Does Social Media Drive Sales? Vendors Say "Yes" Research Says "No" - InformationWeek

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6/1/2009
09:13 PM
Fredric Paul
Fredric Paul
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Does Social Media Drive Sales? Vendors Say "Yes" Research Says "No"

That's the gazillion dollar question. Using social networking sites like Facebook and Twitter to drive engagement, marketing, and customer service is all fine, but the bottom line is whether these services lead to actual sales. Companies who use these services say they do, but a new survey says the don't.

That's the gazillion dollar question. Using social networking sites like Facebook and Twitter to drive engagement, marketing, and customer service is all fine, but the bottom line is whether these services lead to actual sales. Companies who use these services say they do, but a new survey says the don't.Last weekend at the TWTRCON conference, a panel consisting of Mike Prasad, Brand/New Media Director at Kogi BBQ; Beth Mansfield, Public Relations Manager at Carls Jr.; and Stefanie Nelson from Dell Outlet were asked if they made money on Twitter. Mansfield and Nelson said "Yes." Prasad exclaimed, "Hell yeah!"

Sounds good, right?

Not so fast.

Research house Knowledge Networks has released a new study showing that Internet Users Turn To Social Media To Seek One Another, Not Brands Or Products. Here's the scoop:

"While 83% of the Internet population (ages 13 to 54) participates in social media  47% on a weekly basis  less than 5% of social media users regularly turn to these sites for guidance on purchase decisions in any of nine product/service categories. In addition, only 16% of social media users say they are more likely to buy from companies that advertise on social sites."

Knowledge Results of Knowledge Networks research on social media and purchasing.

In a statement, David Tice, Vice President and Group Account Director for Knowledge Networks said, "Our findings show that marketers need to be prudent and people-centric in how they approach social media. Social media users do not have a strong association between these sites and purchase decisions; they see them as being more about personal connection  so finding ways to embrace that powerful function is key."

That part of the study does jibe with my takeaways from TWTRCON, where the speakers emphasized the need for a personal connection with the Twitter community, including using the service for customer service as well as sales and marketing.

And Tice added that despite not affecting purchase decisions, "The fact that they are using social media more now than a year ago is a strong indicator that the influence of these sites and features is here to stay."

So I guess it's "Make friends now, sell later."

NOTE: The survey included 27 different social networking sites. Click here for WebGuild's clickable list.

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