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Treating customers as online equals boosts business, research finds

Date:
August 24, 2010
Source:
Inderscience
Summary:
Companies hoping to benefit from the emergence of online tools, such as social media, blogs, and wikis, must develop ongoing relationships with their customer and encourage interactions between customers. When customers see that a company is devoting resources, effort and attention to enhancing relationships, they are more likely to become advocates for that company's products or services, new business research finds.

Companies hoping to benefit from the emergence of online tools, such as social media, blogs, and wikis, must develop ongoing relationships with their customer and encourage interactions between customers. When customers see that a company is devoting resources, effort and attention to enhancing relationships, they are more likely to become advocates for that company's products or services, new business research finds.

Customers are no longer passive consumers of goods and services, they expect to play a role in the creation, manipulation, and evaluation of digital content. This shift in attitude is epitomised by online photo galleries, such as Flickr and Picasa Web Albums, by the social networking tools such as Facebook and MySpace, and by the advent of blogging, citizen journalism and platforms such as Twitter.

According to Hanna-Kaisa Ellonen and Miia Kosonen of the School of Business, at Lappeenranta University of Technology, in Finland, it is so-called Web 2.0 in particular and, more broadly, social media that have empowered customers to participate and engage in interaction with fellow customers and the companies offering products and services. The shift has led increasingly to customers using various types of discussion forums and blogs to exchange opinions and product information, and information resources, such as Wikis, to publicly edit content, regardless of the company's presence or otherwise.

Companies that are rising to the challenge of social media can successfully engage in this conversation, they explain, and there are many examples of organisations from computer companies to online shoe sellers that have done so. Ellonen and Kosonen point out, however, that while there are several isolated examples of companies successfully adopting a social media strategy as part of their marketing and customer services, the concept is still rather novel and little scientific research in the business arena has been done to reveal how interactions between company and customer function at the social media level.

Writing in the International Journal of Electronic Marketing and Retailing, the researchers explain how they hoped to remedy this situation and to identify and categorise different types of social-media-mediated interactions as well as to explore how such interactions support customer collaboration to mutual benefit of customer and company. As such, the team conducted a comparative case study by looking at four communities from the media industry operating with different social-media applications including wikis, blogs, discussion forums and an online forum for short messages. The areas investigated were a global comic magazine, a dieting community, a local newspaper, and a business daily.

The team found that the type of interactions between customers and the companies involved in each case area are related to the diversity of the different forms of customer collaboration possible.

"The Dieting Community interactions mainly represented the relationship-oriented mode and in this case, customers collaborated virtually in the idea generation for product improvements, testing, giving peer support, exchanging information about customer values and needs, content production and maintaining the quality of the product," the team explains. "Business Daily and Comic Magazine operated in both interaction modes and benefited from virtual customer collaboration in relatively many ways, while local newspaper, which only operated in the instrumental mode, allowed fewer collaboration opportunities."

The team adds that one lesson company managers must learn if they are to improve customer relations and sales through social-media applications is that they must play by rules of social media and treat customers as equals. This is something new that companies need to learn in order to benefit from social media in their customer relationships, the team says.


Story Source:

The above story is based on materials provided by Inderscience. Note: Materials may be edited for content and length.


Cite This Page:

Inderscience. "Treating customers as online equals boosts business, research finds." ScienceDaily. ScienceDaily, 24 August 2010. <www.sciencedaily.com/releases/2010/08/100824082226.htm>.
Inderscience. (2010, August 24). Treating customers as online equals boosts business, research finds. ScienceDaily. Retrieved April 16, 2014 from www.sciencedaily.com/releases/2010/08/100824082226.htm
Inderscience. "Treating customers as online equals boosts business, research finds." ScienceDaily. www.sciencedaily.com/releases/2010/08/100824082226.htm (accessed April 16, 2014).

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