Analytics, AI/ML

Getting a sharper picture of Social Media influence

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Social media platforms have become the new battlefield for marketers where they fight for even a second of consumers' attention. The companies have realized that social media plays a far more significant role in impacting buying decisions than previously thought. It has become a determining factor in driving sales.

A rising influence

McKinsey conducted a research where it examined the buying decisions of 20,000 consumers across Europe. It revealed an unexpected finding that around 26 percent of purchases were made based on social recommendations. It also found that two-thirds of the impact was direct, which means recommendations influenced the decision at the final purchase point. At the same time, the remaining one-third was the indirect impact, where recommendations influenced the decisions initially before buying the product.

Social media influence varies across product categories.

Consumers tend to use social media to a varying extent depending on the product they wish to avail. Considering the study mentioned above by McKinsey, only around 15 percent of respondents used social media for procuring utility services like water, telecommunications, electricity, etc. Whereas, in product categories such as travel, drugs, and investment services, the proportion of people was very high; around 40-50 percent looked at social recommendations.

The influence is more on a first-time buyer. He is 50 percent more likely to be influenced than past buyers.

However, there is still time for social media influence to overtake offline forces. The study revealed that in-person or phone conversations were up to 40 percent more effective than online interactions to influence buying decisions across different product categories.

Social media influencers

These influencers remain an untapped resource by the companies. Some of the top influencers have a large following on platforms like Instagram and Twitter are a direct window to millions of target consumers and represent an opportunity for digital marketers. The McKinsey study showed that only a limited proportion of these influencers were sources of most social recommendations. To be precise, only 20 percent of influencers generated 40 percent of requests which turned into sales. This data shows how underutilized this resource is.

The new normal

The companies should realize sooner than later that social media influence will rise further in the coming years. With more and more people seeking information online about a product before making a purchase, companies will try to  manage their online image and generate engaging, quality content. 

Companies should also focus on bringing more and more influencers into their fold to promote their products. These strategies can help the companies identify potential buyers. They could even encourage less active influencers to be a part of their campaign.

 Social listening is another focus area to know what your consumers feel about your products. In the coming times, as more people will connect through social media and share their experiences,these social media platforms will become the game-changer for companies.

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