There are an increasing number of ways in which the use of social media is being valued and more studies are published that assess the potential impact it can have on profitability. The latest of these was a study released last week from Harvard Business School.
This study showed that positive online recommendations can boost the price consumers are willing to pay by an average 9.5%. Negative recommendations, on the other hand, can reduce the likelihood of purchasing a product or service by up to 11%. This is a clear indication of the ROI to be gained through social media.
This research clearly shows the importance of getting social media right and using its’ potential for maximum effect in terms of customer engagement and impact on the bottom line. Many multi-site retailers have already recognised the power of social media and through investment in social media management software (SMMS) are able to control campaigns centrally whilst at the same time engage with customers on a local level. This ability to promote local centres gives a competitive edge and the ability to attract customers old and new, to their local outlet. As the battle to persuade consumers to spend their hard earned cash intensifies, social media can be the edge you need to come out on top.
Providing good customer service will play a significant role in social media recommendations. Ultimately this not only depends on how good your product or service is but also on how well you respond to complaints.
When all customer service issues were dealt with via post, telephone or email any customers who were dissatisfied with the response they received had few avenues to publicise how they had been dealt with. This is not the case with the increasing use of social media for customer service. Every business now has an online reputation and social media has a major part to play in building this reputation. Everything is visible to everyone immediately so it is vital to get your social media customer service right. Doing this will also increase your recommendations and ultimately drive revenue.
Using social media as part of your customer service proposition also has significant financial benefits outside those already mentioned. Some of these have been quantified by Government who have publicly stated that online transactions are 20 times cheaper than by telephone, 30 times cheaper than face-to-face and 50 times cheaper than by post. These cost-savings are available in both the public and private sectors. Investing in your social media will provide benefits across the board and should be a major consideration for the management team when assessing how to make the organisation more efficient.
Social media can be a risky business. Investing in a Social Media Management Software will give you a positive benefit financially and also peace of mind that you have minimised these risks. Using a SMMS will mean your corporate accounts are safe and secure, protecting your organisation from misuse and ensuring your security remains in place when those responsible for corporate accounts leave. Can you afford not to invest as you increase the use of social media to make your organisation more efficient and attract more business? The very latest research quite clearly states “all organisations need help in managing social media risk”.
The question the Board needs to ask itself is have these risks been taken into account as social media usage increases? The financial benefits from greater use are no longer deniable however alongside investment in use should be investment in management and control.
Need to convince your board it is time to invest more in to social media? Read our 5 top tips