Every so often someone comes out with a study that tries to make the point that investing in social media is a waste of time as it won’t help you sell your stuff.
The latest incarnation is from Forrester (via Business Insider ) analyst Sucharita Mulpuru, who says that less than 1% of online transactions could be traced to a social media post.
I’ll respond in two ways:
That’s one study, here are five that show the opposite
First of all the Forrester research is wildly counter-intuitive. The simple fact of the matter is we do pay attention to consumer opinions online.
Exhibit A – Tripadvisor and Amazon. If social media had no affect on sales why do hoteliers and authors get so anxious about what’s written about them to the extent of (in a few extreme cases) trying to stuff them with fake reviews ? A review site like Tripadvisor is popular precisely because consumers consult it *before* a sale.
1- In fact, according to Nielsen , which conducted a global study of 28,000 consumers in 56 countries, online consumer recommendations are the second most powerful source of ‘brand advertising’ ahead of even editorial endorsements.
Number one was word of mouth endorsement from friends and family which of course sometimes also happen online.
That’s one (fairly persuasive) study that shows the opposite of Sucharita Mulpuru’s report. Here are four more:
2 – 15% of US social media purchasers have bought alcohol due to content they read on a social media site . However the same study by ROI research found that this can increase significantly if that content is about more than just promotions, ad messages and discounts.
For example, Constellation Brands, which has 1.3 million Facebook fans, says 36% have purchased more because of social media.
3 – Constellation Brands raises a key point, it’s about creating a community of advocates who do ultimately buy. According to Bain and co consumers active on social media spend 20-40% more with companies they engage with online than other customers.
4 – And those advocates in turn will persuade other consumers to buy. A comblu study says that super-fans and advocates are 50% more likely to create content that results in purchases
5 – Finally, that positive content and sentiment created by fans is important as social media can certainly work in reverse and harm sales. According to the Convergys Group, a single bad tweet or Facebook comment can cost you 30 customers.
Social media isn’t direct mail
Those statistics I outline above all make a single point – people can create positive sentiment around your brand. That sentiment spreads thanks to online tools. And that sentiment then creates the right mood music for people to buy your products.
However, social media by and large is not a direct response tool, and in that sense the Forrester report is correct. Social media is about everyday human interactions, and human interactions don’t work like that.
I wouldn’t post a Facebook update or send out a tweet along the lines of “hey everyone, click on this link for the new Singer pilsner. It’s refreshing and low calorie too!”
People don’t do it because its crass, you wouldn’t talk like that in real life and so its a sure- fire way to lose friends online. Yet the impetus is sometimes for social media to operate in this fashion, and so sadly some brands talk like that online. No wonder it doesn’t always work as intended.
As a result, I think Sucharita Mulpuru’s study has done us all a favour.
No, social media isn’t comparable to direct mail. And no, I won’t click on a link a friend has sent me to buy a new TV or lawnmower.
However, next time I am browsing in store or online, the chances are when having to choose, I’ll remember him / her raving about it, and I’ll get out my credit card.