Almost every life science company we talk to about web 2.0 and social media has the same question: what’s the return on investment (ROI)? We’ve discussed that the ROI equation for social media strategies and tactics is the same, but that the ‘expense’ and ‘payback’ calculations will likely be different. In this post, we’ll discuss two reports which show that web 2.0 sites have increased traffic and engagement, and that customers who are engaged buy more. Together, they present a strong argument that adding web 2.0 features can directly and positively impact a company’s sales.
Web 2.0 sites are dynamic and interactive, and include sites which the user can add content to such as blogs, forums, and wikis. The first report we’ll discuss is titled ‘Traffic metrics and Web 2.0-ness‘ and it was published in Online Information Review from a group in Taiwan. They surveyed the online habits of about 1000 people and correlated metrics such as sites visited, page views per site, and duration per page on site with the degree of ‘Web 2.0-ness’ a website had.
The researchers found a positive correlation between the Web 2.0-ness of a site and users’ understanding of its content and the number of visitors to the site. In other words, adding web 2.0 elements and more content leads to stronger user engagement with the site and a related increased traffic to the site. One interesting corollary they discuss is the ‘double jeopardy’ small companies face: fewer products=fewer pages=less engagement. We definitely see this with smaller life science and biotech companies we talk to, and we have many ideas to help them overcome this issue.
You may be asking yourself, does increased engagement mean more sales? The second report is from Gallup and is titled ‘Customer Engagement–What’s Your Engagement Ratio?’ (Note: the report is a bit of an ‘infomercial’ but has good information). Gallup first looked at what they call ‘World Class’ companies, which rank in their 90th percentile, to determine whether they engage their customers more than the others. The result was shocking–the ratio of ‘Fully Engaged’ to ‘Actively Disengaged’ customers was ten-fold more for the World Class companies compared to the others. So, top performing companies have a higher ‘engagement ratio’–is this directly related to improved sales? Gallup has found through many examples and industries that emotionally engaged customers spend more and are retained more easily. Moreover, they’ve seen that companies can improve their business performance by increasing their engagement ratio. See the report for more details, as some of the details behind the statistics are not given and thus hard to summarize, but Gallup is a highly respected company and I’m sure more can be learned from them if you need more information.
Taken together, these two reports show that adding more web 2.0 features to your life science company website will lead directly to increased sales. What may be more exciting is that life science and biotechnology offers many interesting ways to add content to your site, and we’ve discussed that you may be closer than you think to making these changes.
Want to learn how to get there even faster? Attend our Social Media for Life Science and Biotechnology Workshop 2: The 4 B?s of First Party Applications interactive webinar. We’ll talk about web 2.0, blogs, forums, and wikis, and how to generate engaging content for life scientists. Also, check out our Social Media for Life Science and Biotechnology Training page, we offer training and workshops on almost every topic, contact us if you don’t see what you need!
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3 thoughts on “How Does Web 2.0 Increase Life Science Product Sales?”
Interesting, though an obvious question regarding causality arises. In addition, while these polls attempt to address the question regarding direct engagement, they do not discuss the benefits realized by biotech companies who affiliate with other web 2.0 sites, such as Quartzy (www.quartzy.com), which offers free online lab management and organization tools to academic / non-profit life scientists.
There is a little bit of a disconnect here though, because just engaging more (chatting via @replies) on Twitter or on a blog is not necessarily going to increase more sales or ROI for a Pharma, Biotech or Life Science company.
Increased hits, views etc are not a metric that necessarily correlates with sales. The company may therefore not be engaging on any web 2.0 platform with customers per se, but rather followers, competitors or vendors and if those followers are not purchasers, you can chat and engage all you like with little or no effect on revenue. of course, sometimes the corollary is true and if your customers are engaging, then of course you can influence your reputation and standing in front of a suitable audience.
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