Why good relationship marketing is like throwing a party

July 12, 2011
Posted by: Peter Friedman, Founder, Chairman & CEO

The way that relationship marketing and social media work is in layers or concentric circles.
We like to think and talk about this using a party metaphor. At the core, you have the people who wanted to make the party, or the guests of honor. That’s usually the brand, and its immediate people executing it. To socialize and to personalize a brand in this way, those people have to be real, live, and transparent participants. You can’t throw a great party if the host doesn’t show up and participate.
In our party metaphor, the brand is equivalent to the host, who walks around to tables at a wedding or Bar Mitzvah and gets up to speak. You can’t have a great party without a party planner and a good DJ, and maybe ushers, too. That’s your core set of people that help bring the party together.
Then you look at your consumers, and you’re going to have a set of people who are your core party participants, who are the life of the party, and you organize a party to foster that and invite those people and empower those people to help be the life of your party. There are a lot of names for it at the brand level, but probably the easiest one is your core brand ambassadors, or your core evangelists.
They’re the most enthusiastic people. They’re not always the most positive people  — sometimes they’re negative people, in fact — but they’re emotionally attached to your brand and they’re going to be there. So these people are going to be the life of the party. You do things specifically to encourage that, and then to empower them to bring in other people.
And then you have the next set of people in your party, or the next concentric circle ring, that are participating enthusiastically. They’re coming out on the dance floor. They may not be the life of the party, but they’re dancing a lot, they’re doing a lot, and they’re enjoying it. They’re creating a greater radiation factor out to the next set of circles, which are the people who are at the party who are liking it, but are kind of standing on the sidelines or sitting at the table and watching. That’s a much larger set of people. For a brand, that’s probably the people that are buying a lot of their stuff. They’re not as active in the party, but they’re attending the party, and they’re tremendously influenced by the enthusiastic people and the core evangelists. And then those people will go out and tell all of their friends about the great party they went to, even though they didn’t participate heavily.
Looking at these relationships, they can go from a 1 or 2 percent in those core circles, to a very large number sitting at the tables, to an even larger number beyond. We know from business history research well from before the age social media — and even more so now — that 2 percent of your customers can influence 50 percent. And then that 50 percent can influence the other 50 percent.
So, if you create a great party for the core 2 percent, who invite their friends, who invite their friends, what happens? You don’t have as direct a relationship with them, but because you have this cascading relationship from the core, to settling in the outer circles, that 2 percent can effectively influence and grow the other 98 percent.
That’s why, when we go back to the party and we talk about relationships, we say, “among and with your friends.” The brand creates relationships among and with its customers, because that among piece, from customer to customer, is where you get the leverage and the radiation out through the concentric circles of the relationships.

Relationship marketing on Facebook

Does this concentric-circles model work on Facebook, too?  It definitely can, but we just haven’t seen it fully realized yet, in most cases.
To date, we’ve seen the model succeed best in branded community websites. A really good example on a large scale is eBay, which built a very strong community of sellers and that radiates out to more. They have half a million to a million sellers in their community.
With Facebook, it’s very, very big, so you have to go vertical, and more narrow and segmented. But any individual brand, by definition, with its own Page, is a segmented experience. But the real issue or dynamic is that today, most brands have not approached Facebook as a true relationship marketing venue, failing to create a cultural model and to use the party metaphor.
Today, most brands and their digital agencies have run toward Facebook with a promotion. They build a fan-count base, rather than building a relationship structure. Now that’s typical in new-media form, and there’s a lot more talk now about which is better: 10 million fans, or 10 million that you engage with? But really, the right question is, which is better: 10 million fans, or 1 million fans that actually engage with you?
I haven’t seen too many brands really building a cultural model on Facebook where they’re building out a relationship structure. The real litmus test for us is, who’s talking to whom? If it’s just a brand talking to the fans, that doesn’t do it. If it’s just the brands talking to the fans and the fans talking back at the brand, that’s better, but it still misses the mark.
When you see the fans talking to each other, and coming back to hang out under your brand because that’s where their friends are, then you’ve created a relationship environment. That kind of behavior is pretty limited on Facebook today, but I attribute that partly to it being so big and everything to everybody. I also attribute it mostly to brand execution, and this can change as brands come to realize the effectiveness of the party metaphor.
This post is part of an ongoing social media marketing series on “Building Relationships” from LiveWorld, a social media agency that offers moderation, insight, and community programming Facebook services for Fortune 1000 brands.