Ed. note: This post is the first in a series drawing from Mainstay Salire’s study on Social Media ROI: Quantifying the Benefits of Social Media Marketing Platforms for the Enterprise. Download the entire report for free here.
Status update: What began a few a years ago as an online pastime for family and friends is quickly turning into one of the most powerful marketing tools for businesses worldwide. That tool, of course, is social media — Facebook, LinkedIn, Twitter, Google+, etc. — and companies are only now recognizing how to harness its sales and marketing potential.
How valuable is social media to business? To find out, Mainstay Salire interviewed marketing executives at nine companies engaged in major social media initiatives. Representing a range of industries — including financial services, insurance, retail, real estate, education, and direct sales organizations — these businesses and institutions were seeking to exploit the power of social media to reach more consumers, spark conversations and commerce, and build brand loyalty through these uniquely direct and personal channels.
Our research found that companies were eager to move beyond their first attempts at engaging customers and prospects through social media. These first steps were generally confined to corporate initiatives, usually in the form of launching a company Facebook Page and Twitter account. Corporate marketing strategies mostly consisted of driving people to these centrally managed social media channels.
The marketing impact from these headquarters-based programs was predictably modest. Fans and followers were slow to sign up, and their online activity level — as measured by the volume of comments, posts, likes and so on — was similarly low. The hoped-for boost in sales and loyalty had yet to materialize.
These lackluster results were not surprising given recent research showing that corporate social media channels are significantly less effective at engaging customers than locally created Facebook Pages and similar networks. (See The Power of Going Local: Comparing the Impact of Corporate Versus Local Facebook Pages, by Mainstay Salire, March 2012.) For this reason, most companies in the study had started to experiment with building out their local social presence — specifically Facebook Pages and Twitter accounts authored and administered by local representatives, agents, advisors, or branch managers.
This is when companies confronted an array of operational barriers — from concern over brand and message consistency to administrative overhead to regulatory compliance — that slowed rollout of their social media programs to local branches, stores, and franchises. This so-called “social media chasm” is described in detail later in the paper.
The study examined both regulated and non-regulated companies across six industries. While social media marketing solutions were embraced by each company, the benefits realized varied somewhat by industry, as shown in the figure below. Companies in non-regulated industries, for example, were not as concerned with the platform’s automated compliance checks and tools.
ROI METRICS FOR SOCIAL MEDIA MARKETING PLATFORMS
How did companies break through these barriers?
In every case we studied, these companies invested in enterprise software platforms that enabled comprehensive, efficient management of corporate-to-local social media programs. To be sure, success depended on more than just enterprise software. Factors such as developing innovative marketing content and campaigns, gaining buy-in from senior leadership, and mastering of the tools by local branches were also critical ingredients.
But executives repeatedly said they could not have scaled out their social media initiatives and achieved business benefits as rapidly without the efficiencies, ease-of-use, and risk-management capabilities provided by the Hearsay Social platform. We grouped the benefits of adopting the platform into three major categories:
1. Sales and Marketing Impact
Companies improved key measures of sales and marketing effectiveness. As illustrated in the figure at left, these measures encompass a “funnel” through which opportunities are converted into sales. Stages of the process include:
- Reach: Exposing social media communications to more fans and followers
- Engagement: Facilitating deeper customer interactions and brand experience by stimulating two-way conversations and interactions
- Conversion: Drive sales transactions that impact revenue through social media offers and dialogue
- Retention: Increase customer loyalty and reduce customer lifetime value management costs
2. Operational Efficiencies
Social media marketing platforms helped minimize the cost of running a complete corporate-to-local social media program by:
- Streamlining the process for pushing corporate content to local branches (through content libraries, templates, and work scheduling)
- Making it fast and easy for local staff to publish social media content
- Decreasing compliance-related management activities
- Minimizing IT overhead through pre-built integrations with ERP, CRM, and other enterprise applications
3. Legal and Compliance Impact
Regulated companies — such as those in the securities, insurance, health, and education industries — benefited from the platform’s integrated compliance checks, which enabled rapid and broad distribution of approved content and minimized the possibility of costly law suits, fees, and fines.
In next blog post of this series, we present the study’s core findings and discuss the “journey” that many companies take — in both regulated and non-regulated industries—as they planned and implemented social media marketing strategies.