The consumer purchase process has changed fundamentally in recent years with the birth and mass adoption of social media. There’s new buyer behavior in town and marketers need solutions to embrace and influence the current shifts in consumer online buying behavior. More and more, consumers rely upon friends and family to make purchases online. When asked, “What sources influence your decision to use or not use a particular company, brand or product”, 71% claimed reviews from family members or friends exert a “great deal” of influence (Harris Interactive, June 2010).
We’ve seen numerous studies stating that family/friend referrals and consumer reviews influence buying decisions. They are significantly more trusted, nearly 12 times more than descriptions that come from manufacturers, according to a survey of US Internet users by online video review site EXPO (eMarketer, February 2010). 77% of online shoppers use reviews and ratings when purchasing (JupiterResearch), and a majority of consumers (74%) rely on social networks to guide purchase decisions (Gartner, July 2010).
There’s plenty of consumer social referral marketing going on, just look at Facebook’s recent announcement of “Sponsored Stories” turning friend activity into advertisements utilizing the unique value of social recommendations. In this video, Facebook product manager “Kent” says, “When we make decisions about products we want to buy or places to go, we’re basically looking for cues from our friends about what those things should be. When we’re looking for information we want that information to come from people we trust.” Consumers are more connected than ever and sharing more than ever, but brands have yet to take full advantage of social recommendation marketing solutions to capitalize on the consumer buying shift and the rise of social commerce.
So yes, we will see more brands activating their existing customers, turning them into brand advocates in 2011 as social referral marketing solutions become more robust both on and off of Facebook. Referral marketing programs will offer measurable ROI and streamline the process into a hands-off extension of their marketing departments as the year progresses. eMarketer agrees, “In 2011, four out of five US businesses with 100 or more employees will use social media marketing. That’s a dramatic change from 2008 when just 42% of companies marketed via social media.” (eMarketer, December 2010).