While many marketers confess to still being stumped when it comes to measuring social media’s return on investment, at least one major brand seems to feel pretty confident about it: KLM Royal Dutch Airlines, the flagship carrier of the Netherlands, long a standout for its forward-thinking social media strategy.
According to air travel trade pub Runwaygirlnetwork.com, which covered an industry conference in Hamburg last week, KLM social media hub manager Gert Wim ter Haar had a very precise number for the amount of revenue generated by his division, which employs roughly 150 people: “Yes we have a huge organization and it costs a lot of money, but social media is also a channel that makes money. In 2014 we were able to contribute to the revenue of the company €25M.” At last year’s exchange rates (2015 has not been kind to the euro) that’s around $34 million.
Wim ter Haar didn’t share a specific figure for how much KLM’s social media efforts cost the company last year, but presumably that number is on file and can be compared with the revenue to calculate ROI, of a sort.
So how does KLM’s social media team drum up business? First of all, Wim ter Haar told conference attendees, the company’s social media channels function as their own e-commerce channels, so customers can actually convert while still on the social platforms. That’s important because the social team found that conversions tended to drop when they tried to refer customers to the KLM Web site. To enable e-commerce within the social channels, the company had to create a secure payment option that social media reps could offer to customers to facilitate the transaction. According to ter Haar, “it takes seconds and we now make €100,000 every week through this payment functionality.”
KLM’s social team has also helped improve customer service. For example, after noticing a high volume of customer complaints on social media about how long it was taking to claim lost property, the airline began sending teams to check planes and return lost items immediately after landing -- then promoted the new service with a video on social media.
I’ve written about some of KLM’s cool social media initiatives in the past. In 2012, for example, it launched program that allows passengers to upload information from their Facebook and LinkedIn profiles and match themselves up with other ticketholders in seating arrangements.