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How does social media allow businesses to form relationships with prospective consumers and clients?

CASE STUDYTITLE

Word count - 3,289

Case study Module |Birmingham Institute of Art and DesignBirmingham City University | MA Design Management | April 2013

Sam Roberts

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01 INTRODUCTION

NATURE OF THE STUDY

02 LITERATURE REVIEW

03 RESEARCH METHODOLOGY

APPROACH

DATA COLLECTION

QUESTIONS POSED

04 PRIMARY RESEARCH FINDINGS

KRIS ROBB – LBi

SARAH SPERRING – PARKWOOD

05 CONCLUSION

LIST OF FIGURES

Figure 1: ACT, Kabani (2012)

Figure 2: Valuable content, Safko (2012)

CONTENTSPAGE

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01 INTRODUCTION

This research investigates and examines how businesses use social media to form relationships with prospective clients and consumers. To start the report introduces and defines the subject area followed by an analysis of surrounding material in form of a literature review. The research methodology is then brought forward and followed thorough to data analysis, this finally leads into to the researchers conclu-sion concerning the research area. It is important to note that social media is referred to as ‘SM’ in areas of the research to simplify language and improve reading experience due to the word repetition.

NATURE OF THE STUDY

Social media is available to everyone; therefore the purpose of its use depends heavily upon the goals of user. SM is generally operated in two ways, the individual is behaving as a consumer of content or they are behaving as an author of content, consumers tend to use SM in a more recreational way how-ever this depends upon the application. Authors (people, brands, businesses) feed their followers with content that matches their interests or purpose and may generate a return which can come in various forms. This ‘return’ on investment might be that the user generated of a new host of followers because the last piece of content published was useful to individuals, or answered questions that some of their consumers had, in essence solving a problem. As social media has grown, businesses have used it as a platform to market and advertise to consumers and customers, this research investigates how these suc-cessful relationships are formed.

INTRODUCTIONPAGE

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02 LITERATURE REVIEW

Kabani (2012) depicts a simple marketing framework known as ‘ACT’ shown in figure 1. Initially a client/consumer is attracted to a website, they have a personal interest in the subject matter and next the pro-cess of conversion may take place. This is when a visitor becomes a consumer or customer, consumers tend to look at products whilst customers make the act of purchasing a product. Finally the final ‘trans-formation’ stage takes place, this is the act of turning past and present successes into a means of attrac-tion, an example of this would be showcasing successful product/service’s as case studies thus becoming ‘social proof’.

LITERATUREREVIEW

Figure 1: ACTKabani (2012)

Kerpen (2011) explains that a social media pres-ence is like a brand or an identity. It is feasible to associate a company with a form of affiliation i.e. the ‘cool kid’ at school that everyone wanted to be friends with. Questions are raised such as why did everyone wanted to be his or her friend? Does this affect their social standing meaning they become ‘cool’?, these identities relate to online personali-ties also. When it comes to online identity it is important for businesses to think about how they want people to perceive them and position ac-cordingly. This kind of technique can be utilised through SM, however it requires a business or brand with a strong identity already set in stone.

Mcquarter (2012) highlighted the team of researchers at Facebook conducted research within their Facebook brand pages and illustrated that through using paid media companies reach 5.4 times more people on average more vs. competitors who had not utilised paid media. The study analysed Samsung Mobile, a major retail brand and finally a major financial services company, all possessing over 3 million followers. Findings indicted that each brand achieved a paid reach that was over five times the size of their organic reach. This insight could be considered as a predictable result, however it illustrates the impact paid media can have on businesses coverage and audience exposure. It also explains how smaller businesses that rely on a smaller budget may struggle to compete with this level of coverage, further emphasising the dominators in each market.

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Ahmed (2012) provides further insights concerning social media relationships, ‘Instead of just interrupt-ing people, serve them and make them feel something. Make meaningful connections.’ Within social networks adverts are targeted through a particular target audience taking into consideration gender, age, education, interests, etc. If a user will ‘Like’ a particular companies fan page then they are giving that company permission to talk to them via the content they publish. This instantly becomes a means for a company to reach their audience and it is also important to consider the multiplier effect of con-nections whereby because ‘you’ as an individual like a company or author it may then be influential to your friends.

LITERATUREREVIEW

A LISTENING TOOL

Olander (2012) states ‘social media can be a fantastic listening tool for companies to react and solve a consumer problem. This gets the audi-ence engaged right away, creating delight. This is about serving so a brand or business can make adjustments, tweaks and improvements. There are various examples across social media where this kind of process is taking place. For example, if Fujifilm release a new rangefinder camera into the market, their target audience will most likely be comparing the performance of this camera vs it’s competitors to then make a purchase. Consumers may well be asking ‘Which is the current best rangefinder camera?’. Fujifilm could post a range of content discussing its performance and even use accredited photographers endorsing or reviewing their equipment with it coming on top.

This could have potentially solved the consumer problem, therefore its particular important to under-stand how through using these touch points a company can help ‘serve’ the customer. Although fol-lowers can be influenced through such methods, they author must also gain the trust of followers or consumers. Peppers (2012) states that the crowd always wins, so work with the crowd, not against it. As a business if mistakes happen, you should apologise and always be honest, attitudes can suddenly build and it is important to be flexible and respond instantly. This leads on to the freedom of speech which is inherited via social media. The Drum reported on a survey conducted by CoolBrands and found that 10,000 people tweet about the company Apple each week, whereas 4,000 people tweet about Samsung. Although this was the case they found that both had a similar number of positive tweets, whereas Apple had more negative comments regarding their prod-ucts. This follows on from Peppers (2012), displaying that once you engage with the crowd and use social media to your advantage, expect your clients and customers too also use it to vent issues if they feel more negative about your services/products.

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Ryan (2012) suggested that before businesses engage with social media It would be wise to consider if their products or services are suited to digital marketing and social media. They need to know if their audience is online or in the process of coming online. If your a butcher based in a thriving market town in the centre of Llanberis, Wales with established clients and you are content in maintaining this level of business then the need of social media isn’t essentially required. The interest and investment into social media is when one wishes to broaden the scope of their business and begin selling a particular service/product to new prospective new clients or too build on their existing ones. Smaller businesses have to examine their relationships and evaluate whether social media is going to be an investment as creating a thriving SM presence takes time and will need to be managed consistently.

LITERATUREREVIEW

VALUABLE CONTENT

Safko (2012) highlighted one of the most important advantages of social media, this is the process of taking people one might not know and turning them into a follower. The act of providing useful content on a consistent basis can be effective as a form of sampling. It’s free and therefore attractive to every-one, the idea of receiving valuable content that helps people will give them a reason to return, and this is the conversion process taking place. Figure 2 shows a simple formula for this, the process can take alternate routes but the core input and output remain the same. This supports Kabani (2012) who states that social media rarely leads to instant clients. In regards to your conversion as a social media marketer, your primary goal should be to turn strangers into consumers.

Figure 2: Valuable ContentSafko (2012)

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03 RESEARCH METHODOLOGY

APPROACH

The primary research within this study follows on to investigate how social media can be used to form relationships with prospective consumers and clients; the findings are explored later in this document with the literature review discussion in mind. A strategy was required to implement the primary research and Denscombe (2010) highlighted that the researcher should be able to justify their choice of strategy explicitly and clearly. The researcher chose to conduct an embedded case study, this provided a solid framework for the researcher explore a subject that has grown quite large and also complex. Bell (2010) supported the case study method by stating that it allows the researcher to explore depth within a study whilst aimed at individual researchers.

DATA COLLECTION

The data collection method chosen was semi-structured interviews with practitioners actively engaged in Social Media. Hayes (2000) discusses how interviews can be solid platforms when studying a subject in detail, furthermore Bell (2010) states that interviews allow the researcher to follow up ideas and tease out responses and feelings. The two interviewee’s were managers of social media within large organisa-tions and were in charge of most of their marketing operations concerning social media. The danger of bias has been highlighted by Bell (2010), the interviewer must interpret data in a credible fashion and also conduct questions without influencing the interviewee’s answers. Another concern was access to individuals who specialise in SM, the researcher had to make use of current networks and contact local businesses and agencies.

RESEARCHMETHODOLOGY

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RESEARCH QUESTIONS POSED

The interviews with both practitioners focused around the following questions:

What is your social media strategy and how does it coincide with your goals? (as a business/as a publisher of content)

Are there particular techniques that you utilise as a business? How do you implement them? How often?

How do you measure your return in concerns with Social Media? What has been an effective post or campaign?

Can you give an example of a project, post, technique which has been particular successful, Why did it work?

How do you generate content that satisfies your followers over competitors?

How do you manage social media across multiple sites/applications?

Which social media application has given you/your business the most success? Twitter, Facebook, LinkedIn, Google+, Youtube, Myspace, Pinterest, Tumblr, Why?

Do you try to answer consumer issues/problems through social media? How do you do this?

RESEARCHMETHODOLOGY

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04 PRIMARY RESEARCH FINDINGS

This section of the research examines the themes and theories discussed within the literature review against the primary research findings and analysis. The two practitioners interviewed were:

Kris Robb – LBi Social platform and community development managerSarah Sperring – Parkwood Leisure Digital marketing manager

RESEARCHFINDINGS

KRIS ROBB - LBi KPI’S

Kris works for a marketing agency that helps businesses communi-cate in a variety of ways, his speciality lies within developing social media strategies. One of the first point’s Kris touched upon was con-cerning KPI’s – key performance indicators. These can be measured in a whole host of different ways, however there are 3 basic types.

Firstly by thinking about RAW numbers i.e. number of customers, number of complaints in a business. The next type of measure is a PROGRESS measure, this might be a percentage i.e. what percent complete is an item? The final indicator is a CHANGE measure, i.e. there was a 22% increase in sales vs. last year, last week etc.

RAW - PROGRESS - CHANGEKris stated that these metrics provide a means to measure where a business is and where they want to be through using SM, they are not only an indicator to help form a social media strategy but also help show the return on investment, statistics become very important for SM as it’s hard to measure its use via any other means.

ANALYTICS

This led on to a discussion concerning analytic tools, LBi use Sysomos, Brandwatch and Google Analyt-ics. These can be important when managing social media on a large scale, however even on a smaller scale they can provide full statistics concerning data and push out charts which give visual readings into what is happening through SM. Kris stated that these tools enable LBi to search the web for any mention around a specific query that they build for each and every client search.

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For example, if a client was running a campaign and they want to know how users are reacting to it they would use these tools to search for keywords where it is possible to break them down by demographic. This also means the tools can help define a competitor analysis of a client’s closest competitor. It is possi-ble to build entire campaigns by researching what is out there and being talked about or even build cam-paigns for niche markets that haven’t been openly exposed yet. It is through these tools this ‘chatter’ is found, also knowing what to look for and where to look helps. This reflects and supports Olander (2012) in that, LBi are using these tools as a means to listen to consumers and people, and through listening to people they are then forming campaigns but also understanding things about their competitors.

RICH CONTENT AND APPLICATIONS

Kris felt quite strongly that ‘Rich Media’ is something that always works to engage people through social media, especially through Facebook. This is content such as videos, images, music, they tend to have the highest virality. A well written engaging post that’s text based can drive a substantial amount of engage-ment however it must spark a connection in people. Trends and current topics are great for driving this engagement, Kris believes in the saying ‘Content is King’ which essentially means through the creation of useful, engaging, rich content, that is also free, you will see good response and interaction from follow-ers (see appendices). The way in which engagement is created differs between social media applications; successful content driven through Facebook may not be successful at all through Google+. This is where a business or brand must know exactly who they are and produce content in line with this tone. Kris then discussed ‘promoted tweets’ and how they can have a positive impact on exposure to audiences, this supports Mcquarter’s (2012) findings concerning the benefits of using paid media in SM (see appen-dices).

RESEARCHFINDINGS

Within the discussion Kris spoke of how this relates to design agencies or even with business-to-business rela-tionships. As a whole, the core tactics or strategies remain the same, creating engagement is going to come through some form of emotional connection, or even a ‘social proof’. For example, Business A is looking to work with Business B however they are unsure of both their customer service and expertise in their respective industries. If Business B have a Facebook page or multiple Facebook pages which are full of actively engaging customers, supporting them through negative feedback and resolving customer issues, it is a form of ‘social proof’ that Business B are indeed providing a good level of customer service.

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SARAH SPERRING - PARKWOOD LEISURE

Sarah is currently Parkwood Leisure’s digital marketing manager, Parkwood manage and own a large host of Leisure centres across the UK. When Sarah arrived Parkwood had virtually no social media presence, hearing how she has developed their company through social media from such an elementary level was very insightful.

RESEARCHFINDINGS

STRUCTURING AND MANAGING SM

The way in which SM content is structured and organised was an important consideration for Parkwood for a variety of reasons. In relation to Facebook, Parkwood set up social media pages representative to their specific leisure centres rather then one big corporate ‘Parkwood Lei-sure’ page. Through doing this Sarah can monitor these pages, give feedback, provide quarterly reviews on each centre and manage the overall standards across centres. Each leisure centre has a member trained in SM so they can update their own pages, it would be impossible for Sarah to manage 82 updates a day with no support.

Additionally, if members need to be made aware of something i.e. a class is cancelled then the staff can quickly update the page. Taking things further, Sarah states that this helps manage any positive/negative feedback from the customers or consumers. If everyone came to one page to voice complaints then it would take up a large proportion of the page and potentially create a negative ripple effect, this would also make it difficult to pinpoint which centres the complaints are directed at.

CONTENT

In correlation with the discussion with Kris, Sarah was strongly supportive of the results rich content can produce, the use of images and video creates a more invested interest and can help form emotional attachment. Continuing on, Sarah explained that emotional attachment might be the point where one of their Facebook page’s becomes a ‘community’, a thriving group of people actively discussing issues related to the page, In this instance it might be members asking for gym partners or discussing exercise routines and Sarah has witnessed these connections take place and realise how they have provided a platform for their customers (see appendices). Another insight was into how consumers have evolved through marketing and social media, they are smarter and much more aware of the content around them.

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Parkwood manage their content by keeping information related to their centres making up 80% of any posts, whereas their marketing messages are only output 20% of the time. Everyone is bombarded with marketing messages throughout daily life and especially through their social media applications, control-ling this ratio is important. This reflects back upon Ahmed’s (2012) statement ‘instead of interrupting people, serve them, make them feel something’. Through serving customers with useful content Park-wood provide an information hub, and by creating an online community they can make their customers feel something.

ROI AND NEGATIVE COMMENTS

LBi monitor ROI through the CTR’s that a particular campaign or post receive, they utilise analytics tools to see these metrics. Sarah discusses how it is hard to measure an ROI when it comes to social media, for example she does not feel that measuring ‘Likes’ is a good way to measure a return. This is because it is easy for a user to ‘like’ something on Facebook, many people do this and never return to the page, it is suggested that considering the views of a particular post or piece of rich content along with the com-ments received will provide better answers to the success of it (see appendices). Once again, a comment on a post shows engagement and it can also depict emotional connection depending upon the nature of the content or post. Negative comments are a problem that some businesses grapple with in their social media channels, this is because when a user is frustrated or upset about something they can voice an opinion more easily then ever and so along as they reach a recognised channel. Sarah spoke of various negative feedback that comes through their centre pages and so long as the business is willing to be open and listen to the negative feedback then actions can be made to change this. Peppers (2012) discussed the importance of working with the crowd and not against them, the results of solving the issue can also be shown through social media that will boost your customer service standing publicly, this is another good example of the two-way communication SM offers.

RESEARCH ISSUES

The researcher had planned for a third interview with a social media manager at Npower, however the interviewee had to withdraw, gaining access to active SM practitioners was slightly more difficult then anticipated. Additionally a poll was created through LinkedIn as a means to potentially gather more out-side data, however there were not enough responses to sufficiently conclude any findings towards the research.

RESEARCHFINDINGS

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RESEARCHCONCLUSION

05 CONCLUSION

Throughout both the primary and secondary research there were methods trending that ap-pear to support one another across social media. Social media allows businesses to talk to their consumers or customers, but more importantly it allows them to listen to their consumers or customers and this is where the relationship really begins. If utilised correctly, social media has the capability of furthering or creating emotional attachment a person has with a business, its product, service, author. The key is within producing useful or valuable content that is available freely, it does not matter what the subject matter is but it should serve people, the whole idea of gaining valuable content for free automatically cre-ates an emotional attachment, it becomes a place that users will return to because of the posi-tive experience that took place. To develop this relationship businesses must consider how they might engage consumers and customers, through producing rich content a business can serve different mediums that are enjoyed (emotional attachment) and then create posts which target trending discussions or provoke a response from followers. Through time this may even lead to a community being form dependant upon the page’s purpose. These principles follow SM in almost every purpose, if design agencies wish to com-municate with consumers or potential clients, well they need to be producing rich content which sparks emotional attachment. For business-to-business uses, they must make sure they are serv-ing the other business in the content that is generated and listen to what the client wants.

The next step for this piece of research would be to focus on a particular company highly active in SM, analyse the processes, channels and strategies taking place and attempt to gain high ac-cess, as this could lead to both deeper and more credible insights.

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IMAGES USED

Images: Digital Trends (2013) www.digitaltrends.com/wp-content/up-loads/2013/02/url30.jpgRics Recruit (2012) www.ricsrecruit.com/getasset/?uiAssetID=a630ddbe-78ce-49c0-9001-31cd56b4d1a1Little local marketing company (2012) www.thelittlelocalmarketingcompany.co.uk/wp-content/uploads/2012/12/social-media.jpgDigital Trends (2013) http://www.digitaltrends.com/wp-content/uploads/2010/08/youtube-video-web.jpgTSL Web Design (2012) http://www.tslwebdesign.com/fckeditor/upload/image/SocialMedia1.jpg