Social media business models

I think on the whole the business models have remained the same. However, their efficiency, reach etc., has changed.
In the ancient era, i.e., before the advent of social marketing, the typical roles in an organization usually included one or more customer facing roles such as sales, customer service and field operations. Usually, most organizations had one or more switchboards for routing outside communication.
However, with social media, these distinctions have blurred. Employees of organizations are expected to maintain the right social etiquette while chatting with people from outside the organization and employees and customers shall always be connected, whether with the twitter handle or by some other means.
While these have definitely affected the way that customers perceive businesses, has this led to a change in business model per se? With data analytics, it has become easier to understand what drives customers. We can do Data Analytics to figure out how car sales in the USA have been affected by reviews at leading websites. In fact, some of these analytics models can predict car sales with as much as 80% accuracy.
It has also led to “herd behaviour” in some cases. For example, in some gaming titles, there are some stringent copy-protection deployed which make it difficult to pirate those games. However, in many sites like Amazon, reviewers chose not to actually review the merits or demerits of the game and instead pour their scorn on this copy-protection algorithm. The game got an average of ~2/5 primarily based on their copy-protection.
Social media has also reduced the companies’ margin for error. In today’s world of instant videos, instant chat and other instants, the smallest slip can blow up in the companies’ face. There are review websites like MouthShut.com which discuss whether a company has done some terrible wrong to somebody. And if a company finds itself there, then its business is doomed. The company needs to nip every negative comment in the bud and employ either employees or algorithms to discover these comments as soon as they can.
Finally, companies must recognize that customers today are more knowledgeable than ever. In the Stone Age (I mean 50 years ago), customers can bluff about their “lowest prices”. But, today it is almost impossible. There are multiple shopping sites, multiple aggregators of shopping sites, multiple aggregators of aggregators and so on and so forth which would render any such attempt meaningless. So now, companies need to assume that customers know everything and move backwards.
Ultimately I still feel that business models have not necessarily changed and let me you tell why. Technology is ultimately an enabler. It is not a creator. In this case, it just allows people to express emotion easily. And allows other people to know that emotion. Would these behaviours not have been exhibited before? Definitely. Would companies not have responded to those? Probably. But the main twist lies in the fact that companies’ room for manoeuvre has reduced. Companies now have to respond in hours rather than weeks. Whereas the fallout before could be restricted to a city or a town, now it cannot really be restricted. Still, if an old firm does the basics right, it can still make great profits.

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