One of social media’s greatest benefits to brands is the ability to scale up customer engagement for value creation. The most intimate and valuable type of interaction was until recently facilitated mostly by one on one engagements that demanded extensive human resources and expenditures. Now, powered by digital platforms, engagement reaches scale. Engagement via social media has more to offer than recruiting customers and driving sales.

It can help extend the customer life-time by creating loyalty, as well as optimise it by turning customers into advocates and enjoy additional leads and sales. And –finally, but potentially most importantly, engagement through social media can generate insights from customers, which can lead to better products and services.

Social media has the power to bring consumers close to organisations like never before, up to the point where they can be embedded in the business model. Here, value creation for consumer and for brand reaches its peak. In this third post on ‘value creation’ I will look at some of the sectors and companies that have embedded social media in their models.

To emphasise my point, I will concentrate on organisations that were born prior to the rise of social media but are increasingly adapting to the new platforms and using them as levers.

Coffee retailer Starbucks and FMCG manufacturer P&G were among the early adopters of social media. Both are using social networks to reach consumers with new points of sale; Starbucks’ gift-cards can now be purchased and sent to friends via Facebook; P&G operates not less than seven shops on Facebook.

Both companies crowd-source product development via owned platforms, ‘My Starbucks’ idea’ and ‘Connect +’.  By harnessing the wisdom of the crowd, these brands can offer new products and services that sprout directly from their customers’ desires. Danish toy manufacturer Lego took crowd-sourcing to the next level, it offers its customers the chance to design their own sets of Lego and then produces and sells the user generated models. In doing so Lego addresses the Long Tail of Lego fans by allowing development and sale of niche products that would have never been mass manufactured. Coca Cola, btw, has just launched a similar initiative with its Freestyle app.

Automotive is another industry that is accelerating the integration of social media in its business model. Toyota has announced its plans to address customer loyalty by launching a private social network for car owners, which will enable them to get service alerts and maintenance tips from car dealers, as well as connect with other car owners.

BMW invests in mobile apps, among them one which allows car owners to share and recommended driving routes in 50 countries and another that provides car owners with analyses of their fuel consumption habits. The latter also provides BMW valuable data that contributes to the development of its’ electric car. Mitsubishi uses Facebook to offer various features, including a tab for direct engagement with car service providers. This mechanism provides its car owners with a new and accessible touch point and aims to facilitate an efficient service reservation process for both parties.

You may not expect it, but the 160 year old payment solutions company American Express (AmEx) is one of the most innovative companies in its use of social media. Its ‘Open Forum’ website serves as an online community via which small business owners can interact with each other and gain access to a variety of resources, including apps.

Last year AmEx announced its partnership with social gaming developer Zynga, which allowed card holders to redeem their loyalty points for virtual goods. This extension to gaming demonstrated an understanding of its customer needs and purchasing habits. Earlier this year, AmEx launched projects with Foursquare and Facebook Deals (RIP) to compete directly with Groupon and Google. This too was an extension of the offering aimed at both the brand’s business customers and card holders.

And last, a beautiful example taken from the Pharmaceutical sector; the University of Iowa Children’s Hospital has started using social media to facilitate valuable engagement with its transplant patients. The hospital provides patients with an app that appears on each patient’s Facebook page, listing all the medications that they need to be take that day. The app also sends the information to the relevant physician. This is a service extension that re-designs the hospital’s ‘customer journey’ and adds value to the patients and the system.

So, are you ready to add value to your customers and yourself by embedding social media features in your business?

Guy Kedar, social media and emerging platforms manager EMEA at MEC