CINCINNATI — Social media engagement between a consumer and brand drives both immediate and long-term sales increases, according to a study released Thursday by LoyaltyOne. The research constitutes a social media marketing breakthrough because it establishes the accountability link long sought by brands that have showered dollars on social media outlets while attempting to prove the return on investment to C-suite skeptics, the company stated.
“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 EVP 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.”
The research findings are based on a two-year analysis of brand-customer social media engagement and actual transaction data with Canada's more than 10-million member Air Miles Reward Program. Consumers who participated in LoyaltyOne’s Air Miles loyalty program earned reward miles by making purchases from its affiliated business partners and services across Canada.
The breakthrough results revealed that Air Miles Collectors who participated in social media events and promotions increased their purchases from Air Miles program partners by 15% to 30% over nonparticipants.
Other highlights from the study included:
- 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 lifts 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 spending; 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.”
Transaction-based proof that social media participation increases purchases is the outcome of a research effort undertaken as the 2012 LoyaltyOne Social Media Transaction Impact Study.
Complete findings from the 2012 LoyaltyOne Social Media Transaction Impact Study can be found in a white paper titled The Social Media Payoff – Establishing the Missing Link Between Social Media and ROI.