The Customer As Salesperson: Will the Underlying Social Network Premise Backfire?

Let's face it, when all the artifice is stripped away, the basic assumption underlying the monetization of social networks is that your friends and family will get you to buy stuff they like. This could be a great idea or it could be a disaster. Managers should not assume that what works for some company they read about will be a great concept for their product or service. Some people are going to resent the intrusion. Some are going to start demanding compensation. And some will just want to be left alone. This could create brand equity or it could seriously destroy value by misallocating ad and promotion budget funds. Think, talk, research. Dont just dive in. David Rogers explores the question at BNet:

"From Doritos to Starbucks to Cisco, companies of all kinds are reaching out to consumers to help market their brands for them. Rather than just expecting customers to watch ads and respond to them, marketers are seeking out customers who are willing to collaborate—by submitting ideas, producing content, and helping drive buzz and excitement around their brands.

This customer-driven marketing has been happening organically in the customers’ own networks. (Think of customer tweets about great service, or product reviews on Amazon.) But many savvy marketers are now devising their own platforms and programs to inspire customers to collaborate directly with them, in hopes of directing and leveraging their energy for the greatest benefit to the brand.

To succeed, these marketers need to understand what motivates customers to collaborate at all. Why would customers take the time to contribute to your business? Thomas W. Malone, Robert Laubacher, and Chrysanthos Dellarocas of MIT categorize the motivations for network collaboration as “love, glory, or money.” These three, and one more category, can provide a good starting point for understanding why customers might join forces with you.

1. Love

In many cases, customers choose to collaborate out of love or passion for a brand, a project, or a cause.

This was how Pepsi inspired customers to contribute to its Pepsi Refresh Project. In 2010, the brand broke with 23 years of tradition and, rather than running a Super Bowl ad, took $20 million and asked customers for ideas on how to spend it via grants to social causes in their own communities. Customers were inspired by a chance to win backing for causes they believed in passionately in their own backyards: school grants, local arts programs, or building a new playground. Over 120,00 ideas were submitted, and 77 million votes cast by customers who believed in the project.

Similarly, Starbucks inspired customers to share more than 70,000 ideas when it asked them “How can we improve Starbucks?” on its MyStarbucksIdea web site. Starbucks’ avid and loyal customers sent in ideas for menu improvements, better cup packaging, easier payment and loyalty cards, and forgotten coffee flavors to bring back. Customers whose ideas were implemented received no reward, but they were clearly motivated by the chance to influence and be heard by a brand they cared about.

But what if your project is not inherently inspiring, and your brand does not engender fierce loyalty already?

2. Glory

When CNN launched its iReport news platform, it sought to tap the power of “citizen journalism” by encouraging viewers to send CNN their own on-the-ground photos, videos, and eyewitness accounts of local events. But CNN realized viewers might not want to contribute their pictures anonymously to a news network that would be earning a profit from, and retaining the rights to, their reporting. The key to iReport’s success has been that submissions are not anonymous. If a customer’s photo, video, or story appears on CNN’s Web site or broadcast, his or her name is credited for all to see. The opportunity to be seen as contributing to such a famous and popular network provides a powerful motivation.

When Ford Motors recruited 100 social-media savvy young drivers to test drive its Ford Fiesta and tweet, blog, and post videos about their experience on the “FiestaMovement” network, the company intentionally selected participants who had already proven by their personal use of social media that they were eager to express themselves to the wider world on YouTube, Twitter, and Facebook. Much of the attraction of the Fiesta project was the opportunity to be seen and heard by many more of their peers as part of this highly-publicized project.

3. Money

Of course, sometimes the best way for a business to motivate customer collaboration is to offer money or other commercial benefits.

Doritos has produced more top-rated commercials in the last three Super Bowls than any other brand, thanks to its “Crash the Super Bowl” challenge which has offered up to $1 million to the fan who creates the most popular advertisement for the snack chip brand.

When Cisco announced its first I-Prize in 2008, the company placed an open call for teams anywhere in the world to identify billion-dollar business opportunities for Cisco’s Emerging Technologies Group. After winnowing down 1,200 business proposals received from 104 countries, Cisco announced the winners: a wife, husband, and brother team of two computer science students and an engineer. The three grad students not only received $250,000; they were also given the opportunity to work for Cisco on their proposed new venture, a “smart grid” framework to reduce the passive consumption of power by electronic devices. The award was a small price for Cisco, which estimated that the project could generate a billion dollars in revenue within five to seven years.

4. Hybrids

In many cases, the motivations for customers to collaborate with a business are a hybrid mix of social, status, and financial rewards. Part of the success of the Doritos ad challenge is that the brand engenders the same kind of love that drives customers to contribute ideas to Starbucks. The FiestaMovement participants were never paid by Ford, but they did receive free use of a new car for six months, which helped to both attract applicants and put the winners in a positive frame of mind when they began tweeting and posting about their experiences. And although the cash award may have attracted participants to Cisco’s I-Prize, the winners were likely motivated just as much by passion for their business idea as for their long-shot chance at winning the money.

The worst mistake marketers can make is to selfishly seek to outsource their own job to customers for free. But by thinking carefully about the motivations and passions of their own customers, many brands can find ways to inspire them to help build their business.

What have you seen succeed or flop in your own industry? Where do customers agree to contribute? Or where do they feel a company’s request is a raw deal?