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Articles, Business Case, Opinion

What should companies use Reddit for?

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Most companies are now widely available on social media, specifically on the most popular ones such as Facebook and Twitter. Business management generally trusts the (hopefully strategic) step towards these websites because it is becoming quite the standard. Also, it is rather easy to control content as the administrator of a business page on these social media. However, this does not necessarily seem to be the case with Reddit. What is going on there and why may companies be reluctant to join?

“Reddit can act as a high risk, high reward asset that can pay huge dividends for your business when used correctly.” Austin Paley for Blue Fountain Media

What is Reddit?

Reddit is a popular website where users can generate “news” posts in the community and others can up- and down vote these such that the trending topics are shown to all visitors. They proclaim themselves to be “The Front Page of the Internet” where users will miss no Internet trend as long as they are connected to the Reddit community.

Subreddit

Within Reddit, people are allowed to create any sort of subcommunity based on a common interest or to ask for help (the popular “AMA” subreddit, standing for “Ask Me Anything”, check it out). This also means that so-called Redditors can create a subreddit about a brand, which can either be positive or negative. This means that there can be several brand communities on Reddit and if the brand is not aware, it is missing out.

The Community Trademarks

Yesterday (May 2nd 2015), Reddit powered over 9000 communities consisting of over 3.4 million logged in Redditors. Besides being an active community, all members on Reddit can choose to be anonymous. Unlike with Facebook and Twitter, it is actually very likely that the user remains completely undercover. This has certain implications for the content of Reddit as Patrick Hong (Momentology) mentions there is a certain “rawness of user-generated comments”. Raw comments, however, can also be seen as uncensored and real depending on how you look at it. Either way, it is useful for a business to know whether their brand is loved or hated. And on Facebook, they might be less likely to find out because users may adjust their comments based on what they want their social circle to see. The community is open, raw, skeptical, and bold.

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Source: The Columbian

Business Example

As one of the first luxury brands, Nordstrom made the risky move of creating its own Reddit community page in 2014. Reddit allows Nordstrom to have more of a conversation with customers that other social media. Twitter, for example, is often used for pre-planned discussions where customers can use a hashtag to post questions. However, Reddit is more of a real-time conversation facilitator. Nordstrom recognizes the value of this and has been actively replying to comments and is even holding AMA (Ask Me Anything) discussions.

My Concluding Remarks

The key, it seems, to be successful on Reddit is to not just promote your product and post material and information. The Reddit community will actually shun you, as they are skeptical towards promotional material. What they value more is room for discussing your brand and products. And that should also be a valuable source of information for companies. Once brand communities are established and consumers find that the company actually responds to their comments and requests, they can help you promote without you even trying. Now wouldn’t that be perfect?

Of course I recognize that Reddit is not the “Utopia” new method to a company’s social media strategy or the one ultimate solution to gaining benefits from your brand community. I am merely stating that companies should be aware of the potential value Reddit brings and how it may be unique from other social channels.

Sources: 

http://www.momentology.com/4359-10-exceptional-examples-of-brand-communities/

http://www.luxurydaily.com/nordstrom-creates-reddit-community-for-consumer-conversations/

http://socialmediarevolver.com/step-step-guide-how-to-use-reddit-business/

http://www.bluefountainmedia.com/blog/reddit-marketing-the-complete-guide-to-using-reddit/

Articles

Youtube, Facebook or Twitter?

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Which is the most valuable social media channel in terms of user-generated content?

Firms like to engage with customers these days and social media strategy seems to be key in the success of customer involvement. They want to receive comments, likes, tweets, and review vlogs. This gives firms the option to co-create value with customers, but what many are not aware of is the differences in such content across the three major social media.

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Smith et al. (2012) tried to determine what aspects of user-generated content (UGC) would be different across Youtube, Facebook, and Twitter. They collected data from two retailers (Lululemon and American Apparel) on the three social media. The main research question evolved around the differences in UGC on six dimensions, which will be discussed in the following paragraphs.

Promotion self-representation
The authors found support for the fact that self-representation actually occurred more often on Youtube compared to Facebook and Twitter. They attribute this finding to the fact that Youtube actually promotes users to be the main character in videos with their “Broadcast Yourself” slogan.

Brand centrality
Brand centrality was found to occur in the highest degrees on Twitter and the lowest degrees on Youtube. Twitter is designed differently where posts have limited word count, thus, the brand centrality is likely to be higher. Youtube highlights the individual self where brands are often only a detail of a video.

Marketer-directed communication
The authors only found partial proof for the fact that marketer-directed UGC would be less likely on Youtube compared to Facebook and Twitter. The first case, Lululemon, indeed showed the lowest market-directed communication for Youtube but American Apparel did not support this hypothesis. Marketer-directed UGC was thought to be lower on Youtube because consumers need to put more effort into that platform (time, resources, technical skill) than in Facebook or Twitter.

Response to online marketer action
Evidence was found for Youtube to have the lowest UGC in response to online marketer action. Again, this difference is attributed to Youtube being a more complex social media.

Factually informative about the brand
Although the authors hypothesized that brand-related factual information in UGC would be equal across the three social media, it was only found that Youtube and Twitter were close. Facebook scored significantly lower on factual information. This difference could have to do with the different levels of actions that firms undertake on social media. For example, American Apparel does not respond to consumer inquiries meaning that other consumers may provide non-factual information.

Brand sentiment
Sentiment in brand-related UGC was also expected to be similar across Youtube, Facebook, and Twitter. Unfortunately, no support was found for this hypothesis. For both firms, sentiment differed across the three platforms and each company had their own particular pattern in this difference. The authors could only conclude that brand sentiment differs per site but that this difference was not predictable.

This paper provides some primary insights concerning the usage of social media by companies that want customers to generate content. The main difference is that Youtube’s videos or comments are less likely to primarily focus on the brand, thus, will not respond as much to marketer action. This does not mean that companies should not invest in Youtube, as this platform might be more useful for other information such as the association with other brands. Twitter is most distinctive from Youtube where brand centrality tends to be higher and tweets can be rather critical. Facebook was found to lie somewhere in between. Companies need to take these differences into consideration when analysing the user-generated content.

A criticism of the paper is the rather limited data, which was collected. The paper only compared two companies in a similar type of industry. Furthermore, the targeted customer segment may also show different types of behavior on social media and this was not included in the study. Lastly, as mentioned in the discussion, the user may perceive their audience on social media in certain ways, which could influence the decision on the type of content to upload.

  • Smith, A. N., Fischer, E., & Yongjian, C. (2012). How does brand-related user-generated content differ across YouTube, Facebook, and Twitter?. Journal of Interactive Marketing, 26(2), 102-113.
Articles, Business Case

Meet Local Motors

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“Dealership customers are doing vehicle-related Internet searches right in front of salespeople during negotiations.” – Darin George in Wardsauto

How will we buy our cars in the future? It is doubtful we will still be standing in the physical locations of dealerships we see today facing a sleazy salesman. Instead, maybe we will experience a virtual test drive before actually ordering the right car via an app or website on our smart devices. Or maybe we will design and build our own cars. Here’s a short clip about the potential future of car manufacturers:

Local Motors (LM) is an Arizona-based car manufacturer running on a business model that stands out within the global car industry. The most unique element of their company must be the inclusion of various stakeholders’ knowledge in designing, conceptualizing, and producing cars. LM allows amateur designers from around the world to send in their ideas for vehicles (the product line also includes a type of bicycle). However, also professionals, customers and partners are allowed to add value to the design and production phase. The crowd of LM is a highly diverse online workforce and together they make one of the most innovative vehicles in the world. Even BMW recognized the hidden talents of LM when they teamed up with the company for an “Urban Driving Experience Challenge”. The crowd of LM was asked to come up with new features and functions to improve the BMW driving experience.

How does LM work exactly?

The business model of LM revolves around the idea of co-creation and open-source. People from all kinds of backgrounds are welcome to join the online car community. They can submit their designs or ideas via the platform and are also empowered to comment or like the works of others. Via a voting system, the most popular design is selected and then the work is opened up for others to start co-creating. It is important to note that all original designs are protected by “Creative Commons”; a non-profit that provides licenses. Once a design is complete, it can be ordered by customers up to 2000 times, meaning the editions are rather limited. The production of a LM car takes place in a local micro factory creating local jobs and sustainability gains. The customer that ordered the vehicle is actually allowed to actively participate in the building process and can get training from the LM community. Lastly, the blue prints become readily available to the LM members who can download them freely and these prints are again protected by “Creative Commons”.

Why would this be the future?

Business models are increasingly evolving around the consumer. In order to remain competitive, it becomes crucial to create an exact fit between a consumer need and a product or service. The consumers of today are much better informed about the alternatives and can set higher demands. LM decided to empower the consumer as much as possible but they also got rid of a tunnel vision on car manufacturing. Part of their success lies within innovation and co-creation, but a major competitive advantage would have to be the fact that they claim to “bring vehicles to the market at 1/100th of the cost and 5 times faster than the traditional vehicular development and production paradigm” as stated in the 2014 report of the European Union on Design for Innovation. Although it must be noted that LM aims for the niche markets where consumers enjoy being part of the car production process, we can admire them for their innovation and co-creation efforts. How can a traditional car dealership and manufacturer battle this unique way of producing and selling cars? How can competitors match LM’s pool of knowledge?

References:

Dervojeda, K., Verzijl, D., Nagtegaal, F., Lengton, M., Rouwmaat, E., Monfardini, E., et al. (2014). Design for Innovation. European Commission, Business Innovation Observatory. European Union.

George, D. (2015, March 15). Car Dealership Salespeople Should Lose the Bicycle Helmet. Retrieved April 3, 2015, from Wardsauto: http://wardsauto.com/dealers/car-dealership-salespeople-should-lose-bicycle-helmet.

Ramaswamy, V., & Ozcan, K. (2013). Strategy and Co-creation Thinking. Strategy & Leadership , 41 (6), 5-10.