A recent briefing by Bain and Co. gives a great top-down view of the state of social business in the enterprise today. It makes a strong case that early adopters of social media are experiencing significant bottom line results, but we are still early in this journey.
Bain also cautioned readers about relying too much on sentiment analytics due to the infancy of the field. We agree (note: NeedTagger uses a very different type of technology which isn’t the same as sentiment analysis. We’ll publish a post on the differences in soon).
Bain surveyed more than 3,000 of their clients to identify what makes social media effective and whether it’s worth the growing investment many companies are making this year.
Here are some of the takeaways:
- the average billion-dollar company spends $750,000 a year on social media
- some leaders spent in the tens of millions per year on their social media programs
- customers who engage with companies over social media spend 20 percent to 40 percent more money than other customers (see figure below)
- socially-engaged customers demonstrate a deeper emotional commitment to the companies, as evidenced by an average 33 points higher Net Promoter® score (NPS®), a common measure of customer loyalty .
- Bain believes that the greatest long-term value of social media is in “closing the data loop”, i.e., collecting data about customer engagement and then using that data to drive the business forward more intelligently.
Looking forward, the top-of-mind questions asked by Bain’s clients include:
- What is the business case for investing further in social media? Where and how much should we invest?
- Fundamentally, how much is consumer behavior changing? What are the biggest opportunities and threats?
- How aggressively are my competitors investing in these tools, and are they capturing differential advantage?
- What are the best practices in deploying social media strategies? What are the pitfalls to avoid?
- Should we build or buy our own “community” or partner with one of today’s leading platforms? Or both? Where should we place our bets?
- How should we organize and coordinate our efforts? Across brands? Across business units? Across geographies?
- How should we measure results? How do we know whether we are creating real business impact?
It’s a great read that makes a CEO-level case for investing in social media monitoring technology.