Social networking can be a boon to business but knowing, engaging and rewarding users of online communities are the keys to success, according to a social media expert from the Australian Psychological Society’s College of Organisational Psychologists (COP).
Organisational psychologist Craig Errey — an expert in online communities in business contexts and the architect of some of Australia’s most popular websites including CBA, Virgin Blue and ASIC — says many organisations have recognised the potential business benefits of social media, particularly online communities, but failed to grasp how to really make them work.
“Although many organisations have set up the technical platforms to facilitate online communities, they haven’t recognised that people are the key ingredient for success,” Mr Errey says.
“Too often they don’t provide the psychological incentives and rewards that encourage users to revisit and contribute knowledge, and thus grow the strength and relevance of the online community.”
To assist organisations to maximise their online capacity, the APS College of Organisational Psychologists has produced a tip sheet – How to create active online communities – which is being launched for National Psychology Week (14-20 November).
“Through social networking, organisations have a unique opportunity to communicate with their customers, to draw them in and to develop a mutually beneficial relationship. Among the benefits are the ability to effectively have your own customers selling your product through online recommendations and answering queries from other customers which is powerful and cost effective,” he says.
FICO, a financial services organisation in the US, is one such online success story. The company was able to achieve a 66 per cent increase in sales by encouraging customers to join its online community, with 13 per cent of sales resulting from someone viewing a community page.
As well as boosting sales, FICO was able to reduce costs through social networking, Mr Errey says.
“Ten per cent of its customer calls are directed through the online community so its own customers provide assistance, which has reduced their average customer service call costs.”
According to Mr Errey, psychology is a key to understanding the factors that attract people to social networking and motivate them to participate.
“People need to feel that they are connecting to other like-minded individuals who have similar values and similar interests, whom they can learn from and in turn share information with,” Mr Errey says. “They also want to be valued, recognised and rewarded for their contributions.”
Based on these insights, Mr Errey has created a model of participant engagement identifying seven types of user – the non-member, observer, regular observer, occasional participating member, regular participating member and leader/super user.
“It is helpful to think of people’s participation as being on a continuum from non-member through various stages to super-user, and at each stage to look at how you can engage people and move them along that continuum until you have an active and engaged online community,” he says.
“You must ensure the information about your online community is easy to search and find. Once you have people logging on, you need to create incentives for them to participate and then acknowledge that participation. To further engage members you must create ways for people to contribute and continue to reward their contributions,” he says.
“Rewards could include elevating someone to expert member status or giving them their own topic thread to answer.
“Understanding people and what motivates them is crucial to achieve online business success. Psychology has much to teach us in this context and if we apply psychological insights we can develop online communities that flourish.”
Organisational psychologist Craig Errey has over 15 years experience in developing online communities, user interface design and change management and specialises in connecting people, work and technology.
Craig has been the primary architect behind many of Australia’s most popular websites including CBA, Virgin Blue and ASIC and works on cutting edge technologies such as touch, medical, social and special-purpose applications.
Organisational psychology is the science of people at work. Organisational psychologists specialise in analysing organisations and their people, and devising strategies to recruit, motivate, develop, change and inspire.
For more information, or to arrange an interview, please contact: Karen Coghlan or Judith Heywood on 0435 896 444.
The APS is the largest professional association for psychologists in Australia, representing nearly 19,000 members. The APS is committed to advancing psychology as a discipline and profession. It spreads the message that psychologists make a difference to peoples’ lives, through improving psychological knowledge and community wellbeing.