Social media strategy must encompass all stakeholders

In November last year Qantas became the third airline (after accident-prone United and the normally safe-handed Southwest) to be undone by social media when its twitter campaign #QantasLuxury backfired spectacularly.  In return for a First Class Gift Pack (see Figure 1 below to be wowed), customers were asked to tweet what their dream luxury inflight experience would be.










Figure 1: The Prize – ‘A luxury amenity kit and our famous QF PJs’

Any hopes Qantas’s social media team had of receiving a few marketing ideas were swiftly quashed.  Instead they received an avalanche of sarcasm and vitriol surrounding the labour relations dispute with unions representing its pilots, engineers, baggage handlers and caterers – “#QantasLuxury is having a CEO who thinks a 71% pay rise is fair and workers are greedy for asking for 3%” being one of the responses.   Customers were also acerbic, many having been greatly inconvenienced when Qantas CEO Alan Joyce had grounded planes some weeks earlier during the dispute; the first reply being #QantasLuxury meant “Planes that arrive in tact and on time because they’re staffed and maintained by properly-paid, Australia-based personnel.”

As argued in a previous article, social media strategy needs to be founded in business strategy, at the core of which is the value proposition that a business provides to its customers.  The reason that companies such as Ford, Dell, Blendtec, Cree Lighting, Nokia, Philips, First Direct, Domino’s, Starbucks, Best Buy, First Direct, Zappos, GiffGaff and Asda have achieved success is because their social media strategy augments or re-inforces how they create superior value for customers and differentiate themselves from competitors.

But as the Qantas example highlights, social media reach beyond customers to other stakeholders – employees, suppliers, partners, shareholders and society (including local community groups, government agencies and NGOs).  What you say on a public platform like Twitter or Facebook will not just be heard by the stakeholder group you are targeting and to think so risks a Qantas-like gaffe.

Implicitly or explicitly, a business has a value exchange with every stakeholder group (see Figure 2).  It offers value (the value proposition) and seeks value in return (target outcomes) and should measure value creation for and value extraction from each group.

Figure 2: Multi-Stakeholder Strategy Ecosystem 

This value exchange is most explicit with customers where a customer proposition is usually articulated and what is sought in return (in terms of customer acquisition, retention, growth and profitability) is clearly stated.  But it applies to all groups.  If we take employees as an example, the company identifies the type of people it wants to recruit (skills, attitudes, etc.), creates an employee value proposition that will appeal to this target population and in return for delivering this superior proposition it receives greater loyalty, superior productivity.  Figure 3 shows how value can be created for each stakeholder group and the value that the company can receive in return.


Figure 3: Value Created and Value Sought by Stakeholder Group 

Effectively a business is an eco-system where value is co-created by different stakeholders and that value is then shared out between them.  Not all stakeholder groups will be treated equally, some will be in a position to negotiate a more favourable value exchange than others (for example due to a near-monopoly position).  And the focus of a business’s strategy is balancing the value created for and extracted from each group so that overall growth can be sustained.  Ultimately this involves defining the capabilities required in each stakeholder-facing area then prioritising which will be developed, finally delivering those capabilities using organisation design, competency development, culture definition, process design, IT enablement and metrics.

As a critical enabling information technology, social media can be a significant contributor to organisational capability across all stakeholder groups.  Many companies already use social tools to engage the workforces both to improve collaboration and productivity (e.g. Philips), enable a better flow of communication from leaders to front line people and back again (e.g. Salesforce) and making the company a more enjoyable place to work (using gamification).  Equally it can provide a way for companies to communicate and collaborate with partners to create new products and propositions (e.g. P&G which has leveraged the Innocentive open source innovation platform to create new products).  It can also provide a means for a respectful dialogue with environmental groups about the steps a business is taking towards sustainability, based around transparency (as false claims will be aggressively refuted).  Finally social media can be used to provide regular share price updates and other communications to shareholders.

So what this all means is that the starting point for social media strategy is looking at the business’s value proposition for each stakeholder group and work out how social media can help broaden (perhaps using Figure 3 as a starting point) and deepen the value created.  Then it requires understanding what the target outcomes are with each group, again evaluating how social media can be deployed to help achieve them.

As highlighted in the previous article, it is quite possible that the business’ strategy is not articulated in this way.  If that is the case, social media strategists need to make their best estimate of what the value propositions and target outcomes are with each stakeholder group and document them as assumptions.  Then show how the ‘draft’ social media strategy supports what has been assumed.  The likely outcome will be discussion about the assumptions and what the value exchange with each stakeholder group should be.

As a social media strategist, you must be part of this because while social media strategy should be shaped by business strategy, the possibilities that social media provide mean the opposite is also true and using the approach outlined above is your way to prove it.

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About Jack Springman

I am a consultant with experience in business strategy and customer strategy development, customer management and customer service transformation.

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