Nike+ Shows Why Corporate Social Networking Is Important

When Nike+ launched two years ago, there were many skeptics.  Other corporations have tried to create a strong social network for their users.  The results have been horrendous for most, but Nike has been able to build their brand and establish strong avenues of interactions with their customers through this social network.

What did they do that Coke, General Motors, and several other large corporations did not do?

First, they gave the platform connectivity and interactivity.  Using a device within the running shoes themselves, members can track every run they do and keep accurate records of how well they are doing.  This in itself has an appeal to those who are serious about running, but Nike+ took it a step further by allowing users to communicate with other runners around the globe.  The mutual interest that can often be called a passion gave the network the “legs” to bring people in and keep them coming back.

The second thing they did was give purpose to the network.  Through events that could only be coordinated online do to logistical challenges of multiple-locations worldwide, Nike+ made itself into a hub for runners to participate with distant peers towards common goals.  Earlier this year, nearly a million users logged on and signed up to run a 10K race.  It was sponsored by Nike simultaneously in 25 cities.

In a recent interview that Businessweek’s Jay Greene had with Stefan Olander, global director of Nike consumer connections, the enthusiasm for the products and network were evicent.  Skeptics were harsh when the network first started, but its success in accumulating active users has made most silence their criticisms.

But in the end, the real question is, “Has Nike+ helped the company sell more running shoes?”

“Absolutely, yes,” said Olander. “We’ve seen great conversions so what we do in our continuous service is we see the relative market share that we gain from other brands and it gives us a tremendous opportunity.  If someone is used to running in another brand and they like another brand, once you start using Nike+ you have a really good reason to try out Nike’s line of shoes.

“We like to think we have a fantastic running shoe line but a lot of that is just what you’re used to so if someone is used to another brand the only reason could be communication.  Another reason is the community and you have another reason to try it out.”

While sales of related products have hit $56 million, it is a drop in the bucket for a company that posted $18.63 billion in sales in fiscal 2008. For a real impact that would raise the eyebrows of other corporations, there would need to be a bigger splash that crossed several products, not just the running shoe niche that appeals mostly to hard-core users.

“I am convinced that the learnings we’ve drawn from what Plus does from a behavioral perspective – absolutely we’ll be to use that and replicate it,” Olander continued.  “I don’t think that it necessarily means always using the same technological solution with a chip in your shoe and a receiver but the insight that you can use digital technology to enhance someone’s performance and make sure that there is both a community angle of it and all the social attraction – all those layers we can definitely use in other categories.”

With a beta launch of their Ballers Network on Facebook underway and plans for future expansion into other products, it is possible that Nike could be the first major corporation to truly enhance their bottom line through social networking.

The keys to launching a strong corporate social networking site are:

• User Focus - Make it useful, fun, and informative for your customers and potential customers.  People do not want to participate in networks that simply advertise new products or offer specials.
• Niche Building - Having a social network is nice, but creating one that is THE place to go for participants passionate in a particular niche is extremely important when it comes to making a network stand out.
• Product Tie-Ins - In the end, a social network should make a splash on the bottom line.  People have shown that they are willing to spend money on a product if the benefits work both ways: the product must enhance the use of the network and the network must enhance the use of the product.
• Event Tie-Ins - The Internet is loaded with ways to learn about and register for events.  By using the social network to improve the efficiency and communication of events, especially ones that are locally focused but involve multiple venues, the overall value of the network will be enhanced.
• Set Community Goals - Nike+ is getting close to logging 100 Million Miles amongst their users.  To promote this, they ask a very simple question:

After all is said and done, don’t forget.  A social network is made for socializing.  There should be ways for users to communicate with each other as well as management within the corporation.  If all of these things are done, a strong social network can be built that will succeed where most others have failed. Here’s a video advertisement about the Nike product.