Businesses Increase Revenue with Social Media: Aalto University

Researchers at Aalto University, the University at Buffalo, and Texas A&M University have proven a link between customers’ use of social media and higher revenue, their press office announced on March 25, 2013.

“Now there is proof that customers who engage with a business through social media contribute more to the bottom line than customers who do not”, said Ashish Kumar, assistant professor of marketing at Aalto University.

“Our study showed that social media activities help strengthen the bond between the customer and the firm. Participating customers on a firm’s social media site contribute 5.6% more revenue and visit the business about 5% more than non-participating customers”, he explained.

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In the past there was no individual-level data that connected a customer’s participation in a firm-hosted social media site and their actual purchase behaviors. Companies questioned whether there was any return on their investment of resources to operate their social media site.

This study proves that building online communities, personalizing messages and encouraging contributions from online members enhances the customer experience as well as increases the frequency of social media visits and promotes sales overall. Such data is important to confirm the pay-offs of social media efforts by firms.

The research showed that the keys to success include maintaining a user-friendly site, sending regular updates about events, personalizing key messages to customers and encouraging interaction from them. By fostering an online relationship, customers can be segmented depending upon their purchase history and prior interactions to determine which customers would be best to target with this marketing effort. It is important to note that not all customers respond to social media efforts equally. This makes market segmentation essential.

As a result of this study, business managers now have a better understanding of the return on their investment in social media. They also now know there is a direct correlation between social media participation and the number of items a customer puts in their shopping basket and subsequently purchases. By capitalizing on this knowledge, marketing can be focused on creating and nurturing the social media communities that generate the most profits.

This study has been published in a special issue of the journal Information Systems Research on ‘Social Media and Business Transformation’; conducted by Ashish Kumar from Aalto University in collaboration with Rishika Rishika and Ramkumar Janakiraman from Texas A&M University, and Ram Bezawada from the University at Buffalo, New York.

Download Article: Rishika, Rishika; Kumar, Ashish; Janakiraman, Ramkumar; Bezawada, Ram: The Effect of Customers’ Social Media Participation on Customer Visit Frequency and Profitability: An Empirical Investigation. Published in Information Systems Research, March 2013.

Companies can generate and achieve concrete revenues with skillful social media

It´s been said people aren’t going to join a group to hear about your company, but will actively join groups that focus on specific topics that interest them. Proof of concepts are  within success stories of over 100 companies currently using PlanMill, who have activated social media in PlanMill systems.

Available since 2009, here’s 2-3 easy steps to view and interact with your social and business networks right within PlanMill! Twitter and LinkedIn widgets can be added to My Workspace using custom parameters. Here’s how:

View demo of PlanMill with LinkedIn and Google Maps!

Have you added Google Maps, Twitter and LinkedIn to your dashboards in PlanMill CRM, PROJECT, PSA & ERP?

 

Enjoy FREE Trial today if you haven’t and experience firsthand how social media can benefit your service business!

Deliver real-time knowledge within your company today using
top social media tools within PlanMill systems!

 

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4 Responses to “Businesses Increase Revenue with Social Media: Aalto University”

  1. NYT: This Week in Small Business: The Silly Money Ratio | Gene Marks Says:

    [...] should. Jeff Korhan explains how to be the best-connected business. Researchers say there is a link between customer use of social media and higher revenue. And thank goodness: there’s now a Pinterest [...]

  2. This Week in Small Business : The Silly Money Ratio | Experts Bto Says:

    [...] but should. Jeff Korhan explains how to be the best-connected business. Researchers say there is a link between customer use of social media and higher revenue. And thank goodness: there’s now a Pinterest for [...]

  3. You’re the Boss Blog: This Week in Small Business: The Silly Money Ratio « Online Scoop Magazine Says:

    [...] but should. Jeff Korhan explains how to be the best-connected business. Researchers say there is a link between customer use of social media and higher revenue. And thank goodness: there’s now a Pinterest for [...]

  4. You’re the Boss Blog: This Week in Small Business: The Silly Money Ratio | Work With Marcel Schmidt Says:

    [...] but should. Jeff Korhan explains how to be the best-connected business. Researchers say there is a link between customer use of social media and higher revenue. And thank goodness: there’s now a Pinterest for [...]


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