Time flies! Here we are just a few days before Christmas and looking back at 2011, I cannot help but wonder at the amazing speed with which the year flew by! 2011 will be remembered for the effective role Social Media played in activist movements across the globe.
Looking at the future, one can see dark clouds on economic horizon given the debt and deficit crisis in Europe and North America. Consumer spending, which has driven economic growth for past several decades given easy availability of inexpensive credit, is drying up as consumers are reluctant to spend given the economic and political uncertainty. As a result, economic growth is almost 0% if not negative and with rising inflation, there is real risk of dreaded ‘stagflation‘ (economic stagnation with high inflation resulting in stubborn high unemployment).
In this scenario, companies are fighting hard for share of customers’ wallet/spend to meet their top line/revenue growth targets at the cost of bottom line/profits. As a proof of this, just note the amount of discounts large retailers and leading brands offered to customers this holiday season. And this is not just limited to budget brands for value conscious customers but also includes luxury brands targeted at affluent customers.
So how can companies not only survive, but thrive in an economic environment characterized by stagnation, high unemployment, eroding purchasing power because of inflation and when customers are unwilling to spend because of economic uncertainty? In economic parlance, this is a perfect storm and it requires some out of the box thinking on the part of companies.
Companies need to use emerging technological tools such as Social Media, Mobile and Cloud computing to drive down cost of doing business and at the same time, maximize value delivered to customers. Remember, it is not about price of a product or service but value perceived by the customer and price he/she is willing to pay for the perceived value of the product or service.
As I highlighted in one of my previous post titled Why Industrial Era Marketing Won’t Work in the Age of Social Media, not involving customers during product/service creation and delivery, and very limited after-sale support via phone is not going to work any more. Companies need to use social media channels and collaborate with their customers at every step of product or service creation and delivery.
To survive and grow in the age of social media, companies will have to re-engineer their product design, manufacturing, delivery and support processes, and not just their marketing processes, in order to involve customers at every stage of product/service creation and delivery. Companies that succeed in involving customers at every step of product/service creation and delivery will thrive and grow in this tough economic climate.
My suggestion to senior executives is that instead of viewing this tough economic climate as a challenge or a problem to overcome, why not view it as an opportunity for change by re-engineering business processes to take advantage of emerging technological tools such as social media and involve or engage customers at every stage of product or service creation and delivery. It can be as simple as a factory manager posting a YouTube video on how the product is made or a hotel employee tweeting about new mattress in all rooms in the hotel. By engaging customers on Social Media channels, companies can win greater mind-share of customers and as we all know, mind-share results in purchase and greater share of the wallet!
And before I end my post, I want to wish readers of this blog Merry Christmas and Happy Holidays.
(Picture courtesy: The well lit Christmas tree that you see above is from my apartment in Dallas, Texas)
I think Dr. Kotadia is most certainly on the right track. Efforts to share and inform are most certainly excellent ways to attract attention and gain visibility online. The challenge though is that Tweeting, posting video, and updating your status is just part of it. Conversation, Collaboration, Cooperation, Commenting, and Curating are as to social media what the 5 C’s of diamond buying are. Treating social media as a megaphone and not a telephone will be the first hurdle most businesses will have to get over. Providing access to our companies so our audience will have a place to interact and see us as real will be the second hurdle. Our ability to stop tracking numbers of people as though they were points on the scoreboard will perhaps be the last one to clear. Along with you, my goal for the coming year will be to bring back the business deal with a handshake via social interaction over the internet and creating tangible relationships not tracking replies. Holiday blessing to you and yours.
Hi Michael:
You are right, Social will not drive growth without engagement. In this post, I have highlighted that Social provides necessary tools for growth in this troubled economic times and the way to do it, as you have pointed out, is by engaging customers on social media.
Thanks again for your comments, much appreciated!
Harish Kotadia, Ph.D.
http://hkotadia.com/
Twitter: @HKotadia