- October 29th, 2012
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The Social Media Payoff: Putting Money Where Your WOM Is
For years, marketers have tried to put a dollar value on a “like.” That figure may still be elusive, but we do now have an idea of what a social media message translates to in improved sales, and it’s in the double digits.
Recent research by LoyaltyOne, conducted with Northwestern University and The University of Western Ontario’s Ivey School of Business, delivers hard evidence that consumers who interact with a brand through social media do spend more with that brand – immediately and in the long term.
The findings are based on a two-year analysis of social media engagement and actual transactional data among Canada’s more than 10-million member AIR MILES Reward Program. What it shows is that AIR MILES members who participated in social media events and promotions increased their purchases among AIR MILES partners by 15 percent to 30 percent over non-participants.
The implications are incredibly encouraging for organizations that have long wondered if their social media investments are paying off. Today, with so many brands competing for the consumer’s limited attention, making that connection is critical to sustained growth.
•The simple act of writing a short public statement on a social media site spurs significant lifts in transaction activity;
• Longer, more elaborate posts about redemption experiences (such as through hospitality or entertainment) created higher lift than shorter, product-based posts;
•The biggest lift created through social media engagement is found in high-potential customers who are not yet fully engaged with the brand.
Lastly, the biggest mistake marketers can make is using social media strictly as a means of communication. Social media is a powerful, expanding channel that should be used to encourage participation in contests, games, causes and other activities that reinforce the brand’s value among consumers. This is the kind of brand engagement drives subsequent transactions.
To see the full report, “The Social Media Payoff,” visit here.