In reading a report from Aberdeen Research on “Customer 2.0: The Business Implications of Social Media”, I learned that of their data set, Best-in-Class organizations demonstrated the following:
- 100% improved year-over-year performance in Return on Marketing Investment (ROMI). The avg increase was an aggregate 11% ROMI.
- 82% improved year-over-year performance in customer retention. The avg increase was an aggregate 9% improvement.
- 81% improved year-over-year performance in new product development. The avg increase was an aggregate 7% improvement.
In other words, 5 out of 5 saw improvement in ROMI while 4 of 5 saw improvement in customer retention and NPD. Consider that a 9% improvement in customer retention could be huge – depending on structure, perhaps a bump of 10% - 20% in margins and/or net income (it’s all relative, but worth noting). Also, a 7% increase in NPD is HUGE: Considering that 9 of 10 new products fail . . . a 7% increase may be the bump that pulls the entire NPD effort out of the red and into the black. Again, these things are all relative . . . but worth noting and respecting.
As I don’t want to get into posting everything, let me offer one of the introductory excerpts worth mentioning:
“The phrase ‘Web 2.0’ has permeated conversations concerning the Internet for the past several years; however, the use of social media applications as an additional touch point for customer and company interaction is a relatively new concept. While the debate concerning what technologies are encompassed by the phrase ‘Web 2.0’ continues, there is little debate among top companies about its business value.”
Let me be overt here: I think that Talent Acquisition stands to benefit from social media as much as marketing, if not more. Our challenge, however, is putting down the toy ourselves and beginning to use it in a way that will drive organizational value, not just bump up our popularity or numbers of ‘buddies’.
Once we end our addiction, stop taking the drugs, and start actually dealing them, our entire industry will make a quantum leap forward :)