Social capital: New ways of creating value
The rise of social networks is bringing about a major shift in the relationship between customers and brands. Today social media has a significant influence on the way a company’s products, services and offerings are perceived. Traditional marketing has been replaced by “social media” as the place where people listen to conversations about a company’s products and services.
Therefore, marketers are also looking at leveraging the social network to create more value for their businesses. “Companies are looking at creating value not just in the goods and services provided, but also from the networks and social interactions they facilitate,” asserts a paper titled, “Business is Social: How Companies are Creating New Sources of Value,” published by the Performance Improvement Council (PIC) of the Incentive Marketing Association (IMA).
This ‘value’ known as ’social capital’ extends the axiom that the customer knows best to the level that customers are one of a company’s greatest influencers — influencing the external brand perception as well as the internal product innovation cycle.
PIC Executive Team member and Maritz Vice President Jerry Klein explains that “not only can companies innovate and create new sources of value for themselves, but companies can generate greater value and meaning for the network itself by enlisting customers in the process of updating products and solutions … Enabling people to participate in a higher purpose than just making widgets is a key part of building a powerful brand with a mission and meaning that resonates with multiple stakeholders.”
The paper suggests that rather than selling features and benefits the old-fashioned way, marketing, sales and customer service people now need to be trained to be active listeners. The customer and his or her experience might be a source of the next big idea.
While traditional media is not totally redundant, traditional marketing is not the behemoth it once was, says the study. A company that thinks about how it can maximize its networks of people, nourish and grow its social capital - internal and external - has the opportunity to create greater value for all constituents and enhance its business.
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