce rating system, Reviews

Posted in Customer Questionnaires, Customer Surveys, Shopper Approved | No Comments »

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