Business consulting firm, Bain & Company, released a report in September and concluded that early adopters of social media (Dell, Wal-Mart, Starbucks, JetBlue and American Express) have captured real economic value from their budget investments.
The survey of more than 3,000 customers helped identify what makes social media effective. Bain found that that customers who engage with companies via social media channels spend 20% to 40% more money with those companies than other customers. They also demonstrate a deeper emotional commitment to the companies, granting them an average 33 points higher Net Promoter® score (NPS®), a common measure of customer loyalty.
The report also give some concrete advice for companies that are unsure about their investments and the value that social media can bring:
- Generate awareness at a fraction of the cost of traditional advertising media
- Prompt trials with daily and increasingly real-time, location-based promotions
- Improve the product/user experience by embedding social capabilities i.e. social gaming/shopping
- Wow customers with real-time service response, recovery and technical support
- Capture torrents of consumer insights, and facilitate consumer-led innovation
- Build community and affinity through engagement, earning greater loyalty, spending and referrals
More evidence that organizations should consider investing in external community building; and more importantly customer advocate programs.
Image: Bigstock: Money Business