Lots of businesses know they should be active in social media like Facebook and Twitter and research by a Victoria University PhD graduate has explained why.
An investigation by Dr. Nick Thompson has shown the power of online communities in getting people talking to each other about brands and products that matter to them.
Dr. Thompson says the most successful brands attract a passionate and loyal consumer community and getting those people to act as unofficial ambassadors is an effective marketing strategy.
"We all know that word-of-mouth recommendations are really valuable and social media can make that happen. Having people talk about your product or recommend it to others builds consumer communities much faster than beating down someones door with direct approaches."
Dr. Thompson says it's still important for businesses to use traditional methods of advertising and promotion to build awareness but they should also be investing in strategies to build communities around their brand.
His research focused on attitudes to the national airline Air New Zealand which he says is seen as doing a good job on both counts.
"Their advertising positions them as likeable and patriotic and their supporters relate to that.
"Air New Zealand is also talked about a lot online with, for example, people getting in touch with friends and family to tell them about the daily Grabaseat deals or their experience flying with them to overseas destinations. That helps strengthen customer relationships."
He says, arguably, the most important thing a company can do to promote its brand is provide a positive customer experience.
"If you give people a good experience they will tell others about it."
Dr. Thompson says social media has enjoyed a phenomenal rise in importance as a sales and marketing tool. "When I started researching the role of the Internet in forming relationships with brands, social media was new on the scene and not well understood. In just five years its become a major force in the industry."
Explore further: Economist probes the high cost of health care