Is Your Business Using Social Media?

by Jay Deragon on 10/21/2008

Business models have shifted over time. Each time models shift the practice of management has to shift as well. Current business models follow a linear path of production and service. At the end of all the connected business processes is the customer, the markets and the ultimate economic transaction. In this model the customer was at the end of the “system” receiving products, services, media and price.

Price was influenced by the markets and the efficiency of the delivery system. Most of today’s business minds are viewing the social web in the framework of the old systemic design of a business, with the customer at the end. However, the social web does not lend itself very well to old business models rather it is an inverted systemic flow which starts with the customer and flows backwards.

This dynamic is just now starting to create rippling effects throughout traditional markets and business models. The dominant response has initially been from advertisers trying to reach consumers in a more direct way and with demographic affinity to their brand.

The emerging shift in business flow will require businesses to make shifts in their thinking in order to both maintain and gain new customers, markets.

Shifts are happening in the following business categories:

  1. Advertisers are looking for new methods and models that reach target audiences.
  2. Marketing : Brands are looking for and adopting new channels for marketing.
  3. Technology: Technological enhancements are accelerating faster than the average user can keep up.
  4. Communications: New mediums and an increases in communications is flourishing.
  5. Industry specific initiatives: Many brands and entire industries are running to the social networking mediums to improve customer loyalty and brand awareness.
  6. Media : Many media companies are just now recognizing the influence of social networking on traditional media methods.
  7. Financial: New methods and models are being developed to create economics out of new services and products offered.
  8. Telecommunications: Social networking mobile applications are proliferating the decks of mobile handsets globally.
  9. Your World : More adults are jumping into and learning the value attributes of social networking.

Are Business Leaders Embracing Social Media?

All of these dynamics collectively are pointing to the potential of significant disruption for those unprepared or unaware. The impact of these dynamics will create strategic shifts for all business models and means. The old strategies are no longer relevant, the new strategies are dynamic and emerging moment by moment. However there is a macro landscape of strategic issues that provide the basis of thinking, or rethinking, about business models. The big will have a different kind of bigness.

According to eMarketer Nearly six out of 10 Americans who use social media interact with companies on social media Websites, according to a September 2008 study conducted by Opinion Research Corporation for Cone.

The researchers found 85% of social media users thought companies should interact with their consumers through social media, at least when needed. “Americans are eager to deepen their brand relationships through social media,” said Mike Hollywood, director of new media at Cone, in a statement. “It isn’t an intrusion into their lives, but rather a welcome channel for discussion.”

Cone is a brand marketer that counts social networking among its capabilities, so its enthusiasm is understandable. But a growing number of retail e-commerce companies agree, judging by an August 2008 study conducted by Vovici Corporation for Internet Retailer.

Nearly four out of 10 online merchants surveyed used social networks. Of those, nearly one-third said they had a page on Facebook, and more than one-quarter said they used each of MySpace and YouTube.

The dynamics cut across all dimensions of business as we’ve known it and new dimensions and a new reality is forming before our eyes. To ignore these dynamics could mean peril to those unprepared……sooner than later.

What say you?

Get the white paper: Leveraging Social Media for Business here

{ 1 comment }

Dan October 24, 2008 at 12:43 am

Newspapers are in an utter panic about what they are to do next – a perfect harbinger of the future given the printing press started it all off. Knight Foundation has a 5 million dollar prize out for ideas that identify the path of traditional media in the next 5 years – that’s all the time they have left. We will see a long a long line of industries facing the same music.

On the other hand I need to ask How can they fail? People are absorbing information at a dramatically increased rate and volume. How on earth can a newspaper be confounded on what they need to do next? It borders on the verge of industrial comedy.

The answer is deceptively simple and it is sitting under our noses – so close, we can’t see it – yet. Jay hits it square when he says the new economy is inverted. The future is exactly, perfectly, beautifully symmetrical to the one that we have today. We got it backwards.

Today we try to force economic growth to precede technological change using debt. In the future technological change must precede economic growth. It is that simple. Nature is a wondrous teacher.

Now, back to newspapers. Social media can be a bit of a fantasy land. Nothing tangible happens until the rubber meets the road – people need to get together in person (or in real time). This is a highly local affair. People will join in unique combination of knowledge assets because that is where the innovation is. Newspapers – or traditional media – can easily serve this market with interchangeable content. Instead of a business section, arts, local, international, technology, politics, sports, editorials – they will need to produce busartint section or techedwolrd, or intechpolspo sections specific to the observer. It sounds whacky now but that’s what the mirror on the wall is telling us.

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