Brand Loyalty Equals Higher ROI

By Yosef Solomon on Mar 17, 2010

Does Social Media convert to a higher ROI? Social Media Marketing consultants get this questions all the time. The answer ultimately depends on your campaign and strategies, but for the most part, yes! A couple days ago I talked about the importance of brand loyalty and it’s potential to increase ROI for any company. Well, today I have the proof to back up my claim.

Mashable, the popular social media news site, reported that companies utilizing social media sites such as Facebook and Twitter are earning higher ROI’s than those that don’t. The study, conducted by Chadwick Martin Bailey and iModerate Research Technologies, found that 67% of consumers following their favorite brands on Twitter were more likely to buy their products. Facebook users were 51% more likely to buy products from brand pages they “fanned.” And if you thought the brand loyalty stops there, think again. Word of mouth marketing is increases as well. How much you ask? Well, 79% of Twitter followers refer a friend to follow, while 60% of fans on Facebook refer their cohorts.

Social Media Marketing sometimes gets dismissed due to its unorthodox approach and questionable ROI. However, as consumers continue to embrace the web and utilize it for more of their purchasing needs, all brands must start establishing an online presence. The study also showed that those companies NOT active in social media are actually suffering from a loss in sales.

The study is another sign that social media is becoming a competitive advantage for those that are participating, and an increasingly major weakness for those that aren’t

Does this mean every company will soon have a Twitter and/or Facebook page? My guess is yes. I’ve talked to some business owners and they say that they’re still hesitant in jumping on the Social Media bandwagon. Some feel their businesses won’t benefit from the exposure due to the fact that they are more B2B than B2C. Granted this is a valid concern, I would argue that transparency and online relevance in one’s brand is important. Regardless of one’s business model, creating a presence online, is almost as important as having a company website. It gives your brand authenticity and allows your clients, users, or customers to contact you through avenues they are comfortable with.

As social media continues to grow and expand, we will see more ways companies are utlilizing this medium to produce higher ROI’s. It’s only a matter of time, if it hasn’t happened already , that every business, firm and sole proprietorship will need to embrace Social Media. Why not start now and put your company on the map!