Show me the sales. How does social media impact the bottom line?
Almost every agency in this space, ourselves included, is often asked to prove a direct link between social media and sales / conversions.
Indeed though awareness for the need for social media marketing campaigns is without a doubt higher than 3-4 years ago, questions about measurement and tangible benefits remain the same.
I’ll come back to whether the ‘show me the sales’ question is useful to ask on its own. But the fact is there is research out that shows social media does impact the bottom line. I’ve distilled some of these into ten key points, included in the presentation below.
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They are as follows:
1 – 83% of consumers globally are likely to visit a website are likely to visit a website recommended by a friend on Facebook, and more than half say comments posted on retailers’ Facebook and Twitter pages, whether positive or negative, also influence their opinions (2011 Global Consumer Shopping Habits Survey – Channel Advisor)
2 – Consumer opinions posted online (70%) are more trusted than information on TV (62%), newspapers (61%) and online banner ads (33%) (Nielsen)
3 – In Europe over 50 percent of respondents aged 16 – 64 with access to the Internet, use social networks to assist with shopping decisions and of those that would be likely to follow a retailer on a social network, 35 percent stated they use social media platforms to read reviews or rank products and services (IBM)
4 – “Customers who engage with companies over social media spend 20 percent to 40 percent more money with those companies than other customers.” (Bain & Co)
5 – A study in South Korea (a mature social media market) found that social impacts sales among moderate and heavy users. Recommendations shared among moderate social media users increased brand sales by 5%.
However, heavy social media users also listen to negative chatter. Brands talked about negatively experienced a 14% sales drop among this grow (Harvard Business School)
6 – The heaviest Facebook users are also the biggest spenders online - the top 20% of users spend $67 per quarter, compared to $27 for non Facebook users (Comscore)
7 – According to a Kantar Media study in the US, 35% of social media users say Twitter has influenced their purchasing decisions (Twitter links also result in more clicks than Facebook)
8 – Even concentrating on smaller social networks can be commercially beneficial. Radio Shack in the US found that customers checking into their stores on Foursquare spend 3.5x more than those that don’t
9 – Super fans and advocates on your social channels are 50% more likely to create content that influences a purchase (ComBlu)
10 - The picture is the same if you look at individual industries. In the ‘quick serve industry’, consumers exposed to social media have a 7x greater likelihood of ‘higher spend’ (WPP / Ogilvy)
Meanwhile, 60% of consumers say they factor other travellers’ online reviews into their plans when booking a vacation / holiday (eyefortravel / Simpliflying)
Is that the right question to ask?
That’s a selection of evidence that provides a direct link between the tweet or Facebook post and the cash register or online check-out. But, as I said earlier, that may not be the right question to ask in isolation.
Yes, social media needs to provide a return on investment just like any marketing spend. But the danger is seeing social media as the brand marketing equivalent of a slot machine – put the coin in and get an instant return.
By and large social campaigns don’t (and shouldn’t) work like that for a number of reasons:
1 – Social works best in tandem with other marketing disciplines. The WPP study mentioned above shows that social campaigns are particularly effective when integrated in the overall marketing mix. Similarly there is evidence that combining search and social marketing campaigns are particularly effective
2 – Social media has a key role to play in protecting a brand’s reputation. There is plenty of evidence of what can happen if you don’t see and respond to negative comments. Indeed, one bad tweet or post can cost you 30 customers (Convergys)
49% of people would be much less likely to buy from a brand which had a page where customer questions went unanswered (Conversocial)
Related to that, a large % of consumers now feel empowered to blast out about companies online (EURO RSCG)
3 – Rather than look at how social media directly drives sales, it is more fruitful to look at how social media can support the whole sales and conversion cycle.
This infographic from Get Satisfaction is a favourite. This illustrates how social media comes into play all the way from the information gathering stage to converting new customers into fans who will talk up your products and services online
4 – Finally rather than ‘how does social media impact sales’, I actually prefer the question ‘how does social media impact behaviour’, which is much more powerful.
To take one high profile example, there has been a direct link between men taking part in the annual ‘Movember’ campaign and social media activity
- [Infographic] How travel marketers calculate ROI on social media and why the future is mobile (simpliflying.com)
- Is social media marketing central to managing online reputation? (marketing.yell.com)
- Social media is a research tool, not a crystal ball (agbeat.com)
- Publishing Insiders Wrap-Up: Facebook Facts from Social Media Expert Mari Smith (amarketingexpert.com)
- To Stick with your Social Media Program or to Abandon It, That is the Question (worob.com)