Saturday, November 19, 2011

We Are Living In The Social Era

In the last century, we have seen the change from agriculture to manufacturing, manufacturing to technology and presently in my opinion technology to social. We are at the start of the social era where digital Darwinism has caused the evolution of consumer behavior when society and technology evolve faster than their ability to adapt. The millennial generation represents one-quarter of the American population. 70% of millennials feel that once they find a company or product they like, they write about their positive experience online with companies and products online. On the flipside, 39% will share negative encounters. Because of this, customers are in the driver's seat and new approaches, tools and skills are required for companies to stay competitive. Due to this change, nothing today is too big to fail or too small to succeed. This has become a major game changer in all aspects of business. Some will fail, some will thrive, however all businesses will have to evolve to this new environment or risk termination. Organizations such as Tower Records, Borders Books and Music, Ann Arbor News and Blockbuster Video to name a few, that once appeared invincible to any market conditions have all fallen to the social era and are now terminally ill or deceased. The days where great companies, products and services organically connected with their markets are numbered. Social media changes the way companies operate internally and externally. In this highly competitive attention economy, where attention is a precious commodity, businesses must purposefully connect with connected consumers and deliver exceptional experiences. How do businesses then survive in this new era?

Before the invention of the internet, people relied on mainstream media such as newspapers, television and radio for news and entertainment. When I was growing up, I remember that the television will be turned on in the the morning and it will stay on until everyone in the family went to bed. The television used to be a device in the living room where my family could spend quality time gathering around to watch movies, cricket matches and the news. Everyone seated in the living room was focused on one medium, the television. Fast forward to my home today, if everyone is at home and we are enjoying "quality" time together in the living room, it is highly likely that each person is tuning in to his or her own medium or even several media sources. My brother is likely to be catching up on the latest episode of his favorite show that has been downloaded onto his iPad while simultaneously writing on his friend’s Facebook wall. My mom will probably be checking her email. My wife will probably be shopping for new clothes online and I will probably be surfing the web, posting a few tweets, checking my LinkedIn account, updating my weekly blog and asking myself why have we purchased a 46 inch flat screen television for all of us to enjoy together. Indeed media choice is providing consumers with access to the information that they want, when they want, 24 hours a day, 7 days a week.

It is obvious that social media has changed the way we interact with one another and get about our daily lives. An unhappy customer can now write a nasty review online talking about their bad experience with a company. Other customers that feel the same way will probably do the same thing. Now you will have a community of unhappy customers sharing their negative experience online and this may potentially ruin the reputation of your company and chase away potential customers reading these reviews. The exact opposite can also happen where positive reviews can attract new customers to the business. This new formula of one plus one equals to many has the potential to enhance or destroy a company’s reputation. A company can no longer get away with consistently offering shoddy products and services or ignoring customers concerns and needs. Organizations need to capitalize on this new trend and understand how they need to change the way they operate. They need to incorporate social media into their organization to help them stay connected to their customers and it takes a leader and culture of engagement to navigate this market in transition. A great example of an organization that does this, is Dell.

Back in 2005, a reputable media thought leader Jeff Jarvis, published a blog post that expressed his hatred for a company that he felt had failed him. His post titled Dell hell: Seller beware” reached his big group of followers and now the reputation of Dell was left hanging. He concluded the post by saying, “You know what: If Dell were really smart, they’d hire me to come to teach them about blogs, about how customers now have a voice; about how their customers are a community- a community often in revolt; about how they could find out what their customers really think; about how they could fix their customers’ problems before they become revolts; about how they could become a better company with the help of their customers. If they’d only listen.” What did Dell do? They listened. But they did more than that; they adapted. Dell established a “Social Media University” and is currently training more than a thousand employees to be the  face and voice of Dell in Social Environments. In doing so, Dell led the way for other businesses to follow, learn and adapt. Dell’s new adaptive business plan wasn’t simply about social media; it was about improving customer experience through better products or services. As Dell’s CMO, Erin Nelson says, “To be successful in a highly competitive marketplace, companies need to truly and transparently understand the full range of customer’s experiences”. A few years later, Jeff Jarvis was blogging about Dell again. This time he was singing praises. Companies need to understand  that we now live in a recommendation based economy where consumers can bypass traditional resources, looking to their peers to support them in making decisions about everything under the sun.

So what makes social so addictive? Harvard Professor of Psychology Daniel Gilbert says in his book, Stumbling on Happiness, that the true essence that is responsible for a human being’s happiness is social activity. It’s no wonder Facebook, Twitter, Youtube and the iPhone that was created in the last 5 years have become so successful in a short period of time. Facebook, Twitter, Youtube and Apple have made a huge impact in our lives. To provide you with some facts, Facebook added 200 million users within a year, Twitter users averages 27.3 millions tweets a day, 48 hours of video is uploaded every minute on Youtube and iPhone application downloads hit 1 billion in 9 months. Customers are connecting with each other online and organizations need to join their conversation or be left out. In order to succeed in today’s climate, organizations must first compete for attention through the hearts, minds, and words of the social consumer.

In today's' social era, organizations need to find better ways to listen and connect with their customers. As the old saying goes, “People do business with people they like”. Social media provides an answer to this. Most organizations are afraid of change and they are not comfortable with the idea of going social. In fact, by understanding how businesses should be managed, they can better understand the benefits of going social. It is that simple; let us go back to basics.  Brian Solis states in his book, The End of Business as Usual, businesses exist because of customers. Customers have specific needs and wants and look to businesses to fulfill them. Those needs are either satisfied or they’re not and products and services represent varying levels of value to customers in addressing those needs before, during and after the sale. What he is basically trying to say is that organizations need to become more customer-centric in order to provide better products and services as it is difficult to see the customer or empathize with them if organizations are too focused on a spreadsheet.  Take BP for example, here’s a company that didn’t get it.

On 20 April 2010, the explosion of Deepwater Horizon killed 11 men working on the platform and injured 17 others. Most importantly, 200 gallons of oil was released into the ocean making this oil spill the biggest in US history. During this period, the cries of anger echoing throughout the social media environment intensified. As the saying goes, news no longer breaks, it tweets. Angry citizens started spewing hate on Facebook, Twitter and blogs. An Environmental Protection Agency administrator Lisa Jackson, even tweeted on the issue saying, “Someone said BP must not be let off the hook. I agree.” Another Tweeter promised, “You can rest assured that I will walk before I would even buy a gallon of your gasoline.” Instead of being open and upfront about the oil spill in the Gulf, the company misread the social environment in which it operates and took a “less is more” approach. They didn’t reach out to ask for help when it became clear that BP didn’t know how to fix the situation – despite the fact that thousands of people would have jumped in with assistance. In fact Dwayne Spradlin, president and CEO of InnoCentive, launched an oil spill challenge to source solutions to help BP solve the problem. Thousands of solutions were submitted by experts online; oil spill recovery experts, chemists, and construction engineers. However BP turned a deaf ear. Thankfully the spill has been stopped. During that period, its stock price fell from $59.88 to $27.02.

There are a few lessons that we can learn from these examples. Firstly, companies need to become more transparent in dealing with the public. Companies also need to have an active team of “listeners” that can respond immediately to comments from the public. This is where social media comes into play. Social Media allows for real time responses and it also allows companies to develop real time strategies based on customers’ feedback. Technologies have changed how companies are operating. Customers have more information on companies, and companies have more information on customers. With this much transparency, a company success will be increasingly dictated by those that can use social media and technology in the smartest way possible to better understand what is happening with customers and competition. I will leave you with a video on the launch of Dell's Social Media Command Center

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