Study Proves Social Media Drives Sales

Research 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 findings are based on a 2-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.

It’s proof that smart social media marketing can deliver a significant, lasting and measurable increase in customer engagement and transactions.

Highlights:

  • Social network updates spur significant lifts in transaction activity
  • Longer posts dealing with redemption experiences (travel, entertainment) created higher lift
  • 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 to raise the value of lower-volume, high-potential consumers.

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“.

Sherrilynne Starkie is a consultant at PDMS. For almost 18 years, Sherrilynne has been advising blue-chip organisations on both sides of the pond, covering Britain, Canada and the United States. For three years, Sherrilynne was the Tech Talk columnist for the Isle of Man newspapers. She serves on the steering committee for Isle of Man Women in Business, is on the Executive Council for the Isle of Man Junior Chamber of Commerce. In the past she was on the management committee for the Isle of Man British Computer Society and the marketing committee of Junior Achievement.