The article I speak of is entitled, Social Network Economy Leaving Business Behind: Resistance and Disbelief Still a Common Response. The author, Lorraine Mallinder, argues that social media is altering all the rules that business has accepted as "operating by the book" for the last 60 years. What do we mean by altering the rules? What were those rules?
Before social media arrived on the scene, companies would develop products or services in anticipation of a market, based on experience, market research, analysis of competition, and so on.
These companies would then find mass communication resources like newspapers, magazines, television, and radio and determine branding messages, campaign pitches, print ads, TV and radio spots, mail drops, fliers, sales literature, and price lists.
If the companies had websites they would try and feature their URLs in ads and throughout their campaigns they would invite prospective customers to learn more, call toll free numbers and maybe even get involved in a contest. Company sales forces would respond to leads generated from these campaigns and follow up to convert prospects to customers.
Enter social media and begin to see how the rules change. Here is just one example.
GroupOn is a company that creates instant demand and uses the viral marketing of social media to build sales. How do they do it?
1. A company approaches GroupOn to create a campaign around a product - it can be an event, a restaurant or bar. a retailer. GrouOn charges no upfront fees for its services. The one common denominator is the offer is at a great price representing significant value.
2. GroupOn targets a specific demographic and specific locale on behalf of the company and sends its offers via email. GroupOn email recipients are often repeat buyers of GroupOn offers.
3. Every GroupOn email recipient who who responds to the GroupOn offer is encouraged to invite friends to take advantage of the deal. GroupOn includes Facebook, Twitter, blog, RSS and email feeds to make it easy for the word to spread.
4. Because every GroupOn offer is goth time and numbers sensitive the incentive to connect among its recipients is very high.
5.When the threshold number is reached within the time deadline everybody in the instant buying group gets the product at the great price. Otherwise the deal goes away.
Think about how different this approach is to traditional marketing. The target audience is narrowly focused to a single city. The prospective customers are incented to invite others to participate. There is no outlay of money for advertising and promotion on the part of the seller. Instead GroupOn helps design the ad, provides editorial and copy assistance and provides the target audience database. GroupOn takes a share of the risk and gets a percentage of the revenue from each GroupOn campaign. With 97% of its clients providing repeat business it's hard to dismiss this approach to selling in the social media age. It just simply works.
What social media has done is create motivated consumers who are involved with your business when you embrace them through social media. GroupOn is just one example of how companies are taking social media connections seriously and yielding immediate ROI.
That's why I encourage you to take the first steps to make social media part of your marketing strategy in 2010.
- Len Rosen
- Toronto, Ontario, Canada
- Len focuses on helping small and new businesses succeed through developing appropriate marketing and sales strategies. Len enjoys mentoring, relishes in getting both arms and feet wet in addressing technology, marketing and sales issues. He understands the drivers impacting business results for today and tomorrow including time-to-market, time-to-revenue, marketing, sales channels and social media.