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The Positive Effects of Social Engagement on Reputation

Reputation Management - Posted: Sunday, 9 August, 2015 - 22:00

It’s proven! Social media engagement has indeed a significant positive effect on corporate reputation. Researchers Dijkmans, Kerkhof and Beukeboom have shown that brand engagement via social media improves the corporate reputation. This is true for customers, but even more so for not-customers. Based on their research, we'll explain why corporations should engage in social media activities and how this will lead to more organisational revenue and profit.

Summary of the study

The scientific study investigated whether and when organisations’ social media activities of an organisation and people’s engagement with those activities are related to corporate reputation. They chose KLM Royal Dutch Airlines as a case company, “because it is very active on a range of online platforms, has enough online followers, and is regarded as a frontrunner in this field”.  

They conducted a survey among customers and non-customers originating from four different sample groups: a general representation of the adult Dutch population, a sample of KLM’s Twitter followers, a sample of KLM’s Facebook fans and members of their loyalty program ‘Flying Blue’. They surveyed their social media use, their engagement with KLM’s social media activities and their perception of KLM’s corporate reputation.

Consumers’ online engagement with the company was found to improve their perception of the corporate reputation. This result was even more clear for non-customers. Of course, the more people used social media, the more they engaged with the company online and the better they perceived its reputation.

Why social media engagement leads to a better reputation

Like other companies, KLM mainly publishes sharable and attractive content, contests and good tidings on their Facebook and Twitter channels. This positive content on the social media channels of KLM gives colour to the image of the organisation. This way, social media engagement leads to a better reputation among the people exposed to it. Because the image of non-customers is pretty blank – they do not have any personal experience with or many interactions the company – their image is affected even more than that of customers.

More than 50% of the social media messages of the public about companies and brands is positive as well. However the 10% negative messages can harm the reputation – in this case mostly about lost luggage and delayed flights – it is scientifically proven that public replies by the company that are written in the right way nullify this effect.

Why a good reputation leads to more profit

A good reputation has multiple positive effects on the revenue and profit of your organisation. First of all, it serves as an important selection criterion in the buying process. Potential buyers are more likely to select an organisation with a good reputation. They are also willing to pay more for their products or services.

A good reputation also creates market entry barriers and keeps the number of competitors down. Furthermore, customers of organisations with a good reputation tend to buy again and are less likely to choose for products or services of a competitor. As follows, social media engagement produces higher customer loyalty and higher customer retention.

Conclusion

Hence, time to take action. Maybe you’ve just started setting up professional social media engagement, maybe this article will give you a reason to allocate more resources to professional social media activities. Even if you have allocated enough resources and have appointed a proficient social media team, there’s always room for improvement.