Magazine Spring 2008 Big Idea: Social Business

Harnessing the Power of the Oh-So-Social Web

People are connecting with one another in increasing numbers, thanks to blogs, social networking sites like MySpace and countless communities across the Web. Some companies are learning to turn this growing groundswell to their advantage.

Josh Bernoff and Charlene Li Reading Time: 22 min 

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Social Business

Social business research and more recent thought leadership explore the challenges and opportunities presented by social media.
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Companies are used to being in control. They typically design products, services and marketing messages based on their own particular view of what people want. Keeping up with customers has meant conducting research on their needs and test marketing new products and services. Because the balance of power has favored large corporations with a lock on manufacturing, advertising, distribution and other operations, the term “customercentric” was mostly just a buzzword.

Now, though, many customers are no longer cooperating. Empowered by online social technologies such as blogs, social networking sites like MySpace, user-generated content sites like YouTube and countless communities across the Web, customers are now connecting with and drawing power from one other. They’re defining their own perspective on companies and brands, a view that’s often at odds with the image a company wants to project. This groundswell of people using technologies to get the things they need from one another, rather than from companies, is now tilting the balance of power from company to customer.

To understand the dramatic implications of this shift, consider what happened in 2006 when Brian Finkelstein, a law student, was having trouble with the cable modem in his home. A repairman from Comcast Cable Communications Inc. arrived to fix the problem, but when the technician had to call the home office for a key piece of information, he was put on hold for so long that he fell asleep on Finkelstein’s couch. Outraged and frustrated, Finkelstein made a video of the sleeping technician and posted it on YouTube. The clip became a hit, with more than one million viewings, and to this day the image continues to undermine Comcast’s attempts to improve its reputation for customer service.

Participation in Online Social Activities Around the World

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Comcast is not alone. Another popular YouTube clip contains dialogue between a customer trying to cancel his subscription and America Online. What should have been a simple conversation becomes a battle as the AOL service representative stubbornly persists in trying to retain the customer, sorely trying his patience. Finally, the customer says, “I don’t know how to make this any clearer for you: Cancel the account. When I say ‘cancel the account,’ I don’t mean help me figure out how to keep it. I mean cancel the account.&

Topics

Social Business

Social business research and more recent thought leadership explore the challenges and opportunities presented by social media.
More in this series

About the Authors

Josh Bernoff and Charlene Li are vice presidents and principal analysts with Forrester Research, a technology and market research company based in Cambridge, Massachusetts. They are also the coauthors of Groundswell: Winning in a World Transformed by Social Technologies (Harvard Business School Press, 2008).

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Comments (5)
Paddu G
While over two years have passed after this article was written, the overall direction of marketing remains the same: leveraging social media channels. Obviously some tools and granular tactics might have changed. However, when more and more companies get on to the social media bandwagon, this channel will also become crowded. And consumers have to be disrupted for marketing.

Take the case of Dell or Comcast. When blogs and twitter were new, someone at the top took notice and addressed the issues. Imaging millions of their customers hitting the blogs and twitter! If they cannot service a customer through a well equipped service center, they cannot service them through social media too. It is a matter  of time before they get overwhelmed. In fact, already some companies have started fighting their unsatisfied customers when they publish unwanted comments on blogs!
Phill Barufkin
Social media is another marketing tool and should be treated as such. So, beyond what was talked about, the same type of strategic rigor and marketing planning that is applied to any communication program should be done so for social media to most effectively advance business.

Phill Barufkin is a strategist, planner and researcher who works with businesses to deploy integrated marketing programs.

- Posted By Phill Barufkin
Daniel Roberts
It's interesting to me to see how short social media falls in so many ways. Even if you go through the ever popular socialnomics video and find the sources, you'll see how much of that was embellished.

Not to say social media doesn't have it's business uses. I use it constantly to stay in front of people I already know and to make new connections. It's just not the magic bullet that it is often made out to be.
Phill Brufkin
Social media is another marketing tool and should be treated as such. So, beyond what was talked about, the same type of strategic rigor and marketing planning that is applied to any communication program should be done so for social media to most effectively advance business.

Phill Barufkin is a strategist, planner and researcher who works with businesses to deploy integrated marketing programs.
connectme
One of the first social applications was an experiment by an Oklahoma cable operator in the 70s, which had to decide which football game to air. What started as a simple question took on a life of its own, as people called in to make the case for airing one team over another. 

This didn't go unnoticed - Warner executives at a little-known company called QUBE took community interactivity to another level a few years later with their vision of interactive TV. QUBE was a demand generation channel: you received a television event embedded with multiple opportunities to interact at different levels of involvement. Just about every television commercial today ends with a call-to-action; unheard of in the days of QUBE. 

Twitter, not Facebook, is a purer implementation of a demand generation channel. Facebook does many things well, but Twitter is unique in its ability to be a vital part of the experience whether going to a conference, traveling, or listening to a song. 

Mark my words: you will still need media to "interrupt" people out of their daily reverie, with the ability to "drill down" or "telescope" into other behaviors, as per Charlene's POST methodology. What will change will be the economics of interruption, and this is where Twitter beats web-based social networks. 

After all, the uber-precise targeting capabilities of Facebook are not an efficient use of a brand's media budget: there are only so many ways to reach a mass audience even if there were proven, automatable targeting capabilities. In comparison, it's easy to find and influence like-minded followers in Twitter as evidenced by retweeting, Twitter's ability to rapidly coalesce and evangelize a meme. 

As always, the marketer's challenge is to find environments that are used by a sufficiently mass audience for daily activities, where advertising messages are a welcome part of the flow.