Most marketers view social as one of two things: an extension of existing customer care efforts or an advertising channel. In order to truly see the bottom line impact of social, your organization’s viewpoint needs to shift. You need to think of social as a building block that has the power to support, inform and accelerate nearly every aspect of your business.
Focus on three analytics that illustrate social’s impact beyond marketing–research and development, customer retention and referrals.
Research & Development
Social democratizes and diversifies the feedback loop for brands. It widens your focus group from a small subset of people who have the time and willingness to give feedback to a large group of engaged customers who are invested in your brand.
While social is a scalable, cost-effective way to collect demographic data, that feedback is wasted unless brands learn to apply that insight to their business. A Kalypso study on “Social Media and Product Innovation” revealed that while 70% of brands surveyed intend to use social for research and development, only 33% have a plan in place that allows them to apply those learnings. Furthermore, if there isn’t a solidified feedback funnel, the social media team loses its opportunity for attribution. Which makes it even harder for them to prove social’s organizational value.
Quantifying social’s impact on R&D isn’t as difficult as you might think. With management platforms like Sprout Social, you team can tag inbound social messages that are part of a larger campaign, contain product ideas or consumer feedback. From there, you can run a report that aggregates your tagged messages and provides meaningful and actionable customer data to stakeholders and senior leadership.
A recent study from Duke University corroborated that CMOs are more likely to focus their resources on customer acquisition vs. retention. Proving these efforts are misguided, Harvard Business Review has cited that it’s five to 25 times more costly to acquire new customers than to retain existing ones.
Social is a front line to customer retention. It provides a personality to a faceless brand. The two-way conversation that social provides allows even moderately engaged customers to feel like they have a direct line of contact to your business. As a result, brands that use social media to interact with existing customers generate a higher Net Promoter score by an average of 33 points and increase customer spending by 20% to 40%.
But how can you translate that value into a measurable impact on your business? Frankly, it requires breaking down departmental silos and encouraging collaboration across internal teams — two actions that are proven to be extremely difficult for even the most agile companies.
Your sales and marketing teams should work to collaborate and track increased retention among customers who engage with your brand on social. Sure, it’s not easy, but strategizing and mapping out a cross-functional plan with your digital marketing, email, database and sales team will allow you to correlate data and accurately attribute retention to social. From there, you can start to understand the full picture of your efforts and compare those customers with your average retention rates.
Referrals are one of the oldest forms of marketing and social casts a wider net on the act of simply telling your friends about a cool new product. Now you can turn on your smartphone and immediately send a Tweet to Virgin America that shares your thoughts with over 700,000 Twitter followers. Social is one of the most frictionless means of referral. It is scalable for a business and requires minimal work for the consumer. What other medium provides that?
One positive customer experience on social, amplified, could trump your million-dollar ad buy for the Super Bowl. It’s a real time, human-driven platform that can invoke the interest of a global audience or international media outlet in a matter of minutes. It’s the best medium we’ve ever had for engaging with customers and, in many ways, it’s still in its infancy stages. That’s why organizations that are still using social as an extension of their traditional advertising tactics come across as stale and, quite frankly, lazy.
With the simple additions of UTM codes and by taking advantage of advanced tracking, your brand can quickly and easily launch and measure a social referral program that benefits your business and its customers. Unlike email, phone or direct mail marketing, Facebook, Twitter and Instagram enable a brand’s consumer base to become a massive word of mouth machine. And since word-of-mouth is the primary factor behind 20% to 50% of all purchasing decisions, business shouldn’t be ignoring social’s impact.
Organizations typically try to attribute ROI metrics to individual tasks that can are easily quantifiable–reach, lead generation or traffic. But in order to accurately measure ROI, the importance of social throughout the organization needs to be communicated from the top down. It’s critical to onboard your organization in listening and engaging with your audience. Because, regardless of what business you’re in, it’s the customer journey that will have the most positive impact on your bottom line.
An adaptation of this article original appeared in Entrepreneur.
This post 3 Components of Social ROI Your Brand Is Forgetting About originally appeared on Sprout Social.