SAVE | EMAIL | PRINT | MOST POPULAR |  RSS | | REPRINT
|
Turning Social Networking into Revenue: An Amie Street Case Study
March 26, 2008
Disclaimer: Elias Roman, co-founder of Amie Street, is a direct relation of Ernan Roman Direct Marketing's President, Ernan Roman
By Ernan Roman, Edited by Stacy Straczynski
Letting your customers take the wheel may be a brilliant decision for companies looking to increase sales and keep online users engaged
Navigating social networking and blogging sectors to increase sales can be a tough business—you never know what people will write about your product or brand; and, worse yet, you have no control when negative comments flood the Web. Many businesses to date are still hesitant to allow these digital free-speech mediums to enter their online field. But by giving their online audience full control, one online music company was able to convert their social networking and profiling investments into cold hard revenue.
The Company: Amie Street (AmieStreet.com), a social-networking-based music company, has taken the plunge into consumer ownership. The digital music store is the first in which members have a role in determining the price of every song. Founded in Spring 2006, AmieStreet.com offers its music fans a community driven music experience. Every song starts out free and increases in price based on the frequency of purchases. The community determines the value of each song, giving fans true ownership over their music and making the price of a song a meter of its popularity.
The Plan: "A key factor driving the structure of Amie Street was our belief that music is a social experience," says Josh Boltuch, co-founder and CMO of Amie Street. "Music is about much more than acquisition or accumulation. It's about the joy of discovering something new and personal, and then being able to share that experience with others."
Amie Street members are connected to an entire community of music lovers that enables them to make the most out of their music-buying experience. And the online community further encourages interactions between members by offering music credit rewards when they recommend tracks that increase in price. This provides members with an incentive to find and recommend good music. Artists can sell their music on AmieStreet.com, using its platform to connect with a larger audience and build momentum and buzz for their music.
The Problem: With a great business plan up and running, Amie Street needed to fill in the holes to ensure success with such an innovative purchasing model. "As a start-up, everything from our brand image to the Web site itself was in flux and being forged in real time. Due to our rapid projected growth rate, we had to answer some critical questions early in our lifecycle as a company," Boltuch says. Given their experience in improving the online customer experience for NBC and Microsoft, Amie Street asked Ernan Roman Direct Marketing to conduct research and develop strategies to address issues such as:
• What will motivate customers to buy more music and increase usage?
• How can the Amie Street site be significantly improved so it becomes a meaningful destination, customer experience and connection to Amie Street?
• What do people identify as Community building components?
• Which areas of content have the greatest potential for Personalization?
The Process: Tips for Cashing In on Social Networking
Ernan Roman Direct Marketing provides these tips for marketers looking to create revenue from their social networking models:
Tip 1: Content is King. There is no faster way to lose a customer than not having "in stock" what they want—this applies to all offerings, from products to information. Even if you do not have the specific product a customer asks for, you must let them know that you recognize what they want and will at least guide them to similar products.
Tip 2: Do not undersell your product. If you have unique features or a competitive advantage clearly communicate these in customer-friendly language. Do not assume your clients understand these benefits. What is common knowledge to you may leave others floundering in confusion, meaning they-ll go elsewhere for their solutions. Most importantly, watch out for internal jargon.
Tip 3: Focus your Web site and experience to your specific customers. Even though Amie Street is trying to appeal to a broad audience of music customers, it still must communicate a unique brand. Per the research, playing it safe in terms of Web site design and copy did more to turn off customers than if the site had been stylistically "out there." So, focus the experience and design to your specific customers and your industry. Ask, "What does the customer want?"
Tip 4: Social networking and e-commerce are still uncharted waters. Developing a product that is both a social discovery engine and a seamless e-commerce solution is very difficult. Per the research, Amie Street's focus needed to be less on e-commerce and more on the member experience of community and interaction. This allows the company to give users the "ownership" that in turn drives sales.
Tip 5: Members want a connection and this must constantly be reinforced. Many times organizations are able to build a connection with customers. For example, think of Burger King's mascot, The King, and his mass fan club. But companies need to do more to acknowledge how much they value these loyalties. The research identified customer appreciation the golden opportunity to build rock solid brand loyalty.
Tip 6: Every customer is important and must be serviced within hours. No matter how big your business is, customers want to be treated as if they are the only one that matters. When it comes to customer inquiries, comments or problems, everyone should get at least a personal confirmation response from a member of your team within 24 hours. This is an important competitive differentiator and a solid way to build that relationship mentioned in Tip No.5.
Tip 7: Each section of the Web site should only focus on the key messages customers want to see at that point. Per the research, customers were confused or turned off by certain parts of the Amie Street site because the company was trying to jam too many things into certain pages or sections. Just because the Internet offers infinite choice doesn't mean your Web site should. Figure out the one message and action you want to convey at each point in your site, to deliver the best customer experience.
Tip 8: Word of mouth is important, so give customers easy ways to promote you. Amie Street has grown almost entirely through word of mouth, yet they were not giving members easy and convenient ways to talk about Amie Street and the artists they discovered and loved. Community forums or blogs are a great way to get your customers talking.
Tip 9: Price is not the most important factor. Even though Amie Street usually offered the lowest prices compared to other music stores, this surprisingly was often not a major concern to customers. They were more excited about discovering a song first and being able to tell friends. Lesson: It's all about the experience you create on your site, regarding all aspects of doing business with you. The better this feels, the less important price is—even in a very competitive market.
Tip 10: People will opt-in and self-profile their interests and preferences. The research surprised both Ernan Roman Direct Marketing and Amie Street in how much information people were willing to share regarding their preferences in order to receive a more personalized on-site experience and relevant on-going communications. Personalization is the name of the game. Use opt-in self-profiling to drive much more targeted communications, increase your targeting and up your ROI.
The Results: Within the first 60 days of implementing the research-based strategies, Amie Street tracked the following improvements:
• New customer enrollment has increased 16%,
• Average repeat purchases have increased 16%,
• Overall sales have increased 13%.
Ernan Roman is President of NY based Ernan Roman Direct Marketing (ERDM). He was named to "B to B's Who's Who" as one of the 100 most influential people in Business Marketing by Crain's "B to B Magazine." He is also the co-author of "Opt-In Marketing: Increase Sales Exponentially with Consensual Marketing" and author of "Integrated Direct Marketing: The Cutting Edge Strategy for Synchronizing Advertising, Direct Mail, Telemarketing and Field Sales." He can be contacted at ernan@erdm.com or www.erdm.com.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
|
|
SAVE | EMAIL | PRINT | MOST POPULAR | RSS |
|
|
| Back to Marketing Index |
|
|
