Through appropriate and effective utilization of web2.0 tools, business owners can generate enormous revenue by a considerably small amount of expense, comparing to traditional advertising, and the latter might not even productive.
While a lot of companies started to dip their toes into this emerging environment of social media, not so many can make good examples of successfully promoting the brand and products, and increasing customer retention.
So what’s the reason? It might not be easy to answer such a question. But through the case study of success instances might give us some insight about how to cleverly utilize social media to reach desired outcome.
Increase customer retention, and get referral
Through the strategic collaboration with Facebook, American Express has created one active forum for small business owners and managers to interact with each other by sharing successful stories and competing for the prize. Their fan page on Facebook has effectively attracted enormous number of users through the following great features that align well with the business models outlined in Don Tapscott and Anthony D. Williams’s book, Wikinomics, :
1. Peering: Encourage ongoing engagement from customers
Through regularly posting inspiring quotes and interesting word games such as “fill in the blank”, Amex effectively encourages customers to participate and leave their comments. While the majority of active participants are small business owners, the fan page is an ideal platform for them to get exposure and interact with potential business partners or competitors.
2. Acting Globally: Make a win-win situation
Amex regularly launches contests called “Big Break” for small business owners to win the prize of fund and marketing support. While the participants try their best to encourage their customers to vote, it indirectly increases the exposure of Amex and helps to accumulate fan base.
3. Being Open & Sharing: Effectively establish strategic partnership
Small business users can find a lot of useful strategies and tools for integrating their business with social media through Amex’s Page, together with their integrated partnership with major social media such as Facebook and Twitter, customers can further benefit from rewards like free advertisements opportunities on Facebook.
|Make your customers actively participate in the community by cleverly encouraging discussion and thoughts sharing. There are many famous fan pages which have huge amount of users “Like” them, but only a few active users are “talking about them”. When the customers are willingly engaging in the community, the potential retention (customers keep purchasing the products) and referral (customers recommend the products to their acquaintance) may be expected.|
Maximize the benefit of Open Innovation
Millennium Pharmaceuticals started as a young company providing the service as Contract Research Organizations (CROs) to supply information or analysis of biological compounds to pharmaceutical manufacturers. While CROs have no control over the knowledge which they generate from work, Millennium jumped to a new business model, by which Millennium retains all the ownership of intellectual property and can license to other companies or use in another market.
Through this approach, the potential value of intellectual property would not be limited to specific firm and thus can encourage productivity and collaboration in the whole industry.
1. Peering & Sharing: Open innovation encourage knowledge sharing
By retaining the ownership of intellectual property (IP), Millennium can fully utilize the value of it and further encourage the sharing of knowledge among potential customers or competitors.
2. Being Open:
Under the model of open innovation, the intellectual property is no longer kept in core business but can be applied to different target markets. Millennium has created a win-win situation for both pharmaceutical manufacturers and itself by unleashing the value of intellectual property and enhancing positive collaboration.
|The potential value of intellectual property can be boosted through sharing and collaborating. While the larger pharmaceutical firms can acquire the desired intellectual property at a lower cost, Millennium retains the freedom of utilizing specific intellectual property to generate extra revenue.|