Socially-Engaged Customers Contribute 5.6% More to Your Bottom Line

We’ve been waiting for news like this. We knew it was only a matter of time before a study or statistic came out showing, quantitatively, the impact social media can have on your business’ bottom line.

This study was produced by the University of Buffalo School of Management.

Customers who engage with a brand on social media will contribute 5.6% more to the company’s bottom line than a customer who does not engage with the brand on social media.

The co-author of the study, Ram Bezawada, had the following to say:

“Social media activities help strengthen the bond between the customer and the firm – and boost financial performance. When building communities, businesses should craft personalized messages, encourage member contribution, integrate knowledge about customers from both online and offline interactions, and create specialized sub-communities for customers looking for premium and unique products.”

ROI of Social Media for Your Business

Businesses have always struggled with quantifying the ROI of social media marketing, especially when justifying if they should partake on social media or not. We expect this study to be the first of many to demonstrate the quantifiable dollar benefits of social media for your business. But even an increase of 5.6% more revenue from each customer over their lifetime value to your business will really add up. This was only a short-term study though, and social media can have exponential long-term benefits to your business as well.

There are areas in which social media can help your business that are still not directly quantifiable, but nonetheless still very important . These include:

• Customer service.
• Brand awareness / recognition.
• Brand image.
• PR / news tool.
• Market research.
• Trust factor.
• Expected in today’s online realm.

These all add value to your business. It is the fact that they are all quantified in different ways, are tangible and intangible, that make social media ROI as a whole difficult to precisely measure. Yet, new tools and technologies are constantly popping up that are increasingly painting a fuller picture.

We are excited about this to say the least.