“One of the major developments in today’s economy is the rise of social platforms, and firms like Uber and Airbnb are now worth billions of dollars. Despite this, little is understood about how these platforms function. In this article, Rebeca Perren and MSI Academic Fellow Robert Kozinets provide a very important new framework, based on extensive qualitative research. They classify social platforms, which they call lateral exchange markets, on two dimensions: the extent of (1) consociality – the physical and/or virtual copresence of social actors in a network, which provides an opportunity for social interaction between them and (2) platform intermediation – the extent to which the platform provides a stronger intermediary function in transactions between suppliers and customers.

“From this framework, the authors deduce four ideal types—forums, enablers, matchmakers, and hubs, and classify existing social platforms. EBay, for example, is an enabler with both a low consocialty and a low intermediation. Forums score high on consociality but low on intermediation with CarpoolWorld as an example. Hubs score low on consociality and high on intermediation; these firms, typified by LendingClub, strongly focus on creating transactions with limited social contact. Finally, matchmakers like Uber and Airbnb score high on both dimensions.

“The paper does not discuss which type of social platform should be more successful, and this is difficult to deduce from their framework. EBay, for example, has been profitable for years, while Uber is growing very fast though making huge losses. I strongly recommend this paper, for readers who want to update their knowledge on social platforms and how they might adapt their own business models.”

“There is a strong interest in digital technologies such as artificial intelligence, block chain, and the Internet of things. This paper by Donna Hoffman and Thomas Novak is one of the first to discuss the IoT with a deep theoretical focus on important behavioral constructs. What are the consequences of the IoT for marketing and consumers? Specifically, how can IoT change the concept of customer experience?

“They suggest that a ‘nested assemblage’ of CX will emerge as smart physical objects start to intervene in exchanges between firms and consumers. Thus, the customer-firm focus on CX is no longer sufficient to understand how CX develops.

“Hoffman and Novak propose that a consumer-object assemblage emerges from four types of interactions involving parts and wholes: (1) consumer-centric part-part interactions between consumers and objects and (2) consumer-centric part-whole interactions between consumers and assemblages, where the consumer is one of the components of the assemblage. Consumer-object assemblages also emerge from: (3) nonconsumer-centric part-part interactions between objects and objects, and (4) nonconsumer-centric part-whole interactions between objects and assemblages, where the object is one of the components of the assemblage.

“This assemblage results in different forms of CX. Consumers may feel enabled by self-extension and self-expansion, when, for example, the IoT suggests new products or solutions they never thought off. However, consumers may also feel constrained by this assemblage. For example, a consumer might feel silly when talking to Alexa, which may result in a self-restricting and self-reducing customer experience.”

“Despite new business models such as social platforms and new digital technologies, the core of marketing is still how we manage successful customer-firm interactions and relationships. These authors analyzed a large database of customers of a Fortune 500 B2B firm. Building on prior literature, they distinguish two forms of communication. Economic communication focuses on creating transactions and thereby frequently uses attractive offers. Relational communication focuses on social interactions between the firm and the customer, for example, relationship magazines or social invitations.

“Using advanced modeling techniques, the authors investigate the main effects of these two types of communications, how they may strengthen each other, and how these effects vary over time.

“They find positive effects of both economic and relational communications. However, the effects become smaller over time and disappear after about six months. They also show that both forms of communication reinforce each other, suggesting that managers use both forms.

“Finally, they show a strong heterogeneity in the effects of communications, implying that there is strong variation between customers. This suggests opportunities for resource allocation, and indeed the authors show that differentiation in sending out communication forms may increase profits.”