It used to be that a business told it’s customers what they did and how they would provide a product and service. There was a time when customers had limited choices and accepted what was offered. And until the explosion of use of the Internet, dissatisfied customers had few options available to them to express the winter of their discontent. The Internet changed all that through the rise of social media and interactive sites such as blogs. For the first time in history, it became easy to search for anything and to connect with anybody and to give an opinion which was not bound by the constraints of geography or power. As a result, the wisdom of the crowd became the law of the land as individual power threatened to usurp the power of the organization. The power of influence became the authority. Most organizations and businesses today understand that something fundamental has shifted and that a conversation is taking place which they must be aware of and perhaps participate in, but many are confused about HOW to do so and if the ROI will make the
As many businesses and organizations struggle to understand the world of social media and balance their investment of staffing time and reputation management online, they face a number of common struggles. These include: The paradox of the Gift Economy…how does one make money when you’re giving away stuff for FREE? The loss of control…not having full control over the medium or the message about and around your product. The lack of a Comprehensive Plan…failing to think about and plan a coordinated strategy The Inability to track ROI…not determining ahead of time the meaning of success. A mis-understanding of the world of Social Capital…in a sense, the social media world is a parallel universe, running alongside the traditional marketplace. This doesn’t mean that there is no intersection…there is, however the process of intersecting effectively must be appreciated and embraced to be truly effective. It requires a long –term strategy, not a quick do it now, get rich quick approach.
Let’s start with a look at the last bullet point, the misunderstanding of the world of social capital. First it is important to think of online engagment within the context of community. Just like in the traditional world, there are certain expectations about that world. There is an expectation of norms of behavior and rewards and punishment. This exists in the online world as well. A mis-understanding of community guidelines and accepted modes of participation can be costly to an individual or a business. And this does translate into real world economics in the potential for missed opportunities for engagement and business referrals. According to Tara Hunt in her book, ‘The Whuffie Factor’, the term Whuffie comes from the world of science fiction. The term ‘Whuffie’ was coined by Cory Docttorow, the creator of the popular Boing Boing blog to describe social capital in his futuristic science fiction novel Down and Out in the Magic kingdom. In this futuristic world, all other currencies such as the dollar, yen and euro disappear and only the whuffie is used. In this futuristic world, whuffie is stored on your person and is used to pay for day to day needs and services such as renting a hotel room or car. Furthermore, anyone can ping your internal computer to figure out how much whuffie you have in the bank. Tara defines Whuffie as the residual OUTCOME, - the currency of your REPUTATION. You lose or gain it based on positive on: Positive or Negative Actions. Your contributions to the community What people think of you. Every real world business appreciates the value of a good reputation and strives to create goodwill and repeat business through advertising and the delivery of products and services. Every traditional business suffers when their actions are perceived as negative and when they are deemed to be delivering less value to the community than what they charge. Every traditional business suffers when they loose goodwill. The online world simply magnifies these tangible results through an intangible medium.
How do you make money when you give stuff away for FREE? In his radical book, ‘FREE, the Future of a Radical Price’, Chris Anderson who wrote the best selling book, ‘The Long Tail’ and who is also the editor in Chief of Wired Magazine talks about WHY businesses may make more money giving away stuff than trying to charge people for things. According to Chris, ‘the costs associated with the growing online economy are trending toward zero at an incredible rate. Never in the course of human history have the primary inputs to an industrial economy fallen in price so fast and for so long. For example, in 1961, a single transistor cost $10, now Intel’s latest chip has two billion transistors and sells for $300 (or 0.00015 cents per transistor) In the world of real estate, we have watched the deluge of information grow from simply giving listing information to the provision of a robust interphase of community information, demographics, and knowledge about all aspects of the real estate process including information about homes which are currently NOT on the market. Trulia and Zillow are PRIME examples of this phenomenon. With thousands of visitors every day to their websites which deliver information that the public is rabid about, these sites are beginning to cash in. Follow the money…Zillow has announced substantial investor capital at a time when most in the world of traditional real estate are experiencing problems with financing.
The Loss of Control is a very real issue for organizations. At a time of plummeting profits and a rapidly declining bottom line, managers are not naturally drawn to anything which further increases their sense of vulnerability. But perhaps the old adage says it best, ‘it’s foolishness to continue doing the same thing and expecting a different result’. A controlled economy has in some ways always been a myth. Every manager knows that control was more a matter of putting out fires and anticipating crisis than necessarily stopping anything. We’ve never been in control. Yet somehow mankind manages to adapt, survive and even thrive. The laws of nature and it’s ability to replenish it’s resources are a wonderful example of the power of creative chaos.
Utilizing the wisdom of strategic planning can yield invaluable information which creates greater potential for good results. Start small….It’s not wise to try to be everywhere at once. You can only be effective in a few places at a time particularly at the beginning. Spend time in thinking about who your clients are…what they consider important and what medium is likely to work well for them. Invite a Test Group of your most Loyal and Enthusiastic Supporters for the Test Drive…Ask them what they like and don’t like about what you’re currently doing. And imbue the process with real power. Be willing to change in response to what people say. Don’t just give lip service. This process will help you develop LEADERS for your online community. Their support can be critical to your success with the wider group. Create a Plan to drive Traffic to the Community…offer incentives, place links in highly visible spaces on your website, include links to community forums on e-mails, cross-link on blog posts, integrate it into all aspects of traditional advertising and media. Engage the audience when they come by conducting polls and responding to comments. There will be limited success in building an online community on ANY platform if you are absent from the discussion. Allow participants who contribute value to your platform to build up THEIR reputation. This can be done by giving badges of recognition or providing means by which people can be awarded expert status through their on-going valuable, positive support to the community. REWARD the types of behaviors you want to see more of. Lead by Listening…People will tell you what they want and will respond if they truly believe that you are listening. Involve them in improving the community.
ROI aka Return on Investment has been one of the most difficult elements for most businesses and organizations to grasp as they contemplate their foray into this new virtual world. Although the lines are murkier and traditional Newtonian thinking does not necessarily apply, it does not mean that there is not a return on investment or the potential for LOSS in the choice to NOT invest. Perhaps, the best know example of an industry which chose NOT to invest when the online world arrived in droves at their doorstep was the music industry. When milllions of users started sharing files online rather than buying CD’s the music industry decided to fight and sue. Today, CD sales continue to plummet and file sharing has not stopped despite the real threat of legal action. The losses have been staggering, but there are signs that the industry is beginning to understand what it should have been doing…reaching out to it’s customers rather than alienating them. In the book the ‘Whuffie Factor’, Hunt shares a story of one musician Coulton who has built his entire career using social networking tool. Millions of people are driven to his site through fans who post videos of his music on Youtube. He gives away his music for FREE and allows Creative Commons licensing of his music which further increases the distribution. AND…he sells stuff…merchandise, virtual gifts which include bananas and monkeys as well as accepts donations from those who want to support his work. What’s really interesting is that people ALSO buy his CD’s.
This statement by Coulton, the musician blew my mind. But it reflects a significant element of the thinking of many Gen Y’s and Gen X’’ers. “ Security is your greatest enemy. You need to be as friction-less as possible. Coulton explains while describing all the serendipitous ways his music has been discovered that one he removed all control and instead made it incredibly easy for people to take it and use it in various ways. Is it possible that our tendency to be protective and not share easily might actually be costing us money and the potential for greater influence in the future emerging marketplace. A future in which the capital currency is not authority, but rather influence? GROUP EXERCISE: Let’s stop for a moment and let that thought sink in… What are the possible Strengths of this approach to communicating with people? What are some of the Threats? Are there Hidden Opportunities? Where are our Hidden Weakenesses.
Getting WHAT this is all about it key! It’s about the Relationship…relationships which exist because of investment and involvement in community through networking. Individuals and organizations need to understand this on a cellular level. It’s not about PUSH marketing, the practice common in print advertising and the Web 1.0 world in which we TOLD people what we wanted them to know WHEN we wanted them to know it. It’s about providing value and engaging. You Engaging Others…YEO as Jeff Turner of Zeek Interactive puts it. Take a look at your posts on social media sites and blogs…Are people responding & if so WHAT and HOW are they responding. Are your postings interactive? Are you pointing people to additional sources of information? Are you giving CREDIT to others for their contributions and SHARING them with your followers. This is how you build whuffie…by becoming the center spoke which connects others to each other and to the information they seek.
Remember the SCREAM? I’m talking about the scream heard around the world, the scream by Howard Dean which is widely acknowledged as the one which ended his political aspirations to become the next President of the United States in 2004. LET’S WATCH…. This is an example of someone who adapted early to the online medium but didn’t fully comprehend the power of the conversation which was about to take place or how incredible the AMPLIFICATION of a few seconds would become in his fate as a Presidential candidate. Howard Deans’ campaign was essentially cut short by the campaign allowing a message to be amplified in a negative way without being fully aware of the implications or monitoring and engaging in the online forum to counteract or explain/spin their version. GROUP QUESTION: Do You have some thoughts about what you can put in place to respond to a negative response? How Quickly do you think your response should be? Why?
Although Obama was not the first Presidential Candidate to utilize online mediums during the campaign process, he was certainly the most successful. One thing which casual observers may not understand is HOW the campaign managed different platforms on the Internet. They understood the importance of creating messages which would be appropriate for different communities that they were trying to reach. For instance: Flickr was used to post campaign pictures & intimate moments which could be shared easily and served to humanize the candidate and give him increased visibility and familiarity. Facebook was used to run campaigns and to promote events through Facebook groups many of which were manned by volunteers who organized events in their own communities, drummed up support and dollars. Youtube was updated regularly with ads and campaign addresses; in addition many individuals created their own Youtube videos to support the campaign. Ustream.tv was used to live stream events, rallies and speeches 24 hours a day so folks could tune in at anytime which fit their schedule. They also gave their supporters direct access to lists of people to call & access to promotional materials to wear. They created a variety of mobile applications and made it easy for people to share with others The provided easy access to information so their followers were armed with responses to objections ESSENTIALLY, THEY TRUSTED THEIR SUPPORTERS WITH THEIR MESSAGE
In Closing, I’d like to talk briefly about 5 Take-Away or Action items which can be used to successfully Maximize Social Media Relationships. These ideas are weaned from Tara Hunt’s book the Whuffie Factor, gleaned from the book the Groundswell and have also been mentioned in the Harvard Business Review’s website, the day after the election in 2009 by Umair Haque. They are: Turn the Bullhorn Around ~ Listen to Engage Take the time to craft a message and medium for your Target Audience Become a part of the Community ~ don’t just broadcast to it. (Decide WHERE you want to be & then be there, engage!) Create amazing experiences ~ online and off-line; give your audience opportunities to meet, engage and interact. Embrace Creative Chaos, Seek Elasticity and Resilience…Minimize Strategy.
Success can be defined in many ways. One of the biggest challenges in defining success in social media is that traditional rules and formulas cannot compute intangibles. For instance, simply measuring how many people get a piece of advertising material does not tell you anything about what they think or about IF their response would have been better if the ad had been delivered in a different way. Yes, there are tangible measurements which should include benefits derived in pure economic terms. For example, I track the leads and closings which have resulted from my blogging efforts. Over the past years, that number is well over $100,000 in gross closed commissions. It is not unusual to have people contact me after reading my blogs or in response to a posting on Trulia. But, this is not the only thing which should be tracked to determine success in social media forums and relationship marketing. Social Capital is probably best measured by the HEALTH of Relationships. The New Metrics include items like feedback and engagement which results in tangible action. The New Metrics include words like PASSION and INSPIRATION…these go way beyond simply buying something to use and consume it. Imagine for a Moment, an Association where the MEMBERS were PASSIONATE about their association. An association where the staff were members of the team, not just folks performing a function or a job. An association where members were continually sharing their best ideas and benefiting from the best practises of others. An association where members compelled others to join because being a real estate agent here was an awesome experience…personally and professionally?
There is a sea in the world which exchanges nothing…no water or life comes in or out. It is called the Dead Sea. Although it’s waters are rich with mineral deposits, nothing LIVES in this sea, because it never gives of itself, it is dead. As a group of professionals, our industry faces a critical turning point. Every crisis affords unique opportunities for change and transformation. The real estate crisis is no exception. Real Estate agents have always been at the fore front of helping individuals and families successfully navigate the tumult which surrounds the process of transition. At no time has the skill of leading through crisis been more evident than in the current economic crisis. I think that the resilience and generosity of spirit which has allowed us to survive carries within it the power to transform not just ourselves but our engagement with the people we serve. At the end of this crisis, no other profession would be ‘been there’ so to speak in the same fashion that we have and will continue to be. We can use this as an opportunity to expand the Culture of Generosity to create an environment which: Allows ideas to be shared more openly Creates more collaboration between all parties (individual members, brokers, community at large) Encourage each other Reward behaviors which inspire and renew energy and insight rather than deplete valuable resources Mentor a new generation of leaders and members to provide true value and exceptional service Use our resources for Social Good…remembering that all living things must give and be a part of a continual process of exchange in order to truly thrive.
Social Media Conversations for the Marketplace
Relationship Marketing and ROI for Businesses & Organizations
Engaging the Conversation… <ul><li>Whether you like it or not…whether you know it or not…a conversation is taking place behind your back! </li></ul>
Challenges to Effective Relationship Marketing… <ul><li>The Paradox of the Gift Economy… </li></ul><ul><li>The Loss of Control </li></ul><ul><li>The Lack of a Comprehensive Plan </li></ul><ul><li>The Inability to Track Return on Investment </li></ul><ul><li>A mis-understanding of the world of Social Capital </li></ul>
What’s the Whuffie? <ul><li>“ To succeed in this Web 2.0 world, you have to turn conventional wisdom on its head and become a social capitalist. </li></ul><ul><li>A social capitalist is as ravenous as corporate titans like John D. Rockefeller and Bill Gates for success, but the coin of the realm is different . People are on social networks to connect and build relationships . </li></ul><ul><li>Relationships and connections over time lead to TRUST, which is the key to capital formation.” </li></ul><ul><li>Quote from the book “ The Whuffie Factor “ by Tara Hunt </li></ul>
Strive to Change the Nature of the Sea…Not the Direction of the waves *Share Ideas *Collaborate *Encourage *Reward Vision *Mentor Leaders *Do Good
Thank You for Participating… <ul><li>Sources for this presentation include: </li></ul><ul><li>‘ The Whuffie Factor’ by Tara Hunt </li></ul><ul><li>‘ Free, the Future of a Radical Price’ by Chris Anderson </li></ul><ul><li>‘ The Groundswell’ by Charlene Li & Josh Bernoff </li></ul>