Social media posts may impact consumer spending

Negative or neutral likes or comments on a product on social media platforms may influence a buyer as well as impact its sales and revenue, a study by researchers here, including one of Indian-origin, has showed.

"A neutral or even negative social media post with high engagement will impact sales more than a positive post that draws no likes, comments or shares," said Ram Bezawada, Associate Professor at the University at Buffalo, in New York, US.

"This is true even among customers who say their purchase decisions are not swayed by what they read on social media," Bezawada added. Further, the study found that businesses' social posts significantly strengthen the effect of traditional television and email marketing efforts.

When social media is combined with TV marketing, customer spending increased by 1.03 per cent and cross buying when a customer purchases additional products or services from the same firm by 0.84 per cent. When combined with email marketing, customer spending increased by 2.02 per cent and cross buying by 1.22 per cent.

"The clear message here is that social media marketing matters, and managers should embrace it to build relationships with customers," Bezawada said. "Developing a community with a dedicated fan base can lead to a definitive impact on revenues and profits," Bezawada noted.

For the study, published in the Journal of Marketing, the researchers studied data from a large specialty retailer with multiple locations in the US. They combined data about customer participation on the company's social media page with in-store purchases before and after the retailer's social media engagement efforts.