Since the dawn of platforms like Facebook and Twitter, many retailers have been plagued by a single, yet nagging question, “How can we evolve our traditional media plan into an engaging digital and social media plan while growing revenue and profit?” It is no secret that internet users are obsessed with social media, but measuring actual return on investment has traditionally been a challenge for retail organizations. Hundreds of thousands of “likes” and shares on social media can be good for the ego, but if those likes and shares don’t translate into dollars, do they really matter?
How Do You Know Which Data Types Are Useful?
Social media platforms are constantly releasing bigger, better and faster analytics data to customers. However, all data is not equal. It is necessary to parse out the information that can lead to truly actionable insights, but knowing which data sets are actually useful can be overwhelming.
The truth is, there isn’t a one-size-fits all approach to isolating actionable data on social media. Retailers must apply a mix of listening tools, sentiment analytics, machine learning, and old-fashioned human analysis to filter through the terabytes of data to locate the information that will be useful to the company. However, one area where social media can benefit every retailer is product development.
Social Media and Search Provide Focus Groups On-Demand
A recent Neilson Global New Products Report revealed nearly two out of three new products introduced into the market each year will fail. Social media can be a valuable tool for improving certainty in a new product launch by measuring customer needs and wants and correlating those needs and wants to the likelihood of a purchase.
Retailers can use search data and their social media fan base to test the waters, measuring interest in a potential new product. Search activity is an effective way to gauge interest and demand. Search, after all, drives revenue. If searches surrounding a proposed product are low, the retailer can easily test out the effectiveness of a marketing campaign. If, after generating awareness about a proposed new product on social media, search volume and social interest rises, retailers know they are on the right path.
Through the tracking of social data and search data, retailers can more accurately measure pre-launch interest in a product and use the insights they gather to develop more effective marketing and communications campaigns.
Using Social Analytics For Laser-Focused Communications
Social media provides retailers with the unique opportunity to “hear” exactly what customers have to say about their products, services and brand. They also have the ability to “hear” what their customers are saying about competitors’ products, services and brands. While this social eavesdropping can be valuable, analytics allows retailers to take it one step further, offering granular information about customer wants and needs across an almost infinite number of segments.
Social analytics data gives retailers a bridge to understand their customers’ opinions and sentiments, adding significant value to historical shopping and customer data that is already being collected and analyzed through traditional channels. Transactional history and marketing responses alone can provide valuable insight, to be sure. When combined with the psychographics available through social analytics, however; that insight becomes even more rich and robust. Communications that were once targeted can now become hyper-targeted, providing customers with highly personalized, highly relevant deals and product offers.
When retailers know how to effectively measure the business value of their social media efforts, they will be able to gain actionable insight that will lead to higher sales and profits while improving customer loyalty and strengthening customer relationships.