INTERACTING TO LAST: HOW SMALL COMPANIES USE ONLINE SOCIAL MEDIA TO BUILD THEIR CORPORATE IMAGE

Transcription

1 1 INTERACTING TO LAST: HOW SMALL COMPANIES USE ONLINE SOCIAL MEDIA TO BUILD THEIR CORPORATE IMAGE Online social networks in which consumers and companies interact (Kaplan & Haenlein 2010; Muñiz & Schau, 2011) have been considered important tools for improving company consumer relationships (Treadaway & Smith, 2012) for both large and, especially, small companies of up to 500 employees (Puga, 2000, 2002). In Latin America, for instance, 86% of all small companies use online social networks. However, to the extent of our knowledge, there have not been many academic researches on strategies taken to improve company and consumer relationships through online social networks in small companies, despite some managerial literature on the theme (Goodman, 2012). Besides, this paper focuses on consumer-company relationships on Facebook brand fan pages, which are for businesses, brands and organizations to share their stories and connect with people, (Facebook, 2013). The goal of Facebook pages is transmitting official information publicly for consumers who chose to connect to a brand (Zaglia, 2013). Many works published in online social networks so far have focused in online brand communities (Schau, Muñiz, & Arnould, 2009) or on spaces where most interactions are controlled and directed by consumers (Brodie, Ilic, Juric, & Hollebeek, 2013; Dholakia, Bagozzi, & Pearo, 2004; Mathwick, Wiertz, & Ruyter, 2008). Academically, consumer company relations in online social networks have been addressed with focuses on engagement (Brodie et al., 2013), trust (Gligorijevic & Leong, 2011) or social capital (Mathwick et al., 2008). However, little has been said about how such concepts interact to form a small company s reputation. Reputation can be considered a competitive advantage, since it improves stakeholders, including consumers (Abratt & Kleyn, 2012), forecasts (Fombrum & Van Riel, 1997). The reputation of a company is built through a succession of images over time (Balmer, 2001; Fombrum & Van Riel, 1997). Corporate image can be considered the outside world s overall impression of the company including the views of customers, shareholders, the media, the general public, and so on (Hatch & Schultz, 2003, p.1048). Thus, in this paper, we analyze the construction of small companies corporate reputation through its image on Facebook fan pages. In order to do so, the following key concepts related to business consumer relationships in online social networks are used: engagement, social capital and trust. After conducting a netnographic study (Kozinets, 2002) on 10 Facebook fan pages, we present a framework that explains how corporate image (and, consequently, corporate reputation) is built as a result of interaction between the above constructs. Brief literature review In this section we will describe the concepts that were used to defined the codes which sustained our analysis. Engagement is a psychological state that happens while consumers and companies interact, in our case, in a fan page (the focal object). Such interaction also happens in a context (virtual environment) and is permeated by cognitive, emotional and behavioral activities (Bowden, 2009; Brodie, Hollebeek, Juric, & Ilic, 2011; Brodie et al., 2013; Hollebeek, 2011). For our coding we considered two dimensions of engagement: (1) Cognitive dimension, or consumers interest in knowing more about the company (Brodie et al., 2011), as shown by

2 2 consumers seeking information through the fan page and (2) Emotional dimension, consumers bonding with the fan page (Brodie et al., 2011) by liking or commenting on posts. A third dimension proposed by Brodie et al. (2011), behavioral dimension, overlaps with our second concept, social capital, because it means manifesting one s enthusiasm towards the brand. Social capital is a resource from a net of social connections and the content of these connections that can be used to enable action (Adler & Kwon, 2002; Coleman, 1990; Nahaphiet & Ghoshal, 1998). Drawing especially on the business literature on the subject, we defined our codes as: (1) Opportunity, which is the practice of sharing content, creating an opportunity for the company to expand its social ties (Adler & Kwon, 2002) and enjoy its structural resources (Nahaphiet & Ghoshal, 1998); (2) Reciprocity/motivation, exemplified by sharing content or inviting a friend. The consumer who does this creates an obligation of reciprocity to the friend mentioned, which is part of a relational dimension of social capital (Nahapiet & Ghoshal, 1998); (3) Voluntarism, which corresponds to the practice of volunteering to help other consumers within the company page by answering questions (Mathwick et al., 2008), also inside the relational dimensional of social capital (Nahaphiet & Ghoshal, 1998), since it corresponds to adapting to communal social norms and (4) Cognitive social capital, that represents shared interests and narratives that strengthen the ties between members of the fan page (Nahapiet & Ghosal, 1998). Finally, the third concept used was trust. It seems to be consensus among scholars that trust emerges when someone has positive expectations of the intentions or behavior of someone else (Rousseau, Sitkin, Burt, & Camerer, 1998). Whilst Mathwick, Wiertz and De Ruyter (2008) argue that trust is part of social capital in a virtual community. However, as stated above, we are studying fan pages and not typical virtual communities where consumers rule the conversation. Interaction among members in Facebook pages is scarce (Rosenthal, 2014), which means that social capital generation is not the bonding type (Adler & Kwon, 2002), which would require trust for reciprocity in a cohesive community, but is the bridging type (Adler & Kwon, 2002), which means that the company benefits from the weak ties (Granovetter, 1973) of consumers. So, the relation of trust is developed between the consumer and company, while social capital happens among consumers but benefits the company, which is the subject of the conversation. So, the codes for trust were: (1) Benevolence/integrity, which is the presentation of the company through the fan page as helpful and trustworthy (Mayer, Davis, & Schoorman, 1995; Ridings, Gefen, & Arinze, 2002). This is manifested through the content posted; and (2) Ability, which are company s skills employed in interacting with consumers (Mayer et al., 1995). For example, answering consumers questions. Method We followed Kozinets (2002) instructions to perform a netnographic study on small companies Facebook fan pages. Posts, photos, comments, and shared content were copied verbatim during three to seven months per company. Companies with fewer monthly postings were analyzed for longer periods. The data collection began in 2012, during which data from five small companies, each of which are in a specific sector, was compared. In 2013, an additional five small companies, in the hotel or restaurant sector only, were analyzed. These sectors were selected as they have high consumer participation rates compared to other small business services, and respond better in times of crisis (Sebrae, 2013). We restricted the companies to only two industries in order to confirm (and improve) the results obtained previously, within specific contexts.

3 3 The data analysis was iterative (Corbin & Strauss, 2008). The data was first coded line by line (Strauss & Corbin, 2008) using HyperResearch software, in order to obtain an individual description of the activities undertaken by each company. The codes were reviewed and discussed among the authors. For both years, the codes were taken from those previously established in the literature (see Table 1), with only minor modifications in the engagement dimension: for 2012, enthusiasm and conscious participation were used (Vivek, 2009), while for 2013 cognitive and emotional dimensions were considered (Brodie et al., 2011). This change was applied due to the iterative nature of the analysis undertaken. The theoretical framework drawn for 2012 was applied to the new data, and modifications were made according to the data analysis. Results and Discussion After we analyzed the data, we built a theoretical framework that illustrates how the concepts of engagement, social capital and trust relate to one another to form corporate reputation through the succession of corporate images. This framework is presented in Figure 1. Figure 1 Theoretical relationship between businesses and consumers within fan pages on Facebook The small companies considered in this study are in the services industry, and do not have a portfolio of brands that can be distinguished from their corporate brand. Since services companies sell experiences, and not tangible goods on which consumers can rely, reputation or the result of a succession of images (Fombrum & Van Riel, 1997) is one of the main drivers of consumer attraction. The data analysis indicates that corporate image on Facebook fan pages is built via the messages that the company transmits. The company reinforces its image to consumers who already know it, or builds its image to those who get in touch with the brand primarily through

4 4 Facebook. Pictures of beautiful places, promotions and teasers for all the companies are constantly posted in search of consumer engagement, as shown in Figure 2. Figure 2 Four examples of pictures posted on the fan pages of the companies analyzed After seeing posts, consumers engage (Brodie et al., 2011) by praising the brand, posting doubts, sharing content, inviting friends (Adler & Kwon, 2002), helping other consumers (Mathwick et al., 2008), or even reacting positively to statements that the company makes to present itself as trustworthy (Mayer et al., 1995). The cycle repeats, because trust makes the consumers become more engaged, so that the company continues to build its image in search of a better reputation. Examples of consumers reactions can be observed in the excerpt below: Company: Eating time at #(name of the company)!! Time for (name of the sandwich)!! Figure 3 Example of picture posted on the fan page Consumer 1: (tags 5 friends) we gotta eat one of this. I m hungry for it. LOL Consumer 2: hmmmm, this is really great, I loooove it Consumer 3: Wow, (tags a friend)!!!! Get yourself together for meeting the tastiest sandwich of this city!!!!! It drives me crazy! LOL Consumer 4: (shares the company s post) I wish I could eat it now!! Thus, engagement is a means by which to gain trust. Brodie et al. (2011) and Hollebeek (2011) suggested that engagement takes the role of trust for new customers; a consumer first engages with the brand, then develops trust through interaction with the company. When the consumer trusts the brand, engagement becomes trust. However, Brodie et al. (2011) and Hollebeek (2011) did not mention the role of social capital in the creation of trust; instead, our data shows that Facebook provides an opportunity for networking that enhances engagement. In addition, Facebook creates visibility and transparency for the company s actions, which also enhances trust. This trust varies over time according to the extent of the interaction (Mayer et al., 1995). Due to limitations in terms of space in this paper, we offer only few examples, drawn from our analysis, that illustrate how corporate reputation is built in fan pages. Consumers that

5 5 trust tend to engage more in the fan page and foster social ties with the company, thereby spreading the image the company is aiming to create. When consumers tag their friends, so that the latter can see content posted by the company, they are expanding the company s ties and helping to improve its image by means of an indication by consumers to other consumers, which is more credible than the messages companies themselves promote (Allsop, Bassett, & Hoskins, 2007). When consumers comment on a fan page to state how good their service experience was, they reinforce their bond with the company and show others that the company has the ability to satisfy its clients. This action contributes to creating an image for new consumers, and reinforcing reputation for old ones who have already known the company for some time. The excerpt below demonstrates how consumer reactions reinforce a company s reputation. Company: The (name of the company) is preparing something new for you! Consumer 1: What is it? I m curious. My daughter (tags your daughter) and wife want to know it too. Consumer 2: When do you return? I want to celebrate my birthday eating your delicious fondue!!!! Conclusions and Implications for Theory and Practice Our data indicates that small businesses can benefit considerably from Facebook as a promotional and corporate-reputation-building tool. Companies actions lead to consumer engagement, enhanced social capital for both the company and consumers, and increased trust. This cycle improves the company s corporate image, which, over time, increases corporate reputation. Among the content analyzed, the most successful actions from companies in terms of engaging consumers and creating social capital were found to be: (1) those related to the cognitive capital of the company (Nahaphiet & Ghoshal, 1998) i.e. those that provide information that can be shared; (2) promotions that lead to lots of sharing; and (3) items that refer to previous experiences consumers have had with the company. Entrepreneurs can benefit from such insights. The power of the like is sometimes overestimated. However, engagement is a psychological process that is reflected in behavior (Brodie et al., 2011). The act of liking something to earn a promotion, for example, might simply be a behavioral act in expectation of a reward, rather than necessarily reflecting true engagement. This study has several limitations that can be addressed in future research. The first of these limitations is the lack of a detailed outline of consumers prior experience with the company, and of how this affects their relationship with the brand on Facebook. Our findings show that such experience affects customer engagement, as well as serving as a means of strengthening their own social bonds through the process of reciprocity (Adler & Kwon, 2002), with indirect benefits to the company. But what happens when consumers have a service experience that is incongruent with the corporate image they already had in their minds? The second point relates to corporate image and corporate reputation. Gotsi and Wilson (2001) stated that companies are moving from public relations/corporate image to corporate reputation management. However, as stated at the beginning of this paper, small companies still use only rudimentary marketing tools. More effort is needed in order to understand the importance such companies give to their reputation, and how online social media, when used, helps in their professionalization.

6 6 References Abratt, R. & Kleyn (2012). Corporate identity, corporate branding and corporate reputations: Reconciliation and integration. European Journal of Marketing, 46(7/8), Adler, S. & Kwon, S. W. (2002). Social capital: prospects for a new concept. Academy of management review, 27(1), Allsop, D. T., Bassett, B. R. & Hoskins, J. A. (2007). Word-of-Mouth Research: Principles and Applications. Journal of Advertising Research, 47(4), 398. Balmer, J. M. T. (2001). Corporate identity, corporate branding and corporate marketing Seeing through the fog. European Journal of Marketing, 35(3/4), Bowden, J. L. H. (2009). The process of customer engagement: a conceptual framework. The Journal of Marketing Theory and Practice, 17(1), Brodie, R. J., Hollebeek, L. D., Juric, B. & Ilic, A. (2011) Customer Engagement: conceptual domain, fundamental propositions, and implications for research. Journal of Service Research, 14(3), Brodie, R. J., Ilic, A., Juric, B. & Hollebeek, L. (2013). Consumer engagement in a virtual brand community: An exploratory analysis. Journal of Business Research, 66(1), Coleman, J. S., & Coleman, J. S. (1994). Foundations of social theory. Harvard University Press. Corbin, J. & Strauss, A. (2008). Basics of Qualitative Research: techniques and procedures for developing grounded theory. Thousand Oakes, CA: Sage Publications. Dholakia, U. M., Bagozzi, R. P. & Pearo, L. K. (2004). A social influence model of consumer participation in network-and small-group-based virtual communities. International Journal of Research in Marketing, 21(3), Facebook (2013). Informações básicas sobre páginas: O que é uma Página do Facebook? Accessed 28 Dec Fombrun, C. & van Riel, C. (1997). The reputational landscape. Corporate reputation review, 9 (1), Gligorijevic, B. & Leong, B. (2011). Trust, Reputation and the Small Firm: Building Online Brand Reputation for SMEs. 2011, Barcelona: AAAI Press., Goodman, G. F. (2012). Engagement Marketing: How Small Business Wins in a Socially Connected World. New Jersey, NJ: JohnWiley & Sons. Gotsi, M. & Wilson, A. M. (2001). Corporate reputation: seeking a definition. Corporate Communications: An International Journal, 6(1), Granovetter, M. S. (1973). The strength of weak ties. American Journal of Sociology,

7 7 Hatch, M. J. & Schultz, M. (2003). Bringing the corporation into corporate branding. European Journal of Marketing, 37(7/8), Hollebeek, L. D. (2011). Demystifying customer brand engagement: Exploring the loyalty nexus. Journal of Marketing Management, 27(7-8), Kaplan, A. M. & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business horizons, 53(1), Kozinets, R. (2002). The field behind the screen: Using netnography for marketing research in online communities. Journal of Marketing Research, 39(1), Mathwick, C., Wiertz, C. & De Ruyter, K. (2008). Social capital production in a virtual P3 community. Journal of Consumer Research, 34(6), Mayer, R. C., Davis, J. H. & Schoorman, F. D. (1995). An integrative model of organizational trust. Academy of management, 20(3), Muñiz, A. M. & Schau, H. J. (2011). How to inspire value-laden collaborative consumergenerated content. Business Horizons, 54(3), Nahapiet, J. & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. The Academy of Management Review, 23(2), 242. Puga, F. P. (2000). Experiências de Apoio às Micro, Pequenas e Médias Empresas nos Estados Unidos, na Itália e em Taiwan. mento/td/td-75.pdf. Acessed 28 Dec Puga, F. P. (2002). O apoio financeiro às micro, pequenas e médias empresas na Espanha, no Japão e no México. mento/td/td-96.pdf. Accessed 28 Dec Ridings, C.M., Gefen, D. & Arinze, B. (2002). Some antecedents and effects of trust in virtual communities. The Journal of Strategic Information Systems, 11(3-4), Rosenthal, B. (2014). Brand image co-creation and individual identity extension in online environments: a Facebook investigation. Dissertation. Fundação Getulio Vargas. Brazil. Rousseau, D. M., Sitkin, S. B., Burt, R. S. & Camerer, C. (1998). Introduction to Special Topic Forum: Not so Different after All: A Cross-Discipline View of Trust. Academy of Management Review, 23(3), Schau, H. J., Muñiz Jr, A. M., & Arnould, E. J. (2009). How brand community practices create value. Journal of Marketing, 73(5), Sebrae (2013). Atlas nacional de comércio e serviços. Accessed 28 Dec

8 8 Treadaway, C. & Smith, M. (2012). Facebook Marketing: An hour a day. Indianapolis, IN: John Wiley & Sons. Vivek, S. D. (2009). A Scale of Consumer Engagement. The University of Alabama, Tuscaloosa. Zaglia, M. E. (2013). Brand communities embedded in social networks. Journal of Business Research, 66(2),