Some great questions here . . . I'd like to add one more

John: You ask some great questions and I'm looking forward to learning more. Your discussion brings up another force enabled by social media: consumer-developed products. As much as people use social media to glean information so they can adapt to a fast-changing and increasingly complex world, as you observe, they also use it to organize disparate information into product and brand attributes.

But the nebulous nature of "they" causes many of us discomfort. Who is doing the organizing? And, given the democratization of what was formerly the domain of a select group of "brand managers," how should companies assert influence (control might no longer be the operative word here) over the social media forces you describe? Can they exert influence?

You don't control them

Paul Greenberg
Author: CRM at the Speed of Light, 4th Edition
Hi John and Andrew,
Just a brief remark to Andrew's question. The organizing is being done by the customers themselves - though it would be understating the nature of the phenomenon to limit it to customers. Its actually people - and whatever their role is in whichever institutions they care to interact with. Could be political, social, business, whatever.

Fact is that companies CAN'T exert control over those social media "forces" that John speaks of. Those forces are interested - like you and I are - in controlling their own experience with the institutions they interact with. What a business can do is recognize that and control only those things that they can - which is their response to the interactions of the customers. There's a lot that the business has to do. Its no longer just a matter of either acquisition or retention of customers - its a matter of just getting their attention to begin with before the other aspects kick in. Its also no longer just a matter of managing the relationships with customers. Its a matter of giving them the products, services, tools and experiences they need to control their own interactions with the business - the business model is one of aggregation - not producer of goods, provider of services, any longer. The companies that are recognizing that like P&G, or Kraft or Wells Fargo or Dialog Telekom, or even on the vendor side, oddly, Oracle, SAP, and salesforce (in the world of and enterprise apps) are succeeding at seizing new levels market position for their wares successfully. The companies that aren't are beginning to suffer.

In any case, the phrase I'm sure you've heard which is "the customer controls the conversation" isn't just a buzz term. It is the case progressively more and more and the social networks are its means of organization at the moment (that can change though to what I don't know) and the social media are the means for expression of it. But the acquiescence to this fact is the first thing a company has to do - they can't control it.

Becoming part of the conversation

Paul and Andrew,

Paul, thanks for you insightful comments. These are challenging times for businesses. We certainly can identify high profile case where companies have used social media to produce win-win outcomes. However, for every successful effort there are more who are not getting sustainable results. Here are a couple of thoughts on why?

One, many companies see a big distinction between what happens online and what happen in their real-world customer interactions. Failure to act in a consistent way can reduce the impact of either initiative.

Two, people who participate in social media are engaged and with engagement comes an investment and commitment. In this case it is to the community not the company. Businesses need to recognize this and devise ways to authentically become part of the conversation with these people. Yet, many offline customers are treated as consumers. I am using consumers in the Peter Block or John McNight sense where the person looks to others to fulfil their needs. They are more passive and tend to make purchase decisions based on the best trade-off between price and convenience. This is not good news for the businesses that want their business. Their passivity, lack of engagement and indifference towards the product means they apply the price/convenience anew every time they make a purchase.

In sum, businesses new to find ways to authentically become part of the online conversation, the conversation that customers are having with or without them. They need a similar conversation in the real-world, one that encourages customer engagement and facilitates advocacy.

Albert Einstein was said have made a comment something like this, "the kind of thinking that got use here won't get us out." I believe businesses need to recognize that more and more people are moving from being consumers to prosumers or co-creators, with or without businesses. Before devising tactics and techniques, businesses would be will advise to wrestle with the implication of this shift in the nature of relationships with customers.

John

John I. Todor, Ph.D.
Author of Get with it! The Hands-on Guide of Using Web 2.0 in Your Business.