Your Facebook Page Isn’t Helping

Nobody on Facebook gives a damn about your online retail marketing strategy. At least according to a study released earlier this year by Forrester Research and GSI Commerce. The two market research companies analyzed data gathered between November 12th and December 20th, 2010. They found that there was almost no relation between social media marketing and direct retail purchases online.

Their research concluded that less than 2% of purchases could said to be driven by social media marketing. Unlike email marketing and search engine advertising, both of which still prove themselves to be effective marketing tools, social media advertising only shows signs of life when it comes to alerting potential buyers to short term deals and special discounts.

GSI executive Fiona Dias was quoted on Mashable.com as saying, “The best analogy is in the South, a lot of people go to church on Sunday. If you go with the theory that you should market where the people are, then you should be running off to market during church services. Facebook has the same analogy. Buying things from retailers is maybe 10th on the list of things they want to do on Facebook.”

Personally, I don’t find it especially surprising that folks using social media don’t like being pitched to. They want to connect with friends, play games, and humiliate strangers. They like to feel in control and like they are participating in this wild-westesque environment free from the maudlin manipulation of direct marketing.

It is easy to poke a few holes in the study. For example, while only 2% of sales came directly from social media, how many sales were driven by customers visiting and then returning at a later date to purchase? How many sales were driven by a generally positive view of a product or company that was driven by social media?

Others claim that consumers using social media as a direct purchasing tool spend more per sale than those that do not. For example, the New York Times quoted clothing retailer American Eagle as saying that their social media driven customer spent 57% more per sale than other buyers. That number is so impressive that I confess I have doubts about American Eagle’s veracity.

In my opinion this doesn’t mean you should run out and get rid of your Facebook page. There are certainly signs that Facebook is helpful in establishing brand identification and customer response. Reaching out to established customers with honest responses to complaints builds loyalty and provides opportunities to make new sales.

However, it might be time to reign in expectations. Instead of thinking of social media as a TV channel and simply marketing, develop a program that invites customers to your business. Transparency and participation build trust, and trust builds customers. The businesses that do the best job of creating dedicated customers will sell more products.