The Business Sense of Social Media

This week, I was interviewed by Younomy, an India-based publishing and training company. They asked me some interesting questions on important issues such as transparency, interactivity, brand-management, crowd-sourcing, and community building.

Read the highlights below. Or, visit Younomy’s blog to read the whole interview.

Younomy: Your book places huge emphasize on interactivity. Do you think investment in facilitating digital or social media interactions – in terms of creating digital infrastructure, deploying people to manage community, developing widgets, offering incentives to encourage participation, etc, to make “immediate” business sense as much as investments in products or services make?

Andy: I think there can be few things more worth investing in than in tools – digital or otherwise that create meaningful interactions between a company and its customers. The evolution of the social web has provided an opportunity for brands to engage with their customers in a way that involves very little effort on the part of the customer.  All other things being equal this should translate into the opportunity to develop a wealth of extremely broad customer insights that in turn lead to better products and services. So the trade-off between investing in product and in interacting with customers is only encountered by companies who see the opportunity to engage merely as a means to promote their offerings.

The social web is not just a new place for companies to put ads. Those that view it that way are not only wasting their money, they are possibly missing an unprecedented chance to learn a huge amount about their customer and how to fulfill their current and future needs. One last point, here, when it comes to the number of customers to listen to, beyond a certain point size doesn’t matter. It’s a great deal more important to direct effort toward really listening to the relatively few highly engaged customers who say they can’t live without your product than to the many more weak-tie participants that encounter your company solely for a contest entry and a chance to win a trip to Disneyland.

There appears to be two ways to co-create or crowd source product ideas: 1) going to communities with specific problems (the P&G’s Connect and Develop model), and 2) going to communities without any specifications (the Threadless model). Are there any other ways apart from these two to source ideas? What works best in the long run?

Crowdsourcing presents great opportunities, but has achieved such buzzword status that many people have difficulty contemplating it seriously.  There are many examples which have been noted for success such as My Starbucks Idea, Dell’s IdeaStorm, and Threadless among others. As with any effort we profile in The Dragonfly Effect, the key is to have a single, clear goal of what you want to achieve. Each crowdsourcing approach differs in that each is designed to fulfill a different need.  Starbucks and Dell wanted help getting the voice of the consumer out of market research and into the part of the business where products are conceived. Threadless was designed not to support an existing business with insight but to have people cross the line between customer and producer, with a lot of decision-making in between allowing a totally new market to develop–not dissimilar to eBay.

I would not say that any of these success stories have been without specification. In each there is a game layer of sorts with rules and roles that direct how people contribute and spend their energy.  For most companies, the result of a goal-focused design process may result with a crowdsourcing structure more like Dell, Starbucks or P&G.  But it is a mistake to simply imitate.  The question needs to be asked: if I could get a thousand customers/employees/partners to help me, what would I ask them to do?