How important is the management of social media in your organization? What are your social media efforts? What is their value to your organization?

Although social media are becoming increasingly important in the media landscape of worldwide businesses, most managers can’t answer these questions. Thanks to research, published in a recent article, Professor Alain Pinsonneault, co-director of the McGill-HEC Montréal EMBA program, and colleagues from McGill University’s faculty, professors Sunghun Chung, Animesh Animesh and Kunsoo Han, have contributed to a deeper understanding of the influence of the social media efforts on a company’s performance.

Here are some findings from their study relevant for managers.

First, it is important to carefully determine the organization’s short term and long term social media strategy, since social media efforts contribute to bother current and future firm performance.

Second, companies should put more effort into their social media, both in terms of quantity and quality. Both the quantity, measured by the intensity of efforts and the volume of messages issued by the company, and the quality, measured by the richness of information contained in the messages and the firm’s responsiveness, influence consumer engagement with the firm social networks. This commitment is then reflected in posts, comments and likes and positively contributes to the firm’s performance.

Third, there is a benefit to providing rich, informative information, and to interacting with customers: they will pay more attention to the company, and visit the company’s website more frequently. Importantly, the research shows that investing in the richness of the information published on social media will have a more positive impact on firm than a strategy focused on the volume of publications alone. The exception is in transactional companies, (companies who sell their services online, such as airlines or online retail companies). For those companies, the intensity, or volume of publications also positively impacts their performance.

Fourth, the study shows managers how they can gauge the return on investment associated with social media efforts on business performance in terms of market value.

Finally, the methodology used in the study can also be used to analyse and benchmark competitors’ social media efforts, which may be relevant for a manager in planning his own firm’s social media efforts and investments.

For more details, we highly recommend reading the full article.