Social: Sales or Snake Oil?
Some key insights and data that provide a balanced perspective regarding the business case for social.
Some key insights and data that provide a balanced perspective regarding the business case for social.
The debate around the business case for social continues to rage. Respectable business figures are arguing both sides of the issue with unbridled passion.
While some of these positions are provocative and garner a lot of attention, they’re not terribly useful for informing good decision making, as they largely miss the kind of key insights and data that provide a balanced perspective.
In my previous columns, I laid out a practical approach and data supporting the business case for using social to drive sales. In this column, I expand the frame to include an applied framework for brand, marketing, customer service, and insights.
The need for such a discussion became apparent during a recent reading of Forrester Analyst Sucharita Mulpuru’s “State of Retailing Online 2011” study. There were two statistics that stayed with me because they indicate widely held misperceptions about the value of social. In the study, when online retailers were asked, “To what extent do you agree with the following statements?”
These responses are due in large part to poor strategies, a lack of programming coordination, and a failure to capture real business return. I’m betting Amazon and eBay were not included in this study, given that in October 2010, they received 7.7 percent and 4.7 percent of traffic from Facebook, respectively. Even if that traffic converted at 25 percent of their conversion rate (but I suspect it was higher), that’s real money to be plugged into a business case model!
The reasons the business case for social is unclear include:
The organizations that are getting real business results from social have made meaningful traction to solve these key issues.
I’ve introduced two key frameworks that have been adopted by executives at financial services, media, retail, travel, B2B, and branded manufacturing companies. These frameworks address all the key issues listed above.
In summary, a business case in social is emerging. I advise executives to: