eMarketer took a look at this July 2010 survey and they made this easy to read chart that you see here on the right.
As you can see, less than half of the respondents expected to see a short-term or long-term increase in sales due to social media. I’m sure they’d be happy to see that gain, but I expect the response was more about the reality not the hope.
The reality is that we don’t really know what kind of impact social media can have on brands because there just isn’t enough data. Many companies have tried to qualify the ROI per Facebook fan or Twitter follower, but the truth is we don’t have a solid way of quantifying social media behavior.
So, if we can’t see a direct correlation between social media followers and sales, (not including items sold directly through social media links), then why do it?
The survey respondents said they did it to deepen engagement, increase the chance that someone will recommend the product and to increase customer loyalty. That’s one pocket. In the other pocket is this concept of customer insight. 85% of people surveyed chose that as an answer. But what does it mean?
If you look at all the fans on a Facebook fan page as the population of the world in microcosm, there are things you can use. For example, if a large number of fans show up to comment on a new product release (good or bad), you’re doing something right. You’ve got their attention and you’ve compelled them to get involved. If you announce that the formerly yellow product will now be blue and no one responds, then maybe you’re wasting your money on the new version.
At the very least, social media can be used as a polling place and a way of gauging general customer satisfaction. If no one is complaining, then you’re one up on the rest of the world.
It’s true that you can use social media insights to gauge customer interest but is that enough? Is it worth the time and effort you’re putting into a Facebook page just to have your own private, on demand, focus group? What’s the other option? Not have a social media page at all? And what does that say about you?
Now switch hats. As a consumer, are you put off by companies that aren’t on Facebook or Twitter? Would that have any effect over your decision to buy from them?
The perception is, if your brand doesn’t use social media, you’re old fashioned and you’re missing out. But more and more I’m beginning to wonder if that’s true. Surely there are companies that are doing just fine without a social media presence. What about you?