Who doesn’t love data, especially when it proves that you can make more money? Thanks to a study conducted by Twitter, there are now significant numbers behind the ROI of Social Customer Service. Twitter's study shows the correlation between brand responsiveness on social and customers’ willingness to spend across three industries: airlines, restaurants and telecoms.
This effort is an extension of last year’s research analyzing public interactions between airlines and their customers, which showed that overall responsiveness, as well as speed to respond, increase satisfaction scores and revenue potential. This year, the results are even more promising for brands that are investing in exceptional Social Customer Service strategies.
Let’s review Twitter’s five core findings and why they're important:
1. Responding to customers increases willingness to spend
Twitter found that “when a customer Tweets at a business and receives a response, that customer is willing to spend 3–20% more on an average priced item from that business in the future”. Here’s how willingness to spend varies across the airline, restaurant and telecom industries:
This is absolutely huge! Let’s deep-dive into the airline example. Last year, I wrote about how airlines have historically struggled to break even as they face low operating profit margins. Twitter’s results show that if 3.8 billion passengers are expected to travel in 2016 (IATA), and each of them is willing to spend at least $8 extra dollars, the airline industry as a whole could gain $30.4B in excess revenue.
That’s highly encouraging, especially considering that the efforts to respond on social are relatively low compared to legacy channels like the call center. Harvard Business Review found that it costs less than $1 to provide social care on social platforms versus $6 on the call center.
2. Responsiveness increases customer satisfaction
According to the survey results, customers are 44% more likely to share their experiences if brands respond to them on Twitter, and they are 30% more likely to recommend that business, as well as assign 1 point higher (2.66 vs 3.66) on customer satisfaction surveys.
This is particularly pertinent to the telecom industry because service providers have one of the lowest Net Promoter Scores (NPS) rankings at 19.7, compared to travel and hospitality at 38.9, and consumer brands at 42.6.
AT&T and Verizon, the all-time telecom rivals, only have an 8 point difference in their NPS scores as of October 2016: AT&T ranked at 15 points and Verizon at 7. Effective responsiveness and social customer care has the potential to boost Verizon’s score to 8.
That’s a significant increase, considering Bain & Company research has established a strong link between organic growth and a company’s NPS score relative to the relevant competitors in its industry. The relationship between NPS scores and future growth is strongest when there is high competition, low barriers to switch providers, and a mature industry, all of which define the telecom sector.
3. Fast responses generate more revenue impact
While Twitter established that overall responsiveness is linked to willingness to spend, they also show that the speed at which brands respond has a significant effect on top-line revenue potential. A brand that simply shows up on social will only win half of the pie. Twitter found that when airlines respond to a customer’s Tweet in less than six minutes, for example, that customer is willing to pay almost $20 more for that airline in the future.
I already discussed the impact that an extra $8 can make make on top-line growth. Now imagine if that impact could be more than doubled. If this isn’t a good enough reason to invest in top-notch Social Customer Care, I don’t know what is.
Technology can empower businesses to not just respond but deliver meaningful resolution through features like a single view of the customer and dashboards with real-time analytics behind the customer journey. Implementing the right strategy and system to respond as fast and efficiently as possible is an investment that will have much higher returns in the future
4. Embrace the haters
Twitter also calls businesses to embrace the negative conversations on Social instead of ignoring them. 69% of people who Tweet something negative about a brand say they feel more favorable when a business replies to their concern.
Interestingly, in the telecom industry, the conversations that started out negative and had a response resulted in higher brand favorability and 3X higher willingness to pay for their wireless plan compared to positive conversations.
Customer churn is one of the strongest, if not the most pressing, challenges telecoms face to survive in a crowded market. Lowering defections has become a top priority for these brands as the market matures and competition intensifies.
But telecoms have been unable to overcome this obstacle altogether— churn levels still hover around 2% to 2.5% per month, according to Bain & Company.
If Twitter’s findings are correct, it looks like there’s a pretty easy alternative to address this issue—deliver high-quality customer care, even (or especially) to those customers tweeting negative things about your brand.
5. A win-win for businesses and customers
Last but not least, Twitter’s study found that consumers prefer Social because they perceive it as effortless—even favoring it above in-person interactions.
This finding goes hand-in-hand with a recent survey conducted by Conversocial, which found that customers 100% of respondents considered “Ease of Use” as a key aspect of social customer service, with nearly half (45%) qualifying it as the most important aspect.
This is big news because when customers perceive that a service issue is easy to approach, it has a positive impact on brand loyalty and retention.
It's time to get serious about Social Customer Care
If Social Customer Care is effortless for customers, cost-effective for businesses when compared to the call center, and is ROI positive, it’s mind-blowing that some brands haven’t gotten serious about investing in a formal program to address customer issues on social.
For more information on how Conversocial helps brands deliver fast, efficient, scalable engagement with their customers, get a free demo here: