A Marketplace Transformed By Social Media
- Filed under: Social Media
- Date: Jun 30,2009
Traditional businesses are over matched by the speed and effectiveness of Social Media communications.
For centuries, business marketing models have relied on slow unpredictable communications to reach masses of consumers in hopes of converting 1-2% into customers. We can’t blame you – you build your organization around the marketing tools you can use most effectively. You make what you can sell; and you sell what you can market.
Traditional business worked by making average products for average people. We produced in bulk then inserted our commercials in front of as many eyeballs as possible. TV was godly because we could reach masses of people quickly and cheaply.
This model succeeded because people were glued to the television, there was a stockpile of attention, and consumers had few alternatives. Consumers made purchases because they remembered our commercials when reaching for our product, on the shelf, at the local retail store.
At the Speed of Ideas
Times have changed. People aren’t watching TV like they used to, and they don’t watch commercials at all. Mass marketing techniques aren’t very effective anymore because people are tired of being interrupted. Retail store shelf space isn’t quite what it used to be because the internet enables a nearly infinite inventory. Traditional business with its slow cycle times and expensive interrupt marketing rollouts don’t stand a chance against the speed and cost effectiveness of Social Media Marketing.
Today ideas move quickly. The distance an idea travels from the brain of the designer to the intended consumer is minimal – it’s just a blog post away. So Social Media allows (and requires) for rapid innovation; prototyping, failure, and adjustments - all streamlined to move at the speed of the marketplace.
How fast is Fast
Apple inc. found out the hard way just how fast ideas can move. Apple initially released it’s iPhone in an exclusive partnership with AT&T. Anybody could purchase the phone but only those of us with an AT&T wireless contract could use it to make calls. Many people were left standing on the outside, without an At&T contract, and wanted in. Ideas began to flow; designers, hackers, programmers, and bloggers began to communicate via Social Media. Blog posts, forums, and chat rooms were filled with ideas about how to bypass iPhone prevention measures.
Less than a month after its initial release a software solution had been released which bypassed the iPhone’s prevention measures – now anybody, in any part of the world, could use the iPhone. iPhone sales picked up (so did the stock price) as phones were shipped out to people in Europe, Asia, and South America.
AT&T was unhappy; their previously exclusive agreement with Apple wasn’t so exclusive any longer. Additionally, a secondary market emerged; hackers were now unlocking the iPhone, marking up the price, and reselling them on the open market. Apple had to do something. Apple designers and programmers started looking for answers and found them in the same places the hackers had shared their ideas – Blog posts and community forums.
One month later, Apple issued a warning that future iPhone software updates would render unlocked phones unusable. Hackers went back to work, and in less than a month the prevention measures had been bypassed again. Apple continued to fight back, releasing updated versions of the iPhone operating system which patched the holes the hackers used to penetrate their system; but in the end the hacking community prevailed. iPhones are being used all over the world.
We Get What We Want
Now, with the help of Social Media and Search Engines, consumers get what they want; they will retool, redesign, and reverse engineer your product until they get the result they require. Social Media spreads ideas quickly allowing consumers to communicate faster than ever; if your company is not prepared to move at the speed of Social Media you will be left in the dust. Consumers require extraordinary products; if you don’t make it for them they will make it themselves from your products or move on.
Every Industry is Affected
It’s not just the consumer electronics industry; all businesses are affected by Social Media. Your business is affected.
Media companies have to change. Advertising money is being shifted online – away from traditional media outlets. Bloggers are beating journalists to the scoops and headline news. Movies and TV shows, are being ripped off the internet, remixed, and redistributed on sites like Youtube.
Traditional retailers’ monopoly on distribution is over. People buy from each other on sites like eBay. Internet storefronts can have nearly infinite selection and inventory making retail shelf space less relevant. Price comparison happens instantly online, consumers share with each other where to find the best deals, and make purchasing decisions in an instant.
Social Media has redefined business hierarchy. The big and slow have been replaced by the small and fast. People read the news online, purchase goods, or find a date; and the traditional businesses that used to fill those roles have become less relevant.
Consumers are Talking: Your Brand Should Listen
Consumers thrive on word-of-mouth communication; and when they talk your brand or company could be affected. In fact, consumers are probably communicating their thoughts, about your brand image, on community forms and in blog posts; if they aren’t talking now they will be soon. In reality, customers see your brand for what it really is and not what your advertising campaign projects it to be.
Amazingly some businesses are thriving in Social Media, because they now focus on “for whom to produce” rather than “how much to produce”. This means making remarkable products for sophisticated consumers. You can listen to the conversations about your brand taking place in Social Media – the customers will tell you what they expect. After listening you should enter the conversation and bring your message directly to the people who want to hear it. Your brand should tell a story and if it’s worth talking about people will spread the word.
