What You Can Learn From the Facebook Buy Button
When talking about global economics, for years it has been said that “when the United States sneezes, the world gets pneumonia.”
I don’t know if that is quite as true today as it was 10 years ago, but in the social medial world, Facebook is the “United States” and whenever it does something, the whole world notices with rapt attention, and that’s the way it has been recently with the announcement of its new “buy button.”
Will it or won’t it be successful? That’s what most of the analysis focuses on. Right now, only a handful of big businesses will have the opportunity to try it out. For the overwhelming majority of small business owners, the important lessons to learn revolve around the “why” questions.
- If if is successful, why is it succeeding?
- If it fails, why is it failing?
- In either case, how can I use that information?
The sales funnel
Virtually every sales professional understands the sales funnel. You draw prospects into a series of interactions that lead to closing a sale. The length of the sales funnel depends on the product and the industry, and obviously the shorter the better—as long as sales aren’t lost.
If the Facebook buy button generates good sales, then it represents perhaps the shortest sales funnel this side of the bells on an ice cream truck.
The Facebook post that features the product and the buy button, by its very nature, will not contain very much information about the product itself. In other words, the seller doesn’t really have any space to create compelling content to get the buyer to respond to the call to action.
Therefore, if these succeed, their success must in large part rest on the ability of Facebook and the seller to identify the precise audience segment primed to make the purchase.
Revenue share or paid placement?
However, there is one caveat to this: If Facebook implements a revenue sharing model, even moderate success could keep it alive. It would just need to do better than the gift card selling program that Facebook is shutting down to make way for the buy button.
If the buy button is successful, it underscores the importance of streamlining the online buying procedure. In that case Internet retailers would be wise to reexamine their procedures and cut out any extraneous steps required before the purchase is actually complete.
Success would also reinforce the importance of mobile devices in the e-commerce world. Facebook has recently made tremendous inroads into the mobile world and this would be reflected in its buy-button beta. If it does well, you can assume much of its success is coming from mobile buyers. Do you need to be there too?
If the Facebook experiment doesn’t do so well, then it tells us that Facebook’s analytics, demographics and segmentations aren’t where they need to be. But again, if it’s a no-risk revenue share proposition, then maybe we don’t care. It would depend on the cut Facebook wants.
We’ll be watching…
I suggest we all keep an eye on what kinds of sellers Facebook selects during this rollout. You know full well that they will be targeting the sellers who they believe have the highest probability of success.
If you see any of your competitors, or related businesses included in Facebook’s buy-button experiment, watch very closely.
