An exciting new study from Engagement Labs (Formerly Keller-Fay) had some very interesting takeaways for brands concerning the impact that online and offline WOM has on sales. The study tracked the correlations between conversations (online and offline) and sales for 170 brands. The research found 19% of sales resulted from both online and offline conversations. Further, the study found that both sources contributed almost equally; 10% of sales resulted from offline conversations (Word of Mouth) and 9% resulted from online conversations (Social Media).
The study also looked at how a brand uses social media can impact sales: “By improving social performance by just 10 percent, the brands included in this study can realize a two percent increase in sales and large improvements in profit margins compared to business-as-usual figures. For example, the sentiment of conversations, both online and offline, were proven to be a big driver of performance. Therefore, by improving sentiment, a brand can experience a sales lift.”
The More Positive the Conversation Around Your Brand, the Higher Your Sales
So let’s unpack that previous paragraph a bit. If a brand improves the efficiency of its social media efforts by 10%, it realizes a 2% increase in sales. That alone is incredibly significant. But additionally, positive sentiment about a brand online and off leads to an increase in sales.
And what group is the biggest driver of positive sentiment about your brand online? Your happy customers! Your biggest fans are not only the biggest contributors of positive conversations around and about your brand, but they are also the group that is the most motivated to talk positively about your brand!
This is precisely why I am so dedicated to helping companies better connect with and empower their happy customers. Additionally, customers are more likely to listen to and trust a fellow customer than they are a marketing message that comes directly from a brand! You know this to be true from your own experiences: Which are you more likely to trust; A commercial for a brand, or an endorsement for that same brand from a customer you meet in a store? You’re going to trust the customer over the commercial, right? Of course you are.
If you want to improve the sentiment of the conversation around your brand online, then make sure your happy customers are more active participants in that conversation. That’s it. If you don’t take a role in engaging your happy customers, they will be less likely to create positive content around and about your brand online. Which will lead to fewer sales.
But we want you to have more sales. And as this study found, just a 10% increase in the efficiency of your social media efforts results in a 2% increase in sales. For a small business with at least one employee, average annual revenue is $4.9 million. So if a small business with one employee could improve its social media efforts by just 10%, it could realize an increase in sales of $98,000.00.