Showing posts with label content providers. Show all posts
Showing posts with label content providers. Show all posts

Sunday, June 30, 2013

Social Interaction and Content as Pathways to Paying Customers

Companies are seeking to find ways to draw in customers in a data rich environment. With lots of free content there must be something that differentiates sites to create income streams. Content alone is limited but content with social interaction develops engagement and eventual purchases. By developing social networking, group interaction, and constant new information sites can turn passive users into paying customers.

Social computing and networking has taken a more important function in business networks. Social computing power has transferred from organizations to individuals who desire to, “manifest their creativity, engage in social interaction, contribute their expertise, share content, collectively build new tools and disseminate information” (Parameswaran and Whinston, 2007, pp. 753).  It is a process of collaboration and social building. 

Commitment to a site and its content is important for overall engagement. Organizational commitment theory indicates that user’s behavior on content sites is directly related to their level of commitment (Meyer and Allen, 1991). Users must find value in the information and have a level of engagement with the materials being presented. 

Research by Oestreicher-Singer & Gal; Zalmanson (2013) helps to understand how online social interaction and user familiarity create higher levels of website subscription. A total of 150,000 participants (subscribers and non-subscriber) user profits were analyzed over a three month period in order to determine their behavior and likelihood of purchasing. Such research helps in understanding how website features foster higher levels of paying customers.

The research found that those who interacted consistently with other members were more willing to purchase subscriptions. In addition, those who run forums and become social online leaders were also more likely to purchase subscriptions. This helps indicate that people find a sense of social positioning and responsibility as they deal with others and are willing to pay to maintain that position. 

The number of play lists, blog posts, and groups managed predicted purchasing behavior. In essence, as people became more associated with and interactive with the company they were willing to extend these opportunities to engage in opportunities they enjoy.  The ultimate interaction activity and commitment displayed was seen in group leadership and blog posting.

Subscription rates are enhanced from building communities that revolve around social networking. The social interaction encourages constant participation and frequency which leads to eventual purchases. Those purchases occur because people desire to enhance their functionality in order to participate more with others. The stronger the consumer becomes engaged and builds an identity with others that are using the service the more likely their eventual purchases. 

Organizations should consider the development of social networks based around that product line. Whether that product is music, movies, education, camping supplies or anything else it is precisely that self-identity and interaction that helps encourage higher rates of engagement. Consumers must find utility and comfort with profiles before moving onto making full-scale purchases. They spend time on the site and familiarity brings both loyalty and purchases. 

Meyer, J. and Allen, N. (1991) A Three-Component Conceptualization of Organizational Commitment, Human Resource Management Review, 1 (1).

Oestreicher-Singer, G. & Zalmanson, L. (2013). Content or community? A digital business strategy for content providers in the social age. MIS Quarterly, 37 (2). 

Parameswaran, M., and Whinston, A. (2007). Research issues in social computing. Journal of the Association for Information Systems, 8 (6).