The social Web has become the backbone of the value exchange, driving recovering segments of the market.
There is a newfound sensibility that is redefining consumer markets. Whether driven by economic reality and the one-two punch of the "dotcom bust" (which, for most, reduced paper wealth) followed by the housing market crash (which for many more reduced actual wealth), or by the near-ubiquitous ratings of products and services, reviews, and digital testimonials (written not by marketers but real people connected by real social networks), the result is the same: consumers now seek a genuine exchange of value more so than the continued accumulation of "more stuff."
The social Web - and in particular the manner it which it's used by consumers to make purchase choices - has become the backbone of the value exchange, driving recovering segments of the market. Unlike some prior recoveries where consumers returned to pre-crisis spending habits (and spending levels), there is a measurable change in the values and therefore behaviors beginning to appear in consumption studies. The social Web, especially in the conversations that surround your brand, product, or service, is driving success for those firms that offer value, and is simultaneously spelling t-h-e e-n-d for those who don't. That makes "right now" a great time to align your organization - internally as well as externally - with themes like quality, durability, environmental sustainability, and the similar fundamentals that engage and encourage value-based consumers to step up to the cash register with confidence and make that purchase. How do you do this? Read on.
First, get involved with more than social media marketing: get involved with social technology and understand how friending, curation, and collaboration can shorten innovation cycles and create significantly higher levels of engagement and loyalty with your customers. Ideation platforms - implemented as a part of a strategic, business-based program - are a proven, positive-ROI technology. Salesforce.com, Lithium, Jive Software, and your local Drupal/Acquia resources teams have the tools and the know-how to get you up and running, along with the case studies and proof points to help you sell it in. (And if they don't, won't, or can't, look around for someone that does.)
Before you jump in, though, have a plan. Ideation - asking customers, for example, to submit ideas and to collectively vote those submissions up or down so you can pick off and implement the winners - is not for every organization, nor is it a universal fix for every ailment. Consider this: If your customers were to offer their ideas, would your organization accept them or defend itself against them? Does your organizational culture embrace and value change, or does a senior manager still get a desk that, by fiat, is made of oak instead of metal and exactly two inches wider than those occupied by subordinates? Social media has brought many organizations face-to-face with their own inability to respond to change, to embrace customers as collaborative partners, and to take seriously the necessity for creating cross-functional teams charged with producing defined business outcomes rather than tracking (in a vacuum) some arbitrary set of departmental measures. Follow my friend and colleague Gautam Ghosh, or look at the work being done in forward-looking organizations like Philips and PGi for really smart implementations of social technology that enables organizational transformation and response to opportunity and change. (Disclosure: Both Philips and PGi are clients.)
The above may sound harsh - and to be sure, real and sustained transformation in organizations that lack a company-wide, shared, and well-defined culture is difficult - but it's also the "new reality" of the combined impact of the global popularity of the social Web and the global adoption of consumerist sensibilities being driven by the global effects of current economic conditions. External to your business, markets are no longer isolated: internally, work teams are no longer isolated either. There is a growing recognition that we're all connected - and that, through the open exchange of information as it occurs on the Web, outside the confines of the Facebooks and similar walled gardens, we can increasingly seek the value we desire and then vote with our dollars for the businesses and organizations that deliver that value.
In "Spend Shift," authors John Gerzema and Michael D'Antonio make the compelling case for a new and relentless focus on value, which is not the same as "low cost" ("Attention, Walmart Shoppers!"), and the alignment of purchases with the emerging universal principles like durability and sustainability. In a prior column, I talked about the Eveready utility flashlights that sell for $3.49, and whose replacement batteries alone sell for more than that. The message of "Don't repair or replace, just toss and repurchase" will be increasingly rejected as consumers opt for a slightly more expensive product that will last longer, work better, require less resource consumption, and as a result produce better value in the process. Don't believe it? Look at the number of business travelers opting to carry their own refillable water bottles (TSA allows them through security so long as they are empty) rather than buying a bottle once inside the airport and then throwing it away. Want data? In the 2009 to 2010 BrandAsset Valuator survey of consumers, 72 percent agreed with the statement "I am more open to paying more for higher quality goods that last longer and won't fall apart."
It all comes down to what "ovelryanalyticalsuzie" - the online name of a 26-year-old woman featured in "Spend Shift" - perfectly summarized. Paraphrased, Suzie said this: "When consumers share information and (then) collectively vote with their dollars, they can bring a new sense of urgency to marketplace change, can themselves feel more powerful (and therefore are more likely to accelerate this process) and can simply be more responsible in and through their spending decisions." If you jump back to the concept of the purchase funnel and social feedback cycle - the idea that digital word of mouth flows into the purchase funnel in the consideration phase of the selling cycle - consumers driven by value can exert tremendous pressure on manufacturers to move in the direction of longer-lasting, higher quality goods and services.
Social technology can help your organization to make the leap, and here are three (not necessarily easy) things you can be doing right now:
As the momentum builds, actively participate on the social Web and stay connected. Just like you can't surf behind a wave, you can't rest in markets that are driven by change. And if one thing is certain right now, it's the change that is driving the new market opportunities. Social technology, deployed intelligently and with a solid business case both internally and externally, can help you navigate, survive, and thrive on the change that now surrounds us all.
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Dave is the VP of social strategy at Lithium. Based in Austin, Dave is also the author of best-selling "Social Media Marketing: An Hour a Day," as well as "Social Media Marketing: The Next Generation of Business Engagement." Dave is a regular columnist for ClickZ, a frequent keynoter, and leads social technology and measurement workshops with the American Marketing Association as well as Social Media Executive Seminars, a C-level business training provider.
Dave has worked in social technology consulting and development around the world: with India's Publicis|2020media and its clients including the Bengaluru International Airport, Intel, Dell, United Brands, and Pepsico and with Austin's FG SQUARED and GSD&M| IdeaCity and clients including PGi, Southwest Airlines, AARP, Wal-Mart, and the PGA TOUR. Dave serves on the advisory boards for social technology startups including Palo Alto-based Friend2Friend and Mountain View-based Netbase and iGoals.
Prior, Dave was a co-founder of social customer care technology provider Social Dynamx, a product manager with Progressive Insurance, and a systems analyst with NASA| Jet Propulsion Labs. Dave co-founded Digital Voodoo, a web technology consultancy, in 1994. Dave holds a BS in physics and mathematics from the State University of New York/ Brockport and has served on the Advisory Board for ad:tech and the Measurement and Metrics Council with WOMMA.
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August 21, 2014