With March Madness descending upon us this week — and as a mega sports fan it’s truly one of the most wonderful times of the year, I figured it was appropriate to infuse a hoops-theme in the title of this article, as it were.
And while I’m not sure of my guest’s basketball prowess, if his hoop skills are anything like his knowledge of social media and branding, I may be in trouble if indeed we do ever go one-on-one. His name is Mikołaj Jan Piskorski, his friends call him Misiek and he is a Harvard Business School professor and author of the book A Social Strategy: How We Profit from Social Media.
“Drawing on his analysis of proprietary data from social media sites, Piskorski argues that the secret of successful (companies) is that they allow people to fulfill social needs that either can’t be met offline or can be met only at much greater cost. This insight provides the key to how companies can leverage social platforms to create a sustainable competitive advantage. Companies need to help people interact with each other before they will promote products to their friends or help companies in other ways. Done right, a company’s social media should benefit customers and the firm. Piskorski calls this ‘a social strategy,’ and he describes how companies such as Yelp and Zynga have done it.”
There’s some very intriguing stuff to glean from the above excerpt such as the fact Piskorski believes that companies and brands should be helping consumers engage with each other before the sales push ensues.
I spoke with the good professor not long about to get his thoughts on a wide array of topics ranging from how his definition of the term “social media” to the age old conundrum if social media is right for both B2C and B2B brands to his thoughts on what the future holds and more.
Steve Olenski: How do you define the term “social media” and has that definition changed over the past 2-3 years?
Mikołaj Jan Piskorski: My thinking about this space has evolved from “social media” to “social platforms.” The word “media” suggests broadcasting from one to many. But, in research for my book, I found that people use these platforms to engage in many-to-many connections to meet new people or deepen their existing relationships. The term “social platforms” better captures these social reasons.
Focusing on these social reasons opens our eyes to how firms can use social platforms for competitive advantage. If you think of “social media” your mind automatically goes to producing content for customers to consume, or perhaps soliciting their input. But, once firms recognize that consumers want to connect to each other, they can develop social strategies that do exactly that under the umbrella of their brand.
American Express, for example, has built a number of proprietary social platforms with great success. For example, the company’s OPEN Forum helps its small business cardholders connect and help each other with business issues. Similarly, Nike created NikePlus platform that allows over 5 million customers to interact with friends who use Nike’s digital products and synchronize them with the platform. The results of such endeavors are impressive. Cardholders who used OPEN Forum functionalities are more likely to recommend Amex credit card to others, while the NikePlus platform has been widely credited with contributing to the 30% increase in Nike’s athletic shoe sales.
It is exactly for this reason that I recommend that firms de-emphasize broadcasting to their customers and spend more time helping their customers connect with each other or become closer to their friends.
Olenski: Are social media and social platforms right for every brand, every industry, B2B and B2C or are there some brands/companies who may not be able to benefit from it?
Piskorski: If you think of social media as purely broadcasting information, it might be hard for firms to leverage it for B2B purposes. But the minute you think of social platforms, which connect customers to each other, B2B becomes easy. When it comes to B2B, a company sells a product to another, but the end users are people, and these people can be connected to others.
Cisco with its Cisco Learning Network is a great example of that. Cisco offers a number of certifications for engineers who put together various types of electronic networks, and provides them with an electronic platform to study for certification exams. Most importantly, the company provides a social platform that allows the engineers to interact with each other to become more effective on their jobs. Engineers valued this opportunity to interact with each other so much that when Huawei tried to access the American market offering similar products at a lower price point, they opposed switching because of the loyalty to the social network created by Cisco. Without investing in the social platform Cisco would have had much more trouble sustaining its competitive advantage.
Olenski: What’s the biggest mistake and/or misconception brands have when it comes to social media?
Piskorski: There are two. I already pointed out to the first one. Brands often are too eager to inject themselves into conversations about their product. Despite a brand’s best efforts, most consumers are not going to identify with or trust a brand the way they would a friend. To alleviate this problem I recommend that companies focus on facilitating interactions between their customers.
The second issue is that companies often engage socially without clear business goals. Instead, they focus on getting the highest number of likes or followers, or getting highest rates of engagement. At the end of the day, none of these metrics matter if they do not lead to higher sales or lower costs. Companies that have mastered the social space start with their business objectives and ask: “What is the source of my competitive advantage, and how can I use social platforms to strengthen it further?” Without asking this question first, many efforts in this sphere end up having no business results, even if they create a lot of engagement with their customers.
Olenski: What do you think the future holds for social media and brands?
Piskorski: Even though broadcasting to consumers on social platforms is still not very good, it will get much better. This is because, social platforms know who we are in ways no other platform does. They know our name, phone number, email, they know who our friends are, and they know what we like, and what content we interact with online. Firms with powerful CRM systems have discovered that they can match their data with Facebook, Twitter or LinkedIn data (through a functionality called Custom Audiences).
With this functionality companies can target very small sets of their customers with very precise offers through these media, and then observe whether these customers actually purchased these products. Because companies know who saw advertising and who did not, they can then precisely attribute sales to exposure to advertising. This will change the nature of marketing from targeting demographics to one-on-one efforts done on a large scale, enabling marketers to adapt their strategies based on direct consumer responses. With this, the direct mail process will move to the online world, and this will change the way brands will think about mass marketing.
I could not agree more with a lot of what Piskorski had to say and in particular his thoughts on the whole “is social media right for B2B brands?” debate. I have written numerous times of the need to remember that no matter what acronym you’re talking about, there are still people at the other end of that line and as he puts it “these people can be connected to others.”
I also very much agree when he says the biggest mistake companies and brands make in the social media space is their incessant “focus on getting the highest number of likes or followers, or getting highest rates of engagement.” The former is still much more prevalent than the latter but they are both equally inherently wrong when it comes to their use of social media.
Sources: Forbes, Google Images