Social media has become an important online channel for companies to proactively promote their brands and products and engage with consumers. Companies often create pages on social media platforms, generate content and interact with consumers.
The use of social media by companies raises a number of research questions. First, to what extent does the use of social media generate business value, especially in terms of corporate sales performance? Second, to what extent (if at all) do sales results from social media operations differ for different types of businesses, and what causes the differences? Third, how should companies effectively use social media to achieve better sales performance, depending on their nature? Answering these questions is important for researchers and practitioners alike.
We examine the impact of companies' social media engagement on their sales performance, answering the if, what, and how questions. The study used a quasi-experimental design in a social e-commerce environment to quantify the increase in sales performance following corporate social media engagement using propensity score matching and double difference methods. The results showed that corporate social media engagement resulted in an average 20.67% increase in sales revenue. Companies selling low-involvement products benefited more from social media adoption than companies selling high-involvement products. In addition, regarding how social media engagement is managed, informational content is generally effective in driving sales growth, especially for high-involvement products, while promotional content, a new type of content found in this study, is more beneficial for sales growth of low-involvement products. At the same time, the number of followers on a company's social media pages has a positive impact on sales revenue.
This study reveals the value of corporate social media engagement, particularly in terms of industry differences and corporate operating practices.
Ren, F., Tan, Y., & Wan, F. (2022). Know Your Firm and Manage Social Media Engagement: Impact on Firm Sales Performance. MIS Quarterly, forthcoming. (https://doi.org/10.25300/MISQ/2022/16162)
