4.3 Corporate Benefit as strategy component

The learning objective of the topic is to

• be able to derive the final content of the strategy component from a formulated strategy and the content of other strategy components.
• Understand the corporate benefit as a defined, elementary component of the social media strategy.
• to be able to include the company benefit as a requirement in the strategy definition.

Reading time of this learning unit approx. 19 minutes.

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Basics

Definition of the strategy component Corporate Benefit

The strategy component CorporateBenefits describes

• the concrete benefits that the company can and wants to derive from the social media strategy / social media use.
• the areas, functions and topics in which the company intends to derive benefit from social media.
• how the company intends to achieve this benefit in social media.

Significance of the strategy component CorporateBenefits

Strategic benefit of the strategy component

The definition of the corporate benefit to be created by the social media strategy / by the social media use is an elementary component of the strategy development. This component of strategy development is based on the company’s goals, the company’s business model, the social media affinity of the markets, and the competitive situation (sources of company benefit from social media).

The strategy component CorporateBenefit itself is an indispensable content component of the strategy. In it, we describe the benefits that the company wants to generate through this social media strategy. Since strategy components also bridge the gap from strategy to day-to-day work, we describe not only the benefit itself in this strategy component, but also as concretely as possible how this benefit – from the social media success of the strategy – is created. If the benefit from social media for the company – completely or partially – does not take place, the social media strategy / use loses its entrepreneurial justification or significance.

Types of BusinessBenefits

Corporate benefits appear in social media in 2 ways.

• A benefit that has a direct impact on a business benefit. The direct business benefit pays directly into a business process beyond social media. These can be:
  • the generation of leads,
  • the direct sale or
  • the creation of valuable insights
  • the improvement of the customer relationship
  • the building of a brand
  • the change of an image

• a benefit that works for the company via social media. These include
  • the establishment of reach
  • the activation of range
  • the redistribution of content in social media
  • the building of relationship in social media

Examples of corporate benefits through social media

• New customer acquisition: the company uses social media primarily to acquire new customers and generates leads via social media.
• Market development: we use social media to develop new markets for existing products, existing markets for new products or new markets for new products.
• Customer loyalty: the company uses social media primarily for customer loyalty – either on its own or in combination with the involvement of other social media users.
• Competitive position: the company expands its own competitive position in the market through social media and generates competitive advantages for this in the form of stronger customer relationships, support through social media (users), social media structures such as communities (e.g. to secure market potential, improve and secure market access)
• Information gathering: the company establishes a communication channel to its users and thus generates valuable feedback on the market and services (needs, assessment and evaluation of services, competitive assessment, etc.).
• Support: the company offers support in social media around its own services – provided by the company alone or with the involvement of social media users.
• Business areas: the company uses social media to identify and develop new markets.

Prerequisites for corporate benefits

As simple as it may sound, there is no business benefit from a social media strategy without the success of the strategy in social media. In other words, in order to achieve a corporate benefit, we must first ensure that our social media strategy is a success and, furthermore, that this success flows into a concrete corporate benefit.

In order to realize a business benefit from a social media strategy, we need

• a success of this strategy
• a translation of social media success into business success.

In the strategy component CorporateBenefits, we describe what concrete benefit we want to derive for the company from the strategy and how this concrete corporate benefit from the successful social media strategy should reach the company.

Interfaces Social Media CorporateBenefits

To ensure that social media success also becomes a concrete corporate success, we create clearly defined interfaces in and with our social media strategy, in which the social media result flows into the respective corporate processes and the use of social media success becomes measurable and traceable – as far as this is practically feasible in the company.

These interfaces describe the social media success, define which corporate benefit is to be supported or achieved by it, in which format or form the social media result is transferred to which area of responsibility and when, and how the corporate success is determined from the social media success. Inevitably, these step points are developed jointly with the respective functional areas.

Practical use of the strategy component in everyday social media life

Strategy components are the bridge of the strategy into the daily work. They convey the contents and objectives of the strategy and thus also serve to align and review day-to-day work. Aligning day-to-day work with corporate benefits can be secured more easily and quickly with a corporate benefits strategy component.

• Orientation: The strategy component CorporateBenefits summarizes which concrete benefit(s) the company should achieve through social media. The definition of this benefit is an elementary part of strategy development. Strategy components are the bridge of the strategy into the daily work. They transport the contents and objectives of the strategy into day-to-day work. In other words, we use the corporate benefit component of our strategy as a guide and yardstick by checking our day-to-day business in social media to see how far it contributes to the corporate benefit.
• Concretization: The concretization of the corporate benefit is a prerequisite for the formulation of the strategy and the contents of the strategy components. Weaknesses and ambiguities thus become visible and can be cleared up in advance of a decision on a strategy option and before implementation in the market. In day-to-day business, we use the concrete forms of the corporate benefit to ensure in planning that the creation of the corporate benefit has the right priority in day-to-day business and to check in the audit to what extent the day-to-day business has taken this priority into account.
• Compatibility: The strategy component Corporate Benefits makes it easier to check the compatibility of the contents of other strategy components (i.e., their support of the Corporate Benefits).
• Change: Changes can be assessed better and faster due to their impact on the corporate benefit of the strategy. If a change affects the company’s benefit, it is likely that the entire strategy will need to be adjusted. This means that in our day-to-day business, we also observe changes in social media from the perspective of their impact on the company’s benefit.

Derivation of the contents of the strategy component

The corporate benefit to be realized with social media is, on the one hand, a formative input into the strategy definition. It should be finally formulated at the end of the strategy definition as an independent strategy component. The corporate benefit itself is determined by

• The company’s goals (for which markets social media should be used)
• the social media affinity of the markets (what can be achieved with social media in the own markets)
• the business model (how the business model will be supported by social media)
• the competitive goals (for social media)

influenced and derived.

Usage

Tasks and objectives of the strategy component

The strategy component CompanyBenefits maps the benefits that the company wants to derive from social media through its social media strategy.

It thus serves as an overview of

• the concrete individual benefits from the social media strategy for the company
• the measures with which the individual benefits are to be achieved.
• the resources required to realize the company’s benefits,
• The goals associated with each benefit and their KPIs.
• the assumptions and premises on which the company benefit is built.
• the interactions with other components of the strategy.

This can be used to create specifications for day-to-day work in social media and to review day-to-day work for its contribution to the success of the social media strategy in general and to the benefit of the company through social media in particular.

Contents of the strategy component CorporateBenefits

The content requirements for the corporate benefit strategy component should include at least the following points

• Definition of the company benefit: here we describe the benefit we want to achieve for our company with the help of this social media strategy – for the business model, the company goals, the competitive and market situation.
• Goals CompanyBenefits for the company through social media: we list here the specific benefits that the company will derive from the social media strategy – for its business model, functional areas, markets and competitive situation. We describe the goals and how we measure these goals (KPIs). This also includes defining the interface in which the social media result is transferred to the respective company process.
• Measures to generate the business benefit: here we list the measures required to create the desired business benefit.
• Measures and integration / connection of the usage foundation in corporate processes: here we describe specifically how we create the benefits from the social media strategy for the company and how we integrate these benefits into which corporate processes.
• Interactions that must be taken into account: CorporateBenefit is interrelated with all other strategy components. Here we summarize critical interactions and their problem solutions.
• Resource requirements of the companyBenefits: Here we summarize the resource requirements resulting from the enterprise benefit. I.e. this section is a summary of the resources (other strategy components) we need to implement the (single) business benefit.
• Assumptions: we note assumptions on which the defined business benefit consists.
• Prerequisites: we hold prerequisites that must be met in order for the business benefit to be realized.

Derivation of the contents of the strategy component

Work steps to determine the business benefits from the social media strategy.

1. Input: merge requirements and opportunities for enterprise benefits – the list of possible enterprise benefits. Here, we build primarily on the findings from the Business Model module, where we can identify potential business benefits through social media – for the existing business model.
2. Evaluation and decision: Examination of the possible company benefits and their effects and requirements for general feasibility and strategy compatibility and decision on the company benefits to be realized in the strategy: The result is a list of realizable and strategy-compatible company benefits.
3. Measures: Formulation of methods and measures for the creation of the individual benefit – List of measures for the company benefits.
4. Interface: define social media success and transition into intended business benefits including formats of success and responsibilities and measurement of success.
5. Review: requirement from each measure for resources – list of resource requirements from business benefits.

Description of the individual work steps

Input / Requirements

We list all possible corporate benefits – i.e. the individual benefits generated by social media for the company – from the areas of

• Business model: here in particular from value propositions, customer relationships, customer segments and channels, and key activities. In the analysis of the business model, we worked out what potential benefits the company can derive from social media for the individual areas of the business model. This insight now flows into the determination of the content of the strategy component in which we take the possible company benefits, the topics that need to be worked on for this and the types of measures required for this (usage formats, social media impact) as input.
• Market / social media affinity: here in particular the affinity of our markets for social media and social media usage formats. We take on board the benefits possible through social media, the issues in the markets that we can influence and work on through social media, as well as the formats of use suitable for them and the types of social media impact.
• Competition: here in particular the starting points for shaping the competitive position via topics and content, usage formats and social media effects. Here, we take on the topics in which we want to shape our competitive position to our advantage with the help of social media and the appropriate usage formats as well as the types of social media impact we can use for this.
• Company goals/growth: here, in particular, the company’s goals from the growth strategy (new markets, new services). Here we take on the topics that describe our target markets and the usage formats as well as the social media effects we can use.

together.

This summary/input for the corporate benefits strategy component results in a list of corporate benefits, topics, usage formats, and social media effects that we use as a basis for the next steps. To turn a potentially long list into a concise one, we summarize the benefits and cross out likely duplicates among the topics.

Evaluation and decision

Next, we are faced with a decision,

• realize all benefits in parallel
• individual company benefits before others.
• prioritize for resource reasons or strategic alignment and realize only some of the potential business benefits.

Note: This decision is not a social media management decision but a business decision. Social media management must prepare this decision and define the effects and requirements of the individual company benefits to such an extent that an assessment of the resource requirements and the opportunities and risks is possible. For this purpose, it helps to formulate the necessary measures for the implementation of each business benefit and, as far as possible, the resource requirements of these measures (budgets, personnel, technical and conceptual requirements, time period).

Measures

Measures: If the priorities of the individual enterprise benefits are not determined from the results of the enterprise benefit summary and feedback from the enterprise functions and management, we define the actions required to realize all of the individual enterprise benefits.

For this purpose, we create a worksheet for each company benefit with

• the topics that need to be worked on for this.
• the usage formats we have to use for this,
• the requirements from the competition, which we must exceed in order to be competitive.

To this worksheet we add

• the UserBenefit (that we generate for the topics / the market,
• the motivation we want to use to activate our users,
• Type and extent of participation, if we want to actively involve users.
• Type and amount of communication (content, communication between users and user companies, user generated content) we need to generate to be competitive.
• Identifiable resource requirements (technical, personnel, financial)

Interfaces

In addition, we list the measures with which company benefits are achieved (overview). These are usually measures from the core strategy components that result in a social media impact that creates business value. For example, this could be an audience that generates prospects, a community that strengthens customer loyalty, etc. However, make sure you also describe the specific individual measures with which the result from these measures flows into the corporate process (where this is the case, for example, in the generation of prospects) or record where the corporate benefit arises directly in social media.

If the business benefit is based on a social media result that needs to be incorporated into business processes – as in the example of prospects or in the generation of market information and insights – define the interface for the transition into the business process as precisely as possible and together with the respective functional areas. This also includes recording how social media success is tracked in the company’s processes and how the resulting company benefits are determined and recorded.

Review

On the one hand, the individual benefit is now offset by a recognizable effort. Second, we can see if we can accomplish this effort with existing resources. This makes it easier to assess the feasibility and priority of individual benefits. Deciding what to prioritize in corporate benefits is also a decision about how far and how much individual functional areas should be supported by social media. This decision is not a social media management decision but a business decision.

Define resource requirements

A resource requirement also arises from the corporate benefit. In order to ensure the integration of social media effects into corporate processes, conceptual, organizational and, at best, technical solutions are required. Depending on how the effects achieved in social media are integrated into corporate processes, we are either predominantly dealing with a conceptual – technical effort for the creation of automated solutions or with an individual effort – for the individual integration.

Based on the respective solutions for integrating the enterprise benefit into business processes, we can also estimate their resource requirements.

Goals Strategy component

For the derivation of goals for the social media strategy component CorporateBenefits, we are faced with a similar task as for the resources required for this strategy component.

The working steps:

• We first define the effects achieved with the help of our social media strategy.
• We then determine the possible business benefits.
• We then define the target figures for managing the company benefits from the social media strategy.

Decision criterion Company benefit

The business benefit that can be achieved with our strategy version is an essential criterion for the suitability / evaluation of the strategy. At this point, we should once again examine the extent to which the corporate benefits that can be achieved with the respective social media strategy version can actually be recognized and integrated into corporate processes in order to be sure that we are presenting management with strategy alternatives that can ensure sufficient benefits for the company.

Opportunities and risks Strategy component

The main risk inherent in our strategy component is a partial or complete loss of impact of our social media strategy for the intended business benefit(s). A second risk is a loss of social media impact from its connection to corporate processes. Here, problems of lacking automatable solutions or of information losses have to be considered and solved.

The most significant opportunity from the strategy component lies in the seamless integration of tailored social media impact into corporate processes. So the more precisely we are able to design a social media impact in a way that best suits the subsequent business processes, the higher the potential benefit of the strategy for the company.

Assumptions and requirements Strategy component

The first and most important assumption in connection with the corporate benefit is that of the achievable social media impact that can be used for the company. Another assumption is that we can smoothly integrate this effect into existing company processes and that it will be implemented there without any losses. This requires appropriate solutions and behaviors that cannot be secured by social media management alone, but are not insignificant for assessing the contribution of social media to corporate success.

Interactions of the strategy component CompanyBenefits

General interactions are described in this section. You will derive the specific interactions – in your strategy / examples – between the individual contents of your social media strategy using the general interactions and your know how from this course.

Interactions – observe priorities

The decision on priorities / implementation of individual corporate benefits should take into account the interactions between the corporate benefits strategy component and other strategy components. The corporate benefit – like the user benefit – is a component of the social media strategy that defines the content of the social media strategy, i.e., it has more of a determining effect on other strategy components than it is influenced by them. That is why we give higher priority to the content of the strategy component CorporateBenefits in the event of conflicts. The exception to this is the UserBenefit. Do not put the business benefit higher than the user benefit, even if this seems tempting. The user benefit defines the success of the social media strategy more clearly than the company benefit. For the company to benefit from the strategy, the strategy must be successful. The user benefit therefore has priority over the company benefit.

The corporate benefit has interactions in particular with

• UserBenefit: the user benefit is the driver of the success of the social media strategy in the market. In this way, the user benefit contributes indirectly to the success of the company benefit. If the UserBenefit has a direct impact on a CompanyBenefit, this increases the success of the strategy and especially the CompanyBenefit. Therefore, we try to design the UserBenefit as close as possible to the CompanyBenefit, so that the UserBenefit pays directly into the CompanyBenefit. This can be done, for example, by generating leads, insights or market potential through user benefits.
• Usage formats: The corporate benefit from social media can also have a direct influence on the usage formats to be used. If, for example, we are aiming for a corporate benefit through higher customer loyalty, and a community is suitable for these topics, this results in an interaction between usage formats and corporate benefits.
• Target groups: we try to generate our corporate benefits from specific target groups. If target groups contribute differently to the company benefit, there is an interaction between the selected target groups and the company benefit to be achieved with them.
• Reach: Our social media reach defines how many users we can reach on social media. Reach thus also defines how much corporate benefit we can generate from social media. If we define a certain business benefit (qualitatively), we can also use the range to define how much benefit we could derive from it quantitatively. If we know what reach is available in social media, or can be tapped by us, this shows us roughly how much corporate benefit can be realized with it.
• Participation: If the participation of social media users in processes makes it possible to achieve greater corporate benefit, there is an interaction between participation and corporate benefit. If, for example, a high level of customer loyalty is a desired corporate benefit and this customer loyalty can be increased through social interaction between customers, participation contributes – both qualitatively and quantitatively – to the corporate benefit.
• Content and topics: if we generate valuable insights or leads (company benefits) via the feedback from content and topics in social media, we have an interaction between these two strategy components.
• Resources: we will need to use resources to contribute to a desired business benefit through social media. If there are deficits or problems at the level of resources, it is very likely that this will be reflected in the company benefits through social media. So, if we have misjudged the resource requirements from our social media strategy or cannot adequately realize them, we are likely to see a reduced or non-existent business benefit. To ensure that the relationship between resources and the success of a strategy component is clear, it is advisable to attach to each strategy component a clear requirement profile for the resources needed for it.

Interactions with the strategy component Objective are automatically given by the fact that the strategy component Objectives summarizes the objectives of the individual strategy components.

Interactions with the strategy component Motivation arise, for example, via the UserBenefit (the success of the UserBenefit defines the scope of the success of the CompanyBenefit. If, for example, we use motivational structures that increase the user benefit, we also increase the company benefit).

Work Templates Strategy Component CompanyBenefits

The following work templates are intended as examples. Develop your own work templates that further address the unique situation of your company and your competition.

Working with working templates should help you to take as few problematic “shortcuts” as possible in the multitude of steps on the way to a well thought-out and reviewed strategy. Most importantly, a comprehensibly developed and documented strategy helps other employees to understand the strategy and helps everyone involved to keep the strategy competently up to date. With a system as complex and interconnected as a social media strategy, it is extremely helpful to not only know the levers to adjust a strategy, but also to more easily understand its impact on other strategy components.

In a worksheet like the example shown here, we can bring together the corporate benefits that can basically be realized with a social media strategy and document which of these corporate benefits should also be realized. The source of these fundamental corporate benefits from social media are business model, corporate goals and, of course, performance potential of social media. Under Source, we record which parts of the business model / corporate objectives are supported by the respective corporate benefit.

This worksheet records which corporate benefit we want to realize and which specific goals are to be associated with it. These can be qualitative as well as quantitative goals.

In this worksheet, we record the measures with which we realize the targeted corporate benefits with our strategy/strategy version and how we define and measure the success of the measures.

This worksheet is intended as an example to show the overview of measures and resource requirements in a comparison.

In this worksheet, we note identified negative interactions of the strategy component EnterpriseBenefits and their solutions.

Negative interactions of other strategy components on corporate benefits tend to be one-sided in nature. In other words, we are dealing with negative effects from other strategy components on the corporate benefit, which is easy to understand: negative effects of strategy components on the social media success of the strategy are always negative effects on the success of the strategy component corporate benefit. Again, since we are focusing on the content of the strategy components in the interactions and not on the results of their implementation.

In this worksheet, we can note the assumptions and conditions that must occur in order for the business benefit to occur. In the case of the strategy component CorporateBenefit, we are generally dealing with a fundamental prerequisite – the success of the strategy. To put it bluntly: no strategy success – no company benefit. Of course, one can note here that every failed strategy can still have a positive effect in some aspect. However, this way of thinking is opposed to the actual goal of strategy: with strategies, we want to achieve something very specific for very specific reasons.

This worksheet is used to illustrate the path of corporate benefits from social media into the respective corporate processes. It makes sense to use this worksheet to address the link between social media results and business processes, and to define that link in clear organizational steps with any technical processes that may be required. They will customize their own worksheet to the individual company benefits we to their integration into company processes.

Exercises

You can find the exercises linked in the header of this topic under “Materials”.