Building consumer relationships through Social Media

Mariana Antonescu Master Thesis

Work-in-progress

Supervisor: Dr. Myria Ioannou European University Cyprus

Introduction
SM is increasingly being adopted by consumers and businesses. In 2010 there were more than 500 million active users on Facebook, 70% outside the United States. By March 2010, more than 10 billion messages, or Tweets, had been sent through Twitter since its launch in 2006. By July, that number had doubled to 20 billion.

In spite of the increasing body of research on SM, considerable knowledge gaps exist

Literature Review - Defining Social Media

According to Merriam Webster Dictionary online, SM is defined as forms of electronic communications (as websites for social networking and micro blogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos) According to Wiki vest SM describes websites that allow users to share content , media, etc. Common examples are the popular social networking sites like Facebook, MySpace. SM are the media for social interaction using highly accessible and scalable publishing techniques. SM use web based technologies to transform and broadcast media monologues into SM dialogues Wikipedia Interactive forms of media that allows users to interact with and publish to each other, generally by means of the internet Wiktionary

Literature Review
Understanding social media

Contrary to the general perception of SM being restricted to networking websites like Facebook and Twitter, the SM encompasses all the services that facilitate creation sharing and exchange of user generated content. SM is the media that allows one to be social or get social online by sharing content, news, pictures, etc, with other people.

Literature Review
Classification of SM

Various types of SM exist on the internet: magazines, internet forums, Web blogs, Social Blogs, Micro Blogging, Wikkis, podcasts, photographs, videos, rating and social bookmarking. Kaplan and Haenlein (2010) classified SM into 6 different types: collaborative projects (wikipedia)

blogs and MicroBlogs: Twiter

content communities : youtube

social networking sites: facebook

virtual game worlds: world of warcrafts virtual social worlds: second life

To illustrate the different SM platforms that are used the most, their diversity and their uses, Fred Cavazza created the SM Landscape for 2011 and 2012

 To help organizations engage with, know and understand better SM Kietzmann et al. propose a framework that defines SM by using seven functional building blocks. Through this framework the implications that each block can have as to how firms should engage with the SM are explained. For example LinkedIn focuses primarily on identity, reputation and relationships whereas YouTube focuses primarily on sharing, conversations, groups and reputation.

Advantages of Social Media

SM allows you to use your own voice SM creates brand visibility and businesses can enhance their brand image through Social Media SM allows wider exposure to products SM is an inexpensive and effective tool

Advantages of Social Media

According to Kietzmann et al. (2011) the behaviour of consumers on the internet had changed from simply expending content, reading it, watching it, buying and selling products or services to now take a more active part by utilizing various platforms like content sharing sites, blogs, social networking sites and wikis- to create, modify, share and discuss internet content. According to his article this represents the social media phenomenon which now has the capability to significantly impact a firms reputation, its sales and even survival. Social media platforms are customer centric (Chua et al., 2009) Allows companies to get closer to customers and, by doing so, build relationships, increase revenues, reduce costs and increase efficiencies. Hatano and Charters (2010) propose social media marketing as Customer Relationship Management

 Connect and engage with audiences. Hence build relationships through communication and listening. Get opinions about newly introduced products on the market Get feedback about products/services (through user reviews) Provides the business with the potential to acquire new customers/fans Provides the businesses with the opportunity to manage their online reputation

Objectives
To understand what triggers a consumer to seek a company or brand via SM To understand if social engagement influences a consumers feeling of loyalty toward a company To understand what consumers value when they are in the environment of a social platform To understand what would make a consumer reluctant to interact with a company through SM To understand what are the perceived obstacles that would make a consumer reluctant to interact

Methodology
The research design is qualitative and quantitative in nature. We will present the qualitative phase. The qualitative research includes: 10 in-depth interviews An interview guide was used which included 33 questions. The Interviews were conducted in Nicosia and lasted between 30 to 45 minutes.

The insights from the qualitative phase will be combined with secondary sources to develop a questionnaire for 150 respondents.

Preliminary findings
SM usage & platforms: 30% of the participants use a form of SM 2 or 3 times a day, 50% once every few days and 20% once or twice a week. The majority of the interviewees use Facebook, Twitter, LinkedIn and YouTube. More than half of consumers dont even consider engaging with businesses via social sites. For them, social media and social networking are about personal connections with friends and family. What interviewees value when they are in the environment of a social platform: The majority of respondents said that the most important for a company is to speak frequently to their followers by posting news and updates about the company and their products. They would also appreciate if the company asked their opinion regarding the products and services.

 90% of respondents believe that SM made it easier for users to speak through SM.
80% responded that SP are not like ecommerce sites. They would need to make it possible for us to buy something directly without having to check out and go to their website, whereas 20% responded that it would be to difficult and they prefer to go the static web page and check and purchase from there. All the participants argued that SM is an efficient tool for a company to create awareness about their new products and stressed that they would need to build a community of followers and be active.

20% responded that their questions addressed to a company through SM have been answered. The rest of 80% did not address any questions.

 Previous experiences will strongly influence future behaviour. Customers who have purchased online and have prior experience will be more likely to go on their online purchasing than those who do not have such experience social networking use is closely related with younger age, higher level of education, and computer ownership.

Women demonstrate higher levels of engagement with social networking sites than men. Women are more likely than men to have a favourable attitude toward shopping for virtual items on social networking. Consumers with higher incomes were more likely to be in the frequent online buyer class. Furthermore online teens with highincome parents are more likely to buy items online than those whose parents earn less money.

 Consumers engaged through SM such as Facebook and Twitter are over 50% more likely to buy and recommend than before they were engaged

Consumers are willing to interact with businesses if they believe it is to their benefit, feel they can trust the company and decide SM is the right channel to use to get the value they seek. That value could be in the form of a coupon or specific information.
80% argued that they express their feelings of dissatisfaction about a companys service or products on SM platform whereas 20% said no because I dont think it would motivate the company to change anything.

Last thoughts

To successfully exploit the potential of social media, companies need to design experiences that deliver tangible value in return for customers time, attention, endorsement and data.

Understanding what customers value, especially when they are in the unique environment of a social platform, is a critical first step toward building a Social CRM strategy.

Thank you