Business Case Studies, Executive Interviews, Randy L Allen on Social Networking

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Executive Interviews: Interview with Randy L Allen on Social Networking
May 2010 - By Dr. Nagendra V Chowdary

Randy L Allen
Associate Dean, Marketing and Corporate Relations and Consultant-in-Residence, The Johnson School, Cornell University

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  • A recent blogworks survey indicates that the blog and Social Media (SM) environment is evolving rapidly and India is no exception to this. The survey reveals that the SM credibility is on the increase: 90% believe that blogs and SM platforms have an impact on business and marketing; 90% believe that buzz and word of mouth are top deliverables from SM activities; 65% think SM can deliver insights and over 46% hope to create better products and services through SM activities. What’s your assessment of such social media environments in emerging markets’ potential to innovate?
    Word of mouth has traditionally been viewed as the most reliable information between individuals, especially for references on products and services. As social media gains trust, I would expect those statistics to increase. Stuart L Hart, the Samuel C Johnson Chair in Sustainable Global Enterprise at the Johnson School at Cornell University, has proposed that there are fewer barriers to innovation in emerging markets since there are fewer entrenched industries with established infrastructures, e.g., utility companies. With 704.2 million Internet users in Asia, according to Internet World Stats – ( and 58% of the world’s mobile phone subscribers living in developing nations (source: http:// P4nk0EOE,) social media and the web provide a tremendous opportunity for innovation to take place. Social media provides a vehicle for the exchange of ideas in countries such as India, where traditional infrastructures for communication are still developing and travel may be out of reach for many. Social media can be used in India to ask questions, gather ideas and foster cooperation to create innovative solutions to complex problems, such as water purification and availability, alternative low-cost forms of energy, new products to service the base of the pyramid, etc.

  • How should companies look at social networking sites – as complementary or competitive threats?
    Companies should consider social networking sites as both complementary and competitive threats. The sites can be complementary because they create another channel of communication with customers, which can enhance and reinforce company messages. They can also be complementary by facilitating soft alliances that enhance the company’s position and products, improving services, sales and positive customer views. However, they can also be competitive, as negative views can be spread very rapidly to a wide network, and competitors can advertise and promote directly beside a company’s advertisements. Companies must have a social media strategy, focus, and designated individual(s) and/or departments charged with monitoring the company’s position on social media and communication by anyone about the company on all of the various social media channels.

  • The US users spent nearly sixand a-half hours on Facebook compared with fewer than two-and-ahalf hours on Google. What does the rising popularity of social networking mean for business? How should companies convert all such users’ time to their advantage?
    It is not possible to convert all user’s six hours on Facebook to their advantage. A starting point for the company is to understand who is on Facebook, can they be segmented and what strategy should be used to target the users, if any.

  • Experts advocate that the companies must articulate and adopt a unique social media strategy to tap into the growing popularity of social media. How should companies go about chalking out social media strategy? What are the critical success factors for getting the power and potential of social media platform right?
    Social media is, or should be, an important element of almost any company’s marketing and communication strategy today. The development of a social media strategy is the same as creating a strategy for any other marketing and communications channel, with the exception that once the message is in the social media space, it is far easier to comment, forward and challenge than in more traditional media. Of more interest are the critical success factors in the social media platform. I would suggest that there are several to consider:

    • Audience and customers being reached by the social media and its fit with the company’s target audience, broadly and for targeted segments of the audience
    • The ability to track the reactions and results of the social media on achieving the desired outcomes
    • The positive viral impact of the company’s use of social media
    • Traditional brand awareness measures
    • Increase in net promoters of the company and a decrease in detractors
    • Degree of control over the messages
    • Ability to measure results. What kind of companies – B 2 B, B 2 C, C 2 C or P 2 P – do you think would be the most benefitted from the social media platforms?

    Since social media is primarily an individual activity today, with the company portion being outreach to individuals, I believe that B2C, C2C and P2P companies will benefit the most from social media. As social media continues to evolve, it may be a good channel for B2B, but not at the moment.

  • Both Twitter and Facebook played a starring role in the online campaign strategy that helped sweep Barack Obama to victory in the presidential race. But like Mr. Obama, social networks have also generated great expectations along the way on which they must now deliver. How should they prove to the world that they are here to stay and demonstrate that they are capable of generating the returns that justify the lofty valuations investors have given them?
    Given the increasing role of social networks in activities such as Presidential elections, disaster relief, communications on events, and the number of active users, social media has demonstrated that it is here to stay. Some may die or be acquired, and new ones will evolve, but they are here and have had the same type of impacts that radio, TV, computers and mobile phones have had. The valuations that investors have given them will ultimately be supported by the profits they generate and the returns they create for shareholders.

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The interview was conducted by Dr. Nagendra V Chowdary, Consulting Editor, Effective Executive and Dean, IBSCDC, Hyderabad.

This interview was originally published in Effective Executive, IUP, May 2010.

Copyright © May 2010, IBSCDC No part of this publication may be copied, reproduced or distributed, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or medium – electronic, mechanical, photocopying, recording, or otherwise – without the permission of IBSCDC.

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