Business strategy and social business strategy

According to Wollan, Smith and Zhou (2010) a business strategy is “the direction, positioning, scope, objectives, and competitive differentiation” of the business.  However, having a social business strategy is important.  It is important and enables a business to learn from the business’ employees, customers, and partners (Li, 2010).  It is important and enables to drive a dialog (both internally and externally) and thus creates a relationship within and outside of the business (Li, 2010; Wollan et al., 2010). This relationship can lead to innovation, because of what is learned from having this relationship within and outside of the business (Li, 2010).

From an external view of a social media strategy, it is seen to engage with its customers and promote its business along with its business strategy.  Originally, marketing departments and public relations (PR) teams ran the early uses of social media, but eventually, it got too complex (Wollan et al., 2010). Today, many companies have multiple teams that use social media, and this is in line with open leadership (Li, 2010; Wollan et al., 2010).  All these departments have to deal with the following key issues related to the business strategy, and it should be contained in their social media strategy (Wollan et al., 2010):

  • “How is social media aligned to the business?”
  • “How should social media decisions are made [or prioritized]?”
  • “How do we manage social media investments?”
  • “What controls do we need in place?”
  • “How do we measure and reward?”

This social media strategy should be created not just by executives but through leaders encompassing all the departments, because of social media impacts all departments, not just marketing and PR departments (Wollan et al., 2010).

Placing an internal view of a social media strategy, it can help shape the human capital strategy, which enables the business strategy (Wollan et al., 2010).  Considering the human capital strategy helps define the needs of their employees, discovering and attracting talent, developing high-potential talent, and deploying the talent in the right place and at the right time through knowledge sharing plans (Wollan et al. 2010). Also, business employees know and even feel any changes made in the business strategy (BusinessWeek Online, 2012). Social media is one of many ways to help drive and understand employee responses to these changes.

However, engaging people/customers from a business perspective is not as simple as just starting a social media page/account and watching what happens.  Li (2010), described that there is an engagement pyramid, where watching what happens and the competitors/suppliers have the lowest level of social engagement and sharing, commenting, producing and curating content show increasing levels of engagement.  It’s in the higher levels of engagement that helps one develop a relationship via social media.  Businesses need to move past the watching what happens level of engagement and start curating content that helps customers and employees share their content (“word of mouth”), which can help drive up the sales of their products and services (Boysen, 2012).

References

Growing popularity of social media

Statement: “Emanating from the growing popularity of social media, consumers expect companies to be present on popular social media channels. As a consequence, companies can no longer maintain customer interactions solely by way of traditional channels.”

The overall statement is true. Traditional media is different from social media.  Traditional media is considered outbound via mailers, television, and cold calling, where social media is considered inbound, with SEO, social platforms (Twitter, Facebook, LinkedIn, etc.), and blogs (Boysen, 2012). Social media allows for relationship building through engagement and interaction, and can be easily measured compared to the expensive, short-term results and harder to measure traditional media (Boysen, 2012; Wollan, Smith, & Zhou, 2010). One great thing about a company’s adoption of social media is collecting, auditing and analyzing social, engagement, and influence data (Li, 2010).  This data analysis allows the company to see which products/services and which campaigns were the most effective in not only obtaining views across different social media platforms but conversion rates from views to purchasing of products/services (Boysen, 2012; Wollan et al., 2010).

Social media allows for consumers to have a more interactive way to get information from an existing company about a product/service (Boysen, 2012; Li, 2010; Wollan et al. 2010).  If consumers like or dislike the product/service enough, they would be willing for free to spread the word about the product/service through their social network. (Li, 2010). Essentially consumers are willing to call out the triumphs and disappointments of a company. Thus, social media potentially has a huge reaching or alienating of new consumers, through this concept of spreading content via word of mouth, which is a very effective way of marketing.  Word of mouth is so effective that 92% of recommendations are followed through on when they come from friends (Boysen, 2012). Social media is built on the connecting friends to each other, and companies should use that concept to their advantage, to enhance gains and mitigate losses.

Finally, a social media campaign strategy and execution is significantly more inexpensive and has a higher return on investment than traditional media (Boysen, 2012).  Companies should move forward to developing a social media strategy and should execute that strategy, to take advantage of the word of mouth phenomena that is relatively low cost compared to traditional media.  The strategy should be considered a living document because social media changes evolve with time and have dependencies to the evolution of popular social platforms (Cohen, 2011; Solis, 2010).  That is how the Red Cross of America is treating social media as they have updated their social media strategy in just a few years (Li, 2010; American Red Cross, 2012).  In 2015, TD Bank had amassed 550K Facebook likes, by having faster response time on their posts than their competitors (1.25 hours response time compared ~5 hours with their competitors), showcasing their financial education campaign (#financialeducation), and having a plan for responding to negative situations & comments (Crosman, 2015). TD Bank couldn’t accomplish this without having a strategic social media plan.

References