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Social Media Works for Business, Study Says

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I don't want to say I told you so, but social media works for business and, finally, there is strong evidence to substantiate that claim.

Several research reports over the past couple of months have validated the influence of social networks like Facebook and Twitter on the buying process.

Specifically, the study of over 1,500 consumers by market research firm Chadwick Martin Bailey and iModerate Research Technologies found that "60% of Facebook fans and 79% of Twitter followers are more likely to recommend those brands since becoming a fan or follower." Not only that, but an "impressive 51% of Facebook fans and 67% of Twitter followers are more likely to buy the brands they follow or are a fan of."

Facebook Twitter research study graph

It has become commonplace for brands to have a presence on these and other social media sites. Those that don't face obsolescence. “If they're not on Facebook or Twitter, then they aren't in touch with the 'electronic' people,” said one participant in the study.

“While social media is not the silver bullet that some pundits claim it to be, it is an extremely important and relatively low-cost touch point that has a direct impact on sales and positive word of mouth,” comments Josh Mendelsohn, a vice president at Chadwick Martin Bailey. “Companies not actively engaging are missing a huge opportunity and are saying something to consumers, intentionally or unintentionally, about how willing they are to engage on consumers’ terms.”

eMarketer and MarketingProfs report the researchers explored why social media users become brand fans. "The top reason to friend a brand on Facebook was to receive discounts, followed by simply being a customer of the company and a desire to show others that they support the brand," according to eMarketer. On Twitter, it was all about discounts, up-to-the-minute information and exclusive content that attracted consumer attention.

In light of this new information, what should a brand do? Several things actually.

1. Establish an outpost on Facebook via the use of a Fan Page. Not only are Fan Pages one of the few means by which businesses can legitimately engage in Facebook, it's pretty darned effective, especially when time and attention is paid to the Page's development. By that I mean frequently updated content, interactions with Fans, and the inclusion of custom content facilitated through the use of staticFBML or apps such as those offered by Involver, which are specifically designed for Fan Pages.

2. Start tweeting for Pete's sake. Even if you use Twitter only as a broadcast channel, at least you have a presence there. If you extend your engagement to include interactions with followers, even better, especially if you can accompany such engagement with special offers and highly-relevant content.

3. Tell everyone you know in every way you can think of. Include links to Facebook, Twitter (and any other social media outlet you inhabit) on your company website, email signature, email newsletter, business cards, and other sales collateral. Heck, I know one furniture company that posted a huge billboard asking everyone to friend them on Facebook.

4. Make your website a hub of social activity. Rather than your site being a stand-alone information silo, tie content produced there to Facebook and Twitter posts. If you have a blog, include the ability for readers to share your posts via Facebook/Twitter and other sites. Conversely, make sure that your social media outlets point back to your website or blog. I still believe the company website has relevance. It's just not the only place where your presence can reside on the Web any longer.

According to Facebook's own figures, more than 1.5 million businesses have active Pages there. The average user becomes a Fan of four pages per month. As for Twitter, a survey done in November 2008 showed that 56 percent of those that use Twitter do so for business purposes, and that 89 percent of users agree that brands should engage consumers there.

The facts are in. Social media works for business. Consumers want you there, expect you to be there, and will reward you with their attention and patronage if you are. Need more be said?


Looking for real-world examples of businesses achieving their social media marketing goals? Our 47-page case-study collection, Facebook Success Stories, shows you how to increase brand awareness, target specific markets, promote new products, and create communities that engage users. Also check out The State of Social Media Marketing, a 240-page original research report from MarketingProfs.


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Paul Chaney is "The Social Media Handyman" and the author of The Digital Handshake: Seven Proven Strategies to Grow Your Business Using Social Media (www.thedigitalhandshake.com). Reach him via pchaney@gmail.com.

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  • by Bill Pollak Tue Mar 30, 2010 via blog

    The assumption of this article is that the engagement of these audiences with these brands was *caused* by their having a presence in Facebook or Twitter. But it seems to me that the connection with the brands existed before the brands Facebook pages or a presence in Twitter. We know that there are people who identify strongly with certain brands and that associating themselves with these brands says something about them that they want to convey to other people (or enhances their personal brands, to put it another way). So of course the Twitter followers and Facebook fans will be more likely to buy or recommend than those who don't follow the brands on Twitter or Facebook; but Facebook and Twitter are effects, not causes.

  • by Paul Chaney Tue Mar 30, 2010 via blog

    Good point Bill. Well-taken. I'm not sure the cause-effect scenario is as clear-cut as you suggest, but I'm not going to deny that there isn't a relationship. Chicken-egg. Regardless, my main message to brands is that they need to be actively engaged in social media, as it provides their loyal customers with yet another avenue by which to engage with them.

  • by Bill Pollak Tue Mar 30, 2010 via blog

    Hi. I didn't read the article as carefully as I should have before writing the comment above. You could have me some embarrassment by disapproving the comment and not publishing it. :-)

    Thanks.

  • by Bill Pollak Tue Mar 30, 2010 via blog

    What I missed when I first looked at this was that this was a measure of likelihood of buying or recommending *after* engaging as a Facebook fan or Twitter follower. So the relationship with the brand gets reinforced and strengthened by Facebook and Twitter. I buy that. Thanks!

  • by Lucila Tue Mar 30, 2010 via blog

    Nice to read a report that finally validates what we where talking about!! Lot of us trusted on social media profiles almost blindly or by examples or case studies. But when you com across someone you have to get to see your point of view numbers are ussually a great tool.
    I also liked the list of tips you described, Paul. It's short and clear, straight to the point... I love it! :)

  • by Adriel Tue Mar 30, 2010 via blog

    It's neat to see results of a survey of intent but I'd be more interested to see whether it really makes a difference on the bottom line.

    I'm sure customers surveyed after seeing a vendor's tradeshow booth would show a similar boost in "oh sure, I'd recommend those guys someday" type of answer. Does that = massive improvement in referrals and sales? You'd have to try to measure it to find out.

    You'd have to close the loop on sales and see exactly how many sales are Facebook fans/friends of fans and try to determine if it made a real difference to bring in the sale or not.

  • by Anthony Baggett Wed Mar 31, 2010 via blog

    Certainly, it isn't the holy grail of SM research, but hey, we have to start somewhere. I welcome any attempt to apply measurement to the medium.

    I do think there is a value in this case, even eliciting the "oh sure" type of reaction, since a well developed FB strategy would seek to elicit the response AND keep it. Unfortunately in the trade show analogy, the customer has only temporary exposure to the company and its message with very little engagement after everyone's gone home.

  • by Andrew B. Clark Wed Mar 31, 2010 via blog

    I like this report for two reasons - 1. it sums up without statistics and analytics the RELATIONSHIP social media has with revenue generation; and 2. it offers a (albeit brief) a great "best practices" for companies looking to utilize social media for marketing.

    Is the research/study comprehensive or deep? No, but this site isn't Neilsen or Forrester.

    Social media is about building that relationship and "being where the consumers are." Today, for many companies, that's going to be in the outlined social media channels.

    Thanks, Paul, for offering the outline. Now it's up to us marketers to apply it to our customers' marketing goals and needs to form viable case studies in support.

    Thanks for the post!

    Andrew B. Clark

  • by Shonali Burke Wed Mar 31, 2010 via blog

    For those of us who already drink the Kool-Aid (I'll never understand why *that* became the drink of choice!), yes, this is great for reinforcement and will help with the presentations, teaching, blogging, yadda yadda yadda (another delightful Americanism I've picked up).

    The one thing I would love folks to focus on is the end result rather than the tools, because I see far too much angst over "how do I do this on Twitter" or "how do I do that on Facebook"... you know what I'm talking about. So to Adriel's point, it's critical we teach people to identify their goals and measurable objectives (and yes, I'm obsessed with those two words), work backwards from there, and then identify the mix of social media platforms they'll add in to their overall marketing mix.

    That's not rocket science - another phrase we seem to beat into the ground - it's not new, and for the most part, it's commonsense. Wouldn't it be great if everyone did it?!

    Thanks for a good read, Paul.

  • by harry hallman Wed Mar 31, 2010 via blog

    Thanks Paul. The study should help a little in explaining why brands should be using social media.

    Another good reason to use SM is the effect it has on search engine optimization. The more digital footprints the better.

  • by Kevin Horne Wed Mar 31, 2010 via blog

    "It has become commonplace for brands to have a presence on these and other social media sites. Those that don’t face obsolescence."

    Stop it. Please.

    51% of Facebook fans are more likely to buy etc etc ... means 49% are not.

  • by Andrew Billmann Wed Mar 31, 2010 via blog

    Has anyone come to the conclusion--after 10 to 15 years of observing online marketing and online business practices--that just when you think you have it figured out, it all changes? From AOL to Geocities to Napster to MySpace, isn't it obvious?

    If businesses have their way (and they always do), Facebook will evolve into a giant online tradeshow. Heck, it's practically that way now.

    Isn't it ironic that we destroy the very things we seek?

  • by Paul Chaney Wed Mar 31, 2010 via blog

    Thanks Lucila. I appreciate the kind words. It is nice to have numbers that validate what we all know (at least hope) to be true.

  • by Paul Chaney Thu Apr 1, 2010 via blog

    Results are key to be sure. As such, measurement is required. You have to "inspect what you expect."

  • by Paul Chaney Thu Apr 1, 2010 via blog

    Shonali, what you suggest is exactly what I tell people in seminars -- ID goals and objectives, then determine which tools are most appropriate to use. We get the "cart before the horse" all too often. (Throwing in a little overused cliche of my own. Heh.)

  • by Paul Chaney Thu Apr 1, 2010 via blog

    Kevin, I refuse to have cold water thrown on this little bit of good news. Rather, I remain optimistic that the 51% will turn into 61, then 71, and so on.

  • by John Tue Apr 20, 2010 via blog

    I have seen some really great examples of small businesses using social media really well and others that don't do so well. The ones that do well are engaging with their audience, not just advertising to them. It has to have personality, no matter how big or small the brand is otherwise it is about as exciting as just another ad on tv.

  • by Paul Chaney Fri Apr 23, 2010 via blog

    I'm with you there Harry. Social and search go together like peanut butter and jelly.

  • by Paul Chaney Fri Apr 23, 2010 via blog

    With 40% of all social media interactions being routed through Facebook, it is certainly evolving into a place where it lays claim to ownership of the new Web. From an operating system standpoint. With the new version of Facebook Connect being what it is, that number will only get larger.

  • by Paul Chaney Fri Apr 23, 2010 via blog

    I'm 100% on board with you there. Social media is about people. It puts them in the forefront. It's what makes this medium unique.

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