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The Green Sheet Online Edition

December 12, 2011 • Issue 11:12:01

Social media reshaping the marketing landscape

The Internet, mobile technologies and social media each have had tremendous impact on the evolution of sales and marketing. Consumers today are inured to traditional "push" marketing - through which sellers blast messages via traditional media in hopes of reaching potential buyers. And social marketing, which uses newer technology, is fast becoming the new norm.

The result is that shoppers today feel more in control of the purchasing process than ever before, according to Lew Paine, Senior Vice President at New York-based GfK Custom Research North America. "We are seeing a new shopping experience emerge where retail marketers have less influence on buying decisions," added Alison Chaltas, a GfK Executive Vice President.

To succeed in this environment, retailers must leverage all the "touch points" of the shopping process. GfK's research revealed that consumers who use the Internet are deeply involved in the shopping experience, using blogs, research sites, coupons and email exchanges to find the best deals. Among those polled in September 2011, 39 percent said they would use deal-hunting websites like Groupon and LivingSocial to seek bargains for gifts during the 2011 holiday season.

"Anarchy is the new norm," the marketing and public relations firm Burson-Marsteller stated in a recent report. Social media, in particular, has shifted the power of persuasion away from corporations and toward consumers and other stakeholders. "[R]esponsible engagement in social media can reap big rewards in building relationships with stakeholders online," the firm wrote.

The paper also noted that only by engaging people on their terms can a company have a positive impact on the perceptions and purchasing decisions of customers and prospects. "A user exposed to your brand via social media will act differently than a user exposed to your brand via search [engines], Lisa Barone, co-founder of Outspoken Media Inc., said in a recent blog post. "They show up with different expectations, under different pretenses and with different goals." Outspoken Media is a New York-based company specializing in online reputation management, social media and other Internet services

Big businesses are starting to get the message: 84 percent of Fortune Global 100 companies use at least one social media platform, according to the firm's Global Social Media Check-up 2011. More than one third (34 percent) of these companies are using four key social media platforms: Facebook, Twitter, YouTube, and corporate or micro blogs. And most maintain multiple accounts on these platforms.

The social media biz

Internet and e-commerce services providers also understand this new dynamic and have broadened offerings for small and midsize businesses to include sophisticated, trust-building, viral advertising campaigns.

Toronto-based e-commerce specialist PayPro Global Inc. helps companies build full-featured Facebook stores and create new advertising possibilities that build on buyers' friend networks. Tapping into friend networks "is proven to be an efficient incentive for ... potential customers to make a purchase decision," the company noted in a recent press statement.

Utah-based PayPro Inc.'s flagship product Zumogo debuted during the 2011 Sundance Film Festival. Subsequently renamed ProPay Link, the product leverages smart phones to support customer-merchant interactions and product research, as well as secure payments. The product, which the company describes as a "social m-payment platform," is designed to "allow the consumer to find merchants, contact them for information, interact and communicate with them, and pay for the product all from the same device," ProPay stated in a recent white paper, Rise of Social M-Payments.

"There are a plethora of resources available to the online consumer, including reviews and ratings, product comparisons and customizing options which ultimately lead to a more educated buying decision by the consumer," said Ken Wisnefski, founder and Chief Executive Officer of WebiMax in Mt. Laurel, N.J.

WebiMax is one of many firms that have emerged to help companies make the most of social media. It offers search engine optimization tools and social media campaigns that help businesses more efficiently reach customers and manage their own reputations. Most recently, WebiMax introduced a video news service that businesses can use to woo business with real-time updates on pricing and related information sent to customers' smart phones.

"The reach of social media in addition to its effectiveness and cost efficiency make it the most closely followed dynamic this year," Wisnefski said.

ISOs and social media

Central Payment Corp., an ISO and processor headquartered in San Rafael, Calif., offers a service called SpotOn. Zach Hyman, a Managing Partner at Central Payment and co-creator of SpotOn, described it as a "social marketing hub for businesses."

SpotOn is designed to simplify the process of reaching out to customers via the social media sites Facebook, Foursquare (a social networking website for mobile devices) and Twitter. It also helps clients keep tabs on what's being said about them online. SpotOn has built-in loyalty functionality, as well as agent tools such as monthly industry newscasts.

SpotOn consolidates all of a client's social media activities on a single dashboard where the client can develop, schedule and monitor the results of targeted customer communications. Central Payment handles all the behind the scenes technical details. Hyman said more than 1,500 clients have signed on for SpotOn since it was rolled out; many of those are new clients who signed just so they could use SpotOn.

The Bagel Café in Santa Barbara, Calif., has been using SpotOn to garner loyalty from a young customer base that Café Manager Wes Hensley described as "deal chasers." Hensley said sales grew 20 percent during the first two months he used SpotOn and that the loyalty program Bagel Café runs through SpotOn is charting 30 swipes a day.

"It allows me to track everything my customers are doing," Hensley said of SpotOn. On days when business is slow, Hensley uses SpotOn to bump up sales by texting deal offers to loyal customers.

Michael Lansing, owner and operator of Gameroom Gallery in Thousand Palms, Calif., said his business has "just blossomed" since he started using SpotOn. "We're utilizing social media to attract customers we haven't been able to reach before," Lansing said.

Gameroom Gallery has a brick-and-mortar outlet that showcases arcade games, jukeboxes, pool tables and the like. It also operates a popular website, www.jukeboxbiz.com, that draws customers from email campaigns and Facebook.

Getting help with Facebook time

A poll of small business owners and employees undertaken in October 2011 by Constant Contact Inc., a Waltham, Mass., company that specializes in online marketing and surveys, found 86 percent of respondents consider Facebook a preferred marketing tool. Twitter was next on the short list of preferred marketing tools, with 60 percent favoring it; LinkedIn was listed by 55 percent.

That survey also revealed 83 percent of small businesses use social media marketing because it's free or relatively cheap; 65 percent see it as a complement to other marketing methods; 95 percent invest in email marketing; and 66 percent pay for online advertising.

Eric Rosado, CEO of Karma Snack, a full-service Internet marketing firm, isn't surprised by these findings. "Most people spend more time on Facebook and Twitter these days than they do in front of email," Rosado said. What's more, he added, "More people are turning to Twitter for news and information than to CNN.com."

By leveraging targeted email campaigns and social media sites such as Facebook, merchants have elevated the concept of word-of-mouth advertising to a new level. For example, it doesn't require much effort to "like" a product or vendor on Facebook. Yet if someone takes the time to "like" Gameroom Gallery on Facebook they're a promising prospect. So Lansing makes a point of sending targeted emails to these prospects in addition to posting pictures on his Facebook page depicting customer installations.

"We found they enjoy having a way to touch what we do," Lansing said. "It's a nice, subtle way of letting people peek in the front door."

Though it may be subtle from the consumer perspective, email and other social media campaigns are anything but subtle from the merchant perspective, as it requires continuous and rigorous attention to detail. Lansing said that with only one staffer to help, he was soon overwhelmed by the tasks associated with maintaining Gameroom Gallery's Facebook page and developing and targeting email campaigns.

"When you get really busy, some things get placed on the back burner," Lansing said. "But you can't let that happen with marketing. SpotOn allows me to do it on my own time." He prepares pitches ahead of time and schedules when he wants the communications sent.

Hyman said he was motivated to develop SpotOn after paying $2,000 a month to a firm to "consult" Central Payment on using Facebook to connect with customers and prospects. The SpotOn project took 18 months to develop, cost "millions of dollars" and still needs tweaks, Hyman said, adding that it has turned out to be "a hot product."

SpotOn is available only to customers of Central Payment, which has about 800 agents selling in the field. There are no plans yet to market SpotOn through other ISOs. Hyman said Central Payment prefers to leverage SpotOn as a market differentiator. "With things like the Durbin Amendment chipping away at revenues, now is a good time for an ISO to come out with a product that no one else has," he said.

Drew Freeman, President of Merchant Data Systems Inc., an ISO headquartered in Miami Beach, Fla., offers a similar assessment. "It's so competitive these days," Freeman said. "We want to be able to give agents opportunities to make money outside of core merchant processing services."

MDS entered into a joint venture with Karma Snack that expands agent offerings to include tools like search engine optimization, viral marketing and customer data tracking for merchants. Plus it helps agents drive sales with prequalified leads. "And once you're driving sales for agents, they really don't want to leave," Freeman said.

Karma Snack offers an interactive software system called Snackboard, which enables merchants and agents to keep tabs 24/7 on every aspect of business and the progress of online campaigns. It provides access to 150 social media sites, many of which are better fits for certain clients than the more popular Facebook and Twitter, according to Karma Snack's Rosado. Rosado added that next year the company will begin managing internal micro blogs through Snackboard.

"It is time for companies to embrace, not fear, emerging media. There is no other way to remain competitive," the Burson-Marsteller white paper said. "The key is to find the right voice and the right tools. Social media allows for a level of conversation in ways never before possible - presenting enormous opportunities for research, brand building and the creation of brand evangelists. The value of social media is that users are highly engaged and want to be heard. So, by listening to them and approaching them from their own point of view, it is possible to have a positive impact on beliefs and performance." end of article

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