That's the finding of a new report by Bain & Company. The report found that customers that engage with a brand via social media spend up to 40% more than those that don't. Likewise they're much more commited to the brand, showing 33% higher loyalty to that brand than those customers that don't interact online.
The report is quite clear however that despite these clear benefits, the gap between the haves and the have nots is wider than ever. Those that really get social media are making hay in this new environment of rich social interactions. Those that don't get it however are floundering.
If you think about it these findings should not be news to marketers. After all it's well known that often profitability does not enter the customer relationship for a little while. First you have the acquisition costs, then you have the cost of servicing new customers until they become familiar with what you do.
Social media changes all of that. Firstly it makes the acquisition costs much lower. Secondly it shortens the time taken to gain the trust of new customers because social channels allow customers to both help one another out and of course gain immediate help from company reps. That they're interacting all the time with real people sheds the inhuman facade many companies still suffer with.
I wrote earlier in the week about the need to make social a part of your corporate DNA, a part of how you do business. The Bain report provides clear parallels with this approach:
By contrast, the leading firms invest significantly more. They pursue integrated social media strategies, with a more holistic assessment of the value that social media can create across the businesses, and with efforts directly tied to strategic business objectives.
It’s not simply a case of setting up a Twitter account or starting a blog. Engagement takes a lot of hard work and has to be approached with caution. That’s because social media has meant consumers have become empowered and therefore more demanding.
A friend and I spoke on Facebook last night for instance. He was on a train home from work and it was jerking about and we had a general grumble about train travel. He tweeted the official channel of the train company complaining of the headache the erratic movement of the train was causing. Within minutes they'd tweeted back apologising and suggesting it might have been caused by leafs on the line (ha) causing the train to jump a bit. Now they didn't offer a free cup of tea but this swift response quickly soothed the situation.
This is the currentl landscape writ large. With information so readily available people expect quick responses when they interact with brands online. If you don't offer such real time customer service then you're a laggard.
It's far from an easy environment to thrive in but hopefully the Bain report will at least provide some grist to show your senior managers that they can't afford to not do this.