New study: Deep brand engagement

I’m releasing today a new research report that I wrote in conjunction with Wetpaint called “ENGAGEMENTdb.” The study looked at how the 100 most valuable brands — as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking — engaged in 11 different online social media channels.

We critiqued the brands on not only their breadth of engagement across these channels, but also their depth,
such as whether they reply to comments made on blog posts. Each brand
was given a numerical score. The top 10 ENGAGEMENTdb brands with their
scores are:

1. Starbucks (127)
2. Dell (123)
3. eBay (115)
4. Google (105)
5. Microsoft (103)
6. Thomson Reuters (101)
7. Nike (100)
8. Amazon (88)
9. SAP (86)
10. Tie – Yahoo!/Intel (85)

The report is available at http://bit.ly/KRGNt and the main site is at engagementdb.com (includes ways for you to do a quick ranking of your engagement). A very neat interactive feature of the site is the ability to see the rankings in different ways, from highest to lowest scores, alphabetical, etc.

Engagement Correlates to financial performance

But even more interesting is that we also looked at the financial
performance of the brands, grouping the companies with the greatest
depth and breadth into a group called “Social Media Mavens”. These
Mavens on average grew 18% in revenues over the last 12 months, compared to the least engaged companies who on average
saw a decline of 6% in revenue during the same period. The same holds
true for two other financial metrics, gross margin and net profit.

Note that we are not claiming a causal relationship — but there is
clearly a correlation and connection. For example, a company mindset
that allows a company to be broadly engage with customers on the whole
probably performs better because the company is more focused on
companies than the competition.

The study also looks at the engagement best practices of four companies: Starbucks, Dell, SAP, and Toyota. Some of the key findings include:

• Emphasize quality, not just quantity. Engagement
  is more than just setting up a blog and letting viewers post comments;
  it’s more than just having a Facebook profile and having others write
  on your wall. It’s also about keeping your blog content fresh and
  replying to comments; it’s building your friends network and updating
  your profile status. Don’t just check the box; engage with your
  customer audience.
• To scale engagement, make social media part of everyone’s job.
  The best practice interviews have a common theme — social
  media is no longer the responsibility of a few people in the
  organization. Instead, it’s important for everyone across the
  organization to engage with customers in the channels that make sense —
  a few minutes each day spent by every employee adds up to a wealth of
  customer touch points.
• Doing it all may not be for you — but you must do something.
  
  The optimal social media marketing strategy will depend on a variety of
  factors, including your industry. If your most valuable customers do
  not depend on or trust social media as a communication medium, or if
  your organization is resistant to engagement in some channels, you will
  have to start smaller and slower. But start you must, or risk falling
  far behind other brands, not only in your industry, but across your
  customers’ general online experience.
• Find your sweet spot.
  Engagement can’t be skin-deep, nor is it a campaign that can
  be turned on and off. True engagement means full engagement in the
  channels where you choose to invest. Thus, choose carefully and
  advocate strongly to acquire the resources and support you will need to
  succeed. If you are resource-constrained, it is better to be consistent
  and participate in fewer channels than to spread yourself too thin.

Qualities of Success

Companies that scored well in the study generally have dedicated
teams, however small, active in the social media channels they utilize.
The study found that the most successful teams evangelize social media
across the entire organization to pull in a broad range of
stakeholders. These companies view social media as an indispensable
tool to help them achieve results, and their approach is
conversational. This mode of operation differs from the approach of
traditional communications and early corporate blog experimentation,
which emphasizes messaging and talking points.

“This is the first study of this depth on the top global brands and
we think the results provide a good guide for corporations and brand
marketers in every industry,” said Charlene Li, Founder, Altimeter
Group. “The success stories we have uncovered provide a blueprint for
companies making decisions about how to best apply their marketing and
consumer relations resources.”

“The ENGAGEMENTdb study goes a long way towards validating the
importance of social media for business,” said Ben Elowitz, CEO of
Wetpaint. “The closer any company is to its customers, the better, and
it’s hard to argue with the ability for social media to create such
proximity. In this day and age, companies should feel much more
comfortable investing in social media — the correlation to results is
so clear.”

Four Quadrants of Engagement

While each company in the study received a quantitative score, the
ENGAGEMENTdb study revealed that companies fell into four specific
categories in terms of their breadth and depth of investment in social
media channels — Mavens, Butterflies, Selectives, and Wallflowers.

• Mavens – brands that have made social media a core
  part of their go-to-market strategies and are very active in many
  channels; usually driven by dedicated teams assisted by company-wide
  awareness and participation.
• Butterflies — brands that recognize the need to be
  in many channels but have only met with real success in a subset of
  their activities; these companies are usually spread a bit too thin.
• Selectives – brands that focus on just a few channels and excel in those; these efforts are usually initiated by an internal evangelist.
• Wallflowers — brands present in only a few
  channels and very lightly in those; these brands are sitting on the
  sidelines and are wary of the risks. They are still trying to figure
  out the best next steps and investments in social media.

Disclosure/Acknowledgements: The research report was done in
conjunction with Wetpaint as a partnership – neither Altimeter Group
nor I were paid to write the report. I designed the study, created the
criteria, developed the engagement scoring, and wrote the report.
Wetpaint provided the people-power to conduct and execute the
evaluations, helped with the data collection and analysis (thank you
Jean Lee!), developed the Web site and handled public relations. All in
all, this was a model of partnership and I am grateful to Wetpaint’s
Kevin Flaherty and Ben Elowitz for their support.

(For more from Charlene, visit The Altimeter Blog)

(Image source: smartcanucks.ca)