The Art of the Business

A blog dedicated to artists who are serious about their business.

Why Social Media Matters (guest post by Rebecca Krause-Hardie) November 16, 2009

Rebecca posed a question to me the other day.  It was something like this…
I know social media is important, and you know it’s  important, but how do we make the case for the value of social media – to people who think its just hype?

I think there are lots of reasons.

First, a bit of perspective: we seem to be approaching social media as if it were a whole new deal. Let’s be clear. We have all been struggling for thousands of years, how to relate to and engage one another; as tribal members, as individuals, families, clans, communities, institutions and organizations.

We have struggled as teen-agers with parental relationship controls, and peer pressure to behave in acceptable ways or be excluded. As adults we are participants in many organizations, institutions, companies, as well as community, cultural, and religious groups, that each subtly define what appropriate social behavior is and what is possible.

For thousands of years, large scale conquests across continents, wars and commerce have cross fertilized our cultures and social structures. Then, POOF, along comes the internet and social media technology tools, that have transformed the informational and social landscape of time, distance, interactive immediacy … and the possibilities for building and sustaining relationships, that are  both positive and negative.

But one thing is clear, over the centuries, through all of this … sustained personal trust, transparency, authenticity, loyalty, passion, and the value of personal relationships in our social networks – is the glue that keeps it all together.

So how does this speak directly to the value of social media today?

Here we are in the thick of it. Social media is about building and sustaining virtual networks of relationships – personal relationships – that are also built on trust, authenticity, transparency and value. When we, as individuals and organizations, invest in social media networking with our friends, associates, customers and prospective customers, there is also significant value that appreciates – to all of the participants.

Many researchers have identified a very specific group of those personal, loyal and passionate supporters, and relationships, that are the core multipliers of each of our networks. Alan Brown calls them Initiators; Fredrick Reichheld calls them Net Promoters.

Here is one analysis of the value of that relationship of trust, transparency and passion, delivered and sustained over time – Frederick Reichheld wrote an article in the Harvard Business Review called The One Number You Need to Grow:

‘Net Promoters’ – People who are wildly passionate about what we do

Enterprise Rent-A-Car was interested in understanding how people’s actions correlated with what they said. If someone says that they like to go to the theater – do they actually go, and what choices do they actually make?   In the study, they first tracked people’s initial responses to the survey, and then followed their actual downstream behaviors.

Historically millions of dollars have been spent understanding customer behavior; learning how to second guess what customers need and want. Most methods were complex, hugely expensive, marginally adequate, and frequently could not actually or accurately predict behavior.

Reichheld decided on a more direct social media approach – have a Q&A conversation with the customer – and really listen.

With the help of Reichheld, Enterprise discovered that the answer to only one survey question was all that was needed. This question is now widely used across a broad spectrum of for profit and nonprofit organizations:  That one question is:

“How likely are you to recommend my company to your friends?”

In the survey, people who answer that question with a 9 or 10 (on a scale from 1 to 10), are your Net Promoters. These people are the ones that will make the buying decision because they love your stuff (you deliver trust and real value over time), and when they passionately refer their friends to you for free, their friends are likely to act on it positively, 75% of the time.  This is an astounding return rate, especially if we look at typical results from direct mail for example with 2-3% returns.

Reichheld goes on to say that to grow your business the ratio of the Net Promoters to all the other respondents should be 75% or better.   How are you doing? You should ask the question and really listen to the answer if you want to grow. If your numbers are lower than that, your customers will be able to tell you what you need to do to change it … if you ask, and then act on it!

Personal referrals are effective 75% of the time!

We just learned from Reichheld that personal referrals are effective about 75% of the time, so it begs the question.  “What are personal referrals about?” They are about personal relationships.  We talk to our friends, and we tell them what is important to us.  We share, we trust, we value….  all the things that evolve from building social capital.  When we are enthusiastic about something we share it.   Let’s say I just had a spectacular experience with the customer service at AutoZone and I tell you about it; that will probably stick with you next time you need to pick up a part.  (Or have a headlight put in….. they did it for me instantly politely and happily!  Yay!)

On the other hand, say I have three excruciating gut-wrenching and really bad experiences in a row with Spirit Airlines (yes I did!) and I tell you about it; that may affect how you think about them too.

What does this have to do with Social Media?

Social media is about building relationships with people.  When people are making their decisions in large part based on what their friends say, then it’s important to know what their friends are saying and feeling.

If they are a passionate promoter then social media tools can help you empower them to deliver your message for free.

If they are not a net promoter, then you should be concerned about what they are saying and feeling that is not helping your cause.  What can your organization do to provide more value and to address the issues that these people have.  How will you even know what they are saying and thinking?

You can use social media tools to listen and have conversations with people. To be relevant you have to be part of the conversation.

Want some facts and figures?   Check out this video on YouTube….

beckydeckRebecca Krause-Hardie is a social media strategist, arts blogger, facilitator/trainer & project manager; helping arts and NPO’s use the web and social media effectively.  Rebecca has over 20 yrs experience in new media, business, marketing, finance. She developed and has been the Executive Producer of the award winning New York Philharmonic’s Kidzone website, now in its 10th year.  Representative clients the Boston Symphony, NYPhilharmonic, Detroit Symphony, MAPP International, Canadian Museum of Nature, NYS/Arts, and the Paul Taylor Dance Company.
She blogs at
She Twitters at @arkrausehardie

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