Markets are Conversations: Are yours naked?
By Gregg Gallagher
I must admit that this whole Web 2.0 thing used to confuse me. Earlier this year I attended a panel discussion of venture capitalists on Web 2.0 and perceived a somewhat cynical viewpoint: investors were seeing it as simply a way to distance themselves & their investments from the failed business models of the Web 1.0 bubble. My own suspicions and skepticism were being confirmed.
That is until I attended a presentation by an expert in new media who opened up my eyes to the true nature of the revolution engendered by Web 2.0. It is a powerful approach to social networking that is creating a new dynamic which brings together millions of people in new and more powerful ways. Web 2.0 is a medium that ALL businesses must come to understand, embrace and leverage with their constituencies. Why is this so?
"Markets are conversations..."
This simple statement is one of the central themes of The Cluetrain Manifesto, a 1999 website, which was subsequently converted into a book. The authors challenged the existing thinking and practices of business which were shaped by, and in turn created, mass communications.
The wiki summarizes its core message:
The authors assert that the Internet is unlike the ordinary media used in mass marketing as it enables people to have "human to human" conversations, which have the potential to transform traditional business practices radically.
A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter-and getting smarter faster than most companies.
What does this mean to your business?
There is a growing expectation on the part of customers and partners across the entire value chain for greater transparency from the companies with which they interact. They are more likely to respond positively to those companies who communicate with them, rather than to those companies who market to them. (With apologies to Bill O'Reilly, the global, internet-enabled marketplace has become the true "No Spin Zone."). People will follow the path that leads them to sources they trust and will route around sources of information, products and services that they believe are not authentic in their conversations with the marketplace.
Savvy firms understand this, and are learning to use social networking and new media tools to embrace this transparency, build closer relationships with their customers and partners, and make them an intrinsic part of their product development & innovation processes.
Companies which fail to understand this fundamental transformation of the marketplace - and act upon it - will ultimately be outmaneuvered by those who get it, and will likely be doomed to the dustbin of business history.
One of the best examples of how a firm built better relationships with their constituencies using these tools is Microsoft, whose public image has been, well - problematic, to say the least. My own experience dealing with Microsoft executives was that while they were tough - bordering on ruthless - they were, by and large, quite smart and honest. However, the general public has generally perceived them as the "Evil Empire." This was not lost on Microsoft employees at all levels, and did result in some demoralization within their ranks.
Over the past few years, Microsoft has been on a "charm offensive", and one of the key factors helping turn their image around is a more personal, authentic chorus of voices arising from their employees' blogs (currently numbering almost 1,400!). Via these blogs, Microsoft customers directly communicate with company personnel - developers and product managers most notably. In a recent survey of visitors to its Channel 9 blog, customers are continuing to change their view of the company and now see it as more trustworthy and customer centric. All as a result of the blogs!
Where do I start?
The tools, applications and approaches that you need to consider in formulating your strategy in this area can feel overwhelming. Many people are just getting on board with "old school" approaches such as email, chat, instant messaging and discussion boards, let alone all the new vehicles of blogs, podcasts, and ideagoras. Which ones you choose to utilize in what contexts should be driven by an overall strategy that integrates your marketing communications with your product innovation strategies.
In future issues I will be discussing each of these two tools in greater depth. In the meantime I recommend the following as your first step down the path of exploration:
- The Cluetrain Manifesto (www.cluetrain.com)
- Wikinomics (Don Tapscott & Anthony Williams)
- Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers (Robert Scoble & Shel Israel)