Alex Knapp, Forbes Staff
“We speak to tons of internet retailers, and the same thing kept coming up: ‘we love what you do with e-commerce, but we make ten times as much in our brick and mortar stores. Is there a way to track that?’”
Source Metrics lets retailers put coupons right in social media streams.
That was the simple – yet surprisingly complicated – challenge that Scott Lake, CEO ofSource Metrics, told me that his customers had laid out for him.
“We kept getting that question so many times that we decided we had to solve the problem,” he said.
But it wasn’t easy. After all, tracking sales from social media in e-commerce is pretty easy. Someone clicks on the offer in Facebook, they buy the product, you have a conversion. It’s pretty easy to track and measure.
Tracking those same social media sale conversions in brick and mortar stores, however, is a lot harder. One major problem? Most point of sale systems used in retail stores are old, and they don’t collect a lot of data. What’s more, virtually every retailer uses a different POS system.
“We realized,” Lake said. “That the most powerful computer in a given retail store is the smartphone in a customer’s pocket. So we decided to make that the way to measure the conversion.”
The way it works is pretty simple: a retailer pushes a coupon offer via Facebook, Twitter, or other social media stream. Clicking the coupon offer pulls up an offer that can only be unlocked in store. So when the customer goes to the store, they buy the item on the coupon (along with other goods, of course). The coupon is then unlocked using a code that’s unique to the store.
By using the unique code when the item is purchased, Source Metrics is able to provide to its customers both the conversion percentage of the offer itself, as well as detailed information about which stores attract more social media attention.
“That way,” said Lake. “Retailers can figure out which stores in a chain have the most active social conversions so they can be targeted accordingly.”
You can see an example of the kinds of data provided by Source Metrics in this mockup they provided me below:
According to Lake, the company is “presently working with large retailers” to get their system up and running. Source Metrics will get paid by charging a certain amount per offer per store being targeted in a social media campaign.
But Source Metrics’ technology isn’t untested. The St Laurent Shopping Centre in Canada used the company’s program to track social media conversions as part of their back to school campaign to attract more visitors to the mall.
During the course of this trial, the shopping center experience a 30% conversion of people who clicked on the offer from their social media stream to actively take advantage of the offer in the mall.
That 30% number sounds excellent, but it was no surprise to Kevin Sterneckert, an analyst specializing in retail at Gartner that I spoke to about Source Metrics.
“What I have observed is that when retailers make efforts to tailor the offers to the audience, the conversion is in the 30 percentile range,” he told me. That compares to a less than 1% conversion of a typical print coupon offer.
“What I have observed is that when retailers make efforts to tailor the offers to the audience, the conversion is in the 30 percentile range,” he told me. That compares to a less than 1% conversion of a typical print coupon offer.
“The more we see examples of this success, the more we’ll see tailored, individual offers,” he continued. “Tracking metrics let’s people see what customers want and pick offers that will likely motivate behavior.”
It’s precisely that ability to use data to provide better offers that motivates Source Metrics in providing this product to its customers.
“What I want to do is give digital marketers a way to quantify in dollars the amount an online social campaign has made for them,” said Lake.
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