Research Reveals Social Media’s Impact on Business and Decision Making

SNCR Research Reveals Social Media’s Impact on Business and Decision Making

I am thrilled to share key findings from research that Vanessa DiMauro and I conducted over the summer called The New Symbiosis of Professional Networks. The research was conducted as part of our 2009 fellowship with the Society for New Communications Research (SNCR).

As introduced in a previous post, a great deal of attention and research has been devoted over the last few years to evangelizing social media as a new form of customer-centric relationship building. Build a network or use social media to deepen customer intimacy has become the mantra of today. However, what is often overlooked is the impact of social media to change behaviors, and the potential to use social media to impact a professional’s decision-making processes. While everyone is endeavoring to capture the mindshare of the buyer, few understand what success truly looks like.

In an effort to better understand the impact of social media on business, we conducted research (as a first step) to examine the role that social media has on decision-making among business professionals. Specifically, we sought to understand the following:

• Is social media typically regarded as a trustworthy source of information for professionals?

• Does social media offer effective tools to access information, advice and engage in professional collaboration? How do they compare to traditional off-line networking?

• What are the tools and sources of social media that professionals rely on to make decisions?

• Will social media change the business and practice of enterprise-level operations?

The methodology for this study involved a mixed methods approach supported by quantitative data gathered via online survey of 356 professionals to understand their perceptions and experiences with social media in support of their decision-making. Select interviews of 12 professionals were also conducted using a semi-structured interview guide as part of the second phase of the study.

Key demographics of the research include:

• Close to a quarter (23%) of respondents identified themselves as CEO of their organization; 50% as “Director” (24%) “Manager” (24%)

• Company size ranged from less than 100 to over 50,000 full-time employees

• Age was well distributed with the greatest proportion in the 36-45 range

• 25 countries were represented, with 58% of respondents living in the US

• All respondents were either the decision makers or influenced the decision process within their company or business unit

Below are key findings and an executive summary of the research. The full report will be available over the coming weeks through SNCR. A presentation of results with detailed charts are available on the SNCR website, now (located halfway down the page).

Six Key Findings From The Research Include:

1. Professional decision-making is becoming more social - enter the era of Social Media Peer Groups (SMPG)

• Traditional influence cycles are being disrupted by Social Media as decision makers utilize social networks to inform and validate decisions

• Professionals want to be collaborative in the decision-cycle but not be marketed or sold to online; however online marketing is a preferred activity by companies.

2. The big three have emerged as leading professional networks: LinkedIn, Facebook & Twitter

• The average professional belongs to 3-5 online networks for business use, and LinkedIn, Facebook and Twitter are among the top used.

• The convergence of Internet, mobile, and social media has taken significant shape as professionals rely on anywhere access to information, relationships and networks

3. Professional networks are emerging as decision-support tools

• Decision-makers are broadening reach to gather information especially among active users

4. Professionals trust online information almost as much as information gotten from in-person

• Information obtained from offline networks still have highest levels of trust with slight advantage over online (offline: 92% - combined strongly/somewhat trust; online: 83% combined strongly/somewhat trust)

5. Reliance on web-based professional networks and online communities has increased significantly over the past 3 years

• Three quarters of respondents rely on professional networks to support business decisions

• Reliance has increased for essentially all respondents over the past three years

6. Social Media use patterns are not pre-determined by age or organizational affiliation

• Younger (20-35) and older professionals (55+) are more active users of social tools than middle aged professionals.

• There are more people collaborating outside their company wall than within their organizational intranet

Executive Summary of the The New Symbiosis of Professional Networks Report:

The convergence of the Internet, Web 2.0 and mobile technologies has created a disruptive shift in business. The era of Business-to-Person (B2P) communications driven by all things social (social media, social networks, and social influence) has emerged as a new model for engagement and Social Media Peer Groups (SMPG) have evolved to take important and influential shape in a new business and economic environment.

This shift has disintermediated many long-standing marketing, communications and selling beliefs that have traditionally guided how companies interact, support and collaborate with their customers. We now work in an environment where companies have diminished control over the reputation of their brands, products and services as the wisdom of crowds increasingly dictate the rules of reputation management and selling. Through the use of social media, customers and prospects now have an almost instantaneous platform for discussion of their ideas, experiences and knowledge. Increasingly, the use of social media is playing an important role in the professional lives of decision-makers as they utilize the tools and mediums before them to engage their decision-making processes. The social nature of decision making has increased with impressive strength connecting generations of professionals to each other - changing the dynamics of customer relationship management, marketing and communications, forever.

In today’s global environment of a vast network of seamlessly connected devices (one billion people connected to internet and 4 billion mobile phones) information has the capacity to travel at a business velocity never before seen. 400+ million people are sharing billions of pieces of content and experiences each week through the online exchanges. Communities of practice, professional networks, e-mail, SMS are the sort of tools that enable multi channel access for individuals (employees, customers, partners and suppliers). We are finally a part of the long-promised global virtual and collaborative work environment.

Online communities and professional networks have arguably changed the way we do business and are, in themselves, new ecosystems, virally creating communities within communities that drive brand recognition and brand experience - beyond the control of most companies to manage. Professional networks facilitate vast interactions, connections and networks of people by enabling collaboration anywhere and at any time.

Through this research we focus on professional use of social media – and it all comes back to the strength of the relationship. Human relationships and peer-to-peer decision making are inherently interrelated. We make decisions about who we trust in work settings based on a number of factors – one often being proximity. With social media, proximity is often superseded in the trust factor by relativity or like-mindedness. Is this person knowledgeable? Credible? Believable? Do we share the same views and networks – on or offline?

Because belonging to a peer network or online community requires us to perform publicly, to share our background by way of a profile, to display our professional connections and networks, trustworthiness is in many cases more tangibly determined. Peer Groups can now be formed by idea sharing and virtual collaboration as easily as the proximity based groups that often form in office settings.

Enter the era of Business-to-Person (B2P) communications and the emergence of Social Media Peer Groups (SMPG).

Through the use of professional networks and online communities, decision-makers are connecting and collaborating with peers, experts and colleagues far and wide in an on demand environment, about the issues that keep them up at night. The impact of these far-reaching business networks is becoming clearer every day as millions of consumers, partners, suppliers and businesses discuss and share their professional experiences with each other with increasing levels of trust and reliance. It has long been known as truth that peer endorsement is the single greatest decision-making accelerant. Through social media, peer influence cycles are happening at a velocity never before seen, and in many ways, companies are losing the ability to control their messages. They need to get back into the relationship cycle but on the terms set forth by the SMPG. Participating in the SMPG relationship requires a behavior change on the part of organizations – one dominated by valuable content and genuine contributions, transparent honesty and a commitment to follow where the decision-maker wants to lead.

What does this all mean?

1. Social Media is supplementing the traditional professional decision-making cycle with great affect

• The era of Social Media Peer Group (SMPG) has arrived and information will travel at a business velocity that has never been seen before enabled by the Internet and Web 2.0 technologies.

2. Challenges are facing marketers who endeavor to mange or control social media network content

• Traditional cycles of decision-making are being disrupted by SMPG

• Managing and influencing professional decision-making will be the major challenge as professionals often do not seek the information that marketers want to share online.

3. The greatest opportunity business has is to engage collaborative influence – via immediacy of impact through social channel