Last year, Madhavi Rongala Pavuluri decided she was done with employment and it was time she set up something on her own. She thought through her options and concluded that what she was really good at was shopping. And thus came about Yellow Button, a tiny store in Bengaluru’s Indira Nagar, which retails dresses, bags and accessories that are a “bit different” from what you would find in large apparel stores. A month before the store opened, Pavuluri set up a Facebook page for it.
Because she did not have much of a marketing budget, she sent out the invitations for the launch through the Facebook page. The response was quite encouraging even though, at the time, most people who knew and liked the page were her friends and family.
Today, a little over a year later, Yellow Button has more than 2,200 ‘Likes’ on its home-page. Pavuluri undertakes almost all marketing activities through that page. New collections are announced on it, photographs are posted, and it’s not just ‘Likes’ that are pouring in, but actual business too.
“The most amazing thing about Facebook has been the number of people who first heard about us there,” Pavuluri says. When a friend ‘Likes’ a page, it goes to the people on that friend’s page and they check it out, and then they ‘Like’ it and then their friends see it, and so on. “We have not paid anybody nor bought Facebook ads but there has still been such a strong response online.”
Even though Yellow Button is a physical store and does not have an e-commerce site yet, Pavuluri has already started selling to online customers. People who see a product and like it, write in to ask for details on its cost and sizes. They then transfer the money to the Yellow Button account and Pavuluri ships the product to customers
anywhere in India. About 15% of customers who walk into the Yellow Button store, come in after hearing about or seeing the store on Facebook. About 5% of the store’s orders are now going out to Facebook customers who order online. And so far, the cost of acquiring these customers has been zero.
The amplification effect
The ‘Likes’ going from Pavuluri’s list to that of her friends, and hence to their friends, is what online marketers call the amplification effect of social media. Sure, you can click through, browse and buy from any of the links of a site you are visiting, but what makes social marketing so interesting and effective is that you can see what others are clicking through and buying as well.
Comscore’s The Power of Likes report on the effectiveness of social media marketing says that if it’s utilised to its best efficiency, brands can deliver an amplification of 81x, which means that the message can go to 81 times the number of people to whom it was first sent.
The study also looked at how Facebook presence and ‘Likes’ translated to offline transactions. As a case study, Comscore analysed four large companies — Amazon, Best Buy, Target and Wal-Mart — to see how their online assets of fans and friends were linked to their offline transactions. All four companies are very active on the Internet.
Data showed that for all four companies, ‘Friends’ and ‘Friends of Friends’ on Facebook spent more than the general population. In Amazon’s case, the company’s Facebook fans splurged 209 on the spending index while a non-fan spent 100. Friends of Fans spent 108 on the same scale.
Before we get to why the message supercedes the medium, let’s look at three specific examples, to see how social marketing is working out for smaller enterprises.
It’s a trade-off
Tanya Sen, 25, and her mother, Ratna, decided to start a business selling jewellery in 2010. They invested a lot of money and hired artisans to design contemporary jewellery with semi-precious stones. “We weren’t sure whether it would work and we didn’t want to spend more money and start a physical store,” says Sen. “So, we decided to go online.” Sen created a Facebook page as soon as the online store — thejunkindia — was set up.
Today, JunkIndia’s Facebook page has over 21,800 ‘Likes’. The mother-daughter duo sell about 150-200 pieces of jewellery a month. “As soon as we put up a picture of a new product, it gets shared at least seven or eight times,” she says. “We only get a new batch of products when we have sold out the current stock. So, being online and selling through Facebook makes our business model very efficient.”
However, there is the possibility that their designs could get ripped off because of the pictures the company posts on Facebook. But Sen says she weighs that against the cost of running an actual store and it is not a bad trade-off.
With or without ads
Divya Gopinath came to Gurgaon after a decade of living in England and Holland, where she often baked cakes for her friends. She wanted to take a year off while she thought up career options. In the meantime, she baked some cakes for a charity event hosted by YWCA and a few people took her number. When they called in with orders for cakes, she began putting up photos of her baking on Facebook. This was in 2010.
Two years later, Gopinath, whose online store is called De Cakery, is a full-fledged baker who is moving her operations from home to a factory. She gets orders for about five cakes a day during the week and has to stop orders at 10 cakes for the weekend. “I don’t advertise outside Facebook,” she says. “Every few months, I pay $2 for a Facebook ad and run it for three weeks. The response is tremendous. One person likes the ad and then 10 of their friends come on board. I can’t cope with the orders that I have currently.”
When she first started De Cakery, Gopinath thought of various offline marketing techniques — dropping pamphlets from door to door etc. But the Facebook response has been so good, she hasn’t had the time to get around to any of that.
The last mile
Freecultr is an e-commerce company that sells apparels and accessories. The Internet is the last mile for online retailers, and a necessary and important place from which to communicate with their customers. Freecultr has a Facebook page with about 170,000 ‘Likes’ but, more importantly it’s an advertiser on the site. It buys stamp-sized advertisements that appear on the right hand side of the page and offers a specific product chosen for the user based on various factors — Facebook allows its advertisers to access data about the user.
So, Freecultr knows if the user is male or female, whether they are interested in biking, photography, books or cars, and what their relationship status is. They can even target advertisements based on life events that users declare on the site. Facebook thus allows the e-tailer the opportunity to flash an advertisement for, say, a handbag, because it’s the user’s wedding anniversary that week, or biking shoes because the person has updated biking as an interest.
Sandeep Singh, COO, Freecultr, says that between banner ads on other sites and targeted ads on Facebook, they find double the conversions in the latter. Freecultr does not use its Facebook page to push sales. It’s usually used for sneak previews on future trends, tips on styling, and so on. “The idea is that you are not friends with someone because you want to buy from them — you are friends because you share some interests and ideas,” Singh says. “We use our Facebook page as a platform for a conversation.”
Customers do post complaints on the Freecultr’s Facebook wall, and the company uses it as a customer service tool. “We have a team that looks at our wall and immediately responds to complaints,” Singh explains. “They then escalate it to our customer service cell. When we solve the complaint, we post it on the wall. We never delete negative comments — we would rather have our customers see that we have resolved the problem than have them think we are deleting their issue.”
While media planners in advertising agencies are increasing their client’s online spends, there are social media marketing specialists who advise — big and small companies — on how to best use these platforms.
One such specialist is Atul Hegde, chief executive officer of Ignitee, a internet marketing agency. According to Hegde, although success rates vary according to the objective of a campaign, a good social media campaign has the power to create brand advocates and champions. In today’s cluttered information environment, this attribute is priceless. Hegde says. “The foundation of any social media campaign is critical. You cannot undo a message — once it’s out there in a social medium, it stays on forever. That is why companies need to minutely think through any social media campaign.
The biggest advantage of running campaigns on social media, according to Hemant Atrish, who runs a London-based social marketing agency, SysComm International, is that campaigns can be continuously tweaked online. “It gives the marketeer a chance to get feedback mid-way,” he says. “And this can be effectively used to tweak the campaign optimally.
Message over medium
While the medium is helpful, the message is more important. The first step to finding customers on social media is to be seen there. Once a user ‘Likes’ a product, the brand can communicate to him through a NewsFeed, but that does not necessarily mean each of these messages actually reach the user. Facebook uses an algorithm that helps optimise the number of users who see the message, and even then, the actual relevance of the message plays a critical part in getting through. So messages which consumers are more likely to ‘Share’, and venues at which consumers check in have a larger likelihood of going viral and reaching more people.
The other key to a successful campaign is dynamic content. Pearl Uppal, founder, Fashionandyou, a website that sells off-season fashion products at a discount, has a dedicated team tasked with ‘looking after’ its million ‘Likes’ on Facebook and Twitter followers. “We have to be dynamic so we come up with various things,” she says. “We have flash sales that are announced on Facebook. We have Twitter Tuesdays which is a special offer purely for our Twitter followers.”
The trick is to get users to talk about the deals as often as possible. Fashionandyou announces happy hours only on Facebook — a couple of hours during the day when the discounts are higher than usual. And every person who ‘Likes’ the announcement throws the message open to the all the people on their Facebook wall.
It’s a bit of a business anomaly that a significant tool for acquiring customers is largely a free medium. That might change eventually. But until then, for start-ups as well as big brands, not having a Facebook plan is likely to be a social-media catastrophe.