Answering that question is core to the business of Curebit, a referral engine that integrates with popular e-commerce platforms to encourage buyers to tell their friends (primarily via email, Facebook, and Twitter) about their purchases. It's not entirely unlike how LivingSocial and other daily deal sites work by offering incentives to bargain hunters who get their friends to purchase the same offer. Curebit also has an offline version in the works for brick-and-mortar sales.
The startup's head of marketing, Jack Yu, shared in an interview some of Curebit's early data and corresponding analysis. Here are five findings that should help SMBs make strategic decisions about the how, who, what, why, and where of their social marketing efforts.
1. Consumers share unique products more often than commodity items. Curebit has found higher sharing rates for products that it considers unique. That means items that can't be found in droves online and off, such as handcrafted iPad cases or candles that contain diamond rings. (Yes, seriously.) Shoppers share those items post-purchase more often than, say, coffeemakers or laundry detergent, which qualify as commodity products.
[Want more tips on how your business can beef up its social presence? See 4 Tips: Prep Your Facebook Page For Holidays.]
"We've seen share rates for unique products more than double that of commodity ones," Yu said. As examples: The aforementioned diamond candles and custom iPad cases--both actual Curebit clients--saw share rates of around 60%, while a company that sells generic cell phone accessories had a 19% rate. A firm that marketed car covers--also categorized as commodity--hit a 36% share rate, still of the pace of unique products. (Curebit defines share rate as the number of times a product is shared divided by the number of times it is shown.)
"The lesson for businesses here is that they should focus their campaigns on their offerings that are harder for customers to come by," Yu said.
2. Huge discounts don't guarantee sharing. The daily deal craze might dupe SMBs into thinking that neon-light-style deals--"Get 60% Off!"--are the best way to generate buzz around a referral deal. Not necessarily. Yu pointed to one Curebit client, a maker of medical ID bracelets: It has achieved generally strong results across its referral campaigns, but when the company doubled its rebate offer from one campaign to the next it saw no change in share rate.
3. Messaging matters more than incentive. Painstaking attention to perfect messaging, on the other hand, can make a monster difference in results. That same medical bracelet manufacturer saw its share rate spike from 17% to 40% simply by revising its original message of "Refer friends and get $XXX," and without making any change to the underlying offer. That's good news for budget-constrained SMBs.
"Even though many companies go the route of trying to offer huge 50% savings a la Groupon, they can get more margin-friendly lifts by optimizing and crafting their messaging instead," Yu said. He kept the winning message close to the vest, but said the change largely hinged on de-emphasizing the word "friends" in the original, lower-performing offer.
"Customers can get turned off by the potential that they would end up spamming their friends. In other words, there is a social cost to sharing which you don't want customers to be thinking about," Yu said. "If you mitigate that by playing around with the messaging, you can improve your share rates by quite a bit."
4. Women share more than men. When Curebit stacks companies that primarily target female customers versus those selling products with mostly male customers, the data points to significantly higher share rates among women than men. (There could also be a correlation to unique versus commodity products.) It's a broad generalization that needs to be grounded in the specifics of a particular business, but there's a reason the marketing plan of a baby clothing boutique looks different than that of a muscle car parts retailer. In fact, using those businesses as actual examples, Curebit has seen share rates of up to 60% for "female" products, whereas the best-performing "male" campaigns top out at around 36%. "Even weaker performers on the feminine side can get as high as 40%," Yu said.
5. The popularity of sharing channels varies across businesses. As a general rule, Yu said share rates tend to be higher for email and Facebook than Twitter. (Curebit has only tinkered with LinkedIn and is taking a wait-and-see approach with Google+.) That said, he notes different businesses and industries might find more success with email while others might be better fits for Facebook, and still others might find strong performance on Twitter.
"It's worthwhile for businesses to test each [channel] and not rely on assumptions from more general industry trends," he said.