Businesses Anticipate Significant Increase in Social Media Investments as it Becomes Essential for Long-Term Success

April 06, 2021 09:00 ET | Source: Sprout Social, Inc

Social Media sits at the center of people’s daily lives and businesses are increasingly reliant on social data to inform strategic decision making across an organization. In fact, according to new research commissioned by Sprout Social (Nasdaq: SPT)—an industry-leading provider of cloud-based social media management software—and conducted online by The Harris Poll, 85% of business executives report that moving forward social data will be a primary source of business intelligence for their company, and nearly half (46%) expect their company’s social media marketing budget to increase by up to 100% in the next three years. These plans align with consumers’ needs—the data shows that going forward social media is the #1 preferred way to learn about brands, ahead of all other channels including email, or TV and print advertising.

The Harris Poll, on behalf of Sprout Social, surveyed more than 1,000 US consumers and 250 business executives to understand how people and businesses use social media today, and how they plan to use it in the future. The report, “The State of Social Media: After a Year of Transformation, Executives Are All-In on Social,” reveals the importance of social media as a business strategy, its role as a cornerstone of customer experience and the challenges facing brands in achieving success.

The report found that today’s consumers expect brands to use social media intelligence to provide a robust, curated experience. And while most executives are aligned on the importance of social media for their business, they are not confident in their company’s ability to meet the needs of their customers on this mission critical channel. Fewer than half of executives describe their current social media strategy as ‘very effective,’ while 90% of executives agree their companies need to more effectively use social data to understand their customers.

“Our research shows that US companies today rely more on social media than any other communications channel for virtually all critical business activities,” said Anna Ginovker, Director and Senior Consultant, The Harris Poll. “Whether for sales or lead generation, engaging with customers, building brand awareness or for gaining customer insights, nearly all executives (95%) agree companies will more heavily rely on social data to identify business opportunities outside of marketing. A majority of executives (59%) also anticipate their use of social media to increase over the next three years indicating this channel is certainly here to stay—as much for businesses as it is for consumers.”

“There is no doubt this past year served as a catalyst for the digital transformation happening across businesses, but what I find most compelling from the report findings is that this transformation is disproportionately unfolding on social media,” said Ryan Barretto, President of Sprout Social. “Consumers are clear—social media is where the customer experience should start, develop and end. Compared to a year ago, consumers have increasingly used social media to discover new brands (43%), recommend brands to their friends and family (33%) and make a purchase (36%). These numbers become even more pronounced for younger generations. For businesses to thrive in this world, it is clear that social insight on key touchpoints across the customer lifecycle cannot be a long-term plan, it must happen now.”

Additional key findings from the report include:

• Social media will become the most important source for data and insights that inform key business decisions. Nearly all executives (95%) agree companies will more heavily rely on social data to identify business opportunities, including those outside of marketing, over the next three years. They anticipate use of social media data to inform strategy and business decisions across sales (67%), customer service (61%), Product (53%), Research and Development (48%) and Human Resources (43%) departments.
• Social media usage is trending upward, especially among younger generations, and expected to continue to grow: The use of social has grown among the majority of consumers over the past year (54%), and 34% expect it will continue to increase over the next three years. Gen Z and Millennials have driven the greatest surge in usage (65% and 63%, respectively), and are more likely to note they expect it to keep rising (45% and 46%, respectively) compared to other generations.
• Relevance is at the core of the customer experience: Consumers expect companies to use social media to provide a more personalized experience based on previous interactions (61%), read and analyze what customers post on social media (59%), and know them better based on their activity on social media (51%). This is more pronounced among Gen Z, Millennials and Gen X, yet no more than 44% of executives are ‘very confident’ in their social media strategy meeting the needs of different generations.
• Positive social media experiences translate into sales: Seventy-eight percent of consumers are more willing to buy after a positive experience with a brand on social, 77% will choose that brand over the competition, and 72% will increase their spending, demonstrating the impact of social on the bottom line.

For more on how businesses and consumers use, and plan to use, social media, download the full data report here.