Thursday, November 19, 2009

Who Should “Own” Social Media?

Social media is still in its fledgling stage, and for many, is still lacking an easily understandable description to properly convey the potential it has for changing the way we do business. As we know, current economic times are increasingly accompanied by the need for ROI measurement. However, ROI measurements are often subjective and partitioned by discipline. In this climate, a divide has begun, whereby social media efforts and programs are being put into disciplinary silos filled with fancy tactics. Ironically, the line between disciplines has never been so blurry.

One thing all social media efforts have in common, regardless of the particular discipline by which they are categorized, is the importance of developing a strategy with the consumer in mind. In order for social media efforts to optimally affect a particular business, it is imperative to gather and analyze consumer insights, both in and out of the social media space. Below, I cite some interesting examples of people and companies doing just this. These organizations are using consumer insights, applied at the macro and micro levels, to drive the thinking that propels the social media efforts and dynamic business strategies for some major players.

At the macro level, John Gerzema has provided us with an excellent illustration of using a broad audience (actually, the entire United States) to draw conclusions about the mindset of today's consumer. In his TED talk, entitled the “post-crisis consumer,” he discusses four cultural shifts that drive new consumer behavior. Each could easily be argued as important to consider when an organization moves forward with a product, growth, marketing or other business strategy. Among his many interesting observations is the concept of Declasse Consumption. In this phenomenon, consumers are thought of as shifting away from showcasing their status through materialism, toward a more 'intelligent' spending on products and services of 'genuine' value. The implication for this kind of shift is that values driven spending has the potential to force capitalism to be better, drive innovation, make longer lasting products, create better, more intuitive customer service and provide consumers with the opportunity to connect with companies that share the same values.

In line with the shift toward a more authentic, values driven economy, lies the concept of the Experience Economy, coined by Joseph Pine. The Experience Economy refers to an environment in which consumers buy experiences, rather than goods or commodities. At a micro level, inbound marketing and software solutions providers such as Chordiant are creating real-time predictive decision models that ensure companies are “on brand” during the customer experience. The basis for this “Experience Economy” is founded upon the business imperative of rendering authenticity, as opposed to a “Service Economy,” where the imperative is to improve quality or a “Goods Economy,” where it is to sell goods. Thus, the consumer's perception of the relationship with a company is the critical element in determining brand loyalty and profitability.

These are just two examples of how consumer insights can be used to highlight the potential breadth for social media applications. One could say that consumer insights professionals have the opportunity to drive social media efforts in a way that extends beyond any particular discipline. This is not to undermine a more narrow or focused approach; there is undoubtedly value inherent in choosing a niche program or vehicle, especially when a specific result is desired. However, companies can benefit from avoiding the mistakes of the past whereby each discipline is working in a silo, as has long been the case in various forms of marketing (PR, advertising, DM, etc.). After all, we have just begun to scratch the surface of what social media can do for businesses.

The good news is that sharing knowledge and results across multiple vehicles, platforms and disciplinary areas will only serve to foster the growth of these uncharted territories. In keeping with this spirit, do you know of any interesting business models impacted via the use of consumer insights in order to create a unique social media application?