Owning Your Brand s Community Drives More Shoppers and Sales
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 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: lithium.com Technologies, Inc. All Rights Reserved. 2
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 ondomain branded communities like? A major research study conducted by Millward Brown Digital has found that the value of a 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, included a large sample of leading consumer brands in Communication Service Provider, Technology, Financial Services, and Retail that use and social media extensively. The sample represented more than 30% of 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 communities and their social media communities. In addition, a survey of 4,000 US consumers evaluated the brand impact on users that engaged in 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. 1
52% Specifically, the study found that in comparison to the brand s other social communities, their 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. 65% Most incremental sales: Same session e-commerce sales conversion rates doubled within 30-days after a customer s first visit to a brand s 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. 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 communities have a strong positive impact on perceptions of trust and loyalty. The brand s community attracted the brands best customers as evidenced by the highest NPS and PI scores for the most customers. 2
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+. 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? 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. 3
A research study conducted by Millward Brown Digital has found that communities (owned and branded by our clients) drive 12 times more sales than all other social channels combined. Additionally, the brand s 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 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 communities could be far more substantial. communities drive 12x more traffic than all other social channels combined Millward Brown Digital study Additionally, the study findings revealed that 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. 4
Research Scope & Methodology The study focused on a cross-section of U.S. 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 customers, and it represented one-third of 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 (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 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 (had visited the brand s community); social (had visited the brand s other social communities, i.e., Facebook, Twitter) and purchaser (had purchased from the brand, but not visited the brand s community or other social communities). 5
Why They Come When asked why users had visited a community or social page, their response was... 38% researching brand s product or service before purchasing 33% to hear more about promotions, sales and new products 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. 36% seeking customer support/help 26% came across it while exploring the brand online 24% to find out about other products and services I can buy from the brand 6
Comprehensive Findings Sales impact Traffic: Nearly twice as many people who visited a community performed a shopping activity within 20 minutes of their visit, compared to Facebook brand visitors (0.7% and 0.4%, respectively). Sales: communities brought in 7.8 times more shoppers and 11.8 times more sales than other social sites. Incremental sales: 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 community: 3% of visitors to a 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 21% 26% 35% 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. 72% Percentage of consumers who considered themselves extremely satisfied with the brands. 76% 34% 79% 39% 7
Percentage in lift of how likely consumers who had recommended the brand in the past were to recommend it in the future. Percentage who said they would or already had signed up for a rewards program. 15% 10% 23% 48% 54% 60% Percentage of consumers who considered themselves loyal to the brand. Percentage who responded they would defend the brand and be brand advocates. 56% 62% 66% 56% 62% 65% what do the results say? 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. 8
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 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. community users spend 8% more compared to other social visitors and the general purchaser, with 23% of users spending between $100-$200 compared to 20% of other social, and 18% of general purchasers; 14% of users will spend $200+, compared to 12% other social, and 11% general purchasers. of Facebook, 1.5% of Twitter, 1.7% of Pinterest, and 0.5% of YouTube visitors. 9.6% of 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 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, 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: 80% Net Promoter Score 85% 87% After a first community visit, the incremental lift in sales went up 100% in the 30-day period after. 3.5% of community users performed a shopping activity within 20 minutes of their visit compared to 2.4% 32% 44% 50% 9
Trust & Loyalty 67% of community users considered themselves loyal to the brand, compared to 63% of other social, and 57% of general purchasers. 70% of users had or would sign up for a loyalty program, compared to 63% of other social, and 58% of general purchasers. 61% of 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 : 74% 80% 84% 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 : 68% Percentage of those who reported they were extremely satisfied with the brand: 40% 72% of and other social visitors have recommended the brands in the past, compared to 62% of general purchasers communities will gain a 22% lift in future recommendations 76% 42% 78% 48% 76% 78% 81% what is the impact? The impact of communities on retailers is significant in both sales conversion and trust/loyalty. 10
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. 53% of online sales volume within 30 days of a branded site visit was driven by 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: 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 70% 67% 71% 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 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. Net Promoter Score 13% 10% 16% 0.9% of 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. communities brought in 6.7 times more shoppers and 26 times more sales than social media alternatives. Trust & Loyalty 50% of users had or would sign up for a loyalty program, compared to 45% other social, and 42% general purchasers. 50% of community users consider themselves brand advocates, compared to 48% of other social and 45% of general purchasers. 11
Consumers who reported that they trust the brand online : Percentage of those who reported they were extremely satisfied with the brand: 71% Consumers who reported that the brand makes it easy to find information or get customer support if I have a problem : 73% 74% 73% 72% 74% 30% 62% of and general purchasers have recommended the brands in the past, compared to 58% of other social. communities will gain a 31% lift in future recommendations. 27% 28% 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 : 60% 66% 67% what is the opportunity? 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. 12
Conclusion These research findings indicate the power of a 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. 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. social helps the world s best brands build trusted relationships with customers. 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 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. is privately held with corporate headquarters in San Francisco and offices across Europe, Asia and Australia. The logo is a registered Service Mark of Technologies. All trademarks and product names are the property of their respective owners. 13