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Proof That Social Engagement Equals Higher Revenue

The way to connect with your customers and clients is by understanding them, engaging them and developing authentic relationships. Social media allows us to develop those relationships through its multitude of channels.

So as your customers flood to the Internet we strategically find ways to meet them there and not only make sure they are aware of your brand, but bond with it through conversations made possible with social media.

Sounds good right? But where's the proof that it works? A report,“Measuring the Social Engagement of The World’s Most Valuable Brands—Who’s Most Engaged?” provides great news: affirmation and reward for social media leaders as well as evidence and direction for the followers.

According to this collaborative study conducted by Charlene Li of The Altimeter Group and Wet Paint, engagement can not only be measured, there is evidence that financial performance correlates with level of engagement. Meaning, it’s *not* just about starting a Facebook page. In fact, it’s all about the multi-channel, deep-and-wide engagement initiatives companies use.

Research conducted on the world’s top 100 most valuable brands revealed a surprising conclusion: While much has been written questioning the value of social media, this landmark study conducted by the Altimeter Group and Wet Paint has found that the most valuable brands in the world are experiencing a direct correlation between top financial performance and deep social engagement. The relationship is apparent and significant: socially engaged companies are in fact more financially successful.

Key Findings of the Study:

1) Depth of engagement can be measured.
As the number of channels increase, overall engagement increases at a faster rate. Engagement differs by industry.

2) Brands participating in the social space fall into one of four engagement profiles.

MAVENS – These brands are engaged in seven or more channels and have an above-average engagement score. Mavens not only have a robust strategy and dedicated teams focused on social media, but also make it a core part of their go-to-market strategy.

BUTTERFLIES – These brands are engaged in seven or more channels but have lower than average engagement scores. Butterflies have initiatives in many different channels, but tend to spread themselves too thin, investing in a few channels while letting others languish.

SELECTIVES – These brands are engaged in six or fewer channels and have higher than average engagement scores. Selectives have a very strong presence in just a few channels where they focus on engaging customers deeply when and where it matters most.

WALLFLOWERS – These brands are engaged in six or fewer channels and have below-average engagement scores. They are still trying to figure out social media by testing just a few channels. They are also cautious about the risks, uncertain about the benefits, and therefore engage only lightly in the channels where they are present.

EngagementChart

3) Financial performance correlates with engagement

  • The findings revealed that there is a financial correlation showing companies that are both deeply and widely engaged in social media, or MAVENS, surpass their peers in terms of both revenue and profit performance by a significant difference.

”The most socially engaged companies typically enjoyed revenue growth of 18% on average over the last 12 months, while the least socially engaged brands saw revenues fall 6%.”

  • The study also showed that social media reach alone may have a positive impact: BUTTERFLIES enjoyed significantly stronger revenue returns than SELECTIVES or WALLFLOWERS.

Why? Because more touch points can present a ripple effect, inducing viral marketing, boosting brand recognition and driving sales volume.

  • SELECTIVES delivered higher gross and net margins, suggesting that deep engagement in a few channels can be a rewarding and effective social media strategy. Focusing on depth over breadth present an opportunity to better understand the customer, react quickly to customer demand, and improve satisfaction – which in turn generates pricing power and drives business success.

Key Take-aways:

  • Engagement via social media IS important — and we CAN quantify it.
  • It pays in both revenue and profits to engage meaningfully in social media. Emphasize quality, not just quantity.
  • To scale engagement, make social media part of everyone’s job.
  • Doing it all may not be for you — but you must do something.
  • Find your sweet spot – it is better to be consistent and participate in fewer channels than to spread yourself too thin.
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