Getting to grips with the validation economy
'Likes' and 'friends' are becoming increasingly meaningless terms; brands need to use their networks to plug into the power of the validation economy, writes Nicola Clark.
The very notion of Blippy is enough to bring me out in a cold sweat. The product, which launched in private Beta in 2009 and was heralded by the tech community as the 'next big thing', enabled consumers to share their credit-card purchases with their social networks. For shoppers (myself included) who hide their credit-card spending from their significant other, the notion of broadcasting their indulgences seemed deeply flawed.
The subsequent fall from grace of Blippy, which has now shifted its focus to reviews, suggests that socialising the act of purchasing remains a marketing challenge. Marketers have hitherto focused on replicating the social experience of bricks-and-mortar stores online and encouraging consumers to 'like' products on Facebook.
While digital analysts have waxed lyrical about the value of this 'like' and the true meaning of a Facebook fan, they risk missing the fundamental drivers of consumer behaviour.
In the so-called 'validation economy', consumers are building on existing behaviours and turning to their social networks for validation and reassurance prior to purchase. The emergence of sites such as svpply.com, where consumers can share their purchases with their networks, as well as the investment of brands such as Levi's in social stores, shows the growing potential for social commerce to thrive in this context.
Speaking at Conde Nast's Digital Briefing in London last week, David Rowan, editor of the UK edition of Wired, said there is some 'strange consumer psychology' in action. 'Sites like Blippy are all about getting the validation of the crowd,' he explained.
The growing power of consumer networks has significant implications. 'Social can bring down regimes, but is also fundamentally changing the way we do business,' said Rowan. Those brands that stop obsessing about the value of a Facebook fan and embrace the full spectrum of the validation economy will thrive.
What marketers need to know to get to grips with the validation economy
- The great fan fallacy
Marketers fixated on the value of a Facebook fan are at risk of missing the bigger picture. The differences between a true fan of any given product or service and a Facebook fan are myriad. Rather than focusing solely on building fan numbers, marketers need to work on enabling consumers to share with their networks. Marketers must be realistic about how much consumers care about their products and want to interact with them.
- Buy before you try
At a time when ecommerce continues to infringe on the high street, it is crucial to ensure that online shopping is as simple as possible. Facebook is adding options to Timeline Story features, including 'bought' and 'want'. Embedding purchase options and the creation of a single check-out function, where consumers can shop across multiple channels and brands, are key developments. Brands need to shift their thinking, both in terms of sales channels and returns.
- The end of targeting as we know it
There is a fine line between a sense of serendipity and consumers feeling like they are being stalked. Marketers need to demonstrate their understanding of their market without effectively robbing consumers of the process of discovery, which is a crucial part of the shopping experience. Consumers are more interested in brands that know their preferences, but marketers should beware forgoing the element of surprise. Clever content curation and expanding their network to incorporate brand advocates is key. A core endeavour of marketing remains encouraging consumers to buy something they never even realised they wanted in the first place.
Nicola Clark is Marketing's head of features. Follow her on Twitter: @nickykc
This article was first published on marketingmagazine.co.uk
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