The number of users of social platforms are staggering; 1.35bn people actively use Facebook alone, so the attraction for businesses is understandable. Having the ability to to find new customers and interact with existing ones, on platforms which are familiar to many is just too good to turn down. However, there are many companies out there which may have amassed great number of friends, likes and followers across many social platforms, but are not able to succeed in generating profits through these channels.
First we must ask, why do people actually use social platforms? It is simple, to satisfy two basic human needs of meeting new people and strengthening existing relationships. What companies need to develop is a social strategy that appeals to these two needs.
But how does a social strategy differ from a digital strategy? The below diagram provides an explanation.
The primary advantage of a social strategy over a purely digital one is in tapping into how people really want to connect with other people not with a company.
“businesses that thrive on social platforms don’t just sell stuff; they also help people to connect”
Piskorski (2011)
Social strategy is outlined above in the quote from Piskorski. By appealing to the basic human needs of meeting new people and strengthening existing relationships, businesses have the potential to take their digital presence to the next level. It allows for them to create a social environment online where people can interact with like minded people.
For this to work, social strategies can be categorised into four paths:
- Reduce costs by helping people meet
- Increase willingness to pay by helping people meet
- Reduce costs by helping people to strengthen relationships
- Increase willingness to pay by helping people to strengthen relationships
In order to understand exactly how this can be done it is suitable to look at real life examples of social strategy in action.
The first example put forward is Zynga’s social strategy. For those who do not know who Zynga are, or what they do, they are an online gaming company; famous for games such as FarmVille and CityVille. The popularity of these games led to revenues of $1bn in 2011. Being games that are based on Facebook, the number of potential users are tremendous, and their success has been down to allowing users to connect with family and current friends as well as rekindle old friendships. A survey carried out by Information Solutions Group about users of Zynga games found that a third of players said it helped them connect with family and friends. Another third of players said it facilitated connections with old friends and the final third responded saying it allowed them to make new friends. These interactions with players’ social groups could potentially reduce Zynga’s customer acquisition costs by half. In doing so Zynga’s social strategy (1) reduces acquisition and retention costs (2) by allowing people to reconnect with friends (3) if they invite them to return to the game.
Another example a successful social strategy in action can be seen with Yelp, the online review platform. There are 135m unique monthly visitors to Yelp, showing that there is a wealth of information on the platform. All reviews on the platform are provided by volunteers (so called Yelpers), thus reducing costs of acquiring its content. Furthermore, prolific “Yelpers” are invited to become an “elite Yelper”. This allows for the interaction of like minded individuals, building new friendships and solidifying existing ones. Yelp’s social strategy (1) helps it obtain quality content for free (2) by allowing the best contributors to meet like-minded people (3) if they write reviews. Due to the fact that it gives the ability to meet like-minded individuals, “Yelpers” are likely to continue their review writing, to further meet their basic human needs.
The next example if eBay’s Group Gift service, which gives the opportunity for a group of friends to pool funds to buy gifts for friends. It provides the social benefit of groups being able to purchase a gift for friends that are better targeted and potentially more expensive than they might have otherwise purchased. In fact, Group Gift purchases are on average five times more expensive than ordinary eBay purchases. Furthermore, after using the Group Gifts service, a third of participants go on to sign up to a new PayPal account and another third return to eBay within a month to purchase other items. Ebay’s Group Gifts service social strategy (1) increases willingness to pay (2) by allowing people to strengthen their friendships through gift giving (3) if they ask their friends to buy from eBay.
The final example is American Express (AmEx) OPEN, and directed at business owners. As owners of AmEx OPEN credit cards users have use of Connectodex, an online social platform that facilitates connecting with other business owners. Connectodex is a service that targets small business owners, allowing them to connect and share information to help learn from each other. Given that a Forrester Research study found that nearly half of small businesses, with revenues of over $100,000, said they want to learn from other business owners. In order to use this site, business owners must use the AmEx OPEN credit card to gain access. Thus encouraging the continuation of business for AmEx. Their social strategy (1) increases willingness to pay (2) by helping professionals to meet others like themselves (3) if they maintain their card membership.
For both Zynga and Yelp, their social strategies are inherently linked with their products. Being social products, it is much easier for them to carry through with their social strategies, as being social is something that runs through the core of the business. However, AmEx and eBay have managed to integrate a social strategy into their businesses with great affect with positive effects on profit.
In order to implement a successful social strategy it is key a business to think about how to take advantage of unmet social needs and then connect the proposed solutions to their current business goals.
However, it is apparent that the examples above are linked with specific products and services, so it may be difficult to implement into other organisations. But with the right product and the correct expertise it can be hugely beneficial to the business. With social platforms becoming even more central to people’s lives, it is something that is important for companies to tap into and develop a social strategy that links to their business goals. The quicker the adoption of such strategies will take organisations to the next level, leaving competitors playing catch up.
Piskorski, M. (2011) Social Strategies That Work, Harvard Business Review. Vol.89, No.11, pp.116-122