Saturday, April 18, 2009

Groundswell: Winning in a World Transformed by Social Technologies

This is a very good book. It provides structure, process, anecdotes and histories for the rapidly changing practice of using social technologies for marketing. It’s primarily written for consumer marketing, but some of the ideas can be used for B2B.

The authors use the term “groundswell” to mean a social trend in which people use technologies to get the things they need from each other instead of from companies. The technologies they refer to are the social technologies that I like to put into the category of web 2.0. Web 2.0 technologies enable many to many communication and conversation.

The authors believe as I do that this groundswell effect, or by any other name, is real, here to stay for awhile and transformative or disruptive; that all attempts to thwart its spread will likely fail; and while all attempts to foster a groundswell will not succeed, not using the web 2.0 technologies for consumer marketing is a failing strategy.

There are a lot of barriers to the diffusion of this type of marketing, not the least of which is letting go of the illusion of message control. The marketing arms of companies passionately attempt to control the brand message. These techniques turn that concept over and returns the “control” of the message over to customers.

Why should you have to relearn all you know about marketing? The authors’ research clearly supports the trend. My research on the social impact of the web 2.0 technologies is inline with the conclusions of this book. Furthermore they assert, as examples, that:

“If you work for a media company, look out. Advertisers are shifting more and more of their money online. The groundswell is creating its own news sites (like Google News or Digg). The very idea of news is changing, as bloggers jostle with journalists for scoops. People take entertainment properties like TV shows and movies, rip them off the airwaves and DVDs, hack them, and repost new versions on YouTube or Dailymotion.

If you have a brand, you're under threat. Your customers have always had an idea about what your brand signifies, an idea that may vary from the image you are projecting. Now they're talking to each other about that idea. They are redefining for themselves the brand you spent millions of dollars, or hundreds of millions of dollars, creating.

If you are a retailer, your lock on distribution is over. People are not just buying online; they are buying from each other. They are comparing your prices with prices all over the Internet and telling each other where to get the best deal on sites like As Chris Anderson, author of The Long Tail has pointed out, shelf space creates far less power when there's nearly infinite selection online.

If you are a financial services company, you no longer dominate flows of capital. Trading happens online, and consumers get financial advice from message boards on Yahoo! Finance and the Motley Fool. Companies like Prosper allow consumers to get loans from each other, instead of from banks. PayPal makes credit cards unnecessary for many transactions.

Business-to-business companies are, if anything, more vulnerable to these trends. Their customers have every reason to band together and rate the companies' services, to join groups like ITtoolbox to share insights with each other, or to help each other out on LinkedIn Answers.

Even inside companies, your employees are connecting on social networks, building ideas with online collaboration tools, and discussing the pros and cons of your policies and priorities.

The groundswell has changed the balance of power. Anybody can put up a site that connects people with people. If it's designed well, people will use it. They'll tell their friends to use it. They'll conduct commerce, or read the news, or start a popular movement, or make loans to each other, or whatever the site is designed to facilitate. And the store, or media outlet, or government, or bank that used to fill that role will find itself far less relevant. If you own that institution, the groundswell will eat up your profit margins, cut down your market share, and marginalize your sources of strength.”

Web 2.0 technologies are being created at an incredible pace. What technologies will be part of a groundswell effect. As the authors point out, it’s not the technology but the relationships. The authors suggest the following questions when evaluating a new technology:

• Does it enable people to connect with each other in a new way?
• Is it effortless to sign up for?
• Does it shift power from institutions to people?
• Does the community generate enough content to sustain itself?
• Is it an open platform that invites partnerships?

The groundswell has two ingredients – technology and people. To understand what types of people would play what roles in the groundswell, the authors introduce the social technographics profile. It characterizes people by creators, critics, collectors, joiners, spectators and inactives. Once you know what the profile is for your customers, you can plan the appropriate social media approach.

If you’re not involved in any groundswell activities, you may wonder, “Why do people participate/” The authors give several reasons why:

• Keeping up friendships
• Making new friends
• Paying it forward
• The altruistic impulse
• The prurient impulse
• The creative impulse
• The validation impulse
• The affinity impulse

Not only is it important that you know your customers’ technographic profile, you have to have clear objectives before you start a program. The authors list five basic objectives for any groundswell program:

1. Listening
2. Talking
3. Energizing
4. Supporting
5. Embracing

The authors provide ample evidence and examples of how to employ web 2.0 marketing. And, as a result, I highly recommend this book.

Groundswell: Winning in a World Transformed by Social Technologies
Charlene Li and Josh Bernoff
Harvard Business Press, 2008, 269p


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