Do social networks have value? Relationship management tools have found to raise the value of 10 luxury hotels through the use of social network marketing (Jung, et. al., 2013). The study focused relationship marketing through social media networks but does help define the advantages that relationship marketing can offer for businesses. Marketing will also have the benefit of influencing behaviors and thoughts in an online world.
Consider how most people view a product or service through the lens of social evaluation. If their friends like a particular product they will likely be open to making a purchase themselves. If the product is extremely popular the value of such products rise and market demand increases. Social marketing is one method of encouraging greater interest in products and services.
In many ways, much of economic behavior is based in social perception of products and services. Most items we purchase on any particular day are not necessities but have social value that raise their economic value. For example, there is value in the trendiness of a particular car beyond simply driving to and from the grocery store.
Social marketing helps create that value. The purpose of social network marketing is to 1.) maintain contact with customers; and, 2.) influence the social perception of products and services. It is typically conducted through the use of social media sites, company websites, forums, and just about any other place where people gather.
Customers who are frequent users of certain products and services naturally want to stay in touch with those companies that help them create their identity. For example, an outdoor enthusiast who is engaged in multiple online outdoor forums may want to stay in touch with a company that produces new outdoor products. Such a person would be interested in the latest and greatest editions.
New products have natural interest among key social circles of heavy users. Providing information that offers a positive perception of products and services can raise their overall status in the minds of consumers. Press releases and focused discussions can help create that perception if the company leads the conversation.
Social marketing is a relatively inexpensive process at its most basic level. For small business it only requires someone to join and engage online communities where such topics are being discussed. Corporations may need to develop their own social circles and provide solutions to existing circles that may be interested in their products and services. Future development and refinement of relationship management tools has the potential to increase sales and raise firm value.
Jung, T., et. al. (2013). Online social networking: relationship marketing in UK hotels. Journal of Marketing Management, 29 (¾).