Why are people so drawn to social media?
The question long haunted Mikolaj “Misiek” Piskorski and eventually led to his new book, A Social Strategy: How We Profit from Social Media. I read about this book recently in an HBS Working Knowledge blog post, and it interested me because even though I’m active on Twitter and LinkedIn, it’s unclear how much (if at all) that contributes to the success of my business.
Here are some excerpts from the article: “Drawing from years of research dating back to before Facebook, the book offers an in-depth analysis exploring why some social media platforms soar while others fizzle, and how business can use them to generate profit.
“I have always been fascinated that humans interact online when we can interact offline as we have for thousands of years,” says Piskorski, an associate professor in the Strategy unit at Harvard Business School. “We used to have friends without Facebook, or Twitter, and we used to find spouses without dating sites, and nobody ever complained. This begs a very basic question—what kinds of interaction does the online world give us that we cannot undertake offline?”
In A Social Strategy, he contends that the real world comes with certain social norms of conduct that keep people from saying what they really want to say, or acting how they really want to act. Successful social media platforms let us bend those rules. In short, unacceptable behavior in the offline world might be perfectly acceptable in the online world.
For example, corporate norms and fear that the boss might find out prevent many employees from openly advertising themselves on the job market. Enter LinkedIn, the eleventh-most-visited site in the world, according to Alexa Internet. The business-oriented social network has more than 300 million members, all of whom list their educational and professional achievements on the site in the name of professional networking. Of course, these virtual CVs are also mined by recruiters to hunt for hot job candidates.
“LinkedIn alleviates the offline normative restriction by giving us plausible deniability,” Piskorski says. Even though the boss might be concerned that you will get a job through the site, the boss also knows that LinkedIn makes you a more effective employee. “So he or she lets you stay on the site, and no norm is violated.”
And then there’s Facebook, the second-most-visited site in the world. “Facebook helps us overcome the norm against being nosy,” Piskorski says. “It does so by letting us look at profiles of others, without actually letting these people know that their content was viewed.”
With a better understanding of why we love social media platforms so much, Piskorski wanted to learn how companies that sell products and services could use them to generate profit. He found that companies adopt two different approaches.
The first approach, which he terms “digital strategy on social platforms,” uses social media to broadcast commercial messages and seek customer feedback. The second approach, “social strategy on social platforms,” steers clear of direct broadcasting in favor of helping customers create and strengthen relationships with each other. These relationships are in exchange for the customers doing various tasks for the company for free.
The distinction between digital and social strategies is a fundamental point in Piskorski’s book. “Digital strategy is no different from what companies have done on other media,” he says. “They simply took this approach and put it on social media platforms. The problem is that this approach does not work well. Most firms can’t generate the requisite engagement, and those that do often fail to convert it into sales. This is because people use social platforms to interact with their friends, and firms are seen as intruders who interrupt the experience.”
In contrast, A Social Strategy says don’t just broadcast to people, arrange interactions between them, too. And once the company facilitates these interactions, it can go back to those who it helped and say, “Now we want you to do something for us.” This quid pro quo is at the core of an effective social strategy.
For Piskorski, the reason is simple. “Think what happens in the offline world when you introduce two people to each other, or you mend a relationship between two of your friends,” he says. “You get social credits with them, such that when you go and ask them for a favor later, they will do what you ask them to. And they will do it fast.”
American Express’s OPEN Forum, a website where entrepreneurs share ideas, is an example of a successful social strategy, he says. “Say I own a flower shop in Paducah, Kentucky, and there’s only one other flower shop in my town. The owner of that other shop probably won’t talk to me about the flower business, because we’re competitors. But with OPEN Forum I can talk to someone in Grand Junction, Colorado, who isn’t a competitor, and he might suggest I try this type of flower or that type of arrangement. Now I’ve received help for my business under the umbrella of American Express, and I’m more likely to recommend AmEx to my friends because I’ve made this great connection, and the cost of customer acquisition for AmEx drops. This is, in fact, what American Express has found to be the case.”
Another example is Cisco Systems, which hosts online communication platforms for IT professionals whose companies use Cisco’s computer networking products. “Cisco is in the B2B business, where we traditionally think that social does not apply,” Piskorski says. “If you go on Cisco’s platform you will see a number of interactions between network engineers who talk about troubleshooting questions, exam preparation, and in many cases, what happens in their personal lives.”
(This network became critically important when a competitor began offering products at a steep discount. Engineers lobbied their companies against buying those products because the competitor lacked a similar social platform.)
Start-ups can also employ social strategy. Yelp, which posts consumer-written reviews of local businesses, rewards its most prolific contributors with the ability to meet other prolific contributors at face-to-face gatherings—something that many of them treasure. In return, the contributors are motivated to generate even more content for Yelp for free.
The trick, Piskorksi explains in the book, is to create a strategy that simultaneously benefits both the company and the customers’ social interactions.
“…without such tight integration between the benefits for customer and company, a social strategy is bound to fail,” he writes. “Specifically, when the task merely solves the social failure but does not benefit the company, individuals will undertake the task, but it will not have any effect on corporate performance. In contrast, when the task benefits the company but does not help the individuals, they will simply refuse to undertake the job, resulting in no profit increases for the company. Getting this alignment to work is perhaps one of the most difficult parts of designing a workable social strategy.”