March 05, 2013

The bottom line: social media should drive bookings

Judging by a debate at a recent airline industry merchandising conference everyone, predictably agrees that there needs to be a return for expenditures in the social arena. However, what nobody could agree on was what exactly it means to deliver an ROI from social media and how exactly to measure it.

For many airlines, social media is more about customer service and not in fact a direct part of sales at all. In fact, social media has become a new vehicle for responding to customer complaints. Many companies have responded with subgroups in customer relations that are dedicated to social media. In this area, one could calculate an ROI based on complaints or customer interactions handled per company representative. And social media allows representatives to respond faster to customers.

Having said this, it is not clear that companies achieve a positive ROI in customer service-directed social media. As it has helped customer service manage certain complaints, it has also become easier for customers to log complaints. Many customer relations departments are larger, not smaller, than before.

Potentially, many customers are now more satisfied by how their concerns are handled. This can be measured but as far as measuring ROI is concerned the big question is: will they buy more airline tickets?

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