It turns out there’s an important number when it comes to social media, and that’s 77. This is the percentage lift in both Net Promoter Scores and Net Profit Margin for industries that have mature social business programs, vs. those that don’t.
Our data shows that mature social business programs boost customer loyalty (through higher NPS scores) and business results (measured by net margin).
Analyzing Social Business Maturity by Industry
To discover this insight, I analyzed data from our 2016 State of Social Business research report, comparing the maturity of 17 social business programs by industry. For each program, such as Social Customer Service, I identified the most and least mature industries. A strong pattern emerged (see Figure 1, below).
The green boxes show which industries scored highest in maturity for each social program, the orange boxes the least mature. For example, looking at the top row, insurance’s maturity scores show leadership in a majority of programs, from Employee Engagement to Social Customer Service. In contrast, media/publishing businesses lack maturity for a majority of social business programs, as shown by the orange boxes in the last row.
Insurance, hospitality and banking/finance industries consistently lead in maturity, while communications, transportation and media/publishing reveal low maturity.
This pattern shows that some industries have been more successful than others at building their culture, infrastructure, strategy and governance around social media, as leadership commitment is needed to succeed in any social business program.
How Social Business Maturity Relates to Loyalty
I next wanted to answer how this maturity correlated to customer success, as measured by Net Promoter Score, and business outcome, as measured by Net Profit Margin. This analysis lead to an exciting insight: the most mature social businesses are both more profitable and have more loyal customers, each by a 77% margin, compared to social business laggards.
What Does It Take to Reap These Social Business Benefits?
While these insights are an exciting indicator for those that invest in social business, there remains a classic “which came first, the chicken or the egg?” question, which is more difficult to answer.
We can see a relationship here, but the root cause is a bit more difficult to discern. For example, why do insurance businesses tend to have higher social business maturity? Is it because their margins are higher, translating to higher investment?
After analyzing social business spending by industry, I did not find that larger budgets correlated to higher maturity. For example, while insurance lead maturity, its budgets were, on average, 7.65% lower than the overall average budget across industries.
The variable that’s difficult to account for is time. It takes time to become a mature social business, so it may be that these industries were early adopters, whose head start is now translating to higher margins and customer satisfaction.
One thing is clear: mature social businesses enjoy both stronger financial return and customer loyalty, and it doesn’t get much better than that.