Business having their own social networks is more profitable than Facebook, new research findings | Univ. of Michigan | The Social Media Learning Lab |

New research:  Businesses make even bigger profits when they have their own virtual brand community, vs. Facebook and twitter social networks.

Yes, it continues to be all about relationships and community.


New research from professors at the suggests a significant payoff for companies that set up their own online communities.

Puneet Manchanda, Professor of Marketing at the Michigan Ross School of Business. and Ross School colleagues Grant Packard and Adithya Pattabhiramaiah use data from an unnamed retailer of books, CDs and DVDs, they found a 19 percent bump in incremental revenue from customers after they joined the online community.

Manchanda calls this revenue "social dollars."

The study, one of the first known to examine empirical evidence of social network outcomes, shows this spending persists over time, well after the novelty of joining the network wears off, and doesn't cannibalize between channels.

In this case, the company sells products both online and in stores, and network members spent more in both venues.

The spending increase came via more frequent purchases, rather than bigger receipts.

More via:  Univ. of Michigan News Service