Business Value of Social Media: The 4 Social C´s

by Prof. Dr. Ulrich Egle, Lecturer and Project Manager at the Institute of Financial Services Zug

Even though social media platforms such as YouTube and Facebook are available for free, their use results in considerable costs for firms. In addition, the value contribution of these platforms is ambiguous and difficult to quantify. The number of Facebook friends and blog comments can be measured easily, but they say little about the profitability of social media applications. Even more complex is the analysis and evaluation of measures that refer to attention, awareness or reach of these platforms. Companies are therefore faced with the challenge to extend their controlling system in terms of social media activities.

A flexible and targeted approach to measure social media success are the 4 Social C’s. The Social C’s refer to Commerce, Content, Community, and Customer Care and are derived from the corporate strategy that is operationalized by selecting respective key performance indicators (KPIs) to measure social media success. We illustrate our concept by means of applying it to case studies of classical Web 2.0 companies.

In practice, we observe that performance measurement of social media based on our concept of the 4 Social C’s has been proved successful, because the approach is individual, pragmatic and structured. An individual social media strategy of a firm represents a target mix with the 4 C’s that involves the selection of firm-specific (financial and non-financial) KPIs. Based on our case studies, we observe that this procedure guaranties a successful (i.e. profitable) use of social media.