Social media and the tribalization of business

Google recently commented that social media will become a “big part” of Internet marketing strategies in the future. New research from Deloitte suggests that before businesses implement such strategies they need to fully understand what drives social media to gain maximum benefit.

by Helen Leggatt

In partnership with Beeline Labs, Deloitte’s Ed Moran researched businesses that have started to use social media and build online communities. He found that many were failing to realize the full potential of their communities. For some, said Moran, it was the inability to reach the critical mass of involvement required and for others it was focusing on the bottom line instead of what their community needed.

Social media requires time, great community managers and providing what the community wants, yet many businesses start off by throwing money at online social technologies. Of the 140 or so businesses that Moran studied, 6% spent over $1 million on building social communities yet “a disturbingly high number of these sites fail,” said Moran (via WSJ).

To maximize social media activity it’s imperative to build up a strong community both in numbers and commitment. The use of dedicated staff that have time to be involved in the community instead of tacking it onto their other marketing responsibilities will also ensure consistency and engagement and businesses should look to measure success not by the number of visits, but by increased loyalty and word of mouth impact.

A few key findings from the report, "2008 Tribalization of Business", include:

- 37% of the communities have been running for 6 months or less
- 27% of the communities have 101-500 members (37% have less than 100)
- 13% of the communities are run by 2-5 full-time managers
- 52% of the companies surveyed plan to increase spending on community