Editors note: This post was originally published by Joshua Paul in April 2012 and has since been refreshed to make sure were bringing you the latest and greatest.
March 7, 2024
What is a Social Business Model? 8 Companies Doing it Right
Once upon a time, during the initial rise of social media platforms and online communities, people were aflutter about what these new developments would mean for their business. The term social seemed to compound every business buzzword, making it difficult to understand what a social business really looks like.
In todays world, the social business model has become an expectation, rather than a new idea.
Heres our formal definition:
What is a Social Business Model? The social business model is a framework utilized by companies to improve their customers experiences, using online channels to prioritize customer success and customer engagement.
Now that we (and the social business model) are older and wiser, we can reflect on what the impact of the introduction of these platforms. To help illustrate the concept better, weve compiled a list of eight companies we think are using the social business model well. Spoiler alert: Netflix is one of them.
Across all types of consumer-facing businesses (B2B and B2C), customers expect to be able to reach a company using various channels whether its through a customer portal, Twitter, an online community, support tickets, an Instagram direct message, other social media platforms, a call center, an email, you get the idea.
Furthermore, theyre expecting a personalized, relevant experience across all these channels. Seeing the connection? The channels of communication have expanded the customer-company relationship is now social.
Curious to learn more about branded communities? Check out The State of Community Management Report for industry trends, below.
8 Examples of Companies Thriving with the Social Business Model
Pursuing a social business model generally looks like using online engagement tools to promote customer success, crowdsource product innovation, and create a stable support network for customers, but everyones use case is different, and it can help to see different ways companies apply the framework.
1. Glossier
Glossier, a B2C makeup sensation, entered the scene when its founder started a beauty blog. The blog has grown into a beauty brand valued at 1.2 million and to what does the founder attribute their success? Listening and responding to online customer feedback.
Throughout its growth, the company has actively sought customer feedback on their blog and other social channels. For example, the companys Instagram account receives five direct messages per minute. But all this feedback is harnessed to make the product better. At one point, customers expressed that Glossier wasnt producing enough makeup to meet the needs of women of color, which led to Glossiers expansion of its product line to include more shades.
Why we like it:
Glossiers obvious attention to customer feedback has led to huge success for the company. The company achieved the status of unicorn (a privately-held startup valued at over one billion) in 2019. And how did Glossier get here? The founder built the brand on engaging with customers online to improve their experience, and the company hasnt veered from that path yet.
Read the full story on Glossier here.
2. Netflix
If youve ever watched something on Netflix, you know that theyre all about personalization. As soon as you click play on that movie or TV show, your dashboard immediately suggests related content. (Why yes, I WOULD like to watch A Christmas Prince: The Royal Wedding, how did you know?!)
Netflix uses the data that customers provide through their clicks, time spent watching, day and time of viewing, all to create the personalization powerhouse.
Why we like it:
Like any consumer, we like it because it makes our streaming experience richer and easier. This is a perfect example of the social business model. Netflix is making the customer experience relevant by harnessing data that customers submit and improving customer satisfaction, experience, and retention. (Plus, viewers love it so much that Netflix can keep raising prices with confidence that most customers will stay.)
Read more about Netflixs approach.
3. Jama Software
Jama Software, a B2B software company, offers a product development software that allows companies developing software to keep critical records of actions and processes. It introduced an online community to its customers to improve the customer experience and make its customers more successful.
How?
For one, it makes customer support a lot easier for the customer by creating a network of customers and providing a resource library for support self-service. Jama is also able to crowdsource product improvements and improve customer intelligence, using community data to get a clear picture of their customers needs and interests.
Why we like it:
Jama Softwares approach prioritizes the customer through engagement and online connection. Not only is the company improving its approach to customer support, but its using online community to gather the data it needs to improve its product and the customer experience.
Read more about Jama Softwares initiative.
4. Harley Davidson
Online automobile/motorcycle communities have popped up to unite buyers in the past few years. Mini Cooper has one, and Harley Davidson similarly connects riders through a community that helps them connect and discuss all things Harley. The business uses this as a chance to unite customers behind their brand, strengthening the bonds of their advocates.
Why we like it:
When youre connected to a community of like-minded people around a product or cause, youre more likely to become engaged, invested, and stick around. Harley Davidson knows this. By uniting customers through this community, theyre harnessing the power of social business to connect customers to their brand and drive sustainable value.
Read more about Harley Davidsons community.
5. Zenoss
Zenoss, a B2B company, develops software that supports IT services and applications of large organizations, working to keep them up and running 24/7. The company has had a user group community for more than 10 years but recently moved toward a full private online community for its customers. Zenosss community allows its customers to collaborate, enjoy an improved user experience, and allows Zenoss to scale its membership base rapidly.
Why we like it:
Zenosss use case shows how a software company can adapt to the social business model use over time, continuously improving how customers can connect with the company and each other online. The company has opened the door to even greater collaboration and crowdsourcing of ideas.
Read more about Zenosss community-based model.
6. Wargaming
Wargaming, a Belarusian video game company, uses customer feedback to improve game updates in real time. When the company released an update to a popular game, World of Tanks, they gathered audience feedback to identify positive and negative feedback and its location, and shared feedback across teams to improve performance.
Why we like it:
Multi-player online games are inherently social so it makes sense that any company hoping to succeed in the business have adopted a social business model. Monitoring customer data during their launch allowed Wargaming to improve its product and meet customers needs.
Learn more about Wargamings strategy here.
7. Discovery Education
Discovery Education provides teaching resources for educators across the globe. Its customers were originally disparate and disconnected groups, until the company introduced an online community. Now, the group of active members calls this online space home, and use the community to support their professional goals, access resources, and build relationships.
Why we like it:
Through the online community, Discovery Education has been able to support its customers and make them successful. The company can provide immediate access to resources and a valuable network of other customers. This application of the social business model points to the success of companies that can find ways to make their customers central.
Read Discovery Educations full story.
8. Starbucks
Starbucks seeks customer feedback from in a modified online community. The coffee companys forum asks customers to contribute ideas and suggestions, and Starbucks will review and possibly implement suggestions, if it is on brand. It has made changes to its menu like adding coconut milk and almond milk to the menu, per customer request, which was praised highly by customers.
Why we like it:
Starbucks created a dedicated online space that it owns, rather than relying on an existing social network to gather feedback. This gives the company a unique look at customer data that its competitors cant see. Starbucks has been responsive to its customers feedback, which is a must when you seek customer feedback out. Its using the suggestions and feedback it receives to improve every customers Starbucks experience.
Read up on Starbucks social business model.
Keys to Perfecting the Social Business Model
Did you notice this list didnt cover just one industry or type of business? Thats because, regardless of industry, the social business model is one thats rapidly becoming a customer expectation (so expect to deliver on it).
How can you take your company further toward improving customer success and experience? Try these takeaways:
- Gather activity data on customers preferences (behaviors, needs, likes, dislikes, etc.)
- Use that data to improve and personalize their experience
- Listen to your customers
- Respond to their feedback
Its all about making your customers the focus of your business, because without them, you wouldnt have one.