March 10, 2012 · 0 Comments
Brands are spending a great deal of time and energy investing in platforms to get likes or pluses, and not really being social at all.
It’s been well over 15 years since the social era started. So many brilliant people have been writing, speaking, and sharing case studies over that length of time, that if I only listed a few, I’d miss some really important thinkers. And if I tried to list them all, I’d hit the word limit on this post. But despite this outpouring of expertise, many organizations still find marketing in the social era ridiculously hard to do well, if at all.
Some problems are technical problems, where the solution is finding the best expert in that field and then working to execute her strategy. But other problems require more than an answer to a known question, and demand that you spend some energy figuring out if you’re asking the right question in the first place.
Perhaps marketing in the social era is that kind of problem. I’d like to use this post to ask a series of questions about marketing in the social era, in the hopes that we get smarter about the challenge it poses.
Does social have to be chaotic?
The old model for customer relationships — that is, the one still used by many companies today — is built around a buying funnel that progresses from awareness to consideration to purchase to loyalty. Fundamentally, this is an information model where companies provide the information and customers consume it.
The funnel is a favorite of marketers because it is linear, uni-directional, and transaction-centric. What this means is that there is a single path built around discrete actions by the company and responses from the buyer. It is not hard to determine where any particular consumer is in the process, so tracking and metrics are straightforward and easy to calculate. Where many marketing activities are hard to measure, this one is easy.
Social marketing experts will tell you that marketing has to become more conversational, more relationship oriented. While most companies have now learned how to say hello and how to apologize, I would argue that few have accepted that the fact that power has shifted. The passive, obedient consumer and paternal, in-control organization have given way to a vocal, informed consumer and an organization struggling to comprehend what this all means to their bottom line. (Of course, the notion of a passive consumer, and a mass market was overly simplistic; consumers were never as passive as companies like to think.)
Relationships aren’t rational, but emotional. They certainly aren’t predictable. (Try applying the marketing funnel to your love life and see how it goes. If you date 20 people, in 2.5 years will you end up with 0.7 kids?) In fact, marketing in the social era does start to look a lot like falling in love, following an arc of romance, struggle, stability, and commitment. As anyone who’s ever been in love can attest, it’s not a linear path.
To a company, this can feel like chaos. There is not a “thing” to manage. The metrics are new, evolving, and unfamiliar, and so they seem unclear. Social marketing lacks a formulaic model that one can put on a PowerPoint slide and show to the Board of Directors. Instead, like a relationship, it is fluid, not formulaic, with a tone of equality between consumer and creator. So perhaps this fluidity is one reason why social marketing is so hard to get right?
One example is that of TED and TEDx. TED has its main conferences (TED in the US and TEDGlobal in Europe) where people with relatively big wallets gather once a year to hear smart people give short talks, creating “ideas worth spreading.” These TEDtalks get released online and allow global participants to share in the spreading of ideas. In June 2009, they announced a program called TEDx that allow many to organize their own TED-inspired conference.
By doing this, they got a benefit equivalent to a multi-million dollar marketing budget by enabling a franchise of passionate users to do their thing. Volunteers coordinated events in places as near as New Jersey and as far as Estonia. There was TEDxKibera, held in Africa’s largest shantytowns in Nairobi, Kenya. The first 2.5 years of TEDx have resulted in 2,500 events in more than 110 countries.
This is social marketing. Passionate people are co-creating because they value TED’s shared purpose. This shared purpose is not “build TED’s brand;” it’s “spread good ideas that matter.”
While a social approach certainly lowers the financial overhead of the organization to expand on purpose, the question is, “At what cost?” Certainly the Komen controversy showed the complexity of the issue. The more an organization depends on others, the more expectations they need to wrestle with. If people give to a cause, they expect a relationship, not a transaction. There’s a fine line between being a “volunteer” which has an asymmetric power balance, and a member of a community, which suggests something more egalitarian. This all evokes many still-unanswered questions, such as: Isn’t it dangerous to have so many people believe they co-own the brand? Or, don’t these people deserve to get paid for their work? Which could lead us to asking, does model has too many hidden costs?
Can you make money this way?
MySQL became a dominant enterprise software company by “giving away” usage but asking for payment for those that need support and maintenance. There were six million users but only five thousand paying customers — just an .083% conversion rate. Yet that fraction garnered $34 million in revenues, making MySQL an attractive acquisition to Sun Microsystems (and then to Oracle). Similarly, Evernote customers are known for declaring their “love” for the product as they buy — and buy they do. As the CEO of Evernote says, this approach increases the commitment of the consumer to keep Evernote around. When the relationship is commitment-focused, not transaction-focused (what have you bought from me lately?) between consumers and the company, it fundamentally shifts engagement.
The software and mobile app world is starting to seep into everyday culture. We’re starting to see this relational approach — pay me what you think it’s worth, after you’ve used my service or product — in everything from music to hairstyling. Where usage used to come last, at the end of the marketing process, it is now more frequently starting the cycle.
This shift is perhaps the most terrifying and unpredictable thing any organization can face. This philosophical approach could change every aspect of the business from product design to engineering to marketing, sales, and support. Sure it sounds good to say “Pay if you love it”, but what if not enough do? Flexibility sounds good as a consumer, but is terrifying to the brand (and the finance team that creates the budget). The MySQL story shows a razor thin margin of adoption — and they were one of the “successful ones.” So, perhaps many organizations look at this kind of social approach, and ask, yeah, but what if not enough people choose us?
How do we resolve these conflicts?
We want innovation, but without experiencing failure. We want to embrace the new, but without risk. We want to act fast and fluid, but to maintain tight controls. We want to empower everyone but retain decision rights for ourselves. We want to experiment, but we also want predictability. We want to be flexible to customer input, but remain ruthlessly efficient. We want to adapt, but we fear the death of familiarity.
This is why it’s hard to go from being an “800-pound gorilla” to a fleet of 800 nimble gazelles — to go from being a centralized institution that competes through overpowering strength and scale to a diffuse tribe that competes by being fast, fluid, and flexible.
Make no mistake. Marketing in the social era is not easy. But remember, it is making mistakes — and the ensuing forgiveness — that give relationships their resilience. Vulnerability begets trust. And though they are difficult to forge, such robust relationships are more likely to endure the ups and downs the market inevitably deals any organization.
This is the fourth of a series on the Social Era, and how the market will increasingly reward fast, fluid, and flexible. It described the new rules of the social era, the ways it shapes how we organize, what we produce, and — with this piece — how we sell and market. Next, what this means to all the parts of the business model.