Wetpaint and the Altimeter Group released a study today that confirms what seasoned communicators with several years of experience already know. Deep engagement with consumers through social media channels correlates to better financial performance. How much?
Companies engaged in social media grew company revenues by 18 percent over the last 12 months. The least engaged saw revenues sink 6 percent over the same time period.
"The closer any company is to its customers, the better, and it's hard to argue with the ability for social media to create such proximity," said Ben Elowitz, CEO of Wetpaint. "In this day and age, companies should feel much more comfortable investing in social media -- the correlation to results is so clear."
The study also concludes that companies which only establish an online presence — present in a few social media channels (Blogs, Facebook, Twitter, etc.) that push messages and seldom engage customers or those spread too thin across dozens of channels — tend to see lackluster returns on investment.
Who are the top ten brands engaged in social media?
1. Starbucks
2. Dell
3. eBay
4. Google
5. Microsoft
6. Thomson Reuters
7. Nike
8. Amazon
9. SAP
10. Yahoo!/Intel (tie)
You can find the entire study via an interactive Web site. Starbucks, which has one of the most prominent engagement strategies demonstrates it understands all strategies require central coordination, each social media channel requires different engagement, and leading company participants understand and can mitigate risk.
Companies often implement technologies without a clear view of how they fit into and support corporate goals. They thus end up with a bunch of point solutions, but no strategy — and worse, no results, with increased internal and external risk.
What does the study mean for smaller businesses?
Companies, regardless of size, need to move beyond tactical considerations and realign their communication plans to fit strategic goals with measurable results. All of their communication decisions need to be grounded in research before companies launch any number of social networking accounts, blogs, and other online technologies.
As mentioned last week, we recently conducted a market intelligence study on a niche industry that should be outperforming despite any economic constraints. However, as this niche tended to rely exclusively on traditional marketing and tactical communication, we were not surprised to find that 15 percent of these businesses had closed in the last six months.
Ergo, even small business needs to reevaluate its communication plans from the bottom up, with those including social media being the most likely to succeed. However, keep in mind, simply entering into social media — creating a fan page or Twitter account — is hardly enough and may even be detrimental. How detrimental? Come back tomorrow.
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