American Marketer


Leverage social commerce to improve customer service and retention

December 17, 2012

Scott Swartz is founder/CEO of MetraTech Corp.


By Scott Swartz

Post-Facebook IPO – not that it has all been plain sailing there – there is not much dispute that social media now provides the billboard of choice for almost any company striving to promote itself through an ability to interact and engage with its customers.

The numbers stand out: Twitter has been coined the “SMS of the Internet” with more than 500 million active users. Facebook itself claims 1 billion, and then there are the millions of users on LinkedIn, Digg, Pinterest, YouTube and Google+.

But today, it is about more than just interacting.

No flash in the pan
It turns out that social media is only the precursor. Social commerce – the subset of ecommerce that involves using social media and its inherent user contributions to assist in the online buying and selling of products and services – is where it really counts. Why should this be so?

Well, according to Buddy Media founder Michael Lazerow, social media influences 90 percent of purchasing decisions. So if you throw in a commercial engine, the possibilities are, clearly, almost limitless.

Social commerce is emergent. It is probably where social media itself was a couple of years ago. It is still unfamiliar to many, but is rapidly soaking up the limelight. Remember flash mobs? They are almost passé now only a couple of years after they seemed quite revolutionary.

These days, “flash buying” is proof that you can monetize everything up to and including an insurrection.

If, as a recent Cap Gemini report suggests, traditional retail is dead, then it stands to reason that social commerce will become hugely influential in the transition to whatever manifestation of online platform comes next.

Even on a simple level, you can see how the social commerce value chain works by linking traditional social media to the commercialization process.

For instance, think how many companies have found that one key benefit of engaging in social media is the ability to generate valuable consumer insights faster and cheaper than ever before.

Through social media platforms, companies can measure communication about specific topics and start to hone in on the popularity of different combinations of goods and services.

For example, companies can literally determine, “Do people who like this sort of food also like this genre of movie?”

Businesses perform this kind of analysis with monitoring tools that provide not only tracking capabilities, but also a rich set of analytic algorithms that can deliver information that drives product development, customer support, lead generation, market research and public outreach.

Danish model
The largest mobile virtual network provider (MVNO) in Denmark is a good example of a cutting-edge communications technology company and the world of social media and commerce colliding with great effect. It is a provider of mobile phone plans and mobile data services to approximately 730,000 customers with a 14 percent market share.

The provider uses social media vehicles including Twitter and Facebook to reinforce its business model’s core values: competitive pricing and exceptional self-care combined with excellent customer service.

This has resulted in the provider having the highest customer satisfaction of any company in Denmark, a fact that demonstrates that social media and social commerce provide the ideal platform on which to actually grow the business.

Social commerce puts user-generated content in the purchase path, bringing value to customers and credibility to the business.

However, social commerce requires an online business to act quickly to provide the customers with what they want, when they want it. To do this effectively, organizations need to leverage a billing provider that can model and efficiently launch new products, pricing and bundles at the customer’s demand.

The data collected in the billing system will enable an organization to drive its business to higher levels of competitive effectiveness by turning billing data into actionable information to improve customer service, drive responsiveness and increase customer retention. After all, there is no value in participating in a conversation if you are unable to quickly act on what you hear.

Scott Swartz is founder/CEO of MetraTech Corp., Waltham, MA. Reach him at