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The Power of a Multi-dimensional Approach to Social Media
facing entrepreneurial ventures—and any comA KEY CHALLENGE pany with a game-changing new offering — is to reduce audience uncertainty about the quality of a new product or service. Thankfully, recent studies indicate that certain types of communications are more effective than others in achieving this goal. For example, in an IPO prospectus, narrative content that portrays a firm as ‘an aspiring leader with a track record’ has been shown to reduce uncertainty, as reflected in issue-valuation premiums.
Researchers have also found that press releases emphasizing the factors that differentiate a firm from its competitors attract the most attention from analysts and mainstream media, thus increasing the chance that investors will provide resources. Currently, however, we lack insight into the potential impact of the stream of brief communications conveyed via social media. We recently set out to determine what kinds of communicative approaches attract audience responses that affirm quality and distinctiveness, thereby contributing to positive impressions among important stakeholders that can lead to firm growth.
What kind of message is your organization (perhaps unintentionally)
signaling via its online communications?
The Realm of the Twittersphere
We decided to focus our research on Twitter, for two reasons. First, given our goal of understanding the impact of social media communications that differ in type from those studied previously, Twitter represents an ‘extreme case’, as it requires content of not more than 140 text characters. Each specific Twitter message therefore features text that is extremely brief relative to what is possible on conventional media, as well as other social media channels such as Facebook and Youtube. And because Twitter communications are primarily text-based, they lack the rich diversity of the ‘symbolic communications’ that are possible when people interact. Second, growing numbers of entrepreneurs are using Twitter to communicate with target audiences. Studies indicate that more than 50 per cent of INC 100 firms have used it, and a survey of close to 2,000 North American entrepreneurial firms showed that 72 per cent had embraced it — up from 58 per cent just a few months earlier.
To conceptualize the types of communication that are possible on Twitter, we compared and contrasted them with other
‘Unique Attribute Cues’ indicate what is unique about
your company’s offerings, relative to competitors.
forms of communication (see Figure One). We refer to communications that are enabled by social media such as Facebook and Twitter as ‘communicative streams’. This term captures the reality that individual posts on a social media platform can be seen as part of a larger body or ‘stream’ of such posts that a firm makes over time. As Figure One indicates, communicative streams share some characteristics with ‘formal narratives’, some with ‘symbolic actions’, and some with neither. Like formal narratives, communicative streams are composed of text, although the text is much briefer. However, unlike formal narratives that are issued at a single point in time, communicative streams and symbolic actions both consist of multiple messages conveyed over a span of time.
To begin our research, we composed a sample of eight entrepreneurial firms (see Figure Two). We chose to focus only on business-to-business firms, since prior research has tended to do so, and we wanted to compare our findings with the existing literature. The firms in our study are identified in this article by pseudonyms.
We purposely included firms whose products varied in terms of the extent to which they were digitized. They ranged from those whose products were completely digital and delivered online to those whose products were not at all digitized or delivered online. We used this criterion because we wanted to take into account the possibility that norms of communication might vary by industry, and that audiences might engage more or differently with firms whose businesses were more ‘virtual’.
Content Categories
After analyzing the content of the companies’ tweets, some consistent patterns emerged. We were able to identify eight ‘content codes’, grouped into three thematic categories.
1. Quality
Tweets corresponding to this theme are most directly relevant to reducing uncertainty related to quality in the eyes of audiences, and many companies posted a range of tweets in this category. We identified three types of content as conveying the theme of quality:
Examples of tweets that were considered FIRM REPUTATION CUES. to signal a company’s reputation included those that signified achievements or recognition of the company. For instance, Appwareco publicized the fact that it had been ranked as ‘an up-and-coming firm’ by a website that reports on the industry in which it competes: “Appwareco named by IDC as one of the Top 10 companies in mobile & wireless to watch today — [link]”. Companies further indicated their reputation by tweeting about instances when they were featured in the business press. For example, Giftwareco noted: “Wow — Giftwareco featured in the Globe & Mail’s Report on Business [link].”
There has been considerable prior literature on the reputations of entrepreneurial firms, establishing that firm-level reputations lower uncertainty with respect to quality and can make companies more attractive to audiences such as investors, customers, suppliers, and employees. Collectively, tweets that indicate that a company has been recognized or honoured thus help to signal that the firm is of high quality.
These are tweets suggesting that MANAGEMENT EXPERTISE CUES. a company’s managers or staff have the competencies that are relevant to their business. Based on research emphasizing the importance of perceptions of management team competence and professionalism in judgments made by important external resource providers, we posit that such tweets have the potential to help convey the company’s quality.
For example, Vencapco tweeted: “Vencapco-blog: Is the credit crunch ending?: The credit crunch is starting to thaw a snick...” This tweet is typical of posts signaling expertise in that it links to the company’s blog, where a full analysis of the topic can be offered. It is also typical in that it is directly relevant to the industry in which the company competes.
Tweets that signal reputation also often identify areas of expertise. For example, Appwareco signaled its founders’ expertise in mobile commerce, as well as the company’s growing reputation among business journalists, in the following tweet: “Check out @Appwareco CEO’S @BNN_TV interview today with Paypal GM about #mcommerce [link].”
The third type of quality-focused PRODUCT/SERVICE VALUE CUES. tweets relates directly to the products and services provided by companies. Tweets in this category either announce some new, value-added service or product or highlight the value of an existing product or service. For example, Bookkeepco frequently announced enhancements to its offering via Twitter, as in the following post: “But wait … there’s more! Bookkeepco now supports VAT/TAX numbers for International clients: [link]”.
In another example, Websiteco indicates the value of its design work by retweeting praise received from one of its clients: “RT @Client: Your beautiful #Client website design was noticed on this list: [link].” Collectively, tweets that are grouped into this theme suggest that the company and its offerings are of good quality, and that the company as a whole is staffed by highly-skilled individuals.
2. Relational Orientation
A second identified theme was content conveying a warm, relational orientation towards the audience. We grouped two content codes into this theme:
These sometimes draw STAKEHOLDER RECOGNITION CUES. tion to some new initiative or achievement on the part of a stakeholder connected to the company. For example, Connectorco recognized a funding achievement made by a firm within its network: “Congrats to Connectorco member Energysavvy! RT @Techcrunch Energysavvy Raises $315 K For Home Energy Smarts Site [link]” In other cases, this type of recognition simply directs attention towards stakeholders’ ongoing activities. For example, Giftwareco drew attention to the hiring practices of a company that is part of a professional network to which the founder of Giftwareco belongs, tweeting: “Great post on @parceldesign’s hiring best practices on @clearfit’s blog [link] ….” Stakeholder recognition can also take the form of thanking. For example, Websiteco thanked a client who included the company in a list of start-ups deemed worthy of support: “@erin_bury Thanks for including #Websiteco in your #can30 slide of Canadian startups to support.”
3. Distinctiveness
In addition to OPPORTUNITIES FOR DIRECT INTERACTION. ing stakeholders, some companies used Twitter to promote opportunities for direct interaction with them. Many of the best examples of this came from Bookkeepco, which frequently promotes such opportunities. For example, in the following tweet, it invited people to attend a local event that its staff was attending: “We here at Bookkeepco think this event is going to rock: [link] …. In Toronto next Tuesday? You should come!” Connectorco also routinely used Twitter to organize interaction opportunities, in particular monthly events called ‘Connectups’. The following tweet invites people to attend, saying: “Need a startup fix? Attend #Connectup tonight & hear from local startups @Damnheels @Wegowego @Endloopstudios.” Regardless of whether people actually take advantage of the opportunities being promoted, such tweets convey an impression of the organization as one that welcomes engagement with outsiders. While the first two categories relate to signals that reduce quality-related uncertainty, the final category is more relevant to signaling what is distinctive about the firm, which might differentiate it from competitors. Several of the companies in our sample frequently issued three types of tweets that could collectively convey their distinctiveness: These cues indicate what might be UNIQUE ATTRIBUTE CUES. unique about a company’s offerings relative to competitors. For example, Bookkeepco differentiated itself by highly individuated attention to customers. In one post, it tweeted: “When’s the last time you did something utterly surprising for a customer or friend? The world needs more of this: [link] ….” The link is to a blog post about a kind act from one friend to another, serving to reinforce the company’s positioning as one that treats customers as unique and valued individuals.
These cues contribute to creating an impression of a VALUE CUES. company’s distinctiveness by reflecting its values. For example, Publicityco used its Twitter account to draw attention to causes or charities the company supported. After the earthquake in Haiti, it issued a number of tweets similar to the following: “Help disaster relief charity Shelterbox Canada @Sbcanada send aid to #Haiti. More info at [link].”
A third category of distinctiveness-related tweets CULTURE CUES. provides insight into a firm’s internal culture. Often, such tweets portray the company as having a light-hearted side, as in the following from Bookkeepco: “@ashok, one of our dev team stalwarts, is a man of many talents. Presenting: “Beer’o’clock with Ashok” [link] ….” In other cases, tweets might give a sense of mutual supportiveness amongst staff. During the 2010 Winter Olympics, a staff member of Publicityco was a torchbearer for a segment of the torch relay. The company then issued a series of tweets about this, including the following: “Big surprise at the office this morning — @trevorb’s mom flew in to see him run the torch.” Such tweets have the potential to signal and amplify what sets the company apart, both in terms of its offerings and its culture. In addition to these catagories of cues, one of our key overall findings was that positive affect, or emotion, in tweets contributes to an overall positive impression of the company. In some cases, tweets convey positive affect through word choice. Connectorco frequently used the term ‘awesome’, an adjective conveying positive sentiment. For example, it tweeted: “Awesome story about entrepreneurs connecting on @Connectorco [link] ….” Occasionally, tweets used sentence structure or punctuation (especially exclamation marks or emoticons) to convey positive affect. An example is the following tweet where Publicityco announced the first blog posting by its founder: “Really (head scratch)? Really (emphatic)! @[foundername]’s first blog post. Really (with conviction).” The notion that positive affect can matter in new venture narratives has received support from research on entrepreneurial passion. This research indicates that ‘displays of passion’ can be influential in convincing people to invest in or otherwise become engaged with a firm.
Four Distinct Communication Streams
To identify specific types of communicative streams, we compared firms with regard to:
• the extent to which the content of their tweets reflected the
three themes we identified;
• the extent to which they conveyed positive affect; and
• the volume of tweets issued.
Our analysis points to four distinct types of communicative streams. Note that, while these streams were enacted by these firms, we recognize that they might not have been conscious and deliberate.
The first type of communicative stream is charac1. SPARSE. terized by a very low tweet volume compared to other firms. Only one firm, Videoco, exhibited this approach. Despite the owner’s stated intentions to use Twitter to grow her business, Videoco issued only one tweet that mentioned the company by name over the five-month period under consideration. By virtue of having a low volume of tweets, a firm has few opportunities to signal its quality, its relational orientation, or what makes it distinctive. We label this type of communicative stream ‘Sparse’ because the sheer paucity of communications seems to leave audiences with little basis for affirming quality or differentiation.
The second type of stream is char2. DISTINCTIVENESS FOCUSED. acterized by a low proportion of total tweets conveying quality, a low-to-moderate proportion conveying relational orientation, and a high proportion signaling distinctiveness. Companies with a high proportion of tweets signaling distinctiveness tended also to have a high proportion conveying positive affect. Websiteco and Publicityco both exhibited this type of stream.
The third type of communicative stream 3. QUALITY FOCUSED. displays a high proportion of tweets with content that falls within the ‘quality’ theme, and a low proportion signaling relational orientation, distinctiveness or positive affect. In our sample, the companies enacting this third type of communicative stream also posted a comparatively low overall volume of tweets. Appwareco and Vencapco both exhibited this type of stream.
This final type of communicative stream is 4. MULTI-DIMENSIONAL. characterized by a high proportion of tweets signaling quality, relational orientation and distinctiveness and a relatively high proportion conveying positive affect. In our sample, firms that enacted this type of stream also posted a comparatively high overall volume of tweets. We call this type of stream ‘Multi-dimensional’ because it entails a mix of signals of all three kinds (quality, relational orientation and distinctiveness), as well as signals of positive affect. Giftwareco, Connectorco, and Bookkeepco enacted this type of communicative stream.
So, which approach best affirms the quality and distinctiveness of a firm? The patterns of results we observed suggests that the firms enacting a Multi-dimensional communicative stream attracted the highest levels of audience responses affirming their quality. Surprisingly, firms that adopted a Quality-focused stream (Appwareco and Vencapco) received very few explicit audience responses affirming quality. Of the very small number of tweets about each of these two firms, the majority merely disseminated information. The firms that enacted a Distinctiveness-focused stream (Websiteco and Publicityco) were equally likely to elicit audience responses that affirmed their quality.
This pattern of results suggests that audiences do indeed react differently to different types of communicative approaches, and that the outcome of quality affirmation requires a stream with a high volume of tweets and a high proportion conveying each of the three themes we identified—quality, relational orientation and distinctiveness, with a sizable proportion of tweets reflecting positive affect.
In closing
Based on our study, firms that enact a Multi-dimensional communicative stream — which entails a comparatively large volume of tweets, a high proportion of which signal quality, relational orientation and distinctiveness as well as positive affect—are likely to receive higher levels of audience responses that affirm quality than are firms enacting any other type of communicative stream.
This finding is preliminary evidence that some kinds of content are more appropriate than others on Twitter. We hope that our findings can help entrepreneurs — and innovators everywhere — become more consciously aware of what they are seeking to convey via Twitter, and of the potential value of a MultiDimensional approach. If nothing else, we hope to sensitize leaders as to what they may, unintentionally, be signaling via their online communication.
Multi-dimensional communication entails a mix of signals of quality, relational orientation and distinctiveness, as well as signals of positive affect.