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The Power of Social Media

Before they loosen the corporate purse strings, those holding them will say, “Show me the impact social media have on reputation and the bottom line.” In answering, start here. Statistics eloquently tell some of the story. Social media can be a boon for brand equity, customer loyalty, and business performance. Various studies have found the following:

  • 74% of consumers have a more positive brand impression after interacting with a company through social media
  • Purchase likelihood increases 51% after a customer clicks the “like” button
  • When they receive good customer service, social media users tell three times as many people about it as do nonusers of social media
  • 83% of people who complained about a given company on Twitter “liked or loved” a response by the company
  • 90% of consumers trust product reviews from people they know; 70% trust reviews from people they don’t know
  • 40% of social media users “like” businesses in order to receive special discounts and promotions
  • Facebook fans of a brand spend twice as much as those who are not Facebook fans

Power of Social Media

Social media are a pivotally important channel in the new area of customer relationship management, or CRM. Today, when customers want to reach businesses to ask a question, express gratitude, or lodge a complaint, they don’t just reach for the phone or ping the customer service e-mail address. Increasingly, they also post on brand social media pages, or the web at large. Integrating social media, enterprise-wide, as a communications and customer relations channel is one of the key challenges and opportunities faced by organizations today.

In all stages of the customer relationship life cycle, online social media platforms are now playing a crucial role. Here are a few of the ways social media are part of the conversation:

  • Awareness, Knowledge, Consideration, Selection: Before purchases are made, conversations about what brands to buy take place online, and the proliferation of customer ratings and reviews influences buyers, along with the sharing of purchases and recommendations. Companies profit through increased online visibility in search, video, mobile, and the blogosphere. More and more companies are profiting from free sampling campaigns, coupons, and sweepstakes. Increasingly, social media are driving customer awareness, influencing customer research and willingness to try new products, and inspiring purchase decisions and recommendations.
  • Satisfaction, Advocacy, Loyalty: After purchases are made, social networks are the new CRM channel, a place to publicly resolve complaints, receive testimonials, and deepen consumer engagement. Brands build equity with their social media fan bases and encourage loyalty through member-exclusive discounts, building of personal relationships, corporate social responsibility, cause-related marketing, and more.

Depending on your industry, acquiring a brand-new customer can cost hundreds of dollars. That’s why retaining loyal customers is crucial for your bottom line

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