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July 20 , 2010

Social networks - the new frontier for customer acquisition

Smaller companies most successful

While many marketers struggle with how to measure social media marketing return on investment, some businesses are finding at least one hard metric where their efforts have paid off—customer acquisition.

According to a February–March 2010 survey from office services firm Regus, smaller companies see the most success, with nearly half of small businesses around the world having acquired a customer through social networks. Large companies were less successful, but more than a quarter had seen social success through customer acquisition. This was despite large companies being more likely to devote budgets to social marketing.

Successful Use of Business Social Networks for Customer Acquisition, by Company Size, Mar 2010 (% of companies worldwide)

The survey of senior managers and business owners from around the world found customer acquisition varied by country, with the US coming in the lower half of the pack. Overall, 40% of businesses studied had acquired a customer through a social site, but only 35% of US businesses said the same.

Successful Use of Business Social Networks for Customer Acquisition, Mar 2010 (% of companies in select countries)

“While the most popular function of these networks remains that of keeping in touch with contacts, businesses are also successfully acquiring new customers, supporting their retention efforts and interacting with customer groups,” said Sande Golgart, vice president at Regus, in a statement. “Organizations who have not yet ventured into the world of social networking may be missing out on sizeable business opportunities.”

In January 2010, Hubspot found that more than 40% of companies using social media marketing had acquired a customer through the channel. The Regus survey, which was not limited to businesses using social marketing, suggests that number may be slowly climbing.

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