SOCIAL MEDIA: LUXURY BRANDS & CONSUMER BEHAVIOR

A female affluent consumer walks into a Saks' shoe department. She tries on several luxury brand shoes and then has to decide between two designer brands. The prices are the same. The look, heel, color are all the same. The shoe's comfort is the same. What is the deciding factor?

Another female affluent consumer is internet savvy and has no problem purchasing luxury items online. She is a keen follower or fan of two luxury brands. She is also an evangelist of both brands. She is in the market to buy luxury brand shoes and must decide between the two. The prices are the same. The look, heel, color are all the same. She has owned both brands before and is satisfied with the quality and comfort of both. What is the deciding factor?

How is social media and digital platforms affecting consumer behavior with luxury brands? There is a lot of  information, research, studies on how these are changing the way consumers purchase. Does the female affluent consumer feel an affinity toward one luxury brand in particular because she is a "fan" of that brand? Does she purchase luxury brand X instead of Y because X has done a better job with its digital presence? Is she more apt to buy brand X because she saw today an image on X's facebook page of actress Angelina Jolie wearing X shoes? What exactly is the deciding factor that pushes the consumer to purchase X rather than Y and what then can luxury brands do to harness these changes in consumer behavior?


Below is the 2010 Luxury Lab Index which ranks the top luxury brands according to digital excellence:

http://www.l2thinktank.com/luxury2010digitaliq/luxury2010digitaliq.pdf

Top Ten Luxury Brands with the highest digital IQ (as ranked by Luxury Lab):

1. Coach

2. Ralph Lauren

3. Louis Vuitton

4. Gucci

5. Hugo Boss

6. Burberry

7. Dolce & Gabbana

8. Giorgio Armani

9. Swarovski

10. Tiffany

According to L2 Founder Scott Galloway,
"... 2010 has been a seminal year for the luxury industry, some brands have put the weight of their organization behind digital, while others have stood still and have been left behind.”  “The ‘it’ product in luxury is not a handbag or watch, but innovative social media programs.”

REPORT FINDINGS:

• "Traffic to brand sites from Facebook more than doubled in 2010, growing from 3.4 percent to 7.1 percent with 73 percent of luxury brands registering the social media giant as a top eight source of traffic. Traffic from Twitter and YouTube decreased.
• Brand sites with social sharing recorded annual traffic growth of 42 percent versus 18 percent for brands without social sharing suggesting the increasing importance of social media optimization.
• Digital competence leads to more site traffic. The 21 brands that increased their Digital IQ demonstrated annual traffic growth of 52 percent versus traffic growth of just 8 percent for brands that registered IQ decreases.
• The 39 brands that sell online boast a Digital IQ of 117 versus an average IQ of 79 for the 33 brands that are not e-commerce-enabled.
• Only half of brands engage in email marketing, only two in five are purchasing search terms and only 10% have mobile sites. "

What Is Social Media Marketing?

More and more people are asking  "What Is Social Media Marketing? What is all the excitement about? What happened to traditional Marketing activities and how are they changing? What can I do with my business to really promote my product or service? What can I do right now for my business?

Social Media defined from Wikipedia encyclopedia:

"Social media are media for social interaction, using highly accessible and scalable publishing techniques. Social media uses web-based technologies to turn communication into interactive dialogues. Andreas Kaplan and Michael Haenlein also define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, which allows the creation and exchange of user-generated content." Businesses also refer to social media as consumer-generated media (CGM). A common thread running through all definitions of social media is a blending of technology and social interaction for the co-creation of value."

The buzz around social media marketing is based on the fact that it is the consumer's influence that is either promoting or killing the product or service.  It is no longer a PR firm, a banner or blatant advertisement.  Traditional marketing activities have changed.

The main problem with social media marketing from a business perspective is that it can be incredibly time-consuming and the ROI is difficult to measure. It is based on Return on Conversation. Social media marketing campaigns are not one time deals. They need to be nurtured over time.  Even small businesses and organizations however can truly benefit from social media.

The first suggestion I give anyone who wants to start with social media activities is to begin to listen and research where their audience is. Get comfortable with social networks that have to do with your product.  Visit forums and message boards. Read blogs. Read tweets. Join groups. Have an active and real interest in these. Do your research.  Look at what your competitors are doing. Look at what companies of your complimentary services or products are doing. Are they on Facebook, Myspace, Linkedin? Are they tweeting? Do they have blogs? What are they saying and better yet, what are their clients saying or complaining about?

The second suggestion I give  is to really keep a clean, detailed and updated databank of your clients. Your satisfied customers will be your first step to outreaching to new potential clients. They will provide the word of mouth you will need as a jumpstart.

Luxury Brands & Social Media Marketing

Burberry acquires 3 million fans on Facebook and has a social network Art of the Trench that is truly engaging. Jimmy Choo runs with its treasure hunt on Foursquare and Louis Vuitton partners with Foursquare to offer a designer badge. Tiffany wears its Engagement Ring iPhone app.  DKNY is doing fashionably well on Twitter.  It is especially exciting for marketing professionals to watch what is going on with social media and luxury brands. Who would have thought that something so exclusive, so closed doors, so v.i.p. as luxury brands would utilize social media to not only get "in touch" with their present followers but to acquire new fans and thus consumers? It is fantastic to see what some of these companies are doing to really harness the power of social media.

Forbes recently wrote that according to a Forrester Research Survey, "in 2008 only one third of international luxury firms actively sold online, yet 8 out of 10 affluent consumers actively used the internet to research and purchase luxury goods on a daily basis."  Another survey shows how these numbers are growing. EMarketer published in 2007 in   "Affluent Internet Users: How The Rich Live Online" that these users will grow from 43.7 million in 2006 to 57.1 million in 2011.  So we know that the affluent purchase more and more online on a daily basis so why aren't more luxury brands taking advantage of this?

This is astounding and signifies that those few luxury brands that are embracing the internet have an extreme advantage over their competitors who refuse to budge. What else can luxury brand designers do to remain at the cutting edge of social media and attract a new generation of luxury consumers?

1. Research

• Study the trends and behavior of  online visitors and customers to identify new opportunities 
• Find creative ways to increase consumer engagement with the brand and product online

 2. Social Media, Mobile & SEO

• Work with in house departments and third party firms to define and execute the mobile strategy 
• Maintain total brand consistency throughout all digital platforms while building  brand awareness, engagement, purchase intent, repeat purchase and brand advocacy
• Direct search engine marketing and optimization
• Utilize digital platforms, stores and third parties to increase e-mail address acquisition 

3.  Ecommerce

• Identify innovative ways to enhance consumer interactions with the brand and product through Ecommerce and especially via mobile devices.

 4. Follow up 

• Analyze performance and tweak and retweak according to results.  Remeasure.

    

Who Said What? Social Media Marketing & How To Monitor What Is Being Said About You

There are a multitude of sites where consumers can comunicate their extreme happiness about you, your product, your service or express their utter disgust and disappointment. With Twitter, Facebook, blogs, forums, Yelp, Pissedconsumer and many others, consumers can build your business up or shut your doors down.  Unanswered complaints or questions about a product for instance can turn potential clients away or disappoint a company's loyal fan or avangelist.

More and more companies are using tools to not only monitor what is being said about them online but also to gather information about the competition, the industry, related products and services. It is not just about defending your product or company but it could help create new opportunities. These tools tell you where your audience is and that is the starting point for engagement.

The most basic of these tools is Google Alerts, which is free to use and sends you an email when a keyword you select appears on the internet in an online discussion. It will tell you what was said, who said it and give you a link to go to for the comment.  If you have many keywords, many brands, many retail stores to keep track of, then you will be better off with a more sophisticated service which provides more detailed information including the influencers of your brand or product.  These can tell you whether a comment is negative, positive and which needs to be addressed.  The following are some of the more sophisticated tools companies are using in social media marketing monitoring:

Viralheat
Trackur
Radian6
Visible Technologies

"My Business is on Facebook and Twitter. Now What?"

It has happened to all of us. We get a profile up for our business on one of the social networking communities like Facebook or Myspace and on a microblog like Twitter and write some posts  on our wall or do some tweeting. We then suggest the page to our friends and even get some “likes” and some followers or fans. We wait a few weeks, maybe months and then boom. Silence. No interaction. No activity. No engagement and definitely no leads. What happened? What went wrong? We ask ourselves, “Why isn’t social media working for my business”?

Once research has been done on the product or service and it has been established that the best social media for the business is social networking through Facebook, then you can take the steps to really harness the power that it can provide.  You also have to establish who your audience is. Is it businesses (B2B) or is it the consumer (B2C)? Or both? Consider the following:

1. The most important thing to remember with social networks is that people do not want to be marketed to so do not try to pitch your product or service at the community on your Facebook business page.

2. Do find groups or associations on Facebook that you have similar interests in as your business and /or start a discussion in that area. You can do this directly on your Facebook business profile.

3. Do share information, suggestions, opportunities that have to do with your industry and not your product. Give away free information that your audience can actually use and be thankful for. Make your content real, interesting, and valuable.

4. Do share your passion for your industry by posting upcoming events having to do with your industry and interesting articles, links, videos, pictures having to do with your industry.

5. Do share and show with your own podcasts, videos or pictures and text what you and your company has done for the society as in charities. Show also how your business has succeeded in a difficult job. For instance you and your staff went over and beyond the call of duty to get the product ready for delivery. Utilize Facebook's video feature. See Nick O'Neil's post : http://www.allfacebook.com/2009/11/how-to-get-thousands-of-facebook-fans-with-a-single-video/.

6. Do make sure your blog, FB, Twitter are all linked so your audience can easily exchange and share information with one another.

7. Always reply to comments and be thankful even for the negative comments. Make sure you address them. Ask the audience for their comments, questions, insight and answer them.

8. Educate your staff and get them onboard. They are what make your company real.

10. Get fans to tag photos you have posted.

11.Utilize your physical office, store or place of business to promote your Facebook page with a laptop present or print media and get clients to become fans instantly (ideally from their mobiles).

12.Sign posts on other walls

13.Use the Share button

14.Suggest your business profile on Facebook to Friends

15. Place widgets on your website or blog. By placing the Like Box on your website, you are encouraging your audience to become a fan of your facebook page.

These are just a few of the many ways you can proactively encourage engagement on your Facebook business page.

Part II- Social Media Marketing Strategy & Defining Your Goals

You need to set specific goals and include them in your social media strategy.  Different types of social media require different types of goals. Goals should be measurable. A starting point for defining goals for social networking sites for instance would be to consider the metrics that apply to them. Here metrics include: number of fans or likes, number of comments, number of discussions started, how much time visitors stay on your site, traffic, number of photos added by friends, and how many times you have been tagged by others.

For example a goal may be to have a 15% increase in fans in 3 months on your social networking site or a similar increase in comments on your blog. If you are not reaching your desired goal, you may need to modify that goal and try a new approach. Perhaps your audience is not using social networking sites but is more present in forums or message boards. Perhaps you need to give more time to the social networking site or perhaps the tactic for engagement is wrong altogether.

Perhaps your goal is simply to turn around the negativity caused by problems with your product or your customer service. Perhaps your goal is to just get out there and get noticed. You have a new product and need exposure.

The more detailed your goals are, the more likely you will achieve them.  Most importantly, how will the achievement of these goals translate to saving money or making money?

Social Media Marketing For Your Business- "Where Do I Begin?"

This will be the first part of a multi part post on steps to take in social media marketing. The first thing that many people tell me is that they have no idea how social media works and do not know where to begin.

The best advice I can give anyone who really wants to harness the power that social media can offer for their business is to listen to the conversations that are taking place regarding similar products, services or industries as their own. Let's take a step back. Here are some of the main types of social media:

Social Networking- Facebook, Myspace, Linkedin
Social Sharing- YouTube, Flickr
Blogs
Microblogging- Twitter
Social Bookmarking- Delicious, Diigo
Social Events- Eventful, Upcoming
Social News  sites- Digg, Reddit
Forums and Message boards
Wikis

How does one find those social media communities best connected to their product or service? Here the most obvious would be to do a google search or similar search engine search. You will quickly see the top listings for your industry, product, service, etc. You will find blogs, forums, discussion groups. You should also do a Twitter search and a Facebook and Myspace search. Here the point is to find where these conversations are taking place. Your particular product or similar product may be present in the form of blogs and on Twitter and not have a significant presence on Facebook or Myspace.

After you have done substantial listening, you can actually join in on the conversations, being honest with who you are and what you are interested in learning and more importantly, sharing. Do not make the mistake of trying to pitch your product or idea to the community because chances are you will be kicked out. Social media communities do not want to be marketed to. Good luck!