Lift Summit Panel: Social Shopping for B2B

Panel members: 

Jeff Cohen (Moderator), Managing Editor of SocialMediaB2B.com
Robert Ball, CEO and Co-founder of Office Arrow, LLC
Mike Lewis, Chairman and Co-founder of Office Arrow, LLC
Eric Bradlow, Co-Director of Wharton Interactive Media Initiative
Steve Ennen, Managing Director of Wharton Interactive Media Initiative

From the program:

Exploring the effect of flash sales sites like Groupon, Living Social, Woot (recently acquired byamazon) and, for B2B, OfficeArrow

How B2B can join the rapidly growing online trend of social shopping

How companies are utilizing new sales techniques and outlets

Groupon revenue of $500 million, recently been valued at over $1billion, fastest growing company ever

How does this relate to B2B?

Overview: Group buying and daily deals

Mike Lewis: Email daily deals. Some require interaction where you tell others about the deal so you can get a lower price. Something you’re interested in, you want to buy it and you get it at a really great price.

Office Arrow: How social shopping is different in B2B space

Robert Ball: Large company procures, small company just buys office equipment. Does social shopping even apply to businesses? Ex. Green ink. Toner.

Different form of lead generation. Way of getting skin in the game. They purchase a coupon for a discount at your store or your site.

Software world, monthly recurring service world, cloud computing world. 90% discount to get someone to buy for the first time.

Go to Market strategy?

Robert Ball: Deal of the day as well as community drive traffic to the site. Publish a lot of content set up to be searched and found. Can opt out of deal of the day.

People want to know how to do things, connect with somebody like them, and save some money.

Eric Bradlow: It’s not about what the customers are saying; it’s about what the right customers are saying.

How do deal of the day offers relate to traditional and digital advertising?

Steve Ennen: What’s the value to the user? Bring something valuable: deal itself, help you do your job better, etc. How do you bring value on long standing basis? Curated content. Maybe surrounds deal of the day.

Business Model – How economics of deal of the day work

Eric Bradlow: Denny’s had a day where they designated that anybody who came in got a free grand slam breakfast ($5.95 value). They gave away over a million. How could they afford to do this? The cost for Denny’s is less than the cost to the customer. Not everybody orders grand slams. They make most of their money on coffee and juice. How many have never been to Denny’s? Let’s say 30%. Now they’ve created lead generation. Now people are talking about Denny’s. How many GRPs worth of free advertising did they get? How many people will become loyal customers? Denny’s made $25 million on this campaign. Always remember marginal costs and viral aspects. They had people try their product instead of just seeing an ad about it.

Robert Ball: Gap Groupon deal: Today only $25 for $50 off at Gap. 440,000 sold that day. Groupon had an $11 million day – split with Gap. Article said Gap stands to lose $5 million today, which was misleading. Key is marginal cost. You don’t want to do this on your own site, because you’re trashing the pricing on your own site. People will think you’re doing daily deals yourself and will wait until the product they want is marked down.

Mike Lewis: Tremendous lead generation/customer acquisition tool. This is just the tip of the iceberg.

Geo-location data:

Steve Ennen: Everybody is moving to social commerce, but it is about the data. Challenge is how do you take that data and integrate it into the organization? People are recognizing the value of the data. What should we collect? Who has ownership? What happens with that information when we get back?

Real-time measurement:

Steve Ennen: Manufacturing doesn’t work in real-time. Challenge is how to build an organization that is responsive. That has right buy-in across all silos. These tools and this environment are not just a province of the marketing department. Have the mentality and educate your company to be responsive.

Deal of the Day sites:

Robert Ball: We drive traffic to our site, but the deal of the day is very much about the company offering the deal. A lot of people won’t buy things without first checking to see if there’s a discount or coupon for it, whether it’s a haircut or a toy.

What about the receiving end of the B2B sale? How do you evaluate the sale?

Mike Lewis: The majority of the people when presented with the opportunity to put deals on Groupon is “How have other people done it?” Most of these work to the benefit of the service provider.

Robert Ball: There are calculators of how you make money using services like Groupon. It’s not 100% accurate, but it’s interesting.

Eric Bradlow: Number one problem is companies don’t think about the purchase behavior of customers. All of these business models are based on repeat-purchase behavior. Because you are more engaged in the process (chose to buy the coupon, chose to go to the store, etc.) you’re more likely to come back for further purchases. You never make money on the first sale; it’s the following sales.

How to avoid commoditization

Eric Bradlow: When you do a Groupon, there’s a spike. There’s also a post-promotion dip. Worse thing that can happen is they were going to Gap anyway, you give them the coupon, they buy more this month but don’t buy next month because you’ve given them a discount.

You must confuse consumers. Never give routine discounts, or people will stock pile.

There’s only one way to know consumer’s willingness to pay: testing. Run A/B experiments. You can learn about willingness to pay, background color, font size, etc. Test, test, test.

Lift: The B2B Social Commerce Summit is a “must attend” event for marketing executives, senior management and business owners looking to apply real-world social tactics that drive sales lift to their business.