Adopting Online Social Networks for Commercial Friendships

1. Adopting Online Social Networks for Commercial Friendships Dr. Sabine Matook and Dr. Susan A. Brown • Presenter • Dr. Sabine Matook • The Universityof Queensland • UQ Business School • Brisbane • Australia

2. Agenda Motivation and Introduction Background on Relationships Research Model and Hypothesis Development Survey Results and Scenario Interviews Outlook

3. Motivation • Online Social Networks (OSN) are a special form of social networks on the Internet • OSN members create personal websites and add personal information in these networks to connect with friends, family, and colleagues. • OSN can have different purposes : business-oriented networks and personal-oriented networks • OSN allow us to digitally represent our connections with other individuals - our network of social relationships • Statics : MySpace has nearly 130 active users, Facebook more than 300 million active users • That means, we have a fascinating phenomena – but what do we do with it? – is not utilized to its full extent

4. Introduction • Introduction of commercial friendship in personal-oriented OSN • A commercial friendship emerges when a firm representative is given access to the OSN by the user • Benefit for firms • Requires OSN users willingness to add the firm rep Research Question: Which factors influence the OSN user to add commercial representatives to their friends’ lists?

5. Background on Relationships My academic history • Individuals establish relationships to satisfy needs • Communal relationship and exchange relationship (Clark and Mills, 1993) • Exchange relationship: members assume that a benefit is given with the expectation of receiving a benefit in return. The receipt of a benefit incurs a debt or obligation to return a comparable benefit. • Communal relationship: members assume that each is concerned about the welfare of the other.Behaviours are motivated by nurturing and caring for the needs of the other. • Friendships are classical communal relationship • Commercial relationships are inherently exchange, they may take on communal characteristics (Price and Arnould, 1999)

6. Commercial Relationships • Commercial relationships are of interest in relationship marketing. • Social exchange theory (Thibaut & Kelley, 1959): individuals engage in relationships as long as they are rewarding. • Assumption that a benefit is given in expectation of receiving a benefit in return • Relationships assessment with respect to the benefits and costs

7. TEACHING & LEARNING Understanding commercial Friendship in OSN • Personal-oriented OSN are friendship networks • OSN users add another person based on the friendship relationship • If a firm rep wants to be added then s/he needs to play the “friendship rules” and offer benefits while keeping the cost at a minimum • Relationship marketing examined benefits and hindrances (costs) a customers can expect to receive from engaging in commercial relationships

8. Benefits commercial relationships Relationship benefits relate to 4 types: Social benefits : emotional part of the relationship Psychological benefits :cognitive processes of triggered by the relationship Economic benefits: monetary benefits Customization benefits : specialbenefits

9. Costs of commercial relationships TEACHING & LEARNING • Relationship costs are categorized into 4 themes: • Up­keep themes: activities to keep up the relationship • Time themes: time to initiate and utilize the relationship • Benefits themes : Existence of problems with the benefits • Personal loss themes: privacy issues, anonymity, and loss of social status

10. TEACHING & LEARNING Which benefits and costs matter in OSN? Considering the virtual environment of OSN, certain benefits and costs are relevant. The benefits that matter in OSN are: (1) convenience, (2) preferred treatment, (3) discounts/price breaks, and (4) tailoring of services.  The costs that matter in OSN are: (1) loss of privacy through self-disclosure, (2), loss of content control, (3) loss of social status, and (4) risk of missing out otheropportunities.

11. Different Behaviors in OSN • Users do use different functions in an OSN • Use of security featuresto restrict access • Different intensity of usage (frequency of updates, number of friends, time spent to post and read others messages) • Different behaviour is motivated by individual characteristics, e.g., extraversion-introversion Light et al., 2008

12. Defining Friendship Relationships • friendship is associated with intimate self-disclosure because friends are expected to share any personal issues; • friendship is based on voluntary social interaction and thus, friends are expected to commit free time to the interaction with one another in the absence of any external pressures; • friendship is motivated by a communal orientation, which means that rewards are not given in expectation of a return and individuals operate on the principal of concern; • friendships have an intrinsic, end-in-themselves quality, which means there is a mutual personalized interest in the degree to which the partners react to one another as unique, genuine and irreplaceable. • Subjective closeness of the friendship = extent to which communal norms are followed, which means friendship characteristics are present

13. Research Model H1: A positive value of the relationship has a significant positive impact on an individual’s willingness to add the firm representative as an OSN friend. H2: A negative value of the relationship has a significant negative impact on an individual’s willingness to add the firm representative as an OSN friend . H3: OSN behavior has a significant impact on an individual’s willingness to add the firm representative as an OS friend. H4: Individual characteristics have a significant impact on the willingness to add the firm representative as an OSN friend. H5: The degree of closeness has a significant positive impact on the relationship between the value of the relationship and the willingness to add.

14. Empirical Work Multi-Step procedure: Determination of benefits and costs individuals (i.e. OSN users) see in adding a friend and a firm rep to their network Development of scenarios Pilot test the scenarios in interviews with OSN users Pilot test the scenarios with OSN users in final settings Large study to determine factors that impact the OSN user to add a firm rep to their friends’ list.

15. Determination of benefits and costs for OSN users • Open – end online survey among 59 facebook users • Demographic • Four questions to determine benefits and costs • Why would you add someone as a friend to your Facebook? • Why would you NOT add someone as a friend to your Facebook? • Why would you add THE TRAVEL AGENT as a friend to your Facebook? • Why would you NOT add THE TRAVEL AGENT as a friend to your Facebook? Introduction of a service encounter and then

16. Results - Adding a friend

17. Results - Adding a service provider

18. Scenario Development • -- Explorative study to pre-test the scenarios • -- Interviews with 35 Facebook users • Creation of scenarios that include: • Aspect of friendship in communal relationships • Relationship benefits of commercial relationship • Relationship costs of commercial relationships • Test of three scenarios – many more combinations possible • Commercial relationship cost and commercial relationship benefits are balanced (C=B) and friendship is not present • Commercial relationship cost are larger than commercial relationship benefits (C>B) and friendship is not present • Commercial relationship cost and lesser than commercial relationship benefits (C<B) and friendship is positive present

19. Example for a scenario :: 3 benefits-1 cost + friendship My academic history And finally think about this situation. You just booked a trip to Florida and you had a lot of fun with the travel agent while choosing a cool hotel. In addition, he pointed you to a hotel hat had a good price but also was in a quite and safe neighbourhood. After every-thing is booked the travel agent Chris suggests that you add him as a friend in Facebook. You are now considering whether or not you should accept him as a friend in your Facebook account. Chris has a VIP membership with the Hilton Hotel. If you add him as a friend in Facebook, he will share his membership benefits with you, so you would get a buy-1-get-1-free dinner buffet voucher. In addition, when you are on this trip to Florida, you would like to have more information on cool locations in Miami and the ferry schedule to get to Key West. Chris (the travel agent) is always online with his Facebook account. Through the internet in the hotel lobby you can easily get him on Facebook to ask him any questions, using instant messages for his immediate response. Also, Chris’s company (the travel agency) is a corporate partner with United Airlines. Thus, he has access to a lot of discretionary benefits from the airline. If you add him as a friend in Facebook, you can get a once in a while free upgrade to Business Class and not only for the Florida trip now. But at the same time, you are concerned that Chris could see all the pictures of you including your pictures taken at your birthday parties and on your trip to Orlando’s Walt Disney World with your little sister.

20. Results – Scenario Development

21. Quotes from the Interviews with Participants TEACHING & LEARNING

22. TEACHING & LEARNING Outlook • Finalize the scenarios • Develop the questionnaire to collect data for the OSN behaviour • Pilot study again and final study

23. TEACHING & LEARNING Thank you very much for your attention. Any feedback, comments, and suggestions for us in continuing with this research project.