Social Media — media created by the public in online communities — represents an inherently different paradigm of communication than traditional mass media. For customers, social media facilitates new ways of connecting, sharing, and organizing relationships and information. For companies, social media offers innovative approaches to marketing, media, product development, and overall customer relations. Social media has influenced a shift in business use of the Internet from developing new technologies and publishing to developing communities of customers and collaborators.
But so far, small companies and start-ups have dominated this space. Amazon represents the closest example we have to a large, established company using social media productively, and Amazon is only ten years old. Small companies looking for disruptive innovations have moved quickly to establish interactive relations with customers online. And perhaps because they are relatively resource-poor — necessity being the mother of invention — start-ups have leveraged the public as their writers, editors, and collaborators. Can large companies play too? We think so.
The Management Innovation Group has developed a framework for any company considering how to build a social media platform. Fundamentally it’s about asking the right questions at the right time, and having the experience to know what the right answers look like.
We start by teaching our clients to identify consumer segments and the opportunity to serve them. This research needs to look across current and potential customer types, and mix questions from ethnographic and marketing points of view. The results should express segments in terms of behavior and lifestyle affinities rather than demographics.
After understanding our customer segment, we explore which business benefits are desired and possible. Being explicit at this stage helps answer hundreds of downstream design decisions. Are you trying to succeed in customer acquisition? Publicity? Customer research? Building a scalable product platform? Viral marketing? Lower development costs?
Having defined our goals we can develop a combination of business process and technology. Again, the right questions are crucial: What is the potential size of the customer base? How do you solve the chicken-and-egg problem of building a critical mass of customers? What are the relative merits of social networking and social media? How can you combine social media with traditional, centrally-produced media? Should you buy, build, or partner?
This approach might look backwards from your typical business strategy or technology development, and it should. Social media platforms that neglect to put the customer first never fail to fail. Companies that over-prioritize software selection or purely selfish business needs are vulnerable to a steady stream of agile, customer-focused new competitors.
While many companies will want to enhance their business with social media, not all will succeed. A social media platform doesn’t simply mean adding an online forum or blog. It requires a shift in organizational mindset, a mindset of constant and immediate customer interaction, customer-driven innovation, and exponential network effects. Only companies willing to make this shift will have the discipline to ask the right questions.
Keywords: Web 2.0, participation, blogs, wikis, forums, ratings, web applications, services, internet