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It comes as no surprise that social influence impacts upon sales both online and offline. Ecommerce success, especially in the business consumer area, is determined in part whether the consumer trusts a seller and product they can’t see or touch.

Retailers understand this importance, which has been outlined within the recent IT in Retail 2013 report. The report analysed the IT strategies of 150 top UK retailers, which represents sales of £203bn and 70% of the UK market.

It’s now been the second consecutive year where ecommerce has taken over spending on store systems. From the report it became apparent that ecommerce has now become their number one priority.

Referrals from friends have also proved to have a significant impact on typical buying behaviour, and for this reason social influence is why marketers get excited about the potential of social networks.

However, although the potential is there, marketers and brands still need to understand the relationship between sales and influence. Friends clearly have some impact on buying decisions across social media but to what extent? Below are some examples to help us understand the impact:

  • Consumers are 71% more likely to make a purchase based on social media referrals (Hubspot).

  • Out of 53% of consumers who said they use Twitter to recommend companies or products in their tweets, 48% bought that product or service (SproutSocial).

  • 70% of active online adult social networkers shop online, 12% more likely than the average adult internet user. (Nielsen).

Clearly social influence plays a key role in purchases but social influence has yet to have an effect on product discounts… until now.

Now with launch of PeerIndex’s new site, this promises product discounted based on your social influence.

The site will simply gives you a discount code to use on a partners site. PeerIndex measures influence by measuring activity, audience and authority across the major social media platforms, currently Facebook, LinkedIn, Twitter and Quora.

The metrics they monitor have been chosen to maximize relevance and insight, while evaluating spam, bots and users gaming the system.

Peerindex New Layout

Ferenc Huszar from PeerIndex says:

We extract hundreds of signals, and a statistical machine learning algorithm gets to decide which ones it actually pays attention to and to what degree. The goal is to maximise the predictive power of our scores, on certain key gold ‘standard datasets we have collected. Among other things the formula looks at how often you get mentioned and retweeted. How influential the people are that interact with you. Crucially, it's not about how active you are, it's about your ability to drive conversations.

Ultimately, social influence can be manipulated to an extent, and possibly more so on Klout (we’ve personally noticed simple measures to influence your score) but could something similar pave the way for a new shopping era online?

People may argue “why high profile influencers should receive discounts?” Ultimately however, maybe it could only take one tweet for sell an extra five units and, let’s be honest, it all boils down to sales.

Brands have been trying to offer customer discounts depending on social influence for several years but not a single platform has got it right.

Back in early 2012, Volga Verdi, California based fashion brand trailed customer discount depending on the number of friends, followers or fans they have on popular social networks. For example, if they have between 20 and 200 followers they receive $7 discount, or $15 if they have more.

We all know fans and followers can be bought. Klout has also been offering percentage off a purchases equal to each user’s corresponding Klout score. So for example, if your score were between 21-40 a user would receive 40% off, but again this has failed to gain traction.

Another factor that will no doubt influence purchases is how a product appears in SERPs. It’s know that both social media posts now show in search results, and social media can influence search rankings, therefore products shared via influential account have the ability to get in front of more eyes.

Interestingly, 23% of the UK’s top 150 retailers don’t have a transactional website. Ultimately ecommerce, along with the high street, is survival of the fittest and the winners and losers will become determined by technology.

Consumers are in the driving seat, and social influence is just the next step of ecommerce. How long before a brand or shopping platform will incorporate a ‘PeerIndex’ style login – similar to that of Google+ or Facebook?

If you could imagine cheaper products on a site such as ASOS based on influence, the virality of products has a whole new social & sharing element. If this is the case this could be huge step for ecommerce, but at the moment it seems to be kept within PeerIndex. 

Tim Grimes

Published 27 February, 2013 by Tim Grimes

Tim Grimes is Strategy manager at mycleveragency and a guest blogger on Econsultancy. You can follow him on Twitter here & mycleveragency here, along with Google+

3 more posts from this author

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James Curtis, Online Marketing Manager at The Wandsworth Group

Rewarding advocacy is smart; rewarding influence which doesn't always relate to the purchase decision is less so.

I could be influential in my critique of a brand's products or services, and yet rewarded for being an influential detractor by that same brand...?

Regardless of how accurate the measure of influence is, if it has no relevance to the product offering or service it's meaningless.

The data sets should compare the subject of influence that individual's have 'power' in - even sweeping generalisations such as industry would be more beneficial than a one-size fits all broad sweep that assumes we're all talking about the same subjects, and those same subjects have equivalent advocacy value.

almost 4 years ago

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Craig

Hey James

There is no doubt that contextuality is an important factor when it comes to predicting the network value/potential to influence others (when we look at the layer below the celebs/media).

That's why we work so hard determining the topics and communities of influence for every individual on the social web.

Although we have only just launched (last night) the discount rewards side of our platform, we will work quickly to contextualise those too.

Soon we will have many, many more products/brands/services and target those according to the interests and influence of each of our members.

If you'd like to get a feel for how we're tackling the science of influence, my colleague speaks far more eloquently than I can on the matter!

http://techcrunch.com/2012/11/27/the-rising-science-of-social-influence-how-predictable-is-your-online-behaviour/

Your point re sentiment is a really interesting one. It's a discussion unto itself! A detractor turned advocate can be an extremely valuable for a brand. Nobody has nailed sentiment analysis to a satisfyingly high degree of accuracy yet, but good progress is being made. In the meantime, we will complement the automated assessments with human qualitative assessments for our clients.

Does this clarify at all?

More than happy to discuss further!

Craig

almost 4 years ago

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Craig

...and Tim, thanks for the write-up. You've picked up on some conceptual future applications for what we're doing.

We'll be working on realising some great advances as we continue to improve and iterate!

almost 4 years ago

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Craig

Hey James

There is no doubt that contextuality is key when it comes to predicting the network value/potential to influence others (when we look at the layer below the celebs/media).

That's why we work so hard determining the topics of influence for every individual on the social web.

Although we have only just launched (last night) the discounts/rewards side of our platform, we will work quickly to contextualise those too.

Soon we will have many, many more products/brands/services and target those according to the interests and influence of each of our members.

If you'd like to get a feel for how we're tackling the science of influence, my colleague speaks far more eloquently than I can on the matter!

http://techcrunch.com/2012/11/27/the-rising-science-of-social-influence-how-predictable-is-your-online-behaviour/

Your point re sentiment is a really interesting one. It's a discussion unto itself! A detractor turned advocate can be an extremely valuable for a brand. Nobody has nailed sentiment analysis to a satisfyingly high degree of accuracy yet, but good progress is being made. In the meantime, we will complement the automated assessments with human qualitative assessments for our clients.

Does this clarify at all?

More than happy to discuss further!

...and Tim, thanks for the write-up. You've picked up on some conceptual future applications for what we're doing.
We'll be working on realising some great advances as we continue to improve and iterate!

almost 4 years ago

Tim Grimes

Tim Grimes, Strategy Manager at mycleveragency

Hi Craig,

Thanks for the feedback - appreciate it! Looking forward to seeing how this could progress into something big. If some large retailers took a system like this on board the social/viral elements of their products could be endless...

Tim

almost 4 years ago

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James Curtis, Online Marketing Manager at The Wandsworth Group

Hi Craig,

Thanks for the feedback...

Firstly, don't get me wrong, it's a very interesting approach, and a logical step of applying metrics of advocacy to our social behaviour - and just like we've always done, give perks to those who speak positively about that.

Saying that, I foresee gaps. Sentiment, like you said is something that many, many bodies are trying to solve, but it's not the only one.

There's the limitations of which social sphere's your pulling influence from - completely understand the initial focus on the Big Three of FB, LI and Twitter for the sheer numbers alone, but are we as marketers becoming constricted by those? Do those networks have greater value of social recommendations than smaller, niche focused communities have? I'm not so certain... guess that'll be the next step forward

Additionally, there's the personas element, some of us adopt different social behaviour depending on the audience we're speaking to (noticed you can't link multiple accounts) and given our behavioural changes our influence surely varies across these.

Throw in our professional social interactions (particularly via LinkedIn, but also what we do on the behalf of our brand/s on other platforms) and the context complicators multiply immensely.

Consider it healthy scepticism for now, but consider me glued to news of the development! And a great article by Ferenc, thanks for the link.

almost 4 years ago

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James Curtis, Online Marketing Manager at The Wandsworth Group

Hi Craig,

Thanks for the feedback (and a great article from Ferenc too!).

It clarifies some open questions, but I'm a healthy sceptic, so few other points I'd like to add for consideration - although I must say, it is a very interesting approach, and a natural evolution of how marketers have been trying to reward positive word-of-mouth for decades.

Firstly, the limitations of social plug-ins... completely understand the linking of FB, LI and Twitter behaviour for the sheer numbers alone, but I can't be cautious that we marketers are being constricted by the Big Three. How does influence on Twitter compare to influence on smaller, niche communities? Do they have equal value? I'm not so certain, but guess that'll be one you'll look into in the future.

Secondly, we're not necessarily linked to one profile, the subjects we influence may vary across multiple accounts on the same platform - are there plans to integrate multiple accounts to take account of this sort of behaviour?

Final thought (for now in any case!) is how we (well...you and the team at PeerIndex in any case) distinguish between personal influence and professional influence (via LinkedIn, but also what we do on behalf of brands on other platforms) - again the idea of context is key here, and it'll be interesting to see how you collate the two.

Very interesting, and while I'm sure there's various angles you'd like to take account of in your calculations, I think it's still early days! Looking forward to future developments though!

almost 4 years ago

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Maria

To be honest I prefer to buy my clothes (goods) when I visit the store. I am skeptic about buying stuff online. I could never be sure if the size that I have ordered it will fit me or if the color that I choose would be the desire one.

almost 4 years ago

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