Lithium’s Dr Michael Wu outlines how to create a social media strategy that is both scalable and sustainable.
With brands busy beavering away to monetise their social media activity, precious little thought is being devoted to how sustainable their strategies are. And the reality is that while their social media strategies may be scalable, the vast majority are certainly not sustainable.
That was the message from Dr Michael Wu, principal scientist at Lithium, on the first leg of the social vendor’s world tour.
Touching down in cities including Paris, Singapore, Munich and Sydney, ‘The Science of Social’ tour will see Lithium furthering its reputation as thought leaders in the social space, and spreading the gospel of Dr Wu, whose latest book (‘The Science of Social II’) forms the key thread of the conferences.
The Lithium genius challenged attendees of the London show to think beyond the existing scalable social strategic thinking, something that is necessary because spikes in social activity such as views and Likes only ever equate to a “tiny blip” that doesn’t last long from a financial perspective. Successful brands must adapt a strategy that is both sustainable and scalable, he explained. But there is a problem with this.
“Not many people think about sustainability,” he told the audience. “This is because it’s hard – the future is uncertain and scary. But science can help you. Scientists have been building models to predict the future, so this can let you think about sustainable strategies.”
And Wu is a proponent of Geoffrey Moore’s four gear model, something that he said supports scalability and sustainability.
Traditional business models have two gears, an acquisition gear and a monetisation gear - “We acquire customers and we monetise them.” But the launch of Cluetrain Manifesto in 1991 highlighted that the market had changed.
“The book said that ‘markets are conversations’. And now where are people having conversations? On social media. So business owners are acquiring customers where they are – social media – and then monetising them. So while the market landscape has changed, it’s still the same two gear model.”
And there is a fundamental flaw with this approach, said Wu, because what you acquire in social media, you do not own.
“You don’t own 2,000 followers – Twitter does,” he explained. “You acquire people’s short attention spans. And this isn’t scalable and sustainable – you can monetise them once and then they’ll go away. If you want to keep monetising them, you’ll have to spend the money that you’ve just got from them to acquire them back!”
As such, a four gear model is required to succeed in the social world, one that adds an ‘engagement gear’ and an ‘enlistment gear’.
“An engagement gear helps you to keep customers longer, so that you can monetise them over and over again,” said Wu. “Engagement helps you sustain monetisation over time. And after you engage the customers, some of them you can enlist to help you acquire more customers. This is very effective and scalable because customers trust other customers, while they don’t necessarily trust your brand. And of course there are a lot more customers out there than there are employees. This helps to scale acquisition.”
The result of these four gears working together is the creation of a “viral loop” – “this is a positive feedback loop that if done right could give you benefits for 5, 10 or 20 years.”
Drilling down into the engagement aspect of this model, Wu explained that while engagement isn’t hard – “anybody can engage… use cute cat videos” – the prerequisite for sustained engagement over a long time is a relationship.
Strong relationships need lots of time and attention, something that the modern customer is unlikely to have – particularly for brands. People have finite time and attention for relationships, and by their very nature, relationships with brands are always weaker than interpersonal relationships with people.
So how can brands build stronger relationships with customers?
- Time – Time together with a person increases tie strength. But if the desire to spend time together isn’t mutual it can turn to hate! So the key is to know when the customer wants to spend time with you and then be there for them at those times.
- Intensity – Customer intensity is always lower for brands than for friends. But you can appeal to greater causes that customers may have strong emotions about, such as the environment… But don’t try too hard in this area and don’t be fake about it because it will backfire.
- Trust – Social media can really help brands develop trust. Trust is essentially how transparent you are. The more transparent you are, the more trust you can build. There are two types of transparency: brand-customer transparency (letting customers know what is happening at your organisation via blogs, etc) and customer-customer transparency (customers want to know what other customers think of the brand, i.e. through community discussion forums). While transparency is one way of building trust, there is another approach: co-creation. People trust themselves, so they tend to trust brands that co-create with them. There are two types of co-creation: passive co-creation (brands are listening and collecting information from customers and then quietly implementing the ideas) and active (actively going out to crowdsource ideation).
- Reciprocity – Make it easy for customers to help eachother and reward them properly and serve them right. Co-creation also builds reciprocity as it’s all about the customer telling the brand what they want and then the brand building it. The key is not to forget to let your customer help you, as it is good for both of you.
Ultimately, Wu concluded that customer communities are ideal platforms for building relationships with customers. While it is difficult to build weak ties on Facebook, meaning that in most cases brands will not be able to develop and nurture new relationships with customers on the social platform, online communities are perfect.
“They are opt-in, so they are there for the customer if they want it but they won’t bug you,” explained Wu. “It may have a greater cause. They are a transparent channel. They are platforms for co-creation. It also enables reciprocity. And that means that it helps your brand to build the four pillars of customer relationships.”
He concluded: “With the social customer, it is not enough to just monetise them. If you only focus on monetisation, you will miss engagement – and then you’ll only be able to monetise them once and that is it. You need to focus on the entire journey – the journey to the transaction point, and after that transaction point.”