TORONTO--()--Research released today by LoyaltyOne and two leading North American academic institutions provides the long-awaited proof that social media interaction between a customer and a brand drives immediate and long-term sales increases. The results establish the accountability link long sought by brands that have showered dollars on social media marketing while attempting to prove the return on investment to members of the C-suite.
“The good news is this research delivers the evidence that investment in social media has the potential to return benefits in the form of transactions, profits and ROI if done well”
The research findings are based on a two-year analysis of brand-customer social media engagement and transaction data with the more than 10-million member AIR MILES Reward Program. AIR MILES collectors were encouraged to engage with the AIR MILES-hosted social community website by sharing thoughts about the brand or participating in promotions; they were rewarded either with a small number of bonus miles or entry to a lottery for large prizes. By analysing their unique collector data, researchers were able to show that these participants increased their purchases from program partners by 15-30 per cent over non-participants.
The key take-away is that properly designed and executed social media marketing can deliver a significant, lasting (up to two months) and measurable increase in customer engagement and transactions.
“The good news is this research delivers the evidence that investment in social media has the potential to return benefits in the form of transactions, profits and ROI if done well,” LoyaltyOne Executive Vice President and CMO Neil Everett said. “The even better news is this study demonstrates that the data obtained through loyalty programs generates a reliable method of measuring this connection.”
Other Highlights from the Study:
- The mere act of writing a short public statement on a social media site spurs significant lifts in transaction activity;
- However, longer, more elaborate posts dealing with redemption experiences (travel, entertainment) created higher lift than shorter, product-based posts;
- The higher the level of participation in a social media event, the greater the impact on a consumer’s purchasing activity;
- Brands can use social media as a tool to raise the value of lower-volume, high-potential consumers who have more room to increase their spend; and
- Events that encourage participants to recreate the core benefits of a brand have higher lift effects than more generic posts – resembling a “co-creation effect.”
About the 2012 LoyaltyOne Social Media Transaction Impact Study
From February 2009 to May of 2011, researchers monitored participation in an AIR MILES social community website where members share tips on the best ways to collect and use miles, and share redemption experiences with the brand. Researchers were then able to use AIR MILES program Collector data to obtain concrete evidence of the impact of social media engagement on purchasing behavior. In total, over 99,000 unique posts were analyzed.
Complete findings from the study can be found in a white paper titled The Social Media Payoff – Establishing the Missing Link Between Social Media and ROI, which can be downloaded at https://loyalty.com/knowledge/articles/social-media-payoff.
LoyaltyOne is a global leader in the design and implementation of coalition loyalty programs, customer analytics and loyalty services for Fortune 1000 clients around the world. LoyaltyOne's unparalleled track record delivering sustained business performance improvement for clients stems from its unique combination of hands-on practitioner experience and continuous thought leadership. LoyaltyOne has over 20 years history leveraging data-driven insights to develop and operate some of the world's most effective loyalty programs and customer-centric solutions. These include the AIR MILES Reward Program, North America's premier coalition loyalty program and a working partnership with Latin America's leading coalition program, dotz. LoyaltyOne is also the equity partner of Direxions, a loyalty pioneer headquartered in India and the owner of COLLOQUY, a group dedicated to research, publishing and education for the global loyalty industry. LoyaltyOne is an Alliance Data company. For more information, visit www.loyalty.com.
Medill was founded in 1921 and offers programs in journalism and integrated marketing communications. It teaches new techniques essential in today's digital world. Medill is leading the way in training a new generation of multimedia journalists and integrated marketing communications professionals. The Medill School of Journalism, Media, Integrated Marketing Communications at Northwestern University is named after Joseph Medill, a newspaper man and former Mayor of Chicago.
About the Ivey Business School, Western University
The Ivey Business School (www.ivey.ca) at Western University is Canada's leading provider of relevant, innovative and comprehensive business education. Drawing on extensive research and business experience, Ivey faculty provide the best classroom experience, equipping graduates with the skills and capabilities they need to tackle the leadership challenges in today's complex business world. Ivey offers world-renowned undergraduate and graduate degree programs as well as Executive Development at campuses in London (Ontario), Toronto and Hong Kong.