Does Social Media Lead to Sales?

There have been a few studies that have shown that most people who are fans of brands are doing it to get special treatment, in the form of ‘freebies’ and discounted prices.  This  theory was again backed by a recent article from Mashable showed “82% of respondents said Facebook page is a good place to interact with brands”.  (Murphy S, Mashable, September 2012). But whilst on the surface these results are positive, a more detailed analysis explores the motivation behind the interaction.

The study was conducted by a market research company Lab 42 who surveyed 1000 Social media users. As the Infographic shows 87% of Social Media users do ‘like’ brands on Facebook, but out of those, the majority (55%) like brands because of either promotion, discounts or free giveaways.  Which leads to the number one reason that users interact with brands, to print off coupons.

What is poignant for marketers with ROI aspirations is that 46% of Social Media Users ‘liked’ a brand but had no reason to purchase. They either wanted a free product, they can’t afford the product or they were helping out a friend.

Since most people interacting with brands are after a freebie,  is  money in Social Media well spent? According to ‘2012 Social Media Marketing  Industry Report, How are marketers using Social Media to Grow their Business’, it is.

The study surveyed over 3,800 marketers, and revealed the following facts:

58% of businesses that have used social media marketing for over 3 years reported an increase in sales over that period

69% reported increase in traffic

75% are using social media to gain marketing intelligence

58% indicated generating leads a major benefit

85% of all businesses that have a dedicated social media platform as part of their marketing strategy reported an increase in their market exposure.

The results show that Social Media aids marketers in exposure and branding,  testing and market research;   it is also a source of leads and traffic to the website and most importantly over a three year period, Social Media increases sales.

I do agree that Social Media is important for all the above reasons, but the correlation between Social Media and sales is hard one to chew over, since a closer look at consumer behaviour with Social Media brands showed that about half, don’t have any intention to buy. Is this market research pitching to the converted, that is, marketing managers who just believe in the media… do fans of a brand  spend more than non fans, and can Social Media  change my purchase intentions?