There’s no escaping social media and the rise of social commerce as the new marketing frontier. Trendwatching.com just released their latest brief on the influence of friends, fans, and followers on consumers’ purchasing decisions, and the sophistication and power of that influence. They call it the F-Factor, and it’s never been more important for brands to make sure they too have “it.”
Why is the F-Factor important to consumers? Offering a more efficient, more relevant, and more interesting purchasing experience, consumers no longer have to spend endless time and effort trying to discover the best of the best or rely on distant, unknown or untrusted (read: brand-driven) sources that could be potentially unreliable or irrelevant.
Sure, consumption has always been social: people have forever been influenced by what others think and buy. KellerFay, a U.S. word-of-mouth marketing research consultancy, estimates that there are nearly one trillion conversations about brands every year in the U.S. alone. And while the core consumer behavior isn’t new, technological developments are enabling new forms of that behavior, amplifying its importance and impact.
The F-Factor is being fueled by new tools and platforms available to consumers and brands. Both groups are evolving and improving these tools as well. A few recent stats demonstrating the reach and power of the F-Factor and how brands are leveraging this power today:
- The F-Factor is currently dominated by Facebook, as more than 500 million active users spend more than 700 billion minutes a month on the site. (Source: Facebook, April 2011)
- Every month, more than 250 million people engage with Facebook across more than 2.5 million external websites. (Source: Facebook, April 2011)
- The average user clicks the “Like” button 9 times each month. (Source: Facebook, 2010)
- Three quarters of Facebook users have “Liked” a brand. (Source: AdAge/Ipsos, February 2011)
- Juicy Couture found that their product purchase conversion rate increased by 160% after installing social sharing features. (Source: CreateTheGroup, February 2011)
- Incipio Technologies, a gadget accessory retailer, found that referrals from Facebook had a conversion rate double the average. (Source: Business Insider, March 2011)
- But it’s not just about Facebook. Take for example the explosive rise of the daily deal site Groupon, which used referrals from friends and colleagues to drive sales of more than 40 million deals in the 2-1/2 years since it launched in November 2008.
And five ways that the F-Factor is influencing consumption behavior:
1. F-DISCOVERY: How consumers discover new products and services by relying on their social networks.
2. F-RATED: How consumers will increasingly (and automatically) receive targeted ratings, recommendations and reviews from their social networks.
3. F-FEEDBACK: How consumers can ask their friends and followers to improve and validate their buying decisions.
4. F-TOGETHER: How shopping is becoming increasingly social, even when consumers and their peers are not physically together.
5. F-ME: How consumers’ social networks are literally turned into products and services.
Are you seeing conversion improvements like the examples above? Does your brand have the F-Factor?
Excellent, insightful article, useful to share with the “I don’t want to
be all that connected but of course I am on facebook at night” crowd. For example, community leaders who are swamped daily, but don’t want the hassle of hecklers. But the “F” factor as described here, I dare say, IS the new economy. And isn’t it a thousand times better than relying on the better business bureau or the consumer products comission of yore? It will be, when businesses realize why consumers are walking (i.e., Netflix, September 1). I think the new economy will look like this: a pyramid, with the early adopter, social media experts — in each industry — with aggregated reviews that are filtered to the industry, and interpreted through academia and industry members, then boiled down into digestable bites for graduate schools, undergraduate study, high school and elementary levels. My eleven year old “gamer” is already chomping at the bit to learn REAL science, as in, how do you make the electrical current that turns on the console? This IS the solution to education too…but I digress and should comment on your Virtual games pact business article!