Dare I be so bold to say it, Social Media is not a business model.
I struggle with the resistance of business owners still today, hanging onto old ways of doing things, trying be in control, running around in circles trying to keep up, business has changed / is changing to where you must deliver your product or service to your customers, if you don’t, they’ll click and be gone. It wasn’t long ago when you had to go to the store, we used film for pictures, we no longer need a land-line, and kept current reading newspapers, now we just have to make a few clicks on a mobile device!
Customers are taking away the business owners power, they are choosing how and when, and how much they’ll pay. This has very little to do with Social Media, it does have everything to do with how business really is, and eventually you will either embrace it, or continue to resist it…either way, you’ll have to change how think about your customers, and how you run your business. Sure there will always be certain types of business that need manual labour, but many of those jobs, as much as you don’t want to believe it, will be lost to automation, this technological change will be devastating to the families relying on those jobs.
This has very little to do with Social Media, it does however, have everything to do with The Open & Free Business Model!
Social Media is NOT a business model, you don’t plug your business into Social Media, you plug Social Media INTO your business.
It used to be, the only way to win at acquiring customers was to buy as much advertising as you could afford. The more you spent, the higher the results. That is and was the traditional advertising model that worked for a bricks & mortar business. Today the game has changed, yes traditional ways still work, not because it’s effective, because it’s what older generations prefer it, and they still have the money.
It’s easy to reach a traditional buyer, just run enough ads on traditional advertising vehicles, and you’ll get their attention. Today the customer with money is getting younger by the minute, and we need to market to them differently. We have to make offers that make us extremely uncomfortable. It used to be, if you wanted to get the greatest reach, you ran radio & television ads, newspaper has never had the same reach. You could run 30 second ads on radio for $30 a piece, but to get the frequency for it to be effective, you had to run more than 3 spots a day. The minimum would be 10 spots a day, because the life span of a radio ad is much like a Tweet on Twitter, about 20 minutes. So to have a successful customer acquisition campaign you had to spend significant amounts of money. The same held true for television, but at a much higher cost, not to run the ads, but to make the ad. Customer acquisition campaigns can also be considered branding campaigns, but they are different.
Today we have the Internet, we can reach more people via the NET than we could with radio & television together, for FREE! I’m not telling you anything you don’t already know, I am wondering why there is still such resistance to it. The resistance has the power to kill your business, and you the business owner must guard against it, not succumb to it.
The challenge with having such great reach on the Internet isn’t the cost, it’s being found, and being heard. Hence, we have a new kind of advertising vehicle like Google, Yahoo & Bing. These powerful search networks have really just adopted the traditional way of advertising for the Internet. If you want to be found, land on the first page, you now have a sufficient budget to have that desired result.
Today you can purchase qualified traffic, which, if you speak to them the right way, will become newly acquired customers. The same challenge you had with traditional mediums, holds true with digital ad networks, you need to dedicate resources to get the desired results you’re looking for.
The secret to customer acquisition today, is by leveraging and Open & Free Business Model, where free is the driving force. Like the resistance, free has the same problem, for reasons unknown to me, entrepreneurs and business owners can’t seem to wrap their brains around free. We understand loss leader concepts, but not free, I suspect the fear of giving something away and not getting paid is far greater than we would like to believe.
Companies that have figured out how to use free, have also figured out how to generate revenue because of it. Companies like Google, Spotify, Skype, Vimeo, Twitter, Evernote, Grooveshark and many more. These companies have proven free works, and they have mastered acquiring customers, they have mastered list building to the 9th degree. It does work, but we seem to have more reasons not to use the model. Whatever the excuse is, it’ll work.
You want to get more customers, give them something they want….for free, and then figure out how to monetize your new customers. The old business models are in the genre of win-lose, the open and free business model is about win-win, where everyone benefits. Mater giving products and services for free, and you will have an entirely new market to sell to. The concept makes sense, it just sounds and feels foreign.
FREE is not the enemy, free is your best friend, learn to embrace free, figure out where free fits in your business, because free is the secret to customer acquisition.
- The Definition Of The Open & Free Business Model (owengreaves.com)
- The Future Of Business – Build Small Loyal Communities (owengreaves.com)
- The Future Of Business – Create. Differentiate. Deliver. (owengreaves.com)
Far too often business owners state that everyone is their customer, it’s wrong, it’s just not true. Even if it were true, how could you possibly serve them all, and more importantly, what services & products would you know to provide everyone? Plus, what would marketers do if they couldn’t target market your products & services.
Typically, those business owners reveal their greatest weakness when making that claim. Firstly, they clearly do not understand business, secondly, they don’t have a business plan, and thirdly….they lack vision. I couldn’t speak more bluntly now could I, and I just gave you three reasons : )
If there is one thing I preach more than any other fact, business is and has changed, and you must change the way you think about business, and more importantly, how you think and see your business. Somehow we have to get away from thinking in terms of an exchange before payment, incorporate free into your business model, and how to be satisfied with less customers. That’s right….less!
Kevin Kelly wrote an amazing piece on 1,000 true fans, it’s really a tribe model in my head, but his theory is sound, and frankly is the future of business. His description of a fan is a thing of beauty, taken from the article on his blog:
“A True Fan is defined as someone who will purchase anything and everything you produce. They will drive 200 miles to see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res version. They have a Google Alert set for your name. They bookmark the eBay page where your out-of-print editions show up. They come to your openings. They have you sign their copies. They buy the t-shirt, and the mug, and the hat. They can’t wait till you issue your next work. They are true fans.”
Now you might have an idea where I’m going, but I doubt it, I’m hard to follow sometimes. The question to ask yourself is, do you have fans / customers as described by Kevin Kelly? If you do, it won’t be hard to tell, if you don’t, you are probably wondering how to get those fans, and where might they be. If you did a business plan without knowing this description, of your preferred customer (fan), you would still be one degree off true north. Your plan would be flawed, because it would be based on old industrial age thinking, it would be based on what you know, and what you were taught in school. But that’s another topic.
Let’s stick with Kevin’s idea of a 1,000 true fans. In Kelly’s model, every true fan spends $100 per year on you whatever you produce. That means you will generate $100,000, that’s a decent pile of dough isn’t it. So there is your equation, 1,000 true fans x $100 = $100,000!! So what’s the problem?
The problem is not the equation, the problem most of the time is you, you get in the way, you begin to think too much, you still don’t understand the why. My workshops, public speaking engagements, my blog, and my book, is all about why you should change the way you think about your business. Most business owners aren’t paying attention to the why, mostly because they are paying attention to the details of paying the bills, covering payroll, and making sure there is stock. So where will you find the time to see what’s really going on, what’s changing, and how to adopt what’s changing? The stock answer, and I hear it every day, ” I don’t have time”. If that’s true, you probably won’t be in business in the next 5 – 10 years, because the way business and the consumers are changing, you will be forgotten, out of site, and out of mind.
The digital platform we call the Internet, is a game changer for sure. The real game changer has nothing to do with you the business owner, it’s the way people have shifted their buying patterns, from what to how. More importantly, these people formerly known as consumers want more control of your offerings, they want to decide, and they’re already talking about your competition. Why? Because you aren’t thinking like the new consumer, and….you aren’t listening to what they want.
There are over 2.2 billion users on the Internet, and another 3 Billion coming in the next 5 years, I know there are 1,000 true fans for your niche, now do you have time to find your 1,000 true fans? If not, hire someone who can show you how, someone with the vision to see the patterns of a changing consumer(s). You already know someone….wink, wink ; – )
Olivier Blanchard has 5 basic rules on the value of a follower, a fan, and a like, in simple terms, it’s based on the amount of money they spend on your product or service in a given calendar year. The potential of a follower and fan, that is something entirely different, and that equation has yet to be determined in my humble opinion. I think we are very bad at determining the potential value of a follower, a like, or a fan…but know this, it’s not linear, it’s exponential.
If you only need 1,000 true fans, “Everyone”, is not your customer.
Click on this link for the complete story on Kevin Kelly’s idea of 1,000 True Fans
Also read Olivier Blanchard’s work on The 5 basic rules of calculating fan/like/follower value.
The Future Of Business – The Consumers New Found Power. It’s been said forever, the customer is always right. So why doesn’t business believe it, why don’t they practice it? Greed? Probably. I as a consumer, more than anything want accurate information, pure uninterrupted support, ease of access, and above all, the freedom to make a decision without being coerced, or sold.
It’s also been said, that a customers experience with a brand (product or service) is what determines the life span of a business. If it’s good, you get another day. If it’s bad, your days are numbered, it’s really that simple. It’s called Word Of Mouth, people talk, and now they talk to millions at the stroke of the keyboard.
The future of business is like the threat of an avalanche, a business can be wiped out as quickly, and it can grow equally as fast. Why? Word Of Mouth. The Consumer has new found power, many will abuse it, that’s human nature, but many will tell the truth. It’s the truth that’s the problem, it’s harder to deal with, it’s harder to make corrections when the truth is revealed. Those who abuse this new found power will be found out, and then will have to deal with the truth, it goes both ways doesn’t it.
Gerd Leonhard has said it, I have said, and many others have quoted it, we will have to learn how to trust the people formerly known as the consumer. Why? Because they have the new found power. Whether you believe it or not, that’s the truth in a nut shell, they can and will determine the future of your business. They don’t need to qualify, they don’t need permission, they only need an opinion. You and I have absolutely no control on how they will share that opinion. As a business owner, we have the opportunity to ensure it’s a positive opinion, there in lies the rub. We have to work hard for that positive opinion, and most of us don’t want to. We want to do just enough to reach our objectives, then get out before we have to work too hard.
I can only offer this, in order to build a legacy, to build a business that makes the world a better place, you have to plan and work hard to ensure that happens. If it’s just about making money, you’re looking at the wrong metric. Money is merely a means to an end, but the legacy, the world, it wants more from you than just handing over money. The new found power of consumers wants more, and will demand it, it will force you to be accountable, you will comply or pay the price of ignoring the new found power consumers have today. Their opinion matters, and you need to pay attention to it.
And that’s why telling the truth, honesty, sound products and services that deliver, and your integrity matter, it is the foundation that will help you build a legacy, a strong successful business. It sounds corny, and it sounds like hard work, that’s because it is. If it was easy, well you know the answer to that one.
The future of business will be built on this new found power of the consumer, they will determine whether you service or product is any good, they will determine if your recommendations actually solve their problems. Plan, work hard, and deliver. That’s how you will get on the good side of the consumers new found power.
Is your business community listening? I ask the question in all seriousness, I’ve discovered the business community in my area is very much asleep on social networks. It’s not only sad, but alarming at the same time. The problem is more about marketing, or how they acquire customers, after all, everyone wants more customers right?
It doesn’t matter what market sector you belong to, most still use social networks no different than they use newspaper, radio & television, they sell till their blue in the face. Yelling their heads off and hoping you will pay attention, you will be convinced to come to their businesses and buy what they were yelling about.
I’m going to share a very small case study with you, and I am the case study. You see, I have made it known on social networks, primarily Twitter, that I am shopping for a new fridge, hardwood flooring, and that I am painting two rooms called the Kitchen & Family room. I’ve been sharing that home upgrade project to all who follow me, and of course the many in the town and area where I live. Something interesting happened, nothing!
I’m surprised for a few reasons, for one, I have one of the largest followings in my area. Two, I hold workshops and teach business owners and entrepreneurs how the future of business has changed, and will continue to change. I even teach them how to listen in social networks. Three, I do a considerable amount of public speaking, to Chamber of Commerce groups and the like, on the very topic, and the future of business. Four, I was certain business owners in my area were actually listening and paying attention. I was wrong.
I even went so far as to Tweet this:
I was, I am that customer, I’m doing household improvements, I’ve been sharing, I truly believed that a business in my area would have been listening, paying attention, and would have connected with me, but nothing. I am not only disappointed, but actually surprised. The fact that no one contacted me to do business, this had me wondering, how many others like me on Twitter (put your favorite social network here)had money to spend but businesses aren’t around to get it. Why do local businesses ignore this apparently untapped market?
I’m even more surprised when I see these social networks getting so much air play on TV, Radio and to a lessor extent newspaper. It’s like saying you don’t know Jesus, but everyone has heard about him. Yes, he is still ignored by the masses too : )
So how is it that a city of 150,000 have missed this opportunity, they are leaving money on the NET (table), they are not listening here on social networks. I am just one of many that I know who are doing home improvements, we’re blogging, Tweeting about our projects, and yet not one business has contacted us.
Imagine, if one person (me) has 20k to spend on paint, hardwood flooring, and appliances and you had been listening on Twitter, your business could of had that business. But what if there are a 100 people like me with that kind of money to drop on goods and services. And as I mentioned, I’m not alone, there is potentially 100k up for grabs with the few friends I know in the same position.
There’s much to be said about marketing and advertising on social networks, but more needs to be done about teaching business owners how to listen and find customers like me.
That’s it, a short case study of me, a 20k bill waiting to be collected, and no one was paying attention. Imagine that. Many of the big name social media marketers preach to listen, to grow bigger ears, and yet, like common sense, there appears to be a huge shortage. When are you going to catch up, the tidal wave is coming, don’t be looking the other way, because your business will lose people like me.
So how would you fix this listening problem in your business community?
One might consider this a business opportunity, educating business owners. Oh and by the way, it’s too late, I spent the money already.
Is your business community listening?