Tuesday, August 03, 2010

Social Media And Conversion Rate

A lot of companies are rushing toward social media, seeing it as a free and great way to promote their business. The hype is huge and the potential seems endless. But now a lot of them has been disapointed. It is difficult to apprehend this new environment, this medium that looks like nothing else. Hence, a lot of them end up getting high investment for little results.

Now social media remain one of the best way to communicate with your clients. It is the ultimate customer relationship management tool: For the first time, you are able to speak with your customers, share with them. And the benefit is that the word of mouth is so powerful that it will assure you a great exposure on the web. This is what we call "resonance".

Now new studies have shown that social media could lead to high conversion rate. It is important as a CRM tool to actually be able to measure the success of campaigns online. I found this very interesting article on a new website I discovered about retailing (In French) Vertical Retail.
Sage Pay, a payment system provider has established a study showing that if an Internet retailer has an average 7% conversion rate, visitors coming from social media would be 10 times more. 70% of those people coming from social media would buy in your online retail!
Harris Interactive undertook other research showing showing that half of the 35 years old or less population would follow the instructions of their friends, vs 17% for leader of opinions like famous people.
According to Sage Pay study, only 5% of marketers who have an online strategy would consider social media efficient. There is therefore a sky of opportunity for whom would be eager to take advantage of it.
Unilever's Chief Marketing Officer Keith Weed consider social media as "word of mouth on steroid". I dislike this term, but hey, it shows the importance social media is getting.
I like those kind of stats, because they show how important social media could be in your customer relationship management program.