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Article

Online Social Networking for Success: Go Premium or Go Home?

Marketing
Published on:
Updated on:
March 23rd, 2022

How to create business opportunities online? Are premium memberships in networks such as LinkedIn helpful for this purpose? The online presence of managers becomes more and more important, according to Andreas Lanz, Assistant Professor of Marketing at HEC Paris, who focuses on seeding questions in most of his research. Together with colleagues from Germany, Professor Lanz investigated premium memberships and found that going premium alone is not helpful––it is all about capitalizing on the advanced networking features.

Photo Credit: LinkedIn Sales Solutions on Unsplash

In today’s business world, managers need to actively shape their personal brand online. An excellent example is Elon Musk who, with his social influence capabilities, can create opportunities peer CEOs can only dream about. He is very available, unlike his peers–– and followers get to see him make and revamp decisions in real-time. In a way, he has more in common with influencers than with top executives calling the shots.

However, make no mistake: This isn’t random. It’s strategy. So what can managers learn from Elon Musk? The key word here is social capital. Creating business opportunities is about having a strong network, namely interpersonal relationships that one can activate to achieve a goal. These relationships––the social capital––require constant nurturing.

 

What can managers learn from Elon Musk? The key word here is social capital.

 

This is where work-related social networks such as LinkedIn can help: They promise to facilitate the accumulation and maintenance of one’s social capital to create business opportunities. Typically, they operate under a freemium business model and offer access to the platform free of charge but require a fee-based premium membership to unlock advanced networking features. But is it worthwhile to go premium in order to faster accumulate social capital? This focal question is still unresolved.

In work-related social networks, there are two types of premium features: Active and passive features. The former operate via activity, i.e., targeted personal messages to non- contacts utilizing an exclusive advanced search filter. In contrast, the latter operate via saliency, i.e., incoming attention that the premium user receives from better positioning in search results and a prestigious premium badge.

Surprisingly, work-related social networks are silent about their efficacy. For example, LinkedIn promotes their premium memberships with claims such as “expand your network,” while also promising to “turn profile views into new opportunities.” Hence, LinkedIn is unclear about the mechanism and what the contribution of the platform’s premium features may be.

 

Premium features can only prove their full value if premium users are also motivated to utilize them as part of strategic networking behavior.

 

To shed light on this question, we analyzed large-scale empirical as well as experimental data from the largest European work-related social network. Our findings are twofold:

First, we find that premium users do not automatically change their networking intensity just because they have access to premium features. But such a behavior change is crucial: Premium features can only prove their full value if premium users are also motivated to utilize them as part of strategic networking behavior.

Second, we find that passive features (e.g., the prestigious premium badge), which makes premium users more salient, is positively linked to social capital accumulation. Yet, their impact is substantially lower compared to active features (e.g., personal messages to non-contacts).
 
Hence, our research suggests that managers indeed should go premium in work-related social networks (e.g., LinkedIn), because we find it’s worthwhile to possess an efficacious networking weapon. However, to unlock its efficacy, managers also need the intent to actually “shoot” it. In other words, managers, after going premium, must then also capitalize on all the advanced active networking features to finally faster accumulate social capital.


Managers, after going premium, must then also capitalize on all the advanced active networking features to finally faster accumulate social capital.


 

Article by Michael Weiler, Simon Stolz, Andreas Lanz, Christian Schlereth, and Oliver Hinz, based on thier research article, “Social Capital Accumulation Through Social Media Networks: Evidence from a Randomized Field Experiment and Individual-Level Panel Data”, Michael Weiler, Simon Stolz, Andreas Lanz, Christian Schlereth, and Oliver Hinz, Management Information Systems Quarterly, forthcoming.
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Marketing
Andreas Lanz - Knowledge
Andreas Lanz
Assistant Professor
Marketing

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