Tag Archives: sales and marketing

Dell Outlet sales through Twitter are a bigger deal than I thought

Dell Outlet Home Page

A few weeks back I wrote a blog post questioning the significance of $3 million in Dell Outlet sales attributed to Twitter (Twitter has made money for Dell Outlet — is it just a big yawn?).  After all, $3 million is just a drop in the bucket of Dell’s total turnover.

On a recent episode of the podcast For Immediate Release, Neville Hobson interviewed Richard Binhammer, who manages Dell’s social media efforts.  Richard mentioned two things that place Dell Outlet’s use of Twitter in context and strengthen the case for Twitter as a marketing tool in this specific instance.

First, Dell Outlet is a small division and doesn’t have much of a marketing budget.  The cost of marketing via Twitter costs virtually nothing.  (Pun intended!)

Second, Dell Outlet has a business model that makes Twitter the perfect communications tool.  It sells discounted computer products and systems that have been used and refurbished, or were left over from canceled orders, or are the equivalents of “seconds,” that is, hardware that has some kind of cosmetic fault that doesn’t affect its performance.

Apparently the business model doesn’t allow for holding on to inventory.  When stuff  gets returned, even if it’s as few as 5 laptops, Dell Outlet has to move product fast.  They can’t afford to have excess inventory clogging up the system.  “I can’t think of any other venue in which we can do that,” Richard says.  Even relatively short newspaper lead times take too much time.  (Oh yes, and newspaper advertising costs money.)

This case raises an important point.  Everyone keeps asking the question, can Twitter and other social media communities be used effectively for business.  The answer is, “It depends.”  It depends on the business model.  It depends on the product.  It depends on the community, why that community has come together, what each individual hopes to get from being there.

Dell Outlet on Twitter is just one of many ways Dell uses, and continues to pioneer, social media for business.  For other Dell activities on Twitter and links to other Dell social media endeavors, go to this page.

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Heeding the call: Mitch Joel’s “best practice in social media” project

Last week, Mitch Joel, of Six Pixels of Separation fame, called on members of the social media blogging community to write a post about one social media best practice they especially hold in high esteem.  Mitch isn’t quite sure yet what he will do with these contributions, but the plan is eventually to edit and bring this collective wisdom together in some form on the web for the benefit of all.  If you would also like to make your voice heard, or just want further information, high tail it over to Mitch’s excellent blog at http://www.twistimage.com/blog/ for details.

One best practice I became aware of was through an interview Mitch in fact recorded a few months ago for his Six Pixels podcast with Brett Hurt, CEO and Founder of Bazaarvoice.  Bazaarvoice designs and manages product rating and review tools for e-commerce marketers and retailers.  Analysis conducted by Bazaarvoice, as well as by Forrester Research, attest to the positive effect on sales when companies enable consumers to review and talk honestly — and unedited — about their products online, even if some of those reviews aren’t positive.  While Bazaarvoice’s research relates especially to retail e-commerce websites, I learned in a couple of email exchanges and calls with the company that the same principles hold true for manufacturer websites.

Here are some of the key things Bazaarvoice has learned that point to the beneficial effect of ratings and review on sales:

  • Product reviews boost conversion rates up to 90%.
  • Consumers actually prefer to share positive comments rather than negative ones.  (I find this especially interesting, as it flies in the face of the standard maxim that an unsatisfied customer will tell 10 people about his or her bad experience while a happy customer who will only tell one person.)
  • Those who review tend to be brand enthusiasts.  Which is probably why, according to Forrester, 80% of reviews tend to be positive (as reported in Groundswell, Harvard Business Press, 2008).
  • But negative reviews also reflect positively on the marketer, as they build credibility and show the company is confident in its product.

I think an additional take on this is that ratings and reviews are in tune with the importance that online consumers place on honesty, transparency and dialogue, especially from brands and companies.  People are going to talk about a company’s products somewhere on the web anyway, so why not encourage that talk to happen where the company can hear it and even participate in the conversation.  Negative points of view, of course, also provide opportunities for directly engaging with dissatisfied consumers, identifying genuine product issues, and addressing them.

So for my money, enabling ratings and reviews of products right on the company website is definitely a social media best practice.

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