© 2011, BzzAgent 1

Leverage Loyalty to Drive Sales

from Social Shoppers

When was the last time you saw a keychain without a retailer loyalty

card on it? Nearly 90% of Americans participate in some type of

loyalty rewards program, and most are enrolled in more than one.

Marketers invest a lot into building these programs so they can

personalize the shopping experience and surround good customers

with relevant offers to make them even better customers. This data

helps marketers build robust profiles on customers to the point where

they can predict their shopping behavior. These marketers know so

much about you, they know what you are going to buy before you do.

The crazy thing is that all this valuable insight is wasted when it comes

to social media marketing. Social media is a powerful and persuasive

marketing channel, but none of the insights from customer loyalty

programs are being used. To most marketers, customers are

completely anonymous online. Social media conversations aren’t

connected to their in-store purchase activities and loyal customers with

the potential to be vocal and persuasive advocates are ignored.

It doesn’t have to be this way.

Determining which loyal customers

have the ability to be influential advocates in social media may be

the biggest missed opportunity for brand marketers today. These

“Social Shoppers” have a deep connection to your brand and they

rely heavily on social media to discuss products and

recommendations with a big audience of followers. In today’s

consumer-driven world, these people are your most persuasive

voices.

The way to find and activate these people is with Social Shopper

Marketing. Social Shopper Marketing is a marketing strategy with

roots deep in both the online and offline worlds. It connects the dots from an individual’s retail

purchase history to their actions in social media - and it follows the path back to the retail store to

track purchases they influenced in others. That’s a powerful combination, and marketers are just

beginning to see its potential.

This guide will demonstrate the importance of social shoppers and provide you with a Social

Shopper Marketing framework designed for consumer brands.

“Determining

which loyal

customers have

the ability to be

influential

advocates in social

media may be the

biggest missed

opportunity for

brand marketers

today.”

“Social Shopper

Marketing is a

marketing strategy

with roots deep in

both the online and

offline worlds”

© 2011, BzzAgent 2

I. Importance of Social in the Shopping Process

A consumer’s path to purchase has been “non-linear” for some time now. Consumers no longer follow a

traditional step-by-step process from awareness to a sale. Access to digital media provides them with all

the research and comparison shopping tools they could ever need. And now that social media has

become a pervasive activity, that process has become even less predictable. Consumers jump from

source to source and friend to friend in a disjointed sequence to learn about products. Whether they are

soliciting opinions on social networks, reading reviews on Amazon or watching consumer videos on

blogs, consumers are tapping social media as a critical part of the discovery, consideration and research

phases.

But the purchase isn’t the end of the path. In fact, this can be where the biggest impact on a brand can

occur. After using your product, consumers go back to the same places they learned about your product

to share their opinions and contribute to the pool of information. This candid and authentic advocacy

influences the purchase decisions of everyone around them and it can spread quickly from person to

person. Positive advocacy can make or break your product, especially if it’s new to the market.

Non-Linear Shopping Requires Non-Linear Marketing

In a non-linear world, marketers need to take a non-linear approach to marketing. With social playing

such a big part of the shopping experience, it should be where marketing plans begin. Not an add-on after

the other media is planned. A social shopper marketing approach has more moving parts than traditional

marketing and it doesn’t try to control the process. It encourages social influence at the very beginning

and throughout the entire shopping process.

© 2011, BzzAgent 3

This is a significant shift for many companies, and significant shifts don’t always come easy. You live in a

world where reliable data and financial metrics are required to make a business decision. Here are

several key trends you can take to your next planning meeting.

• Media Consumption Is Shifting

Marketers have to put their product message where people spend their time and make their

decisions. Television may be the great “reach machine” but marketers can’t rely on it entirely given

its lack of cost efficiency. When a marketer needs to drive profitable sales quickly, digital is the way

to go. Digital media is the second most viewed media after television. Moreover, behavior in the

digital world has undergone a profound transformation in recent years. Social networking now eats

up twice as much of our online time as any other activity. This time is coming from almost all other

online activities, especially email, which dropped 28% between 2009 and 2010.

• Social Blurs the Lines Between Marketing and Distribution

With all this time spent on social networks, consumers have the world at their fingertips throughout

the entire day. They expect brands to have a presence in social media, and they want everything at

the speed of a mouse click. Consumers can change course in just a click, and the paths to purchase

are almost unlimited. This has changed the way brands look at social communities. Sites like

Facebook have become both a marketing and a distribution channel for CPG companies. P&G has

built commerce into many of its Facebook fan pages to capture people when they are most engaged

with the brand. Orders are fulfilled by Amazon, and this has become so popular that Amazon is now

a Top 10 retail account for Pampers.

Says Alex Tosolini, P&G’s VP of Ecommerce: “All of a sudden the traditional model of ‘marketing

does this’ and ‘sales does this’ is blurred. This is an amazing change in the way we go to market.”

• Consumers Buy from the Brands Active in Social Media

A study by the Altimeter Group confirms that deep engagement with consumers in social media

correlates to better financial performance. 100 of the most valuable brands on the

© 2011, BzzAgent 4

BusinessWeek/Interbrand Best Global Brands list were evaluated for the depth and breadth of their

involvement across social media platforms. The most active companies in social media, categorized

as “social media mavens,” grew revenues an average of 18% over the previous 12 months. The

least engaged companies saw an average revenue decline of 6% during the same period. This is

more than a coincidence. Consumers clearly respond to brands that have an active presence in

social media.

• Social Media Is Killing Impulse Shopping

While a lot of marketing focuses on in-store experiences to promote impulse purchases, most

shoppers already know what they are going to buy when they walk into a store. A Yahoo/McCann

study finds that very few purchases are made on impulse, and social media is responsible for killing

it. Why? Because consumers are bringing friends, family and strangers from their social networks

into their decision-making process. Social tools have created solidarity among shoppers and made

finding the best products and the best values a game.

Many think impulse shopping happens all the time in the grocery store. Who could resist the giant

display of new crème-filled treats at the end of the aisle? Most people, it turns out. Impulse buying

in the grocery store isn’t as prevalent as many think -- especially for moms buying for their family. A

study by UPenn-Wharton found that only 20% of supermarket buying is unplanned. And most of that

is driven by the young and single. Those visiting the market on a regular basis to buy for the family

make impulse purchases 13% less than the already low average.

When a shopper is tempted by a display to make an unplanned purchase, an average of only three

products are purchased on impulse. Seems like a lot of effort to try to be one of those three

products. There is a better way.

Build Advocacy Among the Right Customers

to Influence Shoppers

Make no mistake, people use social media to connect with other people. They aren’t going to Facebook

to see what’s new with the latest shampoo brands. But the brands we use are part of our experiences

every day. Some brands can even become part of our identity. It’s not unusual to see people at the gym

with a Nike swoosh on their hat, shirt, shorts, as well as on their feet.

We all like to share our thoughts about new products so we can help others make better decisions. But

it’s important to know that not everyone discusses products the same way. Most of us will share a product

experience with a group of friends in person, by email or on Facebook and Twitter. The problem is that

most of us don’t do this very often. And when we do, we reach only a limited circle of followers. The

average number of followers for a Facebook user is just 130 people.

However, there is a group of people who talk about brands habitually. They are dashing off descriptive

blog posts, rating products on Amazon, tweeting comments day and night, sharing offers on Facebook

and creating YouTube product demonstrations that can attract a larger audience than some cable TV

shows. They are called brand advocates. This is what they love to do, and they are very good at it.

© 2011, BzzAgent 5

Others regularly seek out their opinions, and their recommendations have a direct influence on

purchases.

Now more than ever you need to connect with these brand advocates and encourage them to share their

opinions about your products. After all, it’s not what you post on your brand’s Facebook page that

influences others; it’s what consumers put on theirs. It can be easy to tune out messages from brands,

but when a friend says her hair looks and feels so much better because of a new shampoo brand, people

listen.

II. Connect Social Media & Shopper Insights

Connecting social media to loyalty marketing shopper insights has three primary benefits.

1. Identify and Build Advocacy with Social Shoppers Not all consumers are the same, and your shopper marketing programs need to excel at communicating

with loyal customers. But do you know which of your customers are most active in social media? Do you

know which ones are experts in your category and are advocates for your brand? A social shopper

marketing program can identify those “Social Shoppers” with both high levels of loyalty and high degrees

of advocacy.

The following illustrates this concept. The horizontal axis represents the level of loyalty of a customer

based on their purchase history. The vertical axis represents the level of advocacy they have

demonstrated in social media for your company or your product category.

• Social Shoppers. These are the people who

can really make a difference. They belong to

retail loyalty programs and they have proven to

be your best customers. Many are experts in

the product category and they want to learn

about new and interesting products. Social

Shoppers have a lot to say and they love

sharing their opinions and recommendations

with many others across social media sites.

• Chatterbugs. They don’t buy much from you

but they tend to attract a lot of attention

because of their visibility in social media. They

can take up a lot of your time in social media

because they have large followings and their

posts may influence a lot of people. They are

not educated about your products and are likely

to use a competitor. There may be an

opportunity to convert them to become

advocates, but it will not be an easy road.

© 2011, BzzAgent 6

• Quiet Loyalists. They are active in your loyalty programs and are likely the targets of your trade

promotions. They know a lot about your products, but since they don’t participate in social networks

they are not likely to spread their recommendations.

• Freebie Hunters. They have low loyalty and advocacy scores. Freebie Hunters are infrequent

customers and are often looking for something for nothing. They may be vocal in social media

discussions about discounts, but they aren’t saying anything meaningful about your brand or your

products.

Social shopper marketing isn’t necessarily about moving people up the scales. It is more about

connecting with your ideal customers in the top right -- those social shoppers -- and providing them with

the experiences and activities to share with their followers. Their words, pictures and videos will be far

more effective at influencing others and encouraging them to buy more and tell others.

2. Measure the Business Impact of Social Media Marketers are used to having measurement firms provide data on everything in marketing. This provides

marketers with the financial metrics to understand which programs drive incremental sales at what level of

profitability. We all know what gets measured gets budget, so credible ROI data is necessary to gain

incremental funds or to reallocate budget from other media. Social media has moved beyond the testing

phase, so marketers must prove to CFOs that it deserves more than a test-sized budget.

ROI analysis requires data from all sales channels. Data on purchase intent does not cut it in statistical

models. The analysis must accurately measure isolated campaign impact with valid and industry-proven

methodologies. Measurement at this level is sophisticated and must be conducted by someone without a

horse in the race. Actual purchase data can be collected from retail loyalty cards and third-party

measurement firms to provide the validation needed. (See Section III for details on measurement)

3. Gain Insights and Predict Future Behaviors Social media can be a valuable barometer, especially during a product launch. The topics your customers

discuss in social media can alert you to problems early on, saving you money, time and a whole bunch of

embarrassment. Here are several insights you can gain:

• New Product Ideas. All successful product launches start with a great idea. Sometimes the best

ideas don’t even come from within your company, so open your doors to thinking from outside your

walls. Unilever VIP and My Starbucks Idea encourage consumers to share ideas to improve products

and the company. Since the Starbucks program launched a couple years ago, more than 315 of the

ideas submitted have been implemented across the company.

• Test Marketing Messages. The messaging and packaging around your product may look great in

your conference room, but you can’t always anticipate how consumers are going to react in the

marketplace. Eliminate the guesswork about your marketing messages by testing it with segments of

social media hand raisers. When Wrigley’s was launching Orbit gum, it used social media to test

brand messages and packaging down to subsegments. Instead of a closed-door focus group format,

Wrigley sent new product packaging to hand raisers based on gender and geographic location, and

then compared shifts in opinions.

© 2011, BzzAgent 7

• Gather Product Feedback Early. With all the testing that goes into a product release, it can be hard

to believe that a serious design or manufacturing flaw can make it all the way to the store shelves, but

it happens. And if it does, and customers are disappointed or lose trust, you may never have a

chance at a future version. One social marketing program for a single-serving coffee machine had a

faulty power supply that smoked and sparked when it was plugged in. Customers alerted the

company quickly and the product flaw was fixed.

III. Your Social Shopper Marketing Program Your path to improved loyalty and product sales from highly connected brand advocates starts

here. This is the process BzzAgent uses to connect social media to shopper marketing.

Advocate Targeting The success of your program starts with the right people. Begin by identifying people with

demographic attributes like gender, age, children in the household and income. Layer on top of

that an analysis of people in loyalty marketing programs who have a proven history of purchases

with your products or in your product category. You can even invite people to your advocacy

program just after they purchase your product. This catches them as they are experiencing your

product when their enthusiasm is greatest. It’s a fantastic way to scale your program with highly

motivated customers.

Product Immersion Next, immerse them in a brand experience. Here is where customers become personally

connected to your product. Send them free or deeply discounted samples and educate them on

the facts and benefits of the product. You are trying to build authentic and meaningful

discussions about your product, and the only way that can happen is if people experience the

© 2011, BzzAgent 8

product themselves, at home, with their families. Otherwise, they are just regurgitating your

marketing messages, and nobody wants to hear that.

Guided Activities This is where the magic happens. Advocates are always looking for new and interesting things to

share with their followers. A product that makes cleaning the house easier, a dinner that makes

the kids smile, or a cosmetic that makes them look better than ever are all things people want to

share with others. Let them. Encourage them to share what they want wherever relevant

conversations are occurring across the social web. Remember, though, that their posts must

disclose if they received the product for free. That’s why we ask people to include #imabzzagent

in their posts. The FTC is watching, and so are we -- to protect your integrity and reputation.

Measure Activity The first step in measurement is to understand the amount of activity being generated, where

they occur, and how it compares to your competitors. Not all advocates are alike, and their

interests and enthusiasm will vary significantly from product to product. Use a scoring system to

identify and rank your customers on an advocacy scale. Knowing the frequency of posts, their

sentiment and the quality of the conversations they spark are all very important. But you’ll also

want to have in place a system that penalizes those who oversell. Overzealous brand fans annoy

more often than they persuade.

Analyze Impact/ROI There are a million ways to measure the business impact of your social media. Formulas like

return on engagement, return on trust and viral coefficient are great for showing value. But value

is not the same as units sold, revenue and ROI. Business impact is a financial metric, and it must

be reported in financial terms. Measurement firms have taken proven analytic testing processes

and applied them to a digital medium. Since these are proven methodologies, they give

marketers confidence in the results that they are going to see.

The GMA reports that “manufacturers have not yet figured out how to consistently convert

shopper marketing insights into actions with measurable ROI.” This doesn’t have to be the case.

Here are three ways to measure the sales and ROI of your social shopper marketing program.

Loyalty Card Matched Panel Tests

Measuring sales based on actual household purchases made with retail loyalty shopper cards

closes the loop and provides data on your sales and ROI. This household-level view of

purchases provides a robust understanding of consumer purchase behavior. Companies like

BzzAgent’s parent company dunnhumby manage shopper card programs for many of the world’s

largest retailers. When card holders involved in a social marketing program make a purchase,

marketers can connect the dots back to their social media activities. This not only measures

purchases made by the customer, but it quantifies the influence they had on others around them.

Studies of purchases form households exposed to the social marketing campaign are compared

with a control group of households not exposed to it. If the footprint of the retailer is significant

enough, tracking social media sales with loyalty card transactions will be an excellent

representation of your sales impact and ROI.

© 2011, BzzAgent 9

Matched Market Analysis

Matched Market Analysis looks are store level transactions. Analytic companies like

SymphonyIRI use a two-celled test and control approach to measure sales lift between two

geographic markets. For a social media campaign, two markets with similar characteristics are

selected. People living in one market are exposed to a social media campaign and people in the

other market are not.

With this level of detail, measurement firms apply statistical techniques to match store-to-store

sales data to isolate the sales impact of the social media effort. Even though social media sharing

occurs nationally, there is a sufficient concentration of people in the individual’s local area. Some

variables can’t be controlled in the test. One of them is price and promotion. For example, if

coupons are tripled at Massachusetts supermarkets but not in Los Angeles, the measurement

firms adjust the data for this variable.

Market Mix Modeling

Market Mix Modeling (MMM) allows marketers to look at the big picture of a brand’s marketing.

Firms like Nielsen analyze media effectiveness across channels to evaluate every element of the

marketing mix. The analysis is able to distinguish sales volume from marketing compared to just

being on the shelf. The results demonstrate the sales volume and ROI from each media channel.

MMM studies are usually conducted annually to keep a pulse on the changing trends in marketing

and media effectiveness.

Since social media is typically a smaller media investment, there are some challenges for

analysis. Media investments of 1% to 2% of the budget can be obscured by the large footprint of

television or other media. Keys to getting social media to register in a MMM study include

variation and granularity of the impressions over time. Discussion data must include weekly

impression volume on a market level.

The results have been impressive. Social media has a very favorable ROI compared to other

media. In some cases, the ROI has been as strong, or stronger, as the brand’s most effective

marketing activities, such as paid search marketing. Social media has also proven to

complement the brand’s traditional media efforts, helping increase the effectiveness of print,

television, PR and digital media.

Optimize Consumers don’t think of engagement with your brand as an isolated campaign, they expect it to

be an ongoing process. Don’t leave them hanging by ending your involvement when the

promotions surrounding a product launch ends. Without a constant stream of guided activities,

meaningful new posts and reviews will slow and the content on social media sites will get old

quickly. If your product is its mature stages, turn the attention to the next release or to the launch

of a complimentary product. Your advocates can sustain your momentum to help maintain and

increase revenue.

You also want to optimize your active advocates. With potentially tens of thousands of people

advocating for you at any given time, a system for scoring influence will help you cultivate the

strongest voices and replace the ones that aren’t actively participating. General tools like Klout or

Peer Index are helpful at identifying the potential for influence, but this is just the beginning. You

© 2011, BzzAgent 10

need to understand an individual’s willingness to speak for your brand and their ability to become

an expert in your product. Then you can track actual behaviors for a true prediction of who is

making a difference for your brand.

The Next Era in Social Marketing With the level of individual targeting and measurement now available in social shopper marketing

programs, social media’s role in marketing changes. It’s less about creating Facebook pages and videos

that promote your announcements and extend your ad creative. The emphasis shifts to activating

customer advocacy. Extensive customer data can be used to deliver more personal experiences to

socially active consumers, giving them tools to be your best salespeople. Managing and growing

advocacy is now a critical part of marketing.

The inclusion of social media into sophisticated measurement practices gives marketers the confidence to

scale social to more accurately represent the sales, revenue and profit it generates for the business.

Success is no longer defined by questionable evaluations on influence and engagement. It’s about the

same metrics you use with all other media investments - incremental sales and ROI. As we’ve seen time

and time again, it’s social marketing that often comes out on top.

© 2011, BzzAgent 11

Also Available From BzzAgent

“Field Guide to Brand Advocates” Brand advocates are an entirely different breed of consumer. They love to

talk about the brands and products they use every day. They are thought

leaders in their constantly expanding social circles and their actions

persuade the opinions and purchases decisions of many others. For

marketers, understanding the Internet habits and interests of these in-the-

know consumers is absolutely essential. Brand advocates have the power

to be your most effective salespeople if you know how to work with them.

Download the "Field Guide to Brand Advocates" at u.bzz.com/fieldguide

About BzzAgent

BzzAgent, a dunnhumby company, is a social marketing company that accelerates word of mouth to drive

sales. Powered by an accessible network of 400 million consumers around the world, BzzAgent creates

measurable business results for marketers through an influential advocate network, a powerful

engagement platform, and a proven analytics approach. BzzAgent has been at the vanguard of word of

mouth marketing since 2001, with thousands of programs for leading companies including Unilever,

Wrigley, L’Oréal, and Michelin.

For more information visit:

about.bzzagent.com

500 Harrison Ave. Boston, MA 02118 617.451.2280 sales@bzzagent.com @bzzagent