Ahh… how much difference a few years make. The old world of e-commerce and transactional metrics are softening and social new world performance values are the developing realities for today’s businesses.
A short while back when the economy was booming, e-commerce was the word to describe the then new model and we learned how to navigate the world of click-to-transaction like scientists. The analytic systems from Google, FeedBurner and Omniture were our tools to get the job done. We measured everything and we optimized human traffic from a click to dynamically created content on a landing page to a transaction. This was harvesting at its most efficient. This was a transactional-based business reality.
But the world and the business model with it are changing slowly but dramatically. Old school e-commerce is changing and being modified by what some are calling Social Commerce. Moving forward we are building an economics of social performance where community and commerce are tied together. Fred Wilson drove this home to me in his quote on social commerce from Rob Kalin, founder of Etsy.
The rising dominance of the social web appears to correspond with a questioning of the e-commerce model and created a new ecosystem for engagement with the customer. The focus today is the value of interaction and customer engagement first, the transaction later. The principal action is not harvesting clicks but building a place where conversations between the customers and the company, and between customers and other customers can happen openly in a seamless manner. The goal on the social web is to create a community. Sales and transactions build from interactions and from the community base.
Market makers and business owners know how to find the right click and how to measure every bit and action on the open web but when it comes to building and measuring the dynamics of a community with the goal of social commerce, for the most part, we are without clear guidelines.
This is fascinating because out of a period of e-commerce where everything was quantifiable, we seem to have few real datapoints to depend on. You can’t argue away the social web. You can’t deny the value of conversations between companies and customers. The rules of behavior and engagement are just being written now as we move from the crowd to the community and from harvesting clicks to building a social environment for commerce.
This is not an all or nothing reality. We have an arsenal of analytic tools and data. And we are experts at using them. We also have a bunch of new data points—posts, retweets, links, comments and Facebook Shares. All can be measured but no one really knows their value in the stated goal of creating a commercially viable community.
You can use logic and surmise the value of a post over a click, a retweet over a like, a Share over an embedded link but honestly, we don’t know how these gel to create that ineffable community formula. And if you think about it, all of these data points are superficial by themselves. You need to value the currency of the link, rank the reputation of the commenter, and understand the importance of the Sharer’s groups.
The basic issue underlying all of this flux is not counting and measuring but weighing the value of the information. Interestingly as we figure out the value scale of people’s proxies online we will also figure out commerce models that translate reputation into economics.
This is the Wild West and we are building groups and guiding them into communities with the intent of creating social commerce.
I think of this as good news. Uncertainty creates opportunities. Old systems falling means we get a chance to create the value system for the new ones.
And honestly, when commerce is not strictly a data harvesting activity based on price and match but a value system you need to establish a conversation with your market, it’s a lot more interesting and more like the real world rather than a grand catalogue of clicks and optimizations and transactions. People make it interesting and social commerce has put people rather than clicks at the center of the market where they belong.
