Social Media Engagement and Your Bottom Line
Get the working capital your business needs from Entrepreneur Lending, powered by CAN Capital. Learn More »The power of customer engagement is nothing new. What is new is that technologies and methodologies -- including the Internet, HTML 5, social networking, and user-generated and distributed content -- have expanded the reach of customer engagement and its cousin, word-of-mouth advertising, and the speed at which it spreads. With social media engagement, word of mouth and engagement has become global and nearly instantaneous, and now according to a new study, shown to provide substantive business-related benefits to companies that effectively harness its power.
The ENGAGEMENTdb study details how pervasive engagement with consumers through social media channels such as Facebook, Twitter, blogs, and hosted social networking platforms correlates to better financial performance, and reveals for the first time significant positive financial results for companies who measured as having the greatest breadth and depth of social media engagement. These "Social Media Mavens," as the study labels them, on average grew company revenues by 18 percent over the last year, while the least engaged companies saw revenues sink 6 percent on average over the same time period.
The ENGAGEMENTdb study, which was conceived by Altimeter Group in conjunction with Wetpaint, reviewed more than 10 discrete social media channels, including blogs, Facebook, Twitter, wikis, and discussion forums for each of the 100 most valuable brands as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking. Activity in each channel was ranked for depth of interaction on measures that corresponded to that specific channel. Scores for overall brand engagement ranged from a high of 127 to a low of 1.
The top 10 ENGAGEMENTdb brands with their scores are:
- Starbucks (127)
- Dell (123)
- eBay (115)
- Google (105)
- Microsoft (103)
- Thomson Reuters (101)
- Nike (100)
- Amazon (88)
- SAP (86)
- Tie - Yahoo!/Intel (85)
According to the study's author, Altimeter Group founder, Charlene Li (co-author of the best-selling book "Groundswell: Winning in a World Transformed by Social Technologies"), companies that scored well in the study generally have small dedicated teams, active in the social media channels they utilize. The study also found that the most successful brands evangelize social media across the entire organization to pull in a broad range of employees. These companies view social media as an indispensable tool to help them achieve results, the study shows, and their approach is conversational. This mode of operation differs from the approach of traditional communications and early corporate blog experimentation, which emphasizes messaging and talking points.
While each company in the study received a quantitative score, the ENGAGEMENTdb study revealed that companies fall into four specific categories in terms of their breadth and depth of investment in social media channels -- Mavens, Butterflies, Selectives, and Wallflowers.
- Mavens -- brands that have made social media a core part of their go-to-market strategies and are very active in many channels; usually driven by dedicated teams assisted by company-wide awareness and participation.
- Butterflies -- brands that recognize the need to be in many channels but have only met with real success in a subset of their activities; these companies are usually spread a bit too thin.
- Selectives -- brands that focus on just a few channels and excel in those; these efforts are usually initiated by an internal evangelist.
- Wallflowers -- brands present in only a few channels and very lightly in those; these brands are sitting on the sidelines and are wary of the risks. They are still trying to figure out the best next steps and investments in social media.
The ENGAGEMENTdb website makes it possible for anyone to quickly find out how their social media efforts rank as compared to those of the world's most valuable brands. Just visit the site, take a quick survey, and you will receive an email evaluation of your company's social media efforts compared to the companies in the ENGAGEMENTdb report.