Social Networks in Business and Commerce - Is it Unprecedented?
A deeper ponder helped me identify that customer has always been the focus of any major marketing, sales or service activities. For decades now, marketers have been practicing concept testing, product testing with a representative sample of target segment to gauge reception to the product / marketing idea. The responses have been analyzed to great detail to predict the behavior post product launch. Listening to the customer, analysis of past customer complaints, buying behavior and psychographics are not new for marketers. Consumers and Customers, especially the ones that are purchasing a high-involvement product or service would invariably exhibit post-purchase dissonance behavior. The need for any customer has always been to minimize the post-purchase dissonance and for several decades now, marketers have through mechanisms like service calls, customer groups or clubs or interactive forums aimed at loyalty (like Harley Owner’s Group , Dell , Pampers etc) ensured that the customers have a community to share their buying experience and draw affirmation of their purchase decision. So what has really changed with the advent of Social Networks in its current form?
What has changed is the power of the buyer and the reach and impact of customer feedback / opinion. Social networks give an endless platform to share the delightful experience and formidable dread of a customer alike. Snowball effect of the word of mouth (positive or negative) is amplified multiple times on social networks than any other media known. Product recalls and failures in design have always been in the media but what has changed with S-Commerce is the pace with which information is shared and its wide reach. The cost of a product defect or poor customer service is amplified with social networks as information spreads immediately making it easier for all your customers to switch if not convinced of recompense. Essentially social networks cannot make an organization more customer-oriented but the already customer –focused can leverage to their best advantage and those who choose to ignore can do so at their own peril.
At the same time, the reward for delighting your customers is whopping as well. Social Networks has in essence made commerce and business more high Risk and high Returns from a customer touch point perspective. No longer can you afford to brush aside that one unhappy customer you had in the day or one product delivered late. Brand recognition and Dilution happens in a moment – Thanks to Brand Blogging and the power of WOMM!
Does this spell gloom to the marketers? Not really! Infact your customers are now consultants in disguise who can help you gauge your service levels better, estimate your partners’ competencies, get that most required insight into their needs and wants and tell you what makes your competitors tick. They also make it less risky for you to launch new products by being the ever-enthused co-creators of your new product design or concepts. As WOMMA states good word of mouth marketing strategies involve finding ways to support satisfied customers and making it easier for them to talk to their friends.
The impact of Social networks on commerce is not limited to Sales and Marketing but also includes new product or concept development and sample testing.
Betty Brottlund’s blog on Companies using Social Networking to Boost Sales went on to prove the business relevance of social networks to organizations in as diverse industry segments as Coca-Cola , IBM, StartBucks , Google , Southwest Airlines , Revlon and GE to name a few. Social Networking Analytics is gaining momentum to decipher the complex yet valuable information hidden under plethora of human interactions in the social networks. Human social networks have never been under so much scrutiny and micro-level analysis as it is now.
Benefits of Social networks are not limited to just S-Commerce but also pervades to your own organization, aiding you hear your employees, partners and suppliers for business growth. Sooner you implement the framework to create an inclusive listening mechanism the greater the rewards. Google, Microsoft, IBM are just a few of the prominent organizations that have employee blogs to listen and create a high performance environment. Recruitment, Solution Development, Concept Development, Brainstorming on product or service enhancements, Sales Deal Closure, Partner recruitment, Search, Share Best practices, experiences are all enabled through social networks in a seamless way – all with the comfort of where you are – Thanks to Social networks accessible from Mobile phones. More than half (52 per cent) of mobile phone users in the UK are now using the mobile Internet with email and social networking the most popular activities, according to Webcredible.
Application of Socnets to an organization would perhaps be a topic for another blog that I would come back soon with. To conclude on where I started, I must admit that Social networks have been path-breaking innovation primarily because of the wide-reach, easy access and the powerful impact it has on all stakeholders.
It is prudent and in fact mandatory for all organizations to closely follow the conversation in social networks to gauge future trends, opportunities, and problems.
It is very likely that 2009 may well be the year of social commerce as foreseen by TyTribble . I am keen to listen to your thoughts on the same.
Comments
Social media has been playing vital role in sales marketing and other online marketing campaign. If an organization wants to be on top of what the consumers wants, engaging in social media conversations and updates such as Twitter is a must.
Posted by: John | June 2, 2009 02:56 PM
Excellent post Khanchana. Many companies have been enthused (or even shocked) by this new phenomena and have made amateur attempts to leverage this for roping in customers. However, you make a good point by saying that in addition to listening to the market, companies also need to listen to their employees.
They should also get their employees especially sales, marketing and customer service to listen to the market.
The challenge would be to sift through the plethora of available social networking sites and track the most powerful ones. We are in for exciting times :)
Posted by: Shreedeep | June 4, 2009 06:21 AM
I agree with your comments, John and Shreedeep!
Although many organisations want to join the social commerce bandwagon, it requires a sound plan and policy to ensure effective usage. Social Networks Analytics is gaining momentum by the day, to elicit meaningful information from the cluttered social networks and communications therein. Companies already are benefitting from portals that encourage collaborative idea generation and concept/product development amongst the employees. Growth in social commerce is surely worth watching!
Posted by: Khanchana | June 4, 2009 08:27 AM