Why this Forrester analyst is both right and wrong

Thursday, April 7, 2011

Interesting post over at the Wall Street Journal today about how a Forrester Research Analyst concludes that Facebook won’t become an E-Commerce force. She finds that on average, Facebook gets a 1% click-through rate and a 2% conversion rate and is therefore less effective than e-mail and paid search for customer acquisition and retention – pretty dismal numbers.

What’s behind these numbers? The point here is that Facebook, like any marketing channel, needs to be optimized with a powerful message. If your use of Facebook is limited to a bunch of ‘likes’ and some passive wall content, you aren’t utilizing social media for what it enables – engagement.

Are you customers really talking about your brand and engaging with it? Are your users/consumers generating content that you can share on your Facebook page for their friends and others to see? What about on their own pages? Is your engagement truly ‘social’? Are you leveraging Facebook’s social map to engage with the friends of your users? If so, you needn’t worry – “we found that when my friend’s name is in an ad, I’m over 60% more likely to remember the ad, and I’m over four times more likely to purchase the product. This is word of mouth. This is word of mouth at scale. This is what, as marketers, we’ve always been trying to bottle up and find a way to take advantage of, and the social web is finally allowing us to do that.” says Facebook’s Dan Rose, VP of partnerships & platform marketing.

We couldn’t have expressed this any better. At Punchh, we drive and measure this exact word of mouth, delivering more engagement to brands. We enable this truly social interaction through our social rewards platform. In the end, I suspect that this analyst may be on to something. As social media becomes more of a marketing requirement, we find brands are rushing to create twitter and facebook accounts with little thought to how to use those channels to truly engage with their customers. In the end, if your brand can leverage the strengths of these new channels by truly understanding what it is they enable, you will find that the promises of social media in terms of customer acquisition and retention are not just pipe dreams and can be realized.

For more information, please visit https://punchh.com. Schedule a demo with us at https://punchh.com/contact-us.

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