2.0.1 Social media performance potential for companies – application

The topic Social Media Performance Potential for Business provides an initial overview of the performance potential for businesses.

Reading time: approx. 13 minutes

Exercises: Exercises are in the PDF of all exercises of this course. Download it from here.

The learning objective is to

  • Provide the social media performance potential for businesses as one of the foundations of social media strategy development.
  • to learn about the social media impact.
  • Learn the company’s goals for social media.
  • Get an initial overview of social media usage formats.
  • Getting started in identifying and understanding competitive positions.
  • Identify and understand the business benefits from social media.

The individual social media usage formats and their application will be presented to you more comprehensively in the respective topics. There you will also find the corresponding exercises.

Notes on the application

Here are some notes on the practical use of social media performance potential for businesses. The actual description of the application can be found in the individual sections on usage formats, user benefits, participation, motivation, social media affinity, social media resources, social media channels, as well as the customer journey and, of course, the strategy components.

Application Social Media Effect

Social media impact describes how companies achieve a desired impact in social media. In this section, we will develop an overview of the practical use of social media impact formats, i.e.

  • UserBenefit: we describe the practical application of UserBenefit in the strategy component UserBenefit. The UserBenefit itself creates attention, reach and engagement on social media.
  • Information: the practical use of information is described in the strategy component Contents and Topics.
  • Communication: the practical use of communication in the context of a social media strategy is covered in the strategy component Communication.
  • social context: the use of content and structures that can influence the behavior of users.
  • Participation: participation offerings for users and participation structures – use of social media resources.
  • Motivation: motivational method and motivational structures to support activity and engagement of social media users….
  • Network effect: a benefit that increases with the number of users and helps to engage users to expand the number of users.

and their use in social media usage formats and social media strategy.

Social media impact through social context.

The basics of social media impact through social context are covered under Fundamentals. Here we look at the design options available to companies to use the social context to their own advantage. Mind you, with the serious design options, because less serious approaches are not recommended in the long run.

You can recognize the social context relevant to a company by the presence and impact of relevant topics in social media. That is, when social media users form opinions and gather information for decisions on social media, you can assume a social context for these topics.

Social media impact via the social context thrives on the willingness to share one’s own experiences, knowledge and expertise with others. This readiness can be supported by companies through these approaches:

  • UserBenefits from this behavior (the sharing of own experiences and own competence) e.g. in the form of recognition through feedback or status by the company we the social media users are strengthened. This support has a competitive effect at the same time. If social media users reap significantly more recognition and status for their knowledge and expertise in one platform/channel than in others, the willingness to prefer this platform/channel grows. This will also make this platform/channel more attractive to users who are interested in the experiences of others.
  • Shaping and securing the reach of social media users’ experiences, contributing to the reach and relevance of the social media user who posts experiences. If a company invests more successfully in creating reach for social media users’ experiences with its services, this is a competitive advantage that can have a permanent impact. If social media users are looking for experiences with certain services or the solution to problems, and if the company’s platform/channel with corresponding experiences is primarily displayed here, this causes a clear competitive advantage in favor of customer acquisition, but also customer retention, such as gaining insights into the needs of users and the evaluation of services. The reach of the experience can be supported with both a seaworthy design, as well as networking/connecting the experience to social media platforms and social media profiles as well as corporate platforms.
  • Ergonomics is a key factor in the willingness to share experiences with others. This includes both the technical simplicity of making this experience available and the simplicity with which this contribution is visible and attributable to the individual. Thus, a post with experiences is clearly different for the user if it can establish a directly usable reference to the user – for example, in the form of a link to the user profile in social media – than if the author of the experiences is not recognizable. For the user who posted the experience, it can also be a big – positive – difference if he is recognizable as the author. Creating this connection in an ergonomic and automated way contributes to the impact of the platform like the individual experience / contribution.

Social media impact through motivation

For powerful forms of motivation is

  • knowledge of the target groups and their needs and wishes is an important prerequisite. The effect of our motivation depends essentially on the fact that it corresponds to the wishes and characteristics of our target groups.
  • the design of processes in the platform is a prerequisite. This means that we can either operate in our own platform or integrate corresponding elements into a third-party platform.

Only when both conditions are met can we develop an effective method of motivation that is suitable for our purposes.

So for practical implementation, we first start with the interests and preferences of our target groups and look there for motivation that we can use for our social media offering. For this purpose, we develop a list of suitable motivational approaches on an intrinsic as well as on an extrinsic level and examine to what extent these motivational approaches are

  • correspond to the interests of our target group.
  • can be used for the interests of our company.

When asking about the company’s interests, we not only consider direct interests from marketing and sales but also interests from social media such as building and activating reach in social media, but also disseminating content or promoting participation.

If, after these two steps, we have found suitable motivational approaches for our social media offering, we examine how to design these motivational approaches – as a

  • systembased motivation
  • individual motivation
  • user generated motivation
  • Combination of several motivation methods

If we have also taken this step, we now have a suitable motivation method, consisting of the content and topics we use for motivation and clear guidelines for the type of motivation.

Next, there is the question of the technical implementation of motivation. Here, many good approaches fail because the chosen platforms do not offer the appropriate design options for motivation and motivation is therefore dispensed with. Before we also give up motivation and thus a success factor in a comparable situation, we should check whether we cannot solve the form of motivation via complementary channels. If our chosen social media channel offers neither good opportunities for motivation nor participation, but we can build up greater success in the market and a competitive advantage via social media with both, it makes great sense in my opinion to examine the possibility of dividing tasks between the channels used in order to, for example

  • an intensively used external social media offering (such as Facebook)
  • with its own social media offering with high user benefit, sophisticated motivation methodology and meaningful participation opportunities

to combine. However, this requires more design expertise in social media than simply using predetermined external social media channels.

Social media impact through participation

The design of participation opportunities – like the use of motivational systems – requires design access to the respective platforms and channels. Either these are proprietary platforms and channels or channels that enable the integration of appropriate user engagement features. Unfortunately, external platforms often do not offer attractive participation opportunities that take the interests of the company into account. In cases where companies rely on external platforms to build reach and where no suitable participation offerings can be integrated into the platform, there is still the option of using the external platform as a feeder for a more suitable platform. So building a reach on the external platform, but using it leads to the platform that is more suitable for the company. For users to take this additional step – from a pond-wide platform to a participation platform – there needs to be a convincing user benefit from participation.

Participation that only serves the interests of the company but does not correspond to the interests of the social media users faces a very questionable success. In your considerations, always make sure to start from the user’s interests first when developing participation offerings and to make participation and user benefits a compatible and mutually supportive element. In other words – without a user benefit from participation, there will be no significant user participation.

We develop approaches for the development of participation opportunities analogous to the procedure for the development of motivational approaches. We focus on the interests and wishes of the users and look for opportunities there to contribute to a successful experience for the users with the help of participation possibilities. Once we have found suitable interests and desires for this and have derived possible success experiences from them, we examine the social quality of the success experiences. True to the motto that joy shared is joy doubled, we check whether and how we can give our participation opportunities and the resulting sense of achievement a social quality, i.e. make them shareable and as permanently recognizable as possible for the users’ social networks.

A small example helps to illustrate the differences in the design and impact of participation opportunities.

The classic social media marketing track: A company sells motorhomes and asks users networked with the company – mostly customers – to send in their favorite pictures from their vacation. Prizes will be awarded to the best entries.

A little more motivation and social media: The company leaves the selection of the best images to the users and facilitates the dissemination of the uploaded images to the social networks with the request to vote for these images directly when uploading. This spreads the action and taps into the social networks of connected social media users. The action gets a different reach and also meaning for the participating users, because they can get recognition for their uploaded pictures from their circle of friends.

From action in social media to more social media: The company combines the action with the creation of simple profiles and a motivation system – to vote on the images – and leads the action into a permanent structure. Users can upload pictures permanently and you can subscribe to other users’ pictures. If possible in the stream of your own social network profile.

On the way to becoming a social media champion: The company uses a tagging system to make content lockable in an automated way. Users tag their images and commonalities become visible, which can be used to compile images into collections that have increased entertainment value (activity) and through which users with the same tags can be brought together and networked – this ensures user activity and networking. Communication, information and subscription functions and the connection to external social network platforms create a social media offering that is permanent and permanently effective – in the form of a community with corresponding community management.

Social Media Champion plus: We have most recently built and kept active a community of RV fans of our company in the previous variants. Now we could take a further step and open up this community – focused on our own motorhomes – to motorhome fans from other providers, potential WoMoFans, newcomers and those returning. With supplemented profiles that serve the social media users’ own preferences and through which users can connect even further. This provides us with an important source of information on concrete needs, such as experiences and wishes – both from our own range of products and from the competition. And we have established direct access to the market potential of our competitors. The longer and more intensively we can do this undisturbed, the stronger we bind WoMo users, including those of our competitors, to our platform. It goes without saying that this must be designed accordingly conceptually, communicatively and functionally. And also not quite trivial.

Social media impact through network effects

Network effects are very effective elements in social media. For example, they enable enormous and rapid growth of social media offerings. Now when you think about videos going “viral” it’s something similar to a network effect. This phenomenon is based on the existence of networks that enable the rapid dissemination of content through referrals. The network effect ensures that a user benefit grows with the number of users who use the network. The more users, the greater the user benefit.

Practical example: the social network platforms (such as Facebook) showed very clearly, based on their growth, how the network effect works. If leading persons of a social network (circle of friends) have decided on a certain platform and are also active there, step by step they pull those users with them who are oriented towards these persons. Thus, step by step, more or less the entire circle of friends migrates to this platform.

Previously used platforms become inactive and disappear. The network effect goes both ways.

Unless they operate a successful social network platform, companies cannot create a direct network effect themselves. Their impact in social media is nevertheless dependent on the quality of the social network platform and its network effect. If the network effect of the social network platform becomes negative, the reach of the company(s) in this platform will also be jeopardized. What companies can do to benefit from network effects is to link their social media offerings to the users’ social networks, i.e., to connect the posting of a content in the company’s social media offering with a post in the user’s social network. However, this requires the suitability of the content in the company offer for the circle of friends, so it is not automatically given. The company’s content strategy – including user-generated content – must be appropriately “social” – suitable for the circles of friends and connected with a user benefit for the circle of friends. Challenging but not impossible.

Furthermore, a systematic expansion of the social network – on the external platform such as Facebook – or on the company’s own community platform can be developed from the content of users of the company’s social media offering with the social networks.

Social Media impact and social media usage formats.

Social media effect in social networks: In social networks, we are dealing with information, communication, participation, motivation, user benefits, a social context and a network effect.

Social media impact in audiences: primarly audiences produce their impact with information. User benefit of an audience is information. With information via Audience, we reach the recipient who has subscribed to the news source. An impact that goes beyond this can be created by recommending content to others. Participation in Audiences takes place primarily via the classic functions of liking, commenting and sharing. User generated content would be a form of participation in an audience that goes beyond this level. Therefore audiences must be opened to user generated content. Network effects are rarely possible in audiences.

Social media impact in communities: Communities have an impact through participation, communication, information, their social context, and contribute to motivation themselves (provided these functions are sufficiently taken into account). network effects are possible for communities.

Application CompanyBenefits

We develop corporate benefits through social media for the business model and corporate goals. In other words, we define the corporate benefits we want to create in social media for the individual modules of our business model or corporate goals. We develop the corporate benefits for the modules of our business model in the Social Media Options for Action module of the potential-based strategy model.

Competitive positions for corporate benefits

The connection between competitive position and corporate benefits in social media

Competitive positions are positions in the competition that we have to reach in order to achieve or be able to achieve a desired effect. Competitive positions relate to content and structures.

  • Competitive positions Content: we need to become the leading source of content for specific topics in order to realize the desired business value within these topics.
  • Competitive positions structures: we need to realize the leading position as a community or as a participation offer to be able to realize a desired company benefit.

If we want to realize a certain corporate benefit with the help of social media, we have to achieve the necessary impact in the topic or topics (topics as part of markets) with the help of content and structures. This may be the necessary attention to our content or participation in communities or other required user behavior.

Since this effect usually takes place in a competition, it is necessary that we take or reach the position in this competition in which we achieve sufficient attention, participation or other desired effect.

So if we want to realize a corporate benefit, we can use the content and structures required for this benefit, as well as the competitive situation, not only to identify which competitive position we should take in order to prevail in a digital competition, but also to assess how likely or challenging this will be.

Performance potential for companies and competitive positions in the strategy process

With the options for action, we use this approach as the next step from the fundamental social media performance potential to the competitive positions possible in the competition, which lead us via the subsequent definition of one or more strategy drafts to the concrete use of the social media performance potential through a social media strategy.


Exercises for this content can be found in the header page of this post under Materials linked and in the respective sections of the Options for Action module as well as in this module for the Social Media Usage Formats.