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Increasing sales? Focus on word of mouth marketing is not enough!


Coolblue is an online retailer in the Netherlands and Belgium. They started in 1999 and now have 332 specialized webshops and 7 physical shops in the Benelux. This makes Coolblue one of Netherlands biggest webshops. And they are doing quite good when looking at their awards: Best webshop in the Netherlands in 2011, 2012, 2013, 2015 and second place in 2014. Looking at their social media platforms they are performing well with an online fan base of more than 204.000 fans. In 2013, Coolblue was the highest entering company in the Best Social Media Award with a 3th place. In 2014 they even came closer with becoming NL’s best social media with a second place. On social media they perform outstanding, having great word of mouth marketing and looking at their growth in revenue with last year growth of 45% a TV campaign is an interesting step. In January 2015, Coolblue launched their first TV campaign. But why does Coolblue need a TV campaign while they have such good functioning social media platforms and became huge with word of mouth marketing?

In today’s world it is almost impossible to think about living without social media. Everybody knows or at least has some vague idea about what social media are, and at the same time almost everybody is involved in it daily. Facebook, Twitter, Instagram and so on are examples that will most likely ring a bell for practically everybody. If we look at Coolblue, they use their Facebook page in such a way that we can all watch and follow the company. Mostly it is used at keeping customers up to date and informed about new product, but they also use it to amuse their audience with entertaining content. With people who liked Coolblue’s social media content they want to use e-Word of mouth marketing to create more brand recognition. Brand recognition is a problem for Coolblue, which they can’t solve with word of mouth behavior only. Coolblue’s CEO Pieter said:’’ Untill now we have been growing for years with word of mouth marketing, but now it’s time to grow even faster with our new tv campaign. Then they can experience our service and products, and most of the time our customers are so impressed word of mouth behavior will follow automatically.’’ Also when we take a look at Google trend with Coolblue (blue) and their biggest competitors, Bol.com (red) & Wehkamp (yellow), we see that Coolblue is still way less popular.

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If we look at their social media strategy nowadays their focus on social media platforms are on (professional) fans, and sometimes even a focus group within this fan base (Example: People who love cats). These fans are people who know Coolblue, already bought a product at Coolblue and experienced their service & delivery propositions. These fans show word of mouth behavior, but clearly it is not enough to become as big as their competitors if we look at brand recognition. Looking at this Coolblue case, word of mouth marketing (online & offline combined) can grow a company with cheap marketing. But if you want to become de biggest, you still have to invest in old fashioned marketing to increase brand recognition at the mass.

References
http://www.coolblue.nl
http://nieuws.coolblue.nl/coolblue-start-tv-campagne
http://www.facebook.com/coolblue- http://www.google.nl/trends/explore#q=coolblue

Facebook ads are going to change!


Facebook has struggled with how to get e-commerce working on their platform. Facebook users are spending hours a day on Facebook, but somehow the users aren’t in the right mindset to shop while spending time on the social network. But change is coming, since last month, since Facebook has acquired TheFind.

What is TheFind?

In short TheFind was an e-commerce shopping search engine providing a multichannel environment to personalize the shopping experience. (Crunchbase, 2015) Crunchbase explained them in a more extended way:

TheFind applies patented ecommerce technology to make the consumer shopping experience easy, efficient and fun. TheFind’s powerful shopping search works across the Web looking through every store to quickly find you the best deal and even that hard-to-find item. Uniquely personalized just for you, TheFind continuously learns your taste and style from your activity, likes and purchases, showing you more from your favorite stores and brands. Finally, TheFind organizes all your shopping activity to quickly see what you’ve been looking for and what you’ve bought, and automatically tracks your shipments, returns and receipt. (Crunchbase, 2015)

So which capabilities are so interesting for Facebook?

Since Facebook acquired TheFind, the site went offline with the message that they want to use all their capabilities for Facebook. But how did the TheFind exactly work and which capabilities are so important for Facebook?

–   Product feed technology: Merchants could verify their sites on TheFind’s merchant center and upload a product feed on a regular basis for free. Many e-commerce platforms include the ability to automatically submit feeds to TheFind and the company partnered with affiliate networks.

–   Product search engine: Feed management is just one side of the story. TheFind referred to itself as a shopping search engine. It not only could take structured feed data, it crawled marketplaces.

 –  Personalized recommendations driven by Facebook integration: TheFind started working with Facebook back in 2010 when it enabled users to see what products have Facebook likes by logging in with their Facebook credentials. They provided “Discovery by Likes” for users that sign into Facebook.

–   Local results: This data is potentially huge for Facebook! Over 90 percent of transactions still happen in physical retail locations. When users search on TheFind, they can click on the local results tab (on both mobile and desktop) to find a map of nearby retailers that carry the products. Clicking on a retailer’s name on the map brings up the local inventory along with the phone number, address and distance from the user.

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Facebook’s new advertising possibilities

Social affinities, location targeting and products shown based on past behavior are all possible with what Facebook gets from TheFind. Consumers could start seeing ads in their News Feeds from nearby stores for products based on what they liked on Facebook and around the web, what their friends liked, or with Look Alike audiences what others with similar profiles and social affinities liked. Facebook could keep the coupon and even the price-matching functionality used to tie an ad back to in-store purchases. At the end Facebooks hopes you are going to shop on their social network in the future, because of the even more personalized ads powered by former employees and data of TheFind.

References

– https://www.crunchbase.com/organization/thefind#sthash.pAP1eYBX.dpuf, 2015
https://www.crunchbase.com/organization/thefind, 2015
http://marketingland.com/thefind-tells-partners-new-focus-is-all-about-facebook-product-ads-122800, 2015
http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Facebook, 2015

Why do people fill in reviews on online platforms?


With the new Internet technologies, traditional word-of mouth communication has been extended to electronic media, such as online discussion forums, electronic bulletin board systems, newsgroups, blogs, review sites, and social networking sites. Everyone can share their opinion and experience related to products with complete strangers who are socially and geographically dispersed this new form of word of mouth, known as electronic word of mouth (eWOM). This research is about eWOM which has become an important factor in shaping consumer purchase behavior. In early research is found that information provided on consumer opinion sites is much more influential among consumers nowadays.

For instance, eMarketer revealed that 61% of consumers consulted online reviews, blogs and other kinds of online customer feedback before purchasing a new product or service. In addition, 80% of those who plan to make a purchase online will seek out online consumer reviews before making their purchase decision (Infogroup Inc, 2009). Some consumers even reported that they are willing to pay at least 20% more for services receiving an “Excellent”, or 5-star, rating than for the same service receiving a “Good”, or 4-star rating (Comscore Inc, 2007).

Cheung et al. (2012) stated that we do not fully understand why consumers spread positive eWOM in online consumer-opinion platforms. Among the few existing publications, eWOM behavior is primarily explained from individual rational perspective with the emphasis on cost and benefit. Consumer participation in online consumer-opinion platforms depends a lot on interactions with other consumers. But why do people participate and are what stimulates consumers eWOM intentions?

The following variables were defined in this research as influencers of consumers’ eWOM intentions: Reputation, Reciprocity, Sense of Belonging, Enjoyment of helping, Moral Obligation and Knowledge Self-Efficacy. To test their theoretical framework they conducted a research using a sample of online consumer-opinion platform users from OpenRice.com. In total they collected 203 usable questionnaires.

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After this study three variables were found significant: Reputation, Sense of belonging and Enjoyment of Helping. Sense of belonging had relatively the most impact on consumers’ eWOM intention. The result is consistent with previous eWOM marketing literature, where sense of belonging is an essential ingredient that creates loyalty and citizenship in a group. Also enjoyment of helping others is crucial in affecting consumers’ eWOM intention. Intentions to write about dining experiences in OpenRice.com demonstrate enjoyment of helping others. Consumers can benefit other community members through helping them with their purchasing decisions. Reputation is a small factor affecting consumers’ eWOM intention. This can be explained by some consumers want to be viewed as an expert by a large group of consumers.

The results of this research can be practical relevant in different ways. Online consumer-opinion platform could allow consumers to create their own personal profile to create a stronger sense of belonging to the group. Also platforms could apply reputation tracking mechanisms, so ‘’experts’’ can be found more easily. And last, the platform could provide a mechanism for contributors so readers can show their appreciation for the received reviews, like a chat.

References
– Cheung, C. M., & Lee, M. K. (2012). What drives consumers to spread electronic word of mouth in online consumer-opinion platforms. Decision Support Systems, 53(1), 218-225.

– ComScore Inc., Online consumer-generated reviews have significant impact on offline purchase, http://www.comscore.com/Press_Events/Press_Releases/2007/11/Online_Consumer_Reviews_Impact_Offline_Purchasing_Behavior2007.

-eMarketer.com., Online review sway shoppers, http://www.emarketer.com/Article.aspx?R=10064042008Last accessed.

– Marketingonline.nl, http://www.marketingonline.nl/nieuws/word-mouth-marketing-blijft-last-houden-van-roi-issues