Tom Collinger from Northwestern University presented findings from two studies on social engagement and its financial impact. Study 1 found that relevant social media prompts increased engagement and spending, both immediately and over time. Lower spending customers who engaged were most impacted. Study 2 found that viewing negative word-of-mouth decreased spending while posting it increased spending, if customers could experience the brand value. Strong negative emotions in posts decreased spending while less intense concerns increased it. Both studies provide insights for companies on linking social media engagement to purchase behavior.
2. Industry Impacting, Applied Research that improves marketing communications performance
Some evidence!
Social engagement’s financial impact
2 studies
10 insights
December 9, 2013
Tom Collinger
Executive Director
Spiegel Research Center
T-collinger@northwestern.edu
3. We believe there may be a hierarchy to
customer engagement. . . And it’s not entirely obvious
• Engagement that’s
– Good and bad
– Relevant and not
• Financial Impact that’s
– Significant
– Not
4. STUDY #1:
SPIEGEL RESEARCH STUDY 1.0
CREATING SOCIAL MEDIA ENGAGEMENT THAT DRIVES
PURCHASE BEHAVIORS
Kudos to Edward C Malthouse
Sills Professor of Integrated Marketing
Northwestern University
Mark Vandenbosch University of Western Ontario
Su Jung Kim Research Associate Northwestern University
5. Canadian Air Miles Reward Program
• Coalition Loyalty Program
• Operating in Canada since 1992
• 67% of Canadian households
• 100+ Company sponsors
• “Community” website in 2009
– 99,000 unique posts
• Mile accumulation = proxy for
financial impact
6. The Data
• Random sample of 10,000
collectors as control group
• Accumulation and redemption
history from Mar09 – May11
• All who posted
• Stratified sample of those who
post
7. Research Questions
• How do branded prompts impact
social media engagement and
purchase behavior?
• Do different types of posts affect
behavior differently?
• Is viewing a form of engagement
that translates to financial impact?
8. Analyzed engagement and purchase
impact from 5 prompts
• Block Party
– Rate a “tip or memory”
– Issue a tip
– Chance to win 25,000 miles
• Epic Cruise
– Answer 6 questions (one per week)
– Chance to win a Cruise
• Winter contest
– Tell us what you’re saving for
– Incentive is 10 miles
• Mommy Moments
– Share a mommy moment
– Incentive is chance to win 25,000 miles
• Living Greener
– Share a “living better” story
– Incentive is 5 bonus miles
10. Less relevant prompts get little attention
Share your stories, tips and advice on how you help the planet and receive 5
BONUS AIR MILES reward miles. Make sure you post before April 25th to get
your 5 miles! Post your comments in the Living Greener forum.
“Mommy moments”
11. Posters (engagers) spend more
immediately, and over time
Contest Incentive # of Posters Week 1 Week 2 Week 3 Week 4
Party
Chance to win 25,000
miles
5627
42%
increase
43%
increase
12%
increase
35%
increase
Winter 10 miles 2105
54%
increase
27%
increase
72%
increase
29%
increase
12. Viewers of Winter contest increased
spending > 40%
Low
spenders
Medium
spenders
High
spenders
week 1 week 2 week 3 week 1 week 2 week 3 week 1 week 2
42%
incease
43%
increase
46%
increase 20% increase 20% increase
11%
increase
10%
increase
10%
increase
• Low spenders the most
• A “co-creation” effect
15. 8 Insights worthy of further tests
1. Social engagement without prompts is very low
2. Relevant prompts link to (far) greater engagement
3. Posters spend more in short and longer term
4. Viewers spend (far) more when viewing relevant posts
5. Low spenders who engage impacted most (% not $)
6. The right message causing co creation can be more
valuable than greater price-oriented incentives.
7. Posters who elaborate spend more
8. Elaboration on experiences implies higher future
accumulation
16. SPIEGEL RESEARCH STUDY 2.0
How Negative is Negative Word-of-Mouth (NWOM)?
Moving from Faith to Facts
Evidence on how posting and viewing NWOM on a social media
platform affect customer purchase behaviors
17. Faith: A generalized belief that
NWOM really matters
• 3 Hypotheses
– NWOM is harmful (“disengagement?”)
• Mostly about viewing NWOM
– What about posting NWOM?
• Decrease or increase purchase behavior?
– Negative sentiment is nuanced
• What types of emotions expressed?
• How do they impact purchase behavior?
William R. Wilson, Rice University
Robert A. Peterson, University of Texas - Austin
18. Context and data for this study
• Airmiles data
• Trigger event was unpopular policy
change announcement
• Reviewed posts, views and purchase
impact
• Study period was 15 weeks
• 4 weeks prior and 11 following
• The announcement generated 110
NWOM messages
• 75 customers posted
• 713 viewed the posts
19. We analyzed and coded messages for
types of emotions and intensity
• Analyzed Emotions
– Anger
– Disappointment
– Concern (i.e., doubt, surprise, confusion, etc)
• Coded Level of intensity for emotions
– Increases with the number of emotional
keywords in a post
20. Viewing decreased future spending
(“disengagement?)
Posting increased it, if given a chance to experience the value of the brand
• Viewing NWOM
Point accumulation by 12%
Purchase frequency by 5%
• Posting NWOM & redeeming points (experiencing
the value of a brand)
Point accumulation by 58%
Purchase frequency by 16%
21. Strong negative emotions decrease spending
Less intense ones increased spending
• Posting NWOM that has expression of anger
Point accumulation by 5% (N.S.)
Purchase frequency by 3%
• Posting NWOM that has expression of concern
Point accumulation by 183%
Purchase frequency by 65%
22. Our future work
Better understand relevant
engagement
• In-market experiments
• Other categories
• Compare across platforms &
channels
• Analyze Relationship
Engagement vs. Event
engagement
23. Contact me if. . .
• You’d like the academic
research report in greater
detail.
• Journal submission
• Access to models and
methodology
• You’d like access to future
research
• You’re interested in
sponsoring new research
(Forgive me the shameless plug)
Tom Collinger is the Executive Director of the Medill IMC Spiegel Digital
and Database Research Initiative at Northwestern University. Tom
joined the faculty at Northwestern University in January 1998, served as
Associate Dean and Department Chair from 2005 to 2011, and now
leads a research center linking consumer engagement with marketing
communications platforms to purchase behavior. He also serves as
senior director of distance learning. He is a widely recognized expert in
the areas of integrated marketing communications, direct, database and
e-commerce marketing management, customer loyalty, customer
relationship management, and channel integration. He is a former
Senior Vice President of The Leo Burnett Company, former Vice
President and General Manager of Ogilvy & Mather Direct/OgilvyOne,
and former member of the editorial advisory board for the Journal of
Consumer Marketing. Blog: http://about.me/tchere - See more at:
http://socialmedia.org/summit/preconference/#sthash.VvXCBOyz.dpuf
24. Appendix: Engagement
Insight from academic studies
• Conceptual roots of CE* draw on theory addressing interactive experience and value co-
creation within marketing relationships.
• 2010 Journal of Service Research Special Issue titled ‘‘Customer Engagement’’
is of particular relevance to advancing engagement research in marketing.
• Premise 10 states ‘‘Value is always uniquely and phenomenologically determined by the
beneficiary.’’
• Of particular note is that the terms ‘‘engage’’ and/or ‘‘engagement’’ appear to replace
more traditional relational concepts, including ‘‘involvement’’ and/or ‘‘participation.’’
• The five propositions
– CE reflects a psychological state, which occurs by virtue of interactive customer experiences
with a focal agent/object within specific service relationships
– CE states occur within a dynamic, iterative process of service relationships that co-creates
value
– CE plays a central role within a nomological network of service relationships
– CE is a multidimensional concept subject to a context-and/or stakeholder-specific expression
of relevant cognitive, emotional, and behavioral dimensions
– CE occurs within a specific set of situational conditions generating differing CE levels
*CE = Customer Engagement