The benefits of social media
For some companies, communicating with customers via social media is almost as commonplace as doing so via email. Others wonder what benefits social media actually offers them. A new study examines the benefits companies can derive from social media and what matters most in this context.
A new study has examined this topic (see left). It monitored the social media activities of six major Swiss companies to determine which measures are best suited for which business objectives.
Reach and Customer Loyalty on Facebook
If a company wants to increase the reach of its marketing messages, Facebook is the most powerful tool. 96 percent of all impressions across all study participants and channels came from Facebook. The alpine equipment manufacturer Mammut, for example, generated more than 22 million impressions on Facebook during the month under review. (An impression is defined as each time content from the Mammut page appears on Facebook users’ screens.)
The portal’s dominance was also reflected in the traffic it generated for the companies’ websites: Facebook was virtually the only platform that succeeded in driving users to the sites. (Pinterest is also known for its potential to generate traffic, but was not included in the study.)
The study also examined how effectively companies are able to use social media to build customer loyalty to the company or a brand. The metric used was the number of interactions a user shares with the company (e.g., clicks on the «Like» button or comments on Facebook, retweets on Twitter, ratings on YouTube, or blog comments). Mammut generated the most customer interactions. Among the channels, Facebook once again dominated. Mammut fans interacted with the company 1,146 times on Facebook, but only 37 times on Twitter. The ratio was even more pronounced for the tourism provider Hapimag, where users interacted 252 times on Facebook and just once on Twitter.
Twitter for Customer Support and Innovation
Twitter’s strength lies in one-on-one dialogues with customers. These play a significant role in customer support and in fostering innovation. Across all channels and companies included in the study, 45 percent of innovative ideas come from Twitter users. For example, Hapimag customers have suggested new vacation homes on Twitter, and Mammut customers have tweeted suggestions for product improvements.
Twitter has also proven to be the most helpful channel overall for customer support. For example, UPC Cablecom learned very quickly via Twitter about internet outages and was thus able to promptly provide customers with information on how to resolve the issues. (In addition to Twitter, Mammut also relies on YouTube. On its own YouTube channel, «UPC Cablecom Support,» the company regularly posts new videos explaining how to resolve known issues. Unlike phone support, these support videos are resource-efficient and available to customers around the clock.)
Despite the simplifications that social media brings, maintaining a professional presence on Facebook, YouTube, Twitter, and other platforms requires additional human resources. This raises the question of return on investment (ROI). One finding of the study is that this cannot be satisfactorily determined. If a company operates an online store, it is possible to measure how much revenue is generated by visitors coming directly from social media platforms. However, when it comes to offline sales, as is the case with Denner, things become more complicated.
Unlike ROI, the achievement of other marketing goals—such as reach or customer loyalty, as well as innovation, better support, or a stronger online reputation—can be measured very effectively. Among the companies studied, it was found that those that measure these benefits achieve better results. Monthly reports tailored to the goals a company pursues with social media are best suited for this purpose. These reports should not be prepared by the social media managers themselves, but rather by independent specialists. By holding a monthly meeting to review goal achievement, social media managers stay focused on these goals, and new ideas can emerge during the discussion. The monthly reports also provide insight into the success of pilot projects within an existing program. In this way, those responsible systematically learn about the needs of their target audiences. These learning effects are a possible explanation for the connection between measuring success and achieving success.
Tips for Social Media Managers
Companies can only achieve their social media goals if they encourage their customers to engage. However, conversations must be relevant to the company; otherwise, there’s a risk that customers will become annoyed. Topics related to vacation experiences with the tourism provider Hapimag have worked particularly well on Facebook. Hapimag customers were happy to share their vacation experiences with the company, thereby generating valuable word-of-mouth promotion. At Mammut, posts about products were very well received. Customers were eager to share their impressions, providing valuable feedback to the brand.
It is important for companies to find out what their target audiences want to talk about. In general, the most interaction occurs when content is phrased positively, evokes emotions, and offers users practical value.
Not every social media platform is suitable for every objective. For branding, Facebook is usually the right choice. For a business model that requires a lot of customer support, Twitter or YouTube may be more appropriate. Companies in the business-to-business sector that primarily want to demonstrate their expertise can do so on corporate blogs. It’s worth taking customer needs into account when choosing a platform and topic.
A clear strategic approach is another recommendation confirmed by the study’s findings. Even more evident than the link between a strategic approach and greater benefits is the correlation between regular performance reviews and social media success. No matter what a company aims to achieve on social media—branding, customer loyalty, reputation, customer retention, support, or innovation—the chances of success are greater when goals are defined and regular checks are conducted to ensure the company is heading in the right direction.
Martin Kost*
For the study «Why Social Media for Businesses?» *Martin Kost, a social media consultant and owner of the Standout agency, monitored the key metrics of the social media activities of Toyota Switzerland, Denner, Mammut, UPC Cablecom, Clariant, and Hapimag over the course of one month (the analysis included Facebook, YouTube, Twitter, as well as company-owned blogs and forums). The author assessed the effectiveness of these activities using the Social Media Scorecard (developed by online strategist Mike Schwede). The results show which platforms are suitable for which business objectives. In addition, the author examined the companies’ approaches in terms of their strategic orientation. Certain success factors have emerged, though they do not claim to be universally valid from a scientific standpoint.










