What's the Value of a Like?

Leslie  John; Daniel  Mochon; Oliver  Emrich; Janet   Schwartz

Article | Harvard Business Review | March–April 2017

What's the Value of a Like?: Social Media Endorsements Don't Work the Way You Might Think

by Leslie John, Daniel Mochon, Oliver Emrich and Janet Schwartz

Abstract

Brands spend billions of dollars a year on lavish efforts to establish and maintain a social media presence. But do those campaigns actually increase revenue? New research provides an answer to this question, which has vexed marketers ever since social media burst upon the scene. In a series of experiments, the researchers tested four increasingly interactive ways in which Facebook might affect customers’ behavior. First, they explored whether liking a brand—passively following it—makes people more likely to purchase it. Second, they examined whether people’s likes affect their friends’ purchasing. Third, they looked at whether liking affects things other than purchasing (for example, whether it can persuade people to engage in healthful behaviors). And fourth, they tested whether boosting likes by paying to have branded content displayed in followers’ news feeds increases the chances of meaningful behavior change. The results were clear: Merely liking a brand neither increases purchasing nor spurs friends to purchase more. Supporting likes with branded content, however, can prompt meaningful behavior change.

Keywords: social media; Social and Collaborative Networks; Consumer Behavior; Marketing Strategy; Online Advertising;

Format: Print

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Citation:

John, Leslie, Daniel Mochon, Oliver Emrich, and Janet Schwartz. "What's the Value of a Like? Social Media Endorsements Don't Work the Way You Might Think." Harvard Business Review 95, no. 2 (March–April 2017): 108–115.

Email mking@hbs.edu for a courtesy copy.

In August 2017, Commonwealth Bank of Australia was looking for ways to differentiate itself from competing banks and was also trying to improve the financial well-being of its customers. One domain where this was particularly relevant was in its bank-issued credit card business, where customers routinely selected cards that although profitable for the bank could be a poor fit for customers’ needs—leading to low satisfaction scores, cancellations, and occasionally, financial distress. To that end, the company’s Behavioral Economics team had developed a provocative experiment dubbed “The Good and the Bad.” Rather than just presenting the strengths of its various credit card offerings, they proposed also promoting each credit card’s less-obvious drawbacks. Being transparent with customers might help them make better choices, but would those choices come at the expense of bank performance? Should a company choose to be in the sales prevention business?

Email mking@hbs.edu for a courtesy copy.

This Teaching Note explains the theory of the case and teaching plan for the case: Commonwealth Bank of Australia: Unbanklike Experimentation (619-018). In August 2017, Commonwealth Bank of Australia was looking for ways to differentiate itself from competing banks and was also trying to improve the financial well-being of its customers. One domain where this was particularly relevant was in its bank-issued credit card business, where customers routinely selected cards that although profitable for the bank could be a poor fit for customers’ needs—leading to low satisfaction scores, cancellations, and occasionally, financial distress. To that end, the company’s Behavioral Economics team had developed a provocative experiment dubbed “The Good and the Bad.” Rather than just presenting the strengths of its various credit card offerings, they proposed also promoting each credit card’s less-obvious drawbacks. Being transparent with customers might help them make better choices, but would those choices come at the expense of bank performance? Should a company choose to be in the sales prevention business?

Case | HBS Case Collection | December 2018 (Revised February 2020)

Fishbowl: Scaling Up

Leslie K. John

Fishbowl is a social media app that allows professionals to connect with other relevant professionals both within their company and across industry. Unlike many other social media apps, on which users typically present idealized portraits of themselves, on Fishbowl, people get real. Fishbowl prides itself in being a "safe space" that allows users to feel comfortable interacting with candor - whether to ask difficult questions in order to give and get advice, or just to vent or crack jokes. A key part of the user experience is the ability to post anonymously. But to ensure relevance of posts, when a user signs up, Fishbowl verifies their identity by requiring them to provide their full name, employer email address, LinkedIn account and contact list. Fishbowl has several hundred thousand users and is now looking for ways to monetize the platform. As such, founders Loren Appin and Matt Sunbulli face a mission-critical decision: should they integrate employers into the platform? Although formally integrating employers would provide a much-needed revenue stream, at the same time Appin and Sunbulli worry that doing so could destroy the user experience. Is formalizing employer relationships antithetical to the safe space they have created?

Keywords: communication technologies; customer value; value chain; Interpersonal Communication; Talent and Talent Management; Customer Value and Value Chain; Entrepreneurship; Business Model; Growth and Development Strategy; Marketing Strategy; Advertising; Product Marketing; Two-Sided Platforms; Consumer Behavior; Network Effects; Emotions; Motivation and Incentives; Trust; Software; Technology Adoption; Technology Platform; Communications Industry; Employment Industry; Media and Broadcasting Industry; Technology Industry; Telecommunications Industry; United States;

Citation:

John, Leslie K. "Fishbowl: Scaling Up." Harvard Business School Case 919-013, December 2018. (Revised February 2020.) (Email mking@hbs.edu for a courtesy copy.) View Details

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What's the Value of a Like?: Social Media Endorsements Don't Work the Way You Might Think

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