Business Model in Social Media World
Social Media has an impact on every part of the business model. Eg: It is changing
- the way we acquire or interact with the existing customers.
- the way we reach to our existing customers by disrupting existing channels and converting customers into referrers and channels themselves.
- the way business are run by making communication between employees in the company and clients very rapid and disrupting business processes.
- the ecosystem by allowing smaller businesses maintain larger ecosystems than before.
- the way marketers gather information for business decisions and carry out market research.
Some of the ways in which the social media is changing the business landscape are:
Sales Funnel becomes more complex and variable:
Social media helps customers enter the funnel at variety of points. Social media also acts as a vessel for social proof and information seeking. It is a nebula entity which potentially influences all levels of the funnel and helps narrow their consideration set. Brands like Kellogs and McDonalds have used social media to create awareness in the early part of the funnel. On the other end, brands like Amazon have effectively used social media tools of ratings and reviews to increase conversions at the end of the funnel.
In today’s world of social media, attracting and binding consumers to your brand takes different strategies to be worked on based on the changing environment. These strategies need to be agile to capture different customers in different ways and exploit moments of opportunity as it arises. Brands like Pepsi Co, during the IPL matches this year, launched the thematic campaign on TV but the real time data helped it realize substantial numbers were being delivered via mobile and digital. The marketing team immediately tweaked media allocations, enhancing digital spends.
Inflexible multi-year marketing plan that focus on traditional tactics and media and that do not connect directly to product development and customer service will result in a disjointed and weak funnel for enterprise.
Changing Channels and Employee Skills:
Employees who use twitter or facebook actively need not necessarily possess the skills your enterprise needs in the social business era to build business models of the future. This skill gap is now consciously addressed by companies.
The deciding factor that people used to select a bank was the location of branches and ATMs, so banks put their vast majority of their channel dollars into branches. However, in today’s world of social media, banks differentiate on the products and services they furnish in mobile and social channels rather than the location of or service in their branch.
This will result in shrinkage of banks and the existing employees such as the window-staffing and change counting employees will need to develop new skills.
Products must be social and create trust by aggregation:
Too many brands seem to believe that inserting a “Share This” button or implementing a Facebook widget on their site makes their brand social. Instead, they need to consider why consumers share, when they are most likely to share, and how the brand can facilitate this process from within the product and service experience. For example, after you book a restaurant through OpenTable, the company sends a timely email asking if you would consider rating the restaurant while your memory is still fresh. Another example is Amazon, which gives customers a one-click method to share their recently completed purchase with friends. The key to social won’t be to have the most creative social media marketing campaign but to make it easy for your customers to share from within the product or service experience.
Cars seemed like an unlikely product for the integration of social, yet innovative automakers are leading the way with social technologies built into their product. You have already seen ads promoting cars such as the Chevy Cruze that permit drivers to interact with social networks. Even more ground breaking is Mercedes-Benz’ new telematics app, CarTogether, which allows drivers to find people with whom to share rides and helps to cut down on emissions by reducing the number of car rides people have to make.
Therefore, now is the time for companies to get ahead of the curve by disrupting your own business before the competitor does it. Social media is opening up huge opportunities to innovate.