Relationship Economics: How to improve employee and customer relationships with social media by LinkedIn and Brian Solis

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How genuine communication and engagement in social media helps businesses grow relationships with employees and customers while improving the bottom line

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<ul><li> 1. RELATIONSHIP ECONOMICS: How genuine communication and engagement in social media helps businesses grow relationships with employees and customers while improving the bottom line October 2014 By Brian Solis with Jaimy Szymanski and Rebecca Lieb Custom research by Altimeter Group on behalf of LinkedIn </li> <li> 2. RELATIONSHIP ECONOMICS: Relationships Matter Executive Summary 5QEKCNOGFKCKUWUJGTKPIKPCTGXQNWVKQPVJCVGSWCNKGUVJGRNC[KPIGNF for how information is shared and consumed. With social, mobile, and real time at the heart of consumer technology, everyday people are now CUKIPKECPVRCTVQHVJGOGFKCNCPFUECRG$GECWUGQHVJKUDWUKPGUUGU that wish to thrive in a social economy must study their relationships with customers, employees, and prospects as part of a larger investment in relationship economics. Relationship economics dictates that when DWUKPGUUGUXCNWGRGQRNGGZRGTKGPEGUCPFCURKTCVKQPUVJG[TGCRDGPGVU OGCUWTGFKPRTQVCDKNKV[NQ[CNV[CPFCFXQECE[+PVJKUEQPPGEVGFGEQU[UVGO where people are becoming nodes in popular social networks, relationship economics offer competitive advantages. LinkedIn partnered with Altimeter Group to study some of the worlds most socially engaged companies, including Salesforce.com, Citrix Systems, Bloomberg, MasterCard, Visa, and The Wall Street Journal, among others. 6JGUGEQORCPKGUYGTGKFGPVKGFCUVJGOQUVUQEKCNN[GPICIGFDCUGFQP their ability to use social media to improve engagement and relationships with customers and employees. .KPMGF+PCPF#NVKOGVGT)TQWRVJGPUGVQWVVQNGCTPCDQWVVJGDGPGVUVJGUG companies realized based on how they used the LinkedIn platform in the following areas: CONTENT MARKETING EMPLOYEE ENGAGEMENT TALENT AND RECRUITMENT SALES As our research with LinkedIn shows, the more you invest in terms of purpose, time, openness, value, listening, and engagement in social media, the more likely the relationships will thrive. Our research also suggests that, by investing in relationships through social media, workforce and business performance become more optimistic and productive. About This Research This custom research report is sponsored by LinkedIn. While the research in this report may have been informed by LinkedIn, all findings and analysis are independent and represent Altimeters ongoing body of research. 2 </li> <li> 3. Executive Summary (continued) We learned that successful companies see social media as both channels and prevailing communication and engagement philosophies to attract the worlds DGUVVCNGPVDWKNFVTWUVYKVJGORNQ[GGUCPFEWUVQOGTUCVUECNGCPFPFCPF engage buyers in more meaningful ways. #FFKVKQPCNVQRNGXGNTGUGCTEJPFKPIUKPENWFG EMPLOYEES AT SOCIALLY ENGAGED COMPANIES: Believe that LinkedIn has had a positive impact on their company Are more inspired and optimistic about their company Are more informed and likely to become ambassadors who not only read updates but also share them with colleagues inside and outside the organization Are collaborative and connected with team members on and outside their teams Feel they are having an impact on their organization EXECUTIVES AT SOCIALLY ENGAGED COMPANIES: Are more likely to use professional social media to build relationships and actively create and share content Are vocal proponents in employee use of professional social media 3 </li> <li> 4. TABLE OF CONTENTS The Top 25 Socially Engaged Companies. . . . . . . . . . . . . . . . . . . . . . . Employee Engagement Is at an All-Time Low. . . . . . . . . . . . . . . . . . . Relationship Economics Drive Social Business Transformation. . . Socially Engaged Companies Invest in Relationship Economics to Improve Bottom-Line Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How to Become a Socially Engaged Company. . . . . . . . . . . . . . . . . . . 5 6 7 12 13 4 </li> <li> 5. THE TOP 25 SOCIALLY ENGAGED COMPANIES To demonstrate social engagement and transformation, LinkedIn released its list of the top 25 socially engaged companies in July 2014 (see Figure 1). This list showcases companies that effectively use social media to improve engagement and relationships with customers and employees. In partnership with LinkedIn, Altimeter Group set out VQUVWF[VJGDGPGVUVJCVTGUWNVHTQOJQYVJGUGVQR businesses use this platform in the following areas: CONTENT MARKETING EMPLOYEE ENGAGEMENT TALENT AND RECRUITMENT SALES Figure 1 LinkedIn Introduces the Top 25 Socially Engaged Companies LinkedIn Introduces the Top 25 Socially Engaged Companies Based on billions of signals and insights we have identified the 25 companies who are the most engaged on LinkedIn to leverage relationships with employees and customers. Source: Altimeter Group and LinkedIn 5 Relationship economics dictates that when businesses value people, experiences, and aspirations, they reap benefits measured in profitability, loyalty, and advocacy. </li> <li> 6. EMPLOYEE ENGAGEMENT IS AT AN ALL-TIME LOW In an era of social media, investing relationship economics can represent the difference between engaged and disengaged employees. In late 2013, Gallup released the most recent version of its survey that measures international employee satisfaction. It finds that only 13% of workers feel engaged by their jobs. The vast majority, 63%, is not engaged. Moreover, 24% are actively disengaged (see Figure 2). In a social economy, where employees can easily share experiences with professional and personal networks, influence on morale transcends corporate borders. Unhappy employees eventually contribute to a lull in attracting new, desirable talent. LinkedIn and Altimeter Group surveyed two groups online about their participation on the platform: a target group (N=1,460) and a control group (N=1,378). The target groups respondents were from the top 100 most socially engaged companies, according to LinkedIns proprietary scoring in four key areas (hiring, marketing, sales, and collaboration on LinkedIn). Of the top 100 companies surveyed, 81 are from North America and nearly half are in the software industry. The control groups respondents were from the general user base of employees whose companies are on LinkedIn. Only companies with more than 1,000 employees were surveyed. In both quantitative and qualitative reviews of social media strategies among the top 100, findings demonstrate that communication and engagement improve relationships with customers, employees, and prospects. Relationships carry many virtues that help companies thrive and compete. As social strategies mature, companies transform from the inside out to become more open and forthcoming, adapting to technology and evolving new customer and employee behaviors. Figure 2 Employee Engagement is at an All-Time Low Employee Engagement is at an All-Time Low According to a recent Gallup survey: 13% of employees are engaged 63% are not engaged STATE OF THE GLOBAL WORKPLACE 2013 GALLUP 6 </li> <li> 7. RELATIONSHIP ECONOMICS DRIVES SOCIAL BUSINESS TRANSFORMATION As society becomes increasingly connected, companies must become digitally savvy to compete for customers and top talent. They must also become truly social by investing in more than technology alone; they must invest in fostering valuable, meaningful internal and external relationships. In a social economy, businesses that aim beyond transactional engagement to focus on community are rising above the fray, earning and retaining talent, improving morale, and increasing sales. Paul Jaminet is a scientist whose career has evolved to focus more deeply on strategy consulting and relationship economics. Jaminet believes that relationships are an essential prerequisite for the communications that reveal opportunities and the transactions that exploit them.1 He was inspired by the work of British economist Ronald Coase and Austrian economist and philosopher Friedrich August Hayek. Jaminets work studies the costs of forming and maintaining personal relationships and what benefits those relationships create.2 He found decisions about relationships are often more important than decisions about transactions. It is the consumers relational decision that is critical Its the consumers relational decision that is critical to his business success, not the later transactional decisions. to his business success, not the later transactional decisions, he states on his website (Jaminets italics).3 LinkedIns top 25 socially engaged businesses share many important attributes. One is the goal of improving communication and collaboration between people at every level. This approach involves intentional strategies and transactions that drive relationship economics, causing customers and employees to gain preference and affinity toward businesses that actively invest in nurturing relationships with them. If social media is about the democratization of people and information, Sir Francis Bacons bold assessment in 1597 that knowledge itself is power has never been truer.4 Information leads to confidence. Engagement leads to collaboration. Collaboration leads to improved morale and innovation. Each contributes to a more productive and transparent culture that aligns with the tenets of social media. Relationship economics is not only a viable way to explore the ROI of engagement and community building, it is also becoming a competitive advantage. Enter social media. Organizations now have access to platforms that open doors between customers and employees to foster meaningful dialogue. By communicating updates, useful information, and opportunities and by participating in conversations businesses are moving from broadcasting information to actively hosting or participating in important communities. Microsoft, one of the top 100 socially engaged companies, understands the importance of linking digital goals to strategic community engagement on LinkedIn. The company created a LinkedIn group to better engage its developer audience across Australia, to reach developers outside the Microsoft network, and to create influence via its content. By hosting and engaging with its own community of like-minded software developers, the software company generated a 33% click-through rate from content shared within the LinkedIn community to its external web properties. Another of the top 100 socially engaged companies is Salesforce.com (SFDC). Dave Thomas, SFDCs senior director of content and engagement, believes that employees have quickly come to expect their companies to focus on building relationships through social media: By being more active over the last few years on LinkedIn and other social channels, weve found that employees come to expect that, in a good way. 7 -Paul Jaminet, Scientist </li> <li> 8. Theyre happy when they see our content, they share it, and theyre proud to see us responding in social. Over a short period of time, employee expectations of how social we were going to be as a company rose quickly because they now saw the value of it and appreciated us speaking with a more human voice. It emphasizes trust as well, a high corporate value that goes hand-in-hand with engagement and transparency in social. To what extent do relationship economics matter? The return on investment (ROI) is in the numbers. According to survey results, the differences between employees from socially engaged companies and those from the control group are compelling. Employees at socially engaged companies are more likely to believe that LinkedIn has had a positive impact on their company. In a social economy, relationships matter. Social media helps create emotional connections with consumers and employees. Relationship economics not only contribute to emotional benefits but also are the transactional foundation for word-of-mouth marketing, which fuels business referrals and recruitment for top talent. Socially engaged companies are more likely to drive greater lead generation, cultivate innovation, and yield top talent (see Figure 3). They are: more likely to believe LinkedIn helps them attract great talent (41% of the target group vs. 26% of the control group) more likely to believe LinkedIn makes them more innovative (26% vs. 21%) more likely to believe their company is more competitive (21% vs. 15%). more likely to align social media engagement to more sales leads (11% vs. 7%) Figure 3 Social Media Engagement Stimulates Competition 57% 24% 40% 57% Source: Altimeter Group and LinkedIn 8 </li> <li> 9. Figure 4 Employees at socially engaged companies Feel Empowered and Inspired Employees at socially engaged companies are more likely to be inspired and optimistic about their company. The most socially engaged businesses are learning that intentional social content and community strategies inform and empower internal and external stakeholders and build productive communities where like-minded professionals connect to solve problems and create opportunities. Socially engaged companies are leading the way for a new social era of business transformation, where trust becomes a metric and relationships offer economic value. Employees at socially engaged companies are (see Figure 4): more likely to believe LinkedIn focuses the culture on relationships and engagement (33% of the target group vs. 28% of the control group) more likely to feel inspired at their job (36% vs. 30%) more likely to be optimistic about the future of their organization (52% vs. 41%) more likely to attribute social media engagement strategies to employee retention (12% vs. 10%) Citrixs director of social marketing, Justin Levy, shared how extending information beyond...</li></ul>