Product or service referrals from friends, colleagues and family members are sometimes valued and other times not so much based on whether or not you have the same taste or unfulfilled needs. Although, when comparing a referral from a trusted source to that of an unknown business entity whose primary interest is to get you to buy, more often than not you will be more interested in listening to what your reference has to say.
For the reasons mentioned above, Word of Mouth (WOM) tends to be the most highly valuable marketing resource with high profit potential if managed correctly. How does a marketer nurture this type of communication and how is a company able to provide a WOM vehicle at the point of purchase where consumers can instantly gain enough trust to commit to a sale?
A model that quickly began to change the power of the web has been the rating system similar to that used by eBay and Amazon just to name a few. People buying products are able to leave feedback about their purchase experience ranging from product condition to shipping and even the entire shopping experience. The higher the rating and the better the quality of feedback, the more likely that others will feel confident in committing their money to the same experience.
With the explosion of social media in recent years led by MySpace, Facebook and Habbo to name a few, a new form of currency is rapidly evolving called Social Capital. In essence the larger a social community is, the greater potential that it holds in spreading a message to a listening audience. Considering the network is generally comprised of individuals who know each other relatively well, members are more likely to be receptive to the messages being sent to them.
To further demonstrate the value of social communities, Google recently announced that it has a patent pending to rank influential people in these types of sites. In turn, Google could charge a premium for ads served in association with high ranking individuals.
The challenge then becomes how to tap into the Trust Economy and how is one able to translate these relationships into revenue. As was mentioned in an earlier post Red Bull Goes Social, new social network integration tools are now being offered and are providing real opportunities for converting visitors into customers.
Facebook Connect as was used on the Red Bull site allows visitors to log in to their Facebook account directly through the site. The site owner then has the ability to access user information while the user is able to publish their comments on their Facebook user's news feed. Google has also developed a common API which is defined across a number of websites capable of offering similar features.
The potential of these tools are far reaching. By combining rating systems and powerful social community integration tools, online merchants have the resources to create an environment where consumers may engage with brands on a deeper level while bridging consumer trust barriers.
It will be interesting to see how brands incorporate these tools into their online strategies. Please feel free to share examples of sites currently using these features.
5 months ago