As regular readers of my blog will testify, I believe that social can be a way of life for companies rather than merely a channel to push products and services out through. Nevertheless though, many will look to utilise social media for selling. Whether this works or not has been a matter of some debate pretty much since social media hit the big time.
Some would argue that social is about relationships and conversations, and therefore is ill suited to the last click wins tracking that is often used to determine the financial value of online work. Some new research by the University of Buffalo however suggests that social media is invaluable in a sales sense.
The study, led by Ram Bezawada, reveals that customers that engage with a company via social media, are better customers, often spending more money than those that don’t engage.
“There have been doubts about the effectiveness of social media for business because the link between a firm’s efforts and the return on investment hasn’t been established,” explains Bezawada, who is co-author of a study scheduled for publication in Information Systems Research.
“Our results show that when customers engage with a business through social media they contribute about 5.6 percent more to the firm’s bottom line than customers who do not.”
The study investigated customer participation with the Facebook page of an organisation, and combined this with their purchase history at the company to gain an understanding of how important these people are to the firm.
What is important to point out from the research however is that it doesn’t recommend using social channels to bombard customers with sales messages, but to instead use them to strengthen the bond between customer and company. It’s this bond that then leads to greater sales volume.
Very interesting indeed. Underlines the importance of not going for the hard sell though.
It basically boils down to metrics and ROI measurement, based on initial goals and objectives. If sales is your main focus, moving the needle and engaging with your loyal customer base on social media may or may not increase the bottom line. The question is rather: can you achieve similar ROI or effectiveness without social media, using traditional methods such as email, microsites, direct mail (yeah, you know, with a stamp?) or even, yikes, phone calls…
In a majority of cases, brands and organizations will realize that social media indeed increases effectiveness, reduces costs and creates a closer sense of engagement and discussion, assuming proper resources are allocated, in terms of time, people and money. But in some cases, social media may indeed be ill-suited for some companies. It will depend on target audience and clientele, industry or internal business strategies.
Anyway, great post, as always. Cheers from Quebec City,
Frederic
Quite agree Frederic. As you say, it might be that social media is ill suited for what you're trying to do, or that sales is not what you want to get from social media, or that Facebook/Twitter/AN Other is not the best place for you to fulfill your goals.
You should never feel pressured into doing something just because others are, much better to decide for yourself what the best option is based upon your own unique circumstances.
Can selling via social media work for something larger then products? (i.e. a house)
Don't see why not. I sold my house via an online listing.
I always wonder about this conundrum: are customers more likely to spend more because the brand engages them, or are customers who spend more more likely to engage a brand? Not sure I said that well
But people who are fans of a company are going to like/follow it… so would they have spent more anyway, or does engagement actually influence spending? ROI is one of the trickiest things about social so we have to really be clear about what our goals are and what we're measuring. Interesting stats here, food for thought!
I think being social for companies is huge. But I also think they must do it right. So many companies fail and promote in their social media, and who wants that. If they engage with people and be human that’s where they are going to explode their social media, and sales.
I should probably show this post to my customers
I'm having a hard time convincing more and more small companies that places like Facebook and Twitter can be greatly beneficial for their companies. Luckily, those who do try doing something about this usually end up satisfied and invest even more.
Andre
I see so many companies not using social media marketing to their full potential and they are missing out big time. A lot of them pay to have a Facebook, Twitter and Linkin page created for them and then think all the works been done! Although I think social will catch on eventually, some will take longer than others to see the long term benefits.
Mike
I personally would choose a company with a strong social presence over one that couldn’t give a darn about their presence. I personally have fb, twitter, and instagram for my customers to interact with me and give me fast feedback
A few years back webmasters and SEOs only had to worry about cuddling up to Google now we have to get in bed with Google, Facebook, Twitter etc…
Not all clients are interested in or see the need for all this Social Media
Personally I think it only brings about more opportunity.
Simon
I could not agree with you more. There is nothing worse than a company that get s your “like” or email and just bombards you with offer after offer. It’s about connecting with the customer, supporting them with helpful information making their life easier. This creates a great relationship with your customers and they in turn want to help you and give you their business.
I could care less if the companies I do business with have a FB or Twitter account, I'm looking for a great product or service. I'm 52 and maybe to old to get all of this social media stuff.
The world has been changing. Marketing is the same. Traditional marketing is not enough for good marketing because it could be less cost effective. Social media marketing is a new marketing tool and is a new platform for people to get more interaction with clients and customers.
If you are saying you are old and not bother to use social media, that is fine, but you miss a great way to push your business. (Just saying)
Also, it depends on what you sell to people, and not all social media are going to fit for your products and service.
Tony