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Social Media Engagement and Your Bottom Line

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social-media.jpgThe 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 detailshow pervasive engagement with consumers through social media channelssuch as Facebook, Twitter, blogs, and hosted social networkingplatforms correlates to better financial performance, and reveals forthe first time significant positive financial results for companies whomeasured as having the greatest breadth and depth of social mediaengagement. These "Social Media Mavens," as the study labels them, onaverage grew company revenues by 18 percent over the last year, whilethe least engaged companies saw revenues sink 6 percent on average overthe same time period.

The ENGAGEMENTdb study, which was conceived by Altimeter Group in conjunction with Wetpaint, reviewedmore than 10 discrete social media channels, including blogs, Facebook,Twitter, wikis, and discussion forums for each of the 100 most valuablebrands as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking.Activity in each channel was ranked for depth of interaction onmeasures that corresponded to that specific channel. Scores for overallbrand engagement ranged from a high of 127 to a low of 1.

The top 10 ENGAGEMENTdb brands with their scores are:

  1. Starbucks (127)
  2. Dell (123)
  3. eBay (115)
  4. Google (105)
  5. Microsoft (103)
  6. Thomson Reuters (101)
  7. Nike (100)
  8. Amazon (88)
  9. SAP (86)
  10. Tie - Yahoo!/Intel (85)

Accordingto the study's author, Altimeter Group founder, Charlene Li (co-authorof the best-selling book "Groundswell: Winning in a World Transformedby Social Technologies"), companies that scored well in the studygenerally have small dedicated teams, active in the social mediachannels they utilize. The study also found that the most successfulbrands evangelize social media across the entire organization to pullin a broad range of employees. These companies view social media as anindispensable tool to help them achieve results, the study shows, andtheir approach is conversational. This mode of operation differs fromthe approach of traditional communications and early corporate blogexperimentation, which emphasizes messaging and talking points.

While each company in the study received a quantitative score, the ENGAGEMENTdb study revealedthat companies fall into four specific categories in terms of theirbreadth 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-marketstrategies and are very active in many channels; usually driven bydedicated teams assisted by company-wide awareness and participation.
  • Butterflies --brands that recognize the need to be in many channels but have only metwith real success in a subset of their activities; these companies areusually 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; thesebrands are sitting on the sidelines and are wary of the risks. They arestill trying to figure out the best next steps and investments insocial media.

The ENGAGEMENTdb website makesit possible for anyone to quickly find out how their social mediaefforts 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 emailevaluation of your company's social media efforts compared to thecompanies in the ENGAGEMENTdb report.

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