According to a new report from global strategy and consulting group Bain & Company, early adopters of social media have been able to capture real economic value from their activities.Â These social business pioneers were among the first to implement social media into their organizations on a large scale investing anywhere from $750,000 to $10,000,000 a year in social programs. Â As a result, they have slowly but surely answered the popular social media question of ROI.
So, what is the ROI?
Bain & Co. report that a key indicator of social media return is customer loyalty. Customers who engage with companies over social media typically spend 20% – 40% more with those companies than other customers. Additionally, Bain & Co. also found that customers who engage with brands via social media demonstrate a deeper emotional commitment to the companies. Social media is quickly becoming a cornerstone for companies to engage with and retain their customers for both advocacy and customer service.
The strategy of early adopters
Contrary to popular belief, social media doesn’t apply to the ‘Field of Dreams’ principle, building it is not enough. You need to consistently provide value to your customers if you expect them to engage and interact with your brand.
Bain & Co. outlines a few key strategies that helped these social businesses take off:
- Social media objectives should be matched to existing business objectives
- Know your key customers, and target your efforts with them in mind
- Build a cross-functional social media team to lead social operations
- Monitor progress and measure results
- Keep social media initiatives as nimble as possible, sometimes directions change
There are a few key learnings from this for any business looking to integrate their social activities and become a more organized and efficient social business.
- It’s All About the Data – Without comprehensive data that can go across all facets of the organization, costs will always be higher and results will never be consistent.
- Customers are Everywhere – Meeting customer appetite for brand response has extended past the reach of an owned Twitter or Facebook account. Customers are discussing your brand on their own walls, forums, and blogs.
- Engagement Must be Scalable – Expect volumes of discussion and brand mentions to rise exponentially on social media. With this, the human cost of data sifting to uncover issues will grow without the proper infrastructure.
What should businesses do? Prepare themselves with better technology to capture more data from more sources and triage to the appropriate individuals and units.