Recently, I have been involved in a number of debates about the usefulness of social media in business. I was slightly taken aback that the business value of social media even needed debating. However, many people are simply immersed in their everyday business and personal challenges and have not had the time to consider or explore these issues.
This short article is to get you started in the ‘why’ social media is so important to future business success. I am not going to pound you with statistics: they now overwhelmingly point to majorities of people being online and involved in social media, even if we need to remember the digital disenfranchised and many businesses that operate perfectly well without any online presence.
Social tools, networks and media have enabled customers to do what they’ve always wanted to do — be heard and to have the power to turn their ideas into ways to make the products and services they love even better. These tools are also allowing them to reach more people like them, with common interests and information needs, creating powerful communities not possible only a few short years ago.
So, if you are in business, and can afford to ignore your customers, and potential customers, clustering online and willing to help you deliver them what they want, then you are missing a huge opportunity.
What a company develops from venturing into social media marketing is social capital. There are sound economic reasons for the importance of social capital. Oliver Williamson won the Nobel Prize for Economics in 2009 for his work on transaction costs. One element of his research found that trust reduces transaction costs — in other words, if you’re doing business with someone you know, the cost of doing it decreases.
Remember The Cluetrain Manifesto? It was a set of 95 theses organised and put forward as a manifesto, or call to action, for all businesses operating within what was suggested as a newly-connected marketplace, as far back as 1999. The ideas put forward within the Manifesto aimed to examine the impact of the Internet on both markets (consumers) and organisations.
In addition, as both consumers and organisations are able to utilise the Internet to establish a previously unavailable level of communication both within and between these two groups, the Manifesto suggested that the changes that will be required from organisations as they respond to the new marketplace environment.
Here is a summary, in their words: “These markets are conversations. Their members communicate in language that is natural, open, honest, direct, funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can’t be faked.
“Most corporations, on the other hand, only know how to talk in the soothing, humourless monotone of the mission statement, marketing brochure and your-call-is-important-to-us busy signal. Same old tone, same old lies. No wonder networked markets have no respect for companies unable or unwilling to speak as they do.
“But learning to speak in a human voice is not some trick, nor will corporations convince us they are human with lip service about ‘listening to customers’. They will only sound human when they empower real human beings to speak on their behalf.”
So social media marketing barely needs an ROI, as the current demand is phrased. You just need to decide whether you want to be in business in five years or not. Ignore the sea slowly being sucked away from you and the social media tsunami will catch you unprepared.