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.