Original post: New study: Deep brand engagement correlates with financial performance by Charlene Li, co-author of “Groundswell”
The goals of the study were to measure how deeply engaged the top 100 global brands — as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking — are in a variety of social media channels (including blogs, Facebook, Twitter, wikis, and discussion forums) and, more importantly, understand if higher engagement is correlated with financial performance.
Activity in each channel was ranked for depth of interaction on measures that corresponded to that specific channel. Scores for overall brand engagement ranged from a high of 127 to a low of 1. The top 10 ENGAGEMENTdb brands with their scores are:
- Starbucks (127)
- Dell (123)
- eBay (115)
- Google (105)
- Microsoft (103)
- Thomson Reuters (101)
- Nike (100)
- Amazon (88)
- SAP (86)
- Tie – Yahoo!/Intel (85)
Engagement Correlates To Financial Performance
But even more interesting is that we also looked at the financial performance of the brands, grouping the companies with the greatest depth and breadth into a group called “Social Media Mavens”. These Mavens on average grew 18% in revenues 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. The same holds true for two other financial metrics, gross margin and net profit.
Note that we are not claiming a causal relationship — but there is clearly a correlation and connection. For example, a company mindset that allows a company to be broadly engage with customers on the whole probably performs better because the company is more focused on companies than the competition.
The study also looks at the engagement best practices of four companies: Starbucks, Dell, SAP, and Toyota. Some of the key findings include:
- Emphasize quality, not just quantity. Engagement is more than just setting up a blog and letting viewers post comments; it’s more than just having a Facebook profile and having others write on your wall. It’s also about keeping your blog content fresh and replying to comments; it’s building your friends network and updating your profile status. Don’t just check the box; engage with your customer audience.
- To scale engagement, make social media part of everyone’s job.
The best practice interviews have a common theme — social media is no longer the responsibility of a few people in the organization. Instead, it’s important for everyone across the organization to engage with customers in the channels that make sense — a few minutes each day spent by every employee adds up to a wealth of customer touch points.
- Doing it all may not be for you — but you must do something.
The optimal social media marketing strategy will depend on a variety of factors, including your industry. If your most valuable customers do not depend on or trust social media as a communication medium, or if your organization is resistant to engagement in some channels, you will have to start smaller and slower. But start you must, or risk falling far behind other brands, not only in your industry, but across your customers’ general online experience.
- Find your sweet spot.
Engagement can’t be skin-deep, nor is it a campaign that can be turned on and off. True engagement means full engagement in the channels where you choose to invest. Thus, choose carefully and advocate strongly to acquire the resources and support you will need to succeed. If you are resource-constrained, it is better to be consistent and participate in fewer channels than to spread yourself too thin.
Rank Your Company Against the ENGAGEMENTdb Top 100
Launching today, the ENGAGEMENTdb website (www.engagementdb.com) makes it possible for companies and brand managers to quickly find out how their social media efforts rank as compared to those of the world’s most valuable brands. After taking a quick survey, respondents will receive an email evaluation of their social media efforts compared to the companies in the ENGAGEMENTdb report. Additionally, companies can detail their social media efforts for inclusion in the ENGAGEMENTdb through the website. This data will be used in future research and study of the benefits of social media.
Source: New study: Deep brand engagement correlates with financial performance by Charlene Li, co-author of “Groundswell”