Social Commerce Strategies for Small Online Businesses

Shopping, in many ways, has always been a social activity. Before the rise of the Internet and online shopping, women would often shop for clothes or go to the mall with friends — and, in the more distant past, were often on a first- or last-name basis with their service providers (their dry cleaner, the grocer, their doctor, etc.).

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Similarly, men have long been known to consult or compare opinions with other men when it came to, say, cars and/or farm or yard equipment and/or electronics, and likewise had "their guy" at the stores they frequented.

That social aspect of the shopping or commerce experience is in large part what instilled and maintained customer and brand loyalty. Then along came the Internet, which, to a large degree, changed shopping from a personal to an impersonal experience. Out went the social aspect of shopping, the leisurely browsing and discussions around what to get, and in came how quickly can we get shoppers to the product(s) they are looking for and to checkout.

Yet according to new research from Guidance, an e-commerce solution provider based in California, many shoppers miss that social interaction. And, especially now, when market share is more important than ever, including some social activity or interactivity on your site — things like customer-generated reviews and product rankings, and chat or message boards — can help improve your bottom line.

Over the past few years, larger e-tailers have been adding social features to their e-commerce sites, à la the Amazon model. However, smaller e-tailers have been more hesitant to do so, typically because of the perceived cost and uncertainty regarding the return on their investment. But according to research conducted by Guidance (and others) "every business can benefit from having at least some social commerce, or social activities, on their Web site," said Guidance CEO Jason Meugniot. And they are often more inexpensive and easier to implement than you think.

Customer Testimonials

The simplest, and least expensive, form of social commerce is customer testimonials — quotes from customers who have used and are happy with your product or service.

"Customer testimonials are amazingly helpful to retailers and service providers," said Meugniot. And the more in-depth or detailed the testimonial, i.e., the more information about a particular product or service the customer gives (as opposed to "I love you guys!" or "Great hat!"), the better.

To maximize their effectiveness, strategically place customer testimonials near the product(s) or service(s) the customer is raving about. Also, update your testimonials regularly (adding or replacing comments every couple of months, if possible, or more often). And don't be shy about soliciting customer feedback. Either directly on your home page or in your e-mail marketing, ask customers to send you their comments — and offer some kind of incentive, say 10 percent off their next purchase or free shipping, if you use their comment on your e-commerce site.

Customer-Generated Product Reviews and Ratings

Of all the social commerce features or tools available to e-tailers, customer-generated product reviews and ratings may be the most effective, in terms of impact on the bottom line. Not only do user-generated product reviews add credibility to a site, but, according to research conducted by Bazaarvoice, conversion rates are higher on sites that feature customer-generated product reviews (even if there are a few mediocre or bad ones) than on those sites that do not feature reviews.

Responding to increasing customer demand, many off-the-shelf e-commerce solution providers and ISPs now include this ability in either their basic or premium e-commerce packages. There are also several social commerce service providers, such as Baynote, which allow smaller e-commerce businesses to collect and showcase user-generated content on their own (as opposed to a third-party) site. (See our story "Baynote Strikes Positive Cord with Customers.")

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