The one thing that I’ve learned to appreciate about social media has little to do with technology. Social networks and platforms aside, it is the democratization of media and the ability for everyday people to become part of a global information network that is changing the dynamics of media. Social has reset the balance, leveling the playing field in how people share and consume information.
At the heart of this network, what binds people together, are the connections and relationships that unfold over time. Like in real world relationships, the more you invest in terms of time, openness, value, listening, and engagement, the more likely it is that relationships will thrive. And, that’s the foundation for relationship economics.
As new data from LinkedIn and Altimeter Group shows, this has never been truer in business. This research suggests that, by investing in relationships, workforce and business performance becomes more optimistic and productive. The results of this study are available in its first wave as a comprehensive infographic (download it here...see below).
What’s Old is New Again.
This is where social media and relationship economics set the foundation for a new genre of business. Recognizing the value of investing in relations isn’t necessarily new. But it is one of the greatest, underutilized promises of social media. It’s not about broadcasting or marketing at people. It’s about humanizing the company…giving it a voice and persona.
It’s about empowering employees and customers. It’s about conveying empathy and building a community where community is much more than belonging to something; it's about doing something together that makes belonging matter.
Again, the residual effect and benefits of investing in relationships isn’t new. But, why is it that businesses use technology to instead distance themselves from people?
Doc Searls, co-author of The Cluetrain Manifesto, a fellow at the Center for Information Technology & Society (CITS) at the University of California, Santa Barbara, and an alumnus fellow (2006–2010) of the Berkman Center for Internet & Society at Harvard University, once observed that the very technology meant to build relationships with customers (CRM) for example, was doing anything but bringing customers closer.
“Customer Relationship Management [today] is about [marketing and] sales and not about the relationship. It's about deflecting customers and minimizing contact,” he shared at a marketing conference hosted by IAB (Internet Advertising Bureau).
Social media and relationship economics is instead rooted in bringing people closer.
The ROI of Relationships Economics
How specifically is relationship economics impacting business?
That’s what LinkedIn set out to understand.
LinkedIn partnered with Altimeter Group, a Silicon Valley-based research firm that studies disruptive technology and its impact on business, and where I am a also principal analyst, to study some of the world’s most socially engaged companies, including Salesforce, Citrix, Bloomberg, MasterCard, Visa, and The Wall Street Journal, among others. LinkedIn identified these companies because they demonstrated the ability to effectively use social media to improve engagement and relationships with customers and employees.
Together, LinkedIn and Altimeter Group set out to learn about the benefits these socially engaged companies realized based on how they used the LinkedIn platform in the following areas:
- Content marketing
- Employee engagement
- Talent and recruitment
- Sales
About the Research
LinkedIn and Altimeter Group also conducted an online survey of two employee groups about their participation on the platform: a "target" (N=1,460) and a "control" (N=1,378) group. The target group respondents were from the top 100 most socially engaged companies on LinkedIn. The control group respondents were from the general user base of employees whose companies are on LinkedIn. Only companies with more than 1,000 employees were surveyed.
Findings
Executives Lead the Way and Set the Standard for Engagement
By aligning company values with active engagement, the top socially engaged companies shape employee communication and turn them into brand ambassadors. Everything begins with authentic, meaningful engagement and content, of course.
Among the socially engaged companies we studied versus more general organizations, we learned that as much as 54% of engaged employees read content by their company through social media. Forty percent cite their company’s social media communication as the source for keeping informed on important news. And, 38% are more likely to share relevant company content with co-workers and customers.
At socially-engaged companies, we also found that employees are, in fact, empowered to engage. Among socially engaged companies, 50% of executives are more likely to encourage employee use of professional social media.
Actions speak louder than words. With companies that invest in relationship economics, leaders lead by example. Among the companies we surveyed, 52% of executives are more likely to actively create and share content.
Sharing Fosters Engagement and Optimism
Businesses excel when employees and customers are placed at the center of social strategies. As a result of their company’s use of social media, 31% of employees feel more engaged.
Relationship economics also carry positive emotional benefits, according to our research. It turns out that 27% employees of the top socially engaged companies are far more likely to be optimistic than those of general companies we interviewed (52% to 41%). Additionally, 20% of employees are more likely to feel inspired based on how companies use social media to engage with them.
We also learned that engagement builds pride among teams. 15% of those socially engaged are more likely to feel proud about the leadership of their company.
Social media knows no bounds, either. Employees are not just connected to those in their department, but they also expand their networks to include other employees, customers, and prospects. Doing so creates the potential for market and cross-departmental collaboration and communication. Thirty-nine percent of employees at socially engaged companies feel more connected with co-workers outside of their core teams. And, 59% use social media to build relationships within the company.
Social Media Engagement Contributes to Competitive Advantage
The third conclusion of our research is directly tied to the impact of social media on competitiveness and innovation. In addition to amplified engagement, pride, confidence, and communication, relationship economics play a notable role building competitive advantage. From talent to sales, to cultivating a culture of innovation, socially engaged companies are establishing distance away from conventional companies.
In a day and time when desirable talent is a precious commodity, socially engaged companies are prospering by holding on to coveted employees and winning over talented prospects. We learned that 20% of socially engaged companies are more likely to retain talent. More so, 58% are more likely to, “feel LinkedIn has allowed their company to attract great new talent.”
And, what of competitiveness?
Employees of socially engaged companies see or feel a competitive advantage. In our research, we found that 40% are more likely to, “feel LinkedIn has made their company appear more competitive.”
Of course, we can’t discuss social without bringing out the inevitable question of ROI (return on investment). If you measure ROI by sales leads, it was discovered that 57% of employees at socially engaged companies are more likely to, “feel LinkedIn has allowed them to get more sales leads.”
Relationships Matter
Relationships matter more than ever. They always have. With focus, commitment, and genuine intentions, social media becomes much more than just another marketing channel. Simply said, our research makes the case for investing in relationship economics. Strong but sincere and value-added social media engagement contributes to the bottom line. But, more importantly, the act of investing in relationship economics yields significant human benefits as well.
When companies invest in relationships with customers, employees, prospects and partners, they reap benefits measured in competitiveness, profitability, loyalty, and advocacy. Beyond the bottom line, organizations also evolve into truly social businesses, where technology becomes an enabler for something of greater purpose…driven by the resolve to improve communication, connections, and collaboration between people.
RELATED:
"Relationships Matter: What We Can Learn From the Top 25 Most Socially Engaged Companies on LinkedIn" by LinkedIn's Carole Zibi
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