Many CEOs acknowledge that social networking is here to stay. However, many still regard it as a fad. These CEOs will do well to read this article, where they will learn why they need to adopt social networking right now and how they can discover its power and realize their expectations for Return on Investment.
Consider this scenario: The marketing director of a Canadian retail chain has been trying to convince his colleagues that the company should try out networking tools like Facebook, Twitter, or YouTube to build relationships with customers. He sees that networking technology is being adopted by the corporate world and moreover, he urgently needs a cheap way to shore up his marketing capability because his budget has been trimmed by company-wide cost cutting. In a discussion with the authors, the director revealed that his colleagues are resisting "partly because they are steeped in the tactics of what they have always done and partly because they are not convinced of social networking's value proposition." He would like to try a low-cost campaign, perhaps using a dedicated web site to target mothers who, he has been told, tend to go on-line more than the average customer. But, lacking much hard data on the potential benefits, and concerned that his multi-generational customer base may be unsuitable for social networking, he is now wondering himself whether he is being premature.
The above is a real marketing dilemma, and one that many business managers are confronted with these days. It is a dilemma because many managers today are uncertain about what social networking really means, how it fits their business strategy, and most importantly, how they can define its practical value to the business.
Drawing on our own experience and that of several social media practitioners, this article provides guidance on how the C-Suite should view social networking. It will especially look into the implications of go-to-market and product-development strategies based on learnings from authentic exchanges with customers who really want a say, though not necessarily the only say, on how they intend to purchase, recommend or feel about a product.
Networks and the transformation of influence
Social networks have been described by Tom Smith of Trendstream, a UK-based researcher of global social media usage trends, as "an internet-facilitated and consumer-driven movement of networks, content and knowledge" built on web-based media tools that enable individuals to connect online. Social media, the platform for social networks, are not just new technology - but enablers of a fundamental marketing strategy shift in how organizations and customers relate to each other. As Smith points out, "in the social media age, the network is transforming influence" (see the accompanying chart). This means collaborative, real-time dialogue between informed people holding individual conversations - between the company and customers and vice versa. Many more points of conversation create many more opportunities to foster exchanges of knowledge and to get people engaged.
Socializing content packs a double-whammy. Firstly, free media content is undermining traditional subscription-based content models. Secondly, mainstream corporate communication is moving away from one-way sales messages handed down to mass audiences by hierarchical organizations having exclusive ownership of information.
The repercussions for marketers are only slowly becoming apparent. Social networkers want to talk about consumer brands. They show a depth of engagement that is surprising for those who aren't networkers. As consumers, they feel encouraged to be more open, live more spontaneously, and hold more immediate notions of trust and value. Everything is socialized, trust is more accessible, and influence comes without trying.
Where is the target?
The catalyst for social networking has been the "Gen Y" cohort, those born between the late 1970s and the early 1990s. …