How Does Social Media Affect Revenue?
September 27, 2017
“If the product isn’t on Social Media, then I don’t want to have anything to do with it.” Does this sound familiar? This is a statement most often heard from the buying public nowadays. Although, the question still begs for an answer: “Does Social Media affect the bottomline?”
Social media has become a big part of people’s lives. Checking their social media feeds as soon as they wake up or before going to sleep is now considered a norm. It has also affected businesses and industries across the world — Small, mid-size, and large companies are using social media to increase traffic to their websites.
And, all such efforts are done to hopefully increase sales and revenue.
Studies mentioned that social media posts have influenced both consumer and Business-to-Business (B2B) purchases. Ad Age’s poll results shows that consumers’ purchasing decisions are influenced by social media as much as television does. It was also reported in the Social Buying Study from International Data Corporation (IDC) that 84% of CEOs and VPs use social media to support their purchasing decisions.
Businesses have also mentioned that marketing through social media had a positive effect on their sales . It was stated in a 2016 Social Media Marketing Industry report (PDF) that more than half of the respondents using social media for at least two years has helped them improve sales. For example, Unilever VP-Global People Data and Marketing Analytics Shawn O’Neal says that positive mentions have driven sales for their brands. Due to proprietary reasons, O’Neal couldn’t explain how specifically, but he was able to convince the senior leadership to increase their budget.
Social Media Visibility vs Engagement
Although, having a social media account for your business is not enough. Findings from the University at Buffalo School of Management show that posts with high engagement have the greatest impact on customer spending. The posts were assessed by positive, neutral, or negative sentiment; popularity or engagement; and customer’s social media usage. Among the metrics, the popularity of the post had the greatest effect on purchases. Posts that have neutral or even negative sentiments with high engagement have more impact on sales compared to posts with positive sentiments but has no likes, comments, or shares.
Emerson Salon, a small Washington-based salon, was able to increase their revenue over a span of two years using social media. They were able to gain more than 13,000 followers on Twitter and almost 2,000 likes on Facebook. More than half of their clients have found them due to their social media presence. The owners used Facebook and Twitter to ask customers for feedback and offer discounts. They also respond quickly to their customers’ messages.
Social Media Sentiment Analytics
Most social media platforms already provide customer data that business owners can derive actionable insights from. An added-value would be conducting sentiment analytics to create a better and more complete picture of the customer. More than just numbers, sentiment analytics or opinion mining, is an advanced type of analytics that takes a dive on the emotional aspect of customer statements regarding a product, service, or even brand. This seeks to determine what the customer is saying, and what they mean.
As an example on what insights can be derived from sentiment analytics, check our article on Unsolicited Sentiment Analytics for Carriers in the airline industry.
Whether you own a large company or a small business, anyone who uses social media wisely can reap the benefits that come with it. Understanding the value of engagement versus simply having a social media channel is crucial, but knowing how to effectively measure the channel is key to taking advantage of it.
Using insights available through the various social media platforms are just the tip of the iceberg. There are a lot of other ways to measure how effective a tool social media has been for a brand, and figuring out what should be measured is key to understanding how to evolve and take advantage of the platforms.
From what we had gathered during our study is that analyzing the sentiments of target customers are key to improving campaigns. Pivoting social media campaigns mid-way may prove to be costly, but so is allowing a campaign to continue even if the target audience has shown much negativity against it. Moreso if the campaign is being run across non-digital channels; social media is a good almost-real-time gauge of a campaign’s success.
Share with us: How have you utilized social media to raise your revenue?
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