Business model and social media strategy

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Content: Social media strategy and business model – why business models should be at the beginning of social media strategy development and preferably at the beginning of social media use.

Benefits of the article: Social media strategy competence

The connection between social media and business model

Apart from the fact that social media can represent a business model in its own right, social media has a fundamental significance for almost every business model. Social media can support business models, make them more successful or impair them. In the worst case scenario, social media can completely or partially remove the basis for individual business models.

However, this worst-case scenario, which we can understand very well using Wikipedia, for example, is not our topic. This is about the support of business models through social media, i.e. the normal interaction.

Unfortunately, it is not yet possible to speak of a normal interaction between social media and the business model. Companies that use social media have a business model – otherwise they would not exist – but as a rule they use social media independently of it. In other words, most companies that use social media do without – unconsciously rather than voluntarily – the lion’s share of social media’s contribution to the company’s success.

Why this is the case becomes clearer when we consider the marginal role that strategy plays in the training of social media managers and other functionaries. Where strategy is discussed, it is usually about content, i.e. which content is distributed how – via which channels and media formats to which target groups. The fact that this approach is not a social media strategy and that content is a possible content of a social media strategy, but is very questionable as a freewheeling strategy, remains worth mentioning, but usually receives relatively little attention.

Business models – starting point of the social media strategy

If we understand social media as something that should contribute to the company’s success, it follows that the use of social media supports the company’s success. Corporate success is the result of the company’s activities, which in turn are represented at their core by the business model.

In other words, the business model is what makes the company successful in the market.

If social media is to make a maximum contribution to the company’s success, the social media strategy should be geared towards supporting the business model.

If a social media strategy is not aligned with the business model, it contributes less to the company’s success. It only supports the area it is aimed at. For example, marketing.

So if social media is to support the business model, it is helpful to know your own business model if you are responsible for social media. However, there is still a lot of room for improvement when it comes to the status and understanding of business models in social media management. Unfortunately, the topic is neither part of the training nor sufficiently represented in the specialist literature. This does not detract from the importance of the topic, but it does detract from its popularity. And what our social media hero doesn’t know, he can’t take into account in his strategy or in his day-to-day work.

We usually encounter the business model in visual form in the form of Osterwalder and Pigneur’s business canvas. If you want to take a closer look at the topic of business models, we recommend visiting https://www.strategyzer.com/.

Below is an illustration of a business canvas with my comments on the potential for social media to change certain parts of the business model.

Use of social media to support business models

In order to be able to use social media for business models, we must first work out the performance potential of social media for this business model. This requires us to know the performance potential of social media for companies well enough to be able to make usage of it for a specific business model. We simply take this as a bold assumption for social media managers.

What we are leaving out here in this context is the potential for social media to change business models. Although this is essential, it is beyond the scope of a short blog post. When we develop social media strategies for business models, we certainly take this potential for change into account.

pbsm.strategy model

The potential-based strategy model pbsm is – to Google’s and my knowledge – currently the only strategy model for social media with which strategies can be developed on the basis of business models, the social media performance potential for companies and the competitive situation.

Although the pbsm.strategy model was developed for usage in social media, it is based on general strategy principles and can therefore also be applied and adapted to other areas.

pbsm.strategies for business models

When we develop pbsm.strategies, we follow a simple approach.

• We work out the social media performance potential for the specific business model with the respective benefits that social media can provide for the individual components of the business model.
• We define the areas of the business model and the potential benefits at the lowest possible level. At the smallest possible level because this allows us to work more precisely and in a more focused manner in competition. These individual positions are the smallest components through which we can support our business model with the respective possible benefits from social media. We refer to these positions as competitive positions because we need to be successful in these positions in order to be perceived in the competition in social media and to deliver the respective benefits from social media.
• We define the priority of the respective competitive position in consultation and with the help of the respective specialist departments.
• We define the competitive situation in social media for the competitive positions.
• We define which services our social media strategy must provide for the individual competitive positions in order to be successful in these positions.

Result, basis and initial situation for the strategy definition

Result

After these steps, we have a kind of overview or map that we can use to recognize what benefits we can basically create for the company’s success with the help of social media, what we have to achieve in individual cases – for the competitive positions – with our social media strategy in order to actually realize these benefits in the competition for attention and what this entails in terms of requirements for the company (keyword competencies and resources).

Basis and initial situation for the strategy definition

The actual work of defining the strategy then begins on the basis of this general view. Ultimately, strategy consists primarily of deciding what not to do. In other words, we have to think about how we can use social media to create what benefits for the company’s success.

This means that we have to

• must commit to one or more goals for our strategy.
• commit to securing certain competitive positions.
• agree on the realization of specific benefits and forego the realization of other benefits.
• define the methods for securing competitive positions and the associated benefits for the company’s success.

This means that we have to

• must commit to one or more goals for our strategy.
• commit to securing certain competitive positions.
• agree on the realization of specific benefits and forego the realization of other benefits.
• define the methods for securing competitive positions and the associated benefits for the company’s success.

This then leads more or less inevitably to the development of different strategy versions in order to do justice to different strategy focuses, prerequisites and assumptions.

Due to different priorities, perspectives and evaluations, it is very likely that we will develop different strategy versions in parallel in order to determine in a further step the one or the small selection of strategy drafts that can contribute most to the company’s success.

Although this approach is more time-consuming, it ensures both the involvement of the relevant functional areas in the strategy development and thus the availability of their expertise for strategy development, as well as the acceptance of the final strategy and support for its implementation in day-to-day work.

This integration of the specialist departments in strategy development and the resulting higher acceptance of the result – i.e. the final social media strategy – is by no means sufficient to dispense with active strategy management of the implementation and monitoring of the results and the impact of the strategy as well as its further development in competition.

Evaluation of pbsm.strategies

Agreed criteria are required both for the evaluation of strategy drafts and for the assessment and monitoring of the success and development of final social media strategies.

These criteria should at least cover the performance of the strategy for the company’s success as well as the competitive quality of the strategy and can be used as the basis for KPIs for future-oriented management of the strategy’s contribution to the company’s success.

The evaluation of the strategy is therefore not a one-off process but a permanent task with the aim of ensuring the success of the strategy – and thus its contribution to the company’s success.

The associated task – strategy management – is, like strategy development and securing the information base, an important, if not central, task of social media management, which in practice can easily fall under the wheels of day-to-day work if management is weak.

More informations about social media strategy

Internal resources on strategy (Social Media Strategy)

Strategy Blog

External resources on strategy

• Harvard Business Review Must Reads on Strategy
• Competitive strategy: how to design a winning business model
• From strategy to business models onto tactics
• Choosing How to Compete: Strategies and Tactics in Standardization
• The Origin of Strategy

Newsletter

Questions about strategy in social media or about the pbsm.strategy course

No blog post can answer all the questions on a topic. Especially not with a topic as complex as strategy. So if you have any questions about the topic, just contact me. You can reach me

• via the contact form on this website.
• by eMail
• in LinkedIn