Management consultant Peter Drucker said: “There are only two things in a business that make money – innovation and marketing, everything else is cost.” Is business actually starting to believe this and what are the implications for social business?
First, a definition: social business is strategically engaging customers/ employees/ vendors in dialogue in areas that do not relate directly to sales.
Why? To make the work that a company does:
a. More efficient
b. More aligned to customer and employee goals.
Easily said. Doing it is an extremely difficult and complicated process that requires a company to break down walls and existing processes, invite customers inside to an extent that is likely unprecedented, and change relationships with customers and suppliers. No small order, and not something to be done quickly or easily.
Social network information during selling is being credited with better deals closing faster in numerous cases. Despite this, there have been a few pivots crediting the death or evolution of social business including the Dachis Group being acquired by Sprinklr.
So: dead or alive? And the more practical question: what does a social business actually look like?
Social business is far from dead. Business is experimenting with customer engagement in areas like content, marketing, product development, support, and evangelism more than it ever has before.
There is an evolution underway, but it’s an evolution, not a revolution. Social business has been slower to take hold than expected (partly because the term itself is uninspiring and unevocative; what business is not social?). The reality of what a social business does could not be further from uninspiring and unevocative, but it does remain a mystery to most: what does a social business (or what we prefer to call a networked business) do differently?
What is clear at this still early stage of social business: the value of the approach is there, the technology pieces are in place, and it’s slowly moving toward inevitability. The benefits and cost savings to companies are just impossible to ignore. A mature ‘networked company’ is incredibly efficient. Companies like Jive and Lithium are proving this. When the walls come down in a strategic, structured way, greater efficiency is created:
⇒ Product missteps are either corrected or abandoned earlier.
⇒ Customers with technical problems support each other in online forums.
⇒ Stakeholders test products early and help craft compelling marketing messages that people like them will respond to.
⇒ Employees, partners, and vendors publish a post and share information about new product launches to their networks and generate awareness, conversation, feedback and leads.
In its ideal state, (jargon alert!) the company becomes a self-sustaining organic marketing-driven organism governed by a customer engagement cycle:
⇒ When companies create communities and word-of-mouth programs, these generate powerful, useful content that is then packaged into content marketing or incorporated into user support/UX/CX.
⇒ That content is then distributed by the communities: employees, customers, and partners, whether for marketing or product/service support
⇒ Those leads generate new customers who then participate in feedback programs
⇒ A very efficient virtuous marketing cycle is created that is also largely self-sustaining: optimization is still necessary, but marketing operations and communications elements, once set up, require less strategic focus and more engagement, communication, analysis and program optimization.
Today, starting even a pilot requires two things: a maverick leader’s appetite for fundamental structural change, and a willingness/ corporate structure to support a marketing approach fuelled by data-driven stakeholder engagement. Customers and other stakeholders become the buyers, the creators, the vetters, and the distribution method. When this happens, true social business exists. It’s not marketing utopianism, it’s marketing pragmatism if you’ve seen it in action. We’re not there yet, but we’re not far off.
What are the implications of the networked company for marketers?
⇒ Many marketing programs will gradually move in-house.
⇒ Generalists will give way to consultancies vs agencies who run programs, and big behemoth and small boutique agencies will dominate as disintermediation increases
⇒ Customers will increasingly be managed on a lifecycle marketing and not a transaction basis. This is another inflection point for agencies: ad agencies will have to learn to work beyond the campaign and PR firms will need to become more adept with data to compete with increasing amounts of data-driven in-house work.
In short, social business is not only alive but thriving. The value and technology are there, but outside of some forward-thinking startups, most businesses haven’t figured out how to implement it as part of their wider marketing strategy. There is huge potential (and profits) for companies who can figure it out.