So how could Nike take its 48% share of all the running shoe business in the U.S. in 2006 and grow that business? The company's marketers may have found the answer in its Nikeplus social marketing site.


Analysts debate whether or not the site is directly responsible for Nike's current 61% share of the running shoe market: "Nike+ attracts only serious runners, a drop in the bucket compared with its total customer base." Still, there's no doubt that social marketing has had an impact at Nike. Question is, how much?
In the recent Business Week article: "This Social Network is Up and Running," it's clear that Nike may have established a blueprint for other consumer products to emulate. Reason: it has adopted a very different strategy.
Many companies have tried to build virtual communities centered around their brands–that according to comScore statistics. But for Nike, "It was never about how can we convert some percentage of users (to buy Nike shoes)", according to Stefan Olander, global director of consumer connections. It was about creating a social network for dedicated runners. . .
According to the Business Week article:
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The use of social networks has grown 38% in the past year, per comScore.
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A recent McKinsey survey found that many companies are struggling with Web 2.0 technology.
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McKinsey also cited that only 21% of nearly 2000 executives surveyed were satisfied with available software to launch blogs or create social media.
Back to Nike. Its site www.nikeplus.com was conceived to bring runners together, and to sell them its $29 Sport Kit sensor. As a result of community interest among runners, Nike has sold 1.3 million Nike + iPod Sport Kits, and a half million SportBands at $59 a pop. Total sales: $56 million in 2008. A drop in the sales bucket for Nike, but an important community for them, nonetheless.
It appears that runners' enthusiasm extends into purchasing Nike shoes, as well. How much, though? There are vastly different opinions among analysts about that. More importantly, do marketers within Nike itself know what kind of ROI the site is giving the company? I'd love to find that out and the article doesn't give Nike's own take on this.
The skinny: when used with an iPod touch or nano, the Sport Kit sensor tracks runners' speeds, mileage and calories burned. When runners upload their data to the site, it becomes "a virtual gathering place". To date, runners have logged 93 million miles on the nikeplus.com site. In August alone, 800,000 runners logged onto the site and signed up to run simultaneously in a 10K Nike sponsored race in 25 cities around the world.
Buoyed by the success of this site, Nike is now testing a social network site aimed at the basketball-playing community–as a means to promoting its basketball shoes. I'm betting they'll be successful in building a community of dedicated hoopsters if they use the same strategy with this new site. Bottom line: when the right strategy is in place, it can be a brand builder.
Questions:
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Could it be that companies that disparage social media haven't developed the right strategy to maximize its potential as a marketing tool?
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How do you view social media's role in brand building? Sales building?
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Should companies view social media sites as a potentially powerful tool among other marketing tools at their disposal?
I'd love to hear from you.