While companies have effectively developed social media strategies to promote their businesses and monitor what customers are saying, for many marketers, the ROI for social media still remains elusive. That’s why Manish Tripathi, Assistant Professor of Marketing at Emory’s Goizueta Business School, set out to research how social media affects a business’ bottom line, to help companies justify putting more resources toward their social media efforts.
What are kinds of data are currently being collected by brands? What can they learn from it? And most importantly, how can a business use this data to optimize their social media strategy?
Brands focus collecting data on 1) What Consumers Say, 2) What Consumers Sense and 3) What Consumers Do. But what’s interesting is the relationship amongst these key factors:
To get more specific, what metrics describe consumer-generated media? Marketers can index the following:
- Volume (aka “buzz”): how often people mention your business on a daily basis
- Sentiment: what kind of tone people use when they talk of your brand
- Content: themes of feedback customers have, such as the quality, efficacy or design of your products
What are key findings and applications of this data collection? Looking at data from local Fortune 500 companies, Manish’s research team found that a net negative tone in customer comments had more impact to brands than positive feedback. (Does that come as a surprise? People do pay attention to that one bad review.) By monitoring social media and finding key customer content themes, businesses can alter what types of messages they focus on in their brand-generated media.
The research also found that, depending on the product categories, businesses were able to use social media as a leading indicator of consumer mindset. The traditional approach for brands to gather this data is to do long-term brand equity studies. Social media can be a more cost-effective way to monitor customer sentiment.
While Manish wasn’t able to disclose specific examples of how participants applied the research findings to their social media efforts, one great case study of a social business is Dell. Not only have they embraced social media as a customer service channel, but they’ve trained some 3,000 employees to become internally certified to use social media on behalf of the company. And, they sold $6.5 million in 18 months through their @DellOutlet Twitter account.
Businesses can find great returns on their social media investments, but it should clearly be tied into their larger business goals, whether sales, consumer insights, brand awareness or customer retention. We’re curious to hear from you. How have you been measuring and optimizing your social media programs? Are you a social business?