Why Your Social Strategy is Broken and How To Fix It

by Greg Satell

Facebook has a monthly audience of nearly a billion visitors. Other top sites, like Twitter, Pinterest and LinkedIn, attract hundreds of  millions. By now, nobody doubts the power of social platforms, although few marketers have been able to exploit them successfully.

As Harvard’s Mikołaj Piskorski makes clear in his new book, A Social Strategy, businesses have a long way to go before they truly begin to unlock the potential of the social web.  Most marketers, in fact, use social media much as they would ordinary media—to broadcast messages.

The real potential lies in utilizing social platforms to create solutions for customers’ social problems.  While consumers are understandably skittish about corporations interjecting themselves their personal conversations, they appreciate the opportunity to meet and build relationships with others. And that, it turns out, is an enormous opportunity.

Corporations are not People

Commerce and social activity have always been intertwined. Most of us make our living largely through social interactions and our social status is very much intertwined with our professional life.  So our relations with others has always had a secondary function of contributing to our economic well-being. As Adam Smith famously wrote:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

A lot has changed since Adam Smith’s time. In the 18th century, butchers, brewers and bakers performed genuine social roles. Today, however, we mostly deal with large corporations.  I might want to chat or even confide in the butcher at my local supermarket, but in no way would I want those conversations posted on the corporate web site.

It is because of this basic misunderstanding that most social strategies go wrong. Pepsi, for example, failed miserably with its Pepsi Refresh initiative because the $20 million it invested was unrelated to the value consumers expected of it. Bike trails and after-school programs do little to improve the experience of drinking sugar water.

Today, people expect corporations to offer value by providing solutions. Whether it’s a consumer good, a financial service or any other type of business, consumers expect firms to perform a particular job with either more efficacy or at lower cost than alternatives. For any social strategy to succeed it must offer real solutions to social problems.

Social Failures and Social Solutions

The world is an imperfect place. We have constraints of time, space and resources that limit our ability to meet everyone we might want to. There are also social barriers that prevent us from reaching out. Walking up to someone and telling them about ourselves is often frowned upon and firing questions at someone you just met can be even worse.

Many of the same factors prevent us from maintaining relationships. We can’t possibly find time to visit with everybody we know and even when we do get the chance to see them we don’t share many aspects of our lives.  For example, talking about a new promotion at work or that our child made the honor role might seem like bragging.

Piskorski calls these “social failures” and they have a real cost. We miss out on meeting people that can enrich our lives and fail to maintain relationships that we value. Social platforms have become so popular because they offer viable solutions to problems like these.

Some, like online dating sites and Twitter, enable us to  meet people we otherwise wouldn’t. Facebook helps us maintain friendships we already have and LinkedIn offers opportunities to both maintain current professional relationships and add new ones.

The Social Strategy Matrix

Clearly, enterprises that pursue a social strategy must help people meet others that they wouldn’t or maintain relationships they already have, but also must generate tangible business value. Otherwise, there’s really little point—a lesson Pepsi learned the hard way.

So in order to formulate social strategy, Piskorski combines the concept of “meet” and “friend” solutions with Michael Porter’s insight that a successful strategy must either lower costs or help differentiate the brand in the marketplace.

Social Strategy Matrix

Yelp and Zynga both use social dynamics to lower costs. In Yelp’s case, the company holds events for elite reviewers in order to lower its cost of developing content.  Zynga lowers customer acquisition costs by adding social functionality to their games that helps people keep in touch with their friends.

American Express and Nike, on the other hand, developed social strategies that differentiate themselves in the marketplace. Amex’s Open Forum helps small business owners meet others to engage in professional relationships, while Nike + was designed to allow people to share their fitness activity with friends.

Piskorski points out that any viable social strategy must pass three tests: a social utility test, a unique social solution test and a business value test.

In other words, the strategy must solve a social problem in a way that others cannot easily duplicate, and that either lowers costs or differentiates the business by adding value to its existing offer.

Importantly, he also recommends that businesses maximize the effectiveness of social strategies by targeting “parts of the value chain that are responsible for generating the majority of willingness to pay or the majority of cost.”

Don’t Join the Conversation, Lead It

When social platforms such as Facebook, Twitter and LinkedIn first gained popularity, many self-proclaimed gurus encouraged marketers to “join the conversation.”  Yet as noted above, corporations are not people. Most people don’t feel comfortable having a marketing organization inject itself into their personal lives. It’s just downright creepy.

Consumers don’t engage with businesses because they need a friend, they expect firms to deliver value by providing a solution.  In the case of social strategy, that means facilitating relationships among consumers in the context of the brand, not inserting the brand into consumers’ personal lives.

In addition to Piskorski’s business analysis, social network theory also bears this out.  The strength of a community is not derived from the number of people in it, but from internal linkages among them.  Attracting a million viewers to a YouTube video or a Twitter feed may be an effective broadcasting platform, but it provides little social value.

That’s why it’s important to make the distinction between a digital strategy that involves social platforms and a true social strategy. For a social strategy to succeed, simply joining the conversation is not enough.  You must lead it.

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Greg Satell is a US based business consultant. You can find his blog at Digital Tonto and you can follow him on Twitter.

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