Newsletter signup:

The business of social media marketing, storytelling and gamification

Social Business

Integrating social business thinking and technologies throughout the enterprise.

Social Analytics

The business of social media listening, understanding and reputation


Social media meets social responsibility.

Social Commerce

Where social media relationships translate into transactions

Home » Engagement, industry research, News, Social Business

Bad news for social media ROI skeptics: study

Submitted by on March 27, 2012 – 12:01 pm8 Comments

We saw earlier this month some of the clearest signs yet that marketers have shed their reservations for investing in social media, committing to upping the spend in the coming year. Now, a new study shows that the most social-savvy companies are using social engagement to expand marketshare, generate more sales leads and more efficiently hone their marketing message.

The study, conducted by Austin-based PulsePoint Group and The Economist Intelligence Unit, says companies that fully embrace social engagement are seeing “four times greater business impact” than their less socially engaged peers. How exactly was that measured? PulsePoint looked at the effect of those companies who actively engage with employees, customers, partners, and other stakeholders “in meaningful conversations – enabled by social technologies – so that both parties benefit.  This mutual exchange of value is not just about products but about useful information that builds commonality of interests and a sense of trust.”

Here’s the key findings:

  • The average return on social engagement was calculated to be between 3-5%. The most engaged businesses are reporting a calculated 7.7% business impact specifically from social engagement, which is four times the performance of the lowest performers who only achieved a 1.9% estimated return.
  • The top two areas where executives thought social engagement had real value were  improved marketing and sales effectiveness (84%) and increased sales and market share (81%).
  • C-suite advocacy is critical, now and in the future. Two-thirds of the organizations  achieving the highest returns reported that their C-suites are active advocates– that is, they commit to social engagement as a strategy and they reallocate resources to make it happen.
  • However, a full 28% of C-suite executives still don’t believe in social engagement. And the number one reason? The inability to gauge ROI (45%). For engagement to work, the C-suite has to believe in it and see measurable returns.
  • The most socially engaged segments believe that widely distributed buy-in across the organization – and beyond marketing and communications – is key for scale and generating economic business impact. This even includes operations management and financial leadership.
  • Executives defined social engagement today as online listening (28%), blogging (24%) and building relationships with online influencers (21%).  But the top performers have a different view – they will be more focused on ideas and action in the next two years. Big-return companies crowdsource new products (57%), or let customers participate in developing ideas — they are predicting a significant portion of new products will be derived from social engagement insights.
  • Fifty-nine percent of executives/managers interviewed say that young people, as employees and customers, will expect and value engagement; that’s what is driving their engagement plans. Fifty-four percent say that customers’ expectations of social engagement is driving their plans.
  • In order for companies to know whether their investments are providing returns, appropriate metrics need to be developed.  The research indicates that benchmarks (33%) and key performance indicators (30%) will be the top approaches for measuring social engagement in the next two years.  Today, many companies are depending on executive intuition (27%) or are simply not measuring impact (28%).

PulsePoint says it will host webinar on Thursday, April 19 at 1 p.m. EDT to discuss the findings in more detail. You can register here.

Editor’s Note: Come here some of the top thinkers and practitioners in the area of social commerce speak about what’s driving sales for their firms and what new innovations will drive the market tomorrow at Social Media Influence 2012 in June.


Leave a comment!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.