Using Social Media to Improve Your Bottom Line

Monday, September 7, 2009 | 3:08 PM

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©Andrey Kiselev

In 2009 online retailers figured out that the social revolution was not a passing fad and social media finally entered the mainstream. Tapping into social media to build engagement and a sense of community among customers was not seen as airy fairy marketing or something that is just nice to have--it could actually contribute to the all important bottom line.

Still have your doubts? Consider that Dell in June 2009 had earned $3m through Twitter since it started posting coupons and word of new products on the microblogging site in 2007, $1m of which was spent in the last 6 months alone. Dell Outlet has done particularly well on Twitter due to the inventory fluctuation of returned and refurbished products, and they have gleaned valuable feedback on products from consumers [1].

Twitter may be a relatively new phenomenon, but how about something as simple as allowing reviews on your website? Research conducted for Feefo suggests a third of the consumers polled would not buy from a website that does not support customer reviews and feedback as they believe this provided validation and control against the risk of buying from a ‘bogus’ store. This means you could be missing out on an extra 30% of customers simply by not having a customer feedback feature [2].

Other methods of engagement which online retailers are using include YouTube, Blogs and Microsites. Asda recently launched Yourasda, a community site that includes videos, a store finder, explanatory articles and many calls to interact with questions like "What local produce would you like to see?”. Earlier this year Asda launched a YouTube Channel "Saving You Money TV" that includes customer generated tips plus short films produced by Asda to help people save money. It also acts as a medium for the supermarket to demonstrate how it achieves its cost savings to deliver low prices in its stores. Asda's second quarter earnings were strong with 7.2% like for like sales growth and strong growth coming from Asda.com [3].

Want more proof of the power of social media? A study by Wetpaint and Altimeter Group showed a strong correlation between engaging in different social media and earning higher revenues. The report surveyed the top 100 most valuable brands depth and breadth of social engagement and correlated this to revenue growth and found that on average the companies with the highest social media engagement grew 18% in revenue over the last 12 months, compared to the least engaged companies who on average saw a decline of 6% in revenue during the same period [4].

[1]"Dell Says It Has Earned $3 Million From Twitter", The New York Times, June 12, 2009
[2]"Shoppers now using reviews to confirm a website is genuine before placing an order", Internet Retailing, August 14, 2009
[3]"Asda wins market share as customer numbers reach record high", your.asda.com, August 13, 2009

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