The problem with trying to determine Return Of Investment (ROI) for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable. Surveys are somewhat subjective especially when you discount who would answer the survey over those who didn’t. Nonetheless, every major business has set up accounts on Facebook, Twitter and other social media sites frequented on the Internet.
According to a recent study done by based in Ann Arbor, Michigan-based Foresee Results, fans of the social networking site Facebook now look forward to seeing news about retail sales and promotions on their Facebook pages.
Everyone is talking about social media, and there are lots of opinions about how to do it right. The researchers thought it was important to check in with customers to get their thoughts. How do they interact with retailers via social media? How would they prefer to interact? What value are they seeking from their interactions with retailers via social media?
As part of a study of nearly 10,000 visitors to the biggest e-retail websites in the United States, Fore-See Results wanted to use the methodology of the American Customer Satisfaction Index (ACSI) to examine these issues, because the ACSI is able to show how different elements of a shopper’s interactions with a company (including on social media) impact their purchase intent, loyalty, and recommendations. What they found is validation that social media is a viable marketing strategy when attempting to understand what customers want and know which social media platforms they frequent.
Key findings include:
* 56% of shoppers to top e-retail websites who interact with social media websites have elected to “friend” or “follow” or “subscribe” to a retailer on a social networking site like Facebook, Twitter, and YouTube.
* Facebook is, by far, the best place to reach shoppers–both because it’s where they already are, and it’s where they want to hear from retailers.
* Customers mainly interact with retailers on social media sites to learn about products and promotions – a marketer’s dream come true.
Of the 69% of online shoppers who say they use social media sites, more than half (56%) choose to proactively interact with companies on social sites by “friending” or “following” at least one retailer. This is an amazing testament to customer loyalty and interest in social engagement. Shoppers are actually choosing to engage in relationships with retailers on social sites. However, two-thirds (61%) of online shoppers who interact with companies on social media sites “friend” or “follow” fewer than five companies. Retailers, our customers are giving very few of us their ear. We need to do our part in maintaining these relationships with the kind of content and engagement these customers want and deserve. On the other hand, nearly one-fifth of social media users interact with 11 or more retailers on social sites. There are shoppers out there with large numbers of retail connections.
According to Fore-see Results, there is a payoff to these relationships. The highest levels of satisfaction with retailers’ own sites were found among shoppers who interacted on the largest numbers of social media sites. In fact, site visitors who also interact with a company on a social media site are more satisfied, more committed to the brand, and more likely to make future purchases from that company. This is a bit of a chicken-and-egg phenomenon. It is likely that the customers who are more satisfied and loyal to begin with are the ones who will friend us on Facebook or subscribe to our YouTube channels. However, research shows that when retailers provide rewarding social media experiences, our customers become even more satisfied and loyal. In other words, it’s a cycle. Our most loyal customers are likely to reach out to us on social media, but it’s how we interact with them once they get there that fosters greater loyalty and the likelihood to buy from us in the future.
There are many missing factors within this study. What are the factors that attract groups of customers to a website? Is it content or price? When a retailer accidentally flubs a price in a customer’s favor, it’s amazing how many forums publish the information. The website discovers it from a sudden flood of orders.
Albert Einstein once noted, “Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.” If there’s anything certain then nothing is certain. If this statement is true, it is also false. Social media relationships are valuable but, when it comes to bottom line qualitative factors, it still remains to be seen if this marketing section needs further evaluation. The Fore-see Results study is a remarkable foray into examining the importance of social media sites and interaction with businesses. Further pursuit of answers is a reasonable quest for more studies.
Prominent social psychologist, Philip Zimbardo, once noted, “What troubles me is the Internet and the electronic technology revolution. Shyness is fueled in part by so many people spending huge amounts of time alone, isolated on e-mail, in chat rooms, which reduces their face-to-face contact with other people.” Indeed, social media websites like Facebook and Twitter are redefining the parameters of social interaction. At this early point, there are many unanswered questions about actual ROI.