Imagine that it’s November 1994
A new company launches a website. It is a new venture, starting out with an innovative idea, solid funding, and a lot of ambition. There’s only one major challenge – the market is well established and filled to capacity with companies serving every niche.
Eleven months later a competitive company launches a website. The new entry has 100 years plus history of serving customers through catalogs and bricks and mortar stores. There’s an established database, regular mailings, and heavy foot traffic to introduce to online shopping.
Conventional wisdom would say that the second company had an advantage over the first even though it was fashionably late to the ecommerce party.
Conventional wisdom is wrong.
The first company pushed the envelope at every turn. The second one was just dipping toes to test the waters. The first company tested, won, tested, failed, learned, and tested again. The second company established the web division as a separate entity requiring customers to complete all transactions within the original channel. If you ordered online, it had to be returned online. The reasons for this seemed to be valid at the time, but it cost long term market share.
The advantages of having an established customer base are lost as soon as your competition levels the playing field by creating relationships with their own people. While the second company was debating whether the World Wide Web was a viable marketplace, the first company was making it one.
Fifteen years later, both companies are growing. But the ecommerce landscape might be very different if Barnes & Noble had rallied an integrated organization around ecommerce before Amazon was fully established.
History repeats itself.
Today, instead of ecommerce, we have social media. Once again, established companies are in the best position to capitalize on the opportunity. They have verified followers and fans in their customer database. And, they already know what motivates them to buy.
There are disadvantages, too. Most marketers are well trained to expect instant gratification. They place ads, mail catalogs, or send emails, and orders flow in. Social media is slower, rarely results in direct sales, and is hard to measure. It’s challenging for people who have spent their career in a cause and effect environment to adjust to tools that have a time delay before you see results.
It’s easier to adapt a “wait and see” strategy than it is to aggressively study and test a new channel. The problem is that not everyone is waiting with you. By the time you find the case study that identifies the best strategy for your business, it is too late. Someone has already taken your opportunity.
Social media people today are just like the ecommerce people of yesterday.
They aren’t afraid to venture outside of their comfort zone. When something new is available, whether it’s a tool or a strategy, they’re willing to study and test it. If a key component is missing, they are going to develop it.
They are building their own communities (aka customer databases) and expanding into traditional marketing. In a short time, they will have the competitive advantage because they will have the foundation and the knowledge to grow their businesses. While executives of established businesses are thinking about whether to add social media to their marketing mix, new Amazons are gaining strength.
Before you dismiss this as another fear-mongering article, consider this:
Facebook recently reached 500 million active users
Twitter has over 190 million registered users
LinkedIn has over 70 million registered users
All three are experiencing double digit growth
If your customers aren’t there now, how long will it be until they arrive? And, when they show up, who will be talking to them? Will it be you or a competitor?
Now to the good news for established businesses…
You don’t have to start from scratch. The beta-testing days of the most popular social media platforms are history. There’s still the occasional issue, but they are much more user friendly than they were last year. There are also some fabulous people and tools available to help you along the way.
You have an established fan base. Your customers are probably online already and may be interested in joining your network. I say, “may” because being active in social media doesn’t equate to an interest in business communities. Some people only want to connect with friends and family.
You know what your customers like (or don’t.) Social media provides the opportunity to have real conversations with them. Do you remember the promise of one-to-one marketing? It’s here, but you have to put forth the effort to make the connection.