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Social media diary - Amex

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american express travel services

Amex to launch online community for travel managers

One of the best examples I know of a brand using information they have to add a social layer to their site is the Members Know site from American Express. On this site Amex use the data from spending using their cards to highlight restaurants and hotels in certain cities that are popular with their members. Once you’ve signed up you can share your thoughts on these establishments and exchange travel tips with other business traveller. Today, they are launching a new online community, and this time it isn’t aimed at the business travellers, but at the people who organise their travel for them.

Business Travel Connexion is aimed at corporate travel managers and will combine editorial from Amex and other suppliers with user-generated content. Amex hope to create a real-time resource for the members and also build a fairly homogeneous community of a group of people who would valuable to marketers. They will be able to share information and ideas with each other and also with Amex and other suppliers. The site includes a “Product Lab” area for feedback and co-creation.

So what can we learn from this?

Amex are a great example of how brands are adding social layers to their existing sites and products, delivering real value to people and making the most of the product and information they already have. With Members Know they took data that previously wasn’t used externally (data on spending in hotels and restaurants) and repackaged this in a  way that was both useful for members and encouraged them to interact and upload their own content. In the same way, Business Travel Connection, links a set of individual customers who are isolated (often working with no peers in their organisation) but who share a strong common bond (they all deal with the same problems). That they can be linked through the Amex brand is even more powerful.

When thinking about ‘going social’ - building online communities or using social media - too many firms build approaches that don’t always address their unique position in the market or capitalise upon what they may have to offer. Amex have done things the right way. They’ve thought about their strategy and about why people would engage in an online community that they manage; and about what they have to offer that’s different. These are important stages and ones that we at FreshNetworks spend a lot of time on with clients. Working out why people will engage and why they will engage on your site is a critical first step to any online community.

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Do we need to incentivise participation in online communities?

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There’s a debate to be had in the world of online communities, especially in the world of online research communities about how we incentivise people to take part. At FreshNetworks, in the online research communities that we build and manage for clients we tend not to incentivise, at least not in the traditional way that we see in market research. So for a community we ran earlier this year with C-level executives from across Europe we didn’t incentivise and got high levels of participation. If this had been a focus group or telephone survey, traditional market research would have included incentives (either to the individual or to a charity on their behalf) of over £150 per person. Some other agencies who build and manage online research communities always pay incentives, but as a norm we don’t.

I’m currently reading Dan Ariely‘s Predictably Irrational (a great read for anybody who is interested in human behaviour!), and he discusses exactly the reason why not paying traditional incentives can be an effective strategy. We know that humans operate in both the social context and the market context and Ariely shows how the mere mention of money, quantifying an effort, is enough to place an experience firmly in the market context. Take the example of a lawyer who is asked to do some work to help a group of disadvantaged people - offer to pay them a reduced day rate and they will probably say no; ask them to do it pro bono (for free) and they will probably say yes. In the former case they think they are being devalued (a market context), in the latter they know they are doing it for free as a favour (a social context). The mere mention of money shifted the engagement to a market one.

Ariely describes an experiment that throws more light on how to encourage participation. They recruited a group of students to take part in an experiment - they were asked to spend five minutes doing a mundane task (moving a circle on the left of a computer screen into a box on the right) as many times as possible. One group were given five dollars to take part, another 50 cents and another nothing. The outcome was measurable - the more times the circle was put in the square the harder the participants worked. Whilst it was true that those paid five dollars worked harder than those paid 50 cents, it was those who were paid nothing who worked hardest of all.

A second iteration of the experiment strengthened the theory that mentioning money creates a market context. Rather than offering money they offered gifts - to one group a chocolate worth about 50 cents, to another a box of chocolates worth about five dollars and to a third group nothing. Money wasn’t mentioned, just the gift that they would received. This time all three groups performed equally.

The outcome from these experiments is clear. The mention of money as an incentive for doing something shifts the context from a social one to a market one. People make a decision of how much they will contribute based on the value they think they are receiving. Without the money (or even with a gift not described in monetary terms), people operate firmly in the social context.

When we are building and managing online communities we want people to take part in the social context. The communities are not market-based transactions, but social environments. Monetary incentives (or equivalents) will only go to create an environment at odds with this. That’s why we tend not to incentivise participation in our online communities, we find that we usually don’t need to. Where we do incentivise we tend to do so with gifts, information or access - non-monetary offerings which leave people firmly where we want them in the social context.

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Recommendations - 25% more influence than adverts in social networks

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It seems to be a week for research. A couple of days ago, we reported on research from Rubicon Consulting showing that online reviews are the second biggest influencer on purchases for US adults. Today I’ve been reading research from Razorfish which looks into this in more detail and in particular the role of advertising and the place of brands in social networks. Their Consumer Experience Report shows that 40% of online consumers have made a decision based on an advertisement they saw on social media sites and that three-quarters welcome brand advertising in these spaces.

So consumers are, it would appear from this research, comfortable with brands being present and advertising in social networks. It it worth comparing, however, the 40% of people that have made a purchase decision based on an advert in a social network with the 51% of people in the research who have made a purchase through a recommendation in a social network. This would indicate that whilst advertising and the presence of brands is accepted, personal recommendation have 25% more influence on purchase decisions.

This research does not come as a surprise to us here at FreshNetworks. We know that social networks are very much a me space (I go to Facebook to see my friends, upload my photos and plan my events). It’s a very personal space and it is difficult in this environment for a brand to have as much impact as those people who are in your network. Advertising does work and people do accept it (possibly because they are used to advertising across the web pages they visit) but it cannot have the same impact as something that capitalises upon this network and personal space. It cannot, therefore, have as much impact as a personal recommendation from somebody else in the network (even if you don’t know them).

As we are hearing more and more, people trust people like them more than they trust an anonymous brand in an advert. They make purchase decisions based on things they read in social media, and on social networks, but are more likely to be influenced by recommendations from other users  than they are from advertising. This is why word of mouth is so important in a social media context and why brands should be making the most of and amplifying the organic natural discussions that are out there, rather than necessarily advertising in the way they always have done.

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Crowdsourcing - does the customer know best?

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We’ve written a lot in the past about co-creation, from Mass Customisation to Community Product Design. In some of the more devloped examples of co-creating with customers crowdsourcing is common - getting feedback and ideas from customers, the people who know your product best.

The online communities that we build and manage at FreshNetworks make use of crowd-sourcing for innovation and insight. We use them to help clients create better experiences when on holiday, or to come up with ways of marketing a product better. Other brands are also making use of their crowd - from Oxfam looking for a new slogan to Starbucks wanting to improve its product - it’s a technique that is being used more and more, possibly because social media now gives us the tools and the audience to do it easily.

An article in today’s Guardian (The customer knows best) looks at how crowdsourcing is being used by brands (and has an interview with our CEO Charlie). As the article points out, getting ideas and feedback from users is not new (they cite the example of the Oxford English Dictionary in the 19th century) but social media tools and, more importantly, their growth and common acceptance, is making it easier and quicker to seek ideas and opinions from customers. It’s also making it easier for smaller businesses to capitalise upon the power the crowd can bring. As the Guardian notes:

The evidence from Starbucks and P&G shows that some of the world’s biggest companies can easily engage a crowd. Smaller businesses, naturally, find it much harder to source an army of volunteers, let alone get them to engage with their brand. Recently, however, a relaunched service from Amazon - a pioneer of customer generated reviews - is creating a market that might be able connect the two. Companies subscribed to its Mechanical Turk (mturk.com) service can post simple tasks, such as image tagging, data collection, basic market research and product comparison, and offer to pay potential click-workers a few pence to complete them.

This is a real sign that crowdsourcing is becoming both more available and more widely accepted - more business (big and small) can make more use of their customers in this way.

Of course opening up your business to ideas and comments can throw up challenges - what happens if you get negativity as well as those positive useful comments we all expect. This is of course true, but as  Charlie is quoted as saying in the article:

…some companies are “definitely nervous” about this new, more open form of business, especially in terms of “opening themselves up to positive and negative criticism online and encouraging debate with their customers who aren’t happy.” He says that the evidence is to the contrary. In his experience, most people who participate online want to be positive

Crowdsourcing offers real benefits to businesses large and small and the evidence is that more and more people are experimenting with it. We expect that this kind of engagement will become even more mainstream in the coming year and even that pretty soon customers will expect to engage in this way.

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Online reviews - second biggest influence on purchase decisions

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We’ve written on this blog before about research and reports that show the influence that social media and online reviews can have on purchase decisions, including a post showing how 25m American adults make decisions based on social media. A report out last week supports this and shows the role of online reviews, in particular, to be greater than we might previously have thought.

The report, by Rubicon Consulting, shows that for American adults, online reviews are second only to word-of-mouth in terms of influence on purchase decisions. What is common about both of these, of course, is that they both rely on consumer-to-consumer recommendations. We’ve seen this before with research from Forrester, McKinsey and with our own experience at FreshNetworks of talking to clients. A consumer-to-consumer message is stronger than a brand-to-consumer one. And now it appears that getting this message through online reviews is second only to word-of-mouth.

The detail of the report shows some more exciting and interesting observations. Whilst the influence of online is large and growing, it is worth exploring the differences that emerge, especially those which show where we are influenced weakly by online information.

The areas where the web has greatest influence includes purchase of consumer electronics, vacation planning, choosing a movie to watch, buying a car, looking for a job or choosing a restaurant. In each of these, more than one in three consumers say they are heavily influenced by online information when making a purchase decision. The lowest areas are choosing a mechanic or solicitor and, interestingly given the strong use of social media by the Obama campaign, choosing who to vote for.

It may be that some decisions lend themselves more naturally to being influenced by online content, but I suspect it is just that the tools, sites and content do not yet exist to make influence meaningful in some areas. There are more places where you can share thoughts (and learn others’ thoughts) on consumer electronics and vacation ideas than there are for solicitors. Of course, things change rapidly - DeJuridica, a French site where you can review your solicitor, among other professions, is launching soon.

What we are seeing here is the democratisation of information online - more users reading more reviews from more people on more products.  It is only when a tool becomes used by a broad base of people that it truly becomes useful and can have an impact on the way we live. That’s what is happening now with social media and online communities. And why they matter quite so much.

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