The Relationship Economy……

The mass of evidence builds. The old are now writing about the new. The new are writing about the old that get it. Then there are those writing about why businesses don’t get it.

Does The Evidence Say They Should?

From the WSJ: One of the hot investments for businesses these days is online communities that help customers feel connected to a brand. But most of these efforts produce fancy Web sites that few people ever visit. The problem: Businesses are focusing on the value an online community can provide to themselves, not the community.

David Gammel hits the nail on the head in his post over on High Context Consulting on “Three reasons Branded Online Communities Fail.”

• Focusing on the technology over the value of the community to its members;
• Failure to assign experienced staff to develop the community;
• Poor or no metrics for measuring success

The Wall Street Journal article quoted by David says, “Businesses say that their primary objectives are generating word-of-mouth marketing and increasing customer loyalty. Yet the metric that businesses use most often to measure success is the number of visits to the site. Moran points out that there isn’t much of a connection between what businesses want and what they’re measuring. Better metrics might be rankings in Google or the number of inbound links.”

The Experience blog says: Social media tools are the building blocks for communities, but communities are more than the sum of their social media parts. If we look to real world communities as a metaphor for virtual ones, social media functions–forums, blogs, micro-blogs, ratings, profiles, friend lists, widgets, collaborative tools, and the like–are the buildings, roads, and utilities, but if no one moves in (or everyone leaves), there is no community. A site rife with Web 2.0 tools that go unused is like a ghost town–empty of life and uninviting to anyone who chances to wander in. As in the real world, a virtual community isn’t characterized by its components but by its people.

Eric Schmidt, Google CEO said “One of the things to say,very clearly,is that social networks as a phenomenon are very real.If you are of a certain age,you sort of dismiss this as college kids or teenagers. But it is very real.”

How Long Has It Been About Relations?

The people wonder what is all the fuss about when fundamentally people have been discussing the human relations since the beginning of time.

Then people move into business roles and somehow think human relations take second seat to making money quick……this mentality has breed short term thinking, cost cutting, cover ups and poor quality products and services needing a defense which takes away energy from building relationships, value and pride in what one does and what a business offers.

Maybe all this social stuff is taking us back to the future when relations met everything. The question is whether business leaders can transform their thinking and their organizations to be more relational. In other words How long will business pretend they are social rather than be real about relations. After all we’re entering The Relationship Economy.

What say you?

There are 48,500,000 listing on Google when you type in “Social Media Services“. There are 36,100,000 listing when you type in “Social Media Business Services.

A review of the listing only five pages deep reveals “advertising, ad placement and design services” are the dominant services. It appears as though the majority of the service providers think “social media” is about ad placement, click through, ad analytics and fundamentally the offerings are applying old tricks to new media. One thing is clear, there is a huge market of suppliers offering to help companies enter the world of social media. The problem is some may start you off on the wrong road.

As previously written in post titled “Do Old Mindsets Repeat Themselves” and “Do You Like Being Shot At?” the marketers message to a uniformed and yet eager market is leading the sheep to the wolves den to be slaughtered. The old school of thought concerning marketing and use of media was driven by impressions, click throughs and a host of other “tricks of the trade“. Well here is some news for those looking for help. Stay away from the tricks and enter doing the right things for the right purpose.

What Are The Right Things?

The wrong thing is to think of social media as an extension of old advertising methods. The right thing is to think of it as an opportunity to renew or begin old relations and form new ones.

Of the listing on our Google search we found a site whose white paper promotes three critical elements for entering into “social media” and using the tools correctly. The site is RSSApplied and their white paper promotes three service elements which include:

1. Knowledge
2. Strategies
3. Execution

The services offering appear to be designed around use of virtual tools to deliver the knowledge required, qualified resources to help with the strategies and a community to assist with execution. There is a host of other companies, both large and small, also offering numerous services for businesses but only a few seem to approach the market wholistically.

The pricing for those offering other than “advertising ad design and placement” range from monthly subscription models, monthly campaign management to a full course consulting engagement with all the bells and whistles. The cost ranges were $250 a month for basic services all the way up to six figure engagement for everything from setting up and running a community blog to defining and implementing strategically designed initiatives.

How Does A Business Choose?

For those just entering or those wanting to fix current defunct strategies the options, technology, language and “rules of the road” can be very confusing. The choices are fairly straight forward:

1. Learn on your own
2. Hiring an internal resource to manage your transformation
3. Hiring outside “experts” to help you do the right things and do them right
4. Join a community of experts who can guide you along the way
5. Apply the old rules to the new game and loose

Whatever your choice one thing is certain. Everyone has a roadmap but few really know how to get there.

What say you?

Social Media, blogging, social video, networking etc. can be confusing for those just entering the space. Added to this confusion is the daily releases of new technology, new sites, new bells and whistle and the ongoing onslaught of business jumping into the space. Many individuals and organizations react to the hype and jump in unprepared, ill informed and soon discover a vast landscape that changes with the click of a mouse.

People want to learn the space in the fashion of instant pudding. Just tell me where to go, what to do and which tools to use. There are no quick answers and that is why we’re seeing the proliferation of “services” proclaiming to have all the answers. The fact is the answers change daily but the fundamental dynamics remain consistent. More on the fundamentals later.

We came across the video below which does a good job at simply communicating “What is Social Media” and wanted to share it.

Social Media in Plain English from leelefever on Vimeo.

Also we found a good outline of questions business should ask before “jumping in“. Gino Cosme writes: Questions to ask before starting a social media campaign

1. Why do you want to use social media?
2. Which department will social media become a vertical to?
3. Is the company ready for social media engagement?
4. Similar to point 3, is your company ready for the brutally honest feedback that exists on the Internet about your company or brand and if so, is the business ready to make positive changes to the business?
5. What part of the bottom line are you hoping to improve on with social media?
6. Have you got access to target social media communities that you can rely on to launch a blogger or social networker seed campaign?
7. Speaking of bloggers, are you aware that social media goes beyond bloggers and blogging?
8. Have you experimented and ideally succeeded with a SEO campaign?

The irony of these questions is they actual lead to more questions and that is the long tail journey of all this social stuff. You never stop learning, applying, making new ground, creating new conversational markets and adopting the latest and greates tools to extend your reach and increase your richness. When we say never we mean never.

What say you?

Business in the industrial era was focused on filling a huge demand for mass produced products with a market awaiting all this “stuff”.

Communications with suppliers, employees and the customer was not a significant element of success. Rather the advertising world was responsible for letting the mass market know “we have a product for you to buy”. And the market consumed it like candy.

As society evolved so did the “buyer of all this stuff”. Communication mediums such as radio, television, telephone, email and the internet equipped buyers with a voice to “talk about all the stuff they were buying”. Soon consumers began complaining about defects in the products and services they were buying. Overseas competition began producing “higher quality stuff” and consumers migrated with their pocketbooks. Corporate America awoke to the demands for quality and re-engineered everything accept the communications with the market, the buyers of all this stuff. Quality improved the products but not necessarily the relations.

How Important is Communications?

Kevin Kelly writes: Communication – which in the end is what the digital technology and media are all about – is not just a sector of the economy. Communication IS the economy.

Brian Solis writes: As Social Media becomes more pervasive in marketing, it’s imperative that we become gatekeepers to prevent opportunistic marketers from bankrupting the conversation economy.

Doc Searls writes: The Economist asks, Will Facebook, MySpace and other social-networking sites transform advertising? Good question, but it’s the wrong one.

The right question is, Can we equip customers to become independent of sellers and their controlling intentions —

I’m not only a co-author of The Cluetrain Manifesto, but guilty of being the guy who foisted the “markets are conversations” line on the world in the first place. For all the good intentions behind that line, it’s still woefully misunderstood, and what the Economist says in that paragraph is no exception. To me the most powerful line in Cluetrain came from Chris Locke who wrote,

“we are not seats or eyeballs or end users or consumers.

we are human beings and our reach exceeds your grasp. deal with it.”

Three people telling the same story. Ironically their story is primarily being heard not by the institutions called business rather by “we the people”, the largest and most influence institution is the world.

All this “social stuff” represents power to the consumer, the people. The conversations people have amongst their relationships are creating the new economy. The Relationship Economy has reversed the communications flow where the people are the sender and business is the receiver. Learn to receive and you win. Don’t and you loose.

What say you? Can you hear me?

There is a huge disconnect between the marketers and their market. A disconnect in understanding what the market wants, needs and desires to use. The market is you, me and all our “social friends” who enjoy paving our way through all the social clutter toward a more user centric landscape. While fighting through the clutter the marketers continue to create new “guns” aimed at us as targets of commerce.

Do You Like Being A Target?

Mediapost reported today: “AdBrite now offers behavioral targeting across the more than 70,000 sites within its network. The San Francisco-based company announced the news at OMMA Behavioral on Monday, along with the claim that it has become the largest ad network (in terms of sites available), to offer behavioral targeting. “

“This is really just applying a new form of targeting to our existing network,” said Paul Levine, AdBrite’s vice president of marketing. “So as soon as we switched it on, we became the largest behavioral targeting network in terms of number of sites. Our best guess was that ValueClick had the largest number of behaviorally targeted sites available. Our site count is five times theirs.”

Just Maybe They Are the Target

Who are they? The marketers, the companies they represent and those that support their methods with new technology enabling them to shoot at us.

Brian Solis writes: “Jakob Nielsen added a unique perspective to ClueTrain when he surmised that the authors “defected” from marketing and took sides with markets against it”.

”The markets on the other side of the proverbial “other side of the fence” however, should be warned that the very marketers that forced the defection have figured out that there’s fortune and bountiful opportunities in jumping ship and blending into the new world of Social marketing.”

”If it’s one thing that we can learn about Social media is that people and the markets they represent have rallied against marketing and slick marketers and have demanded personalization, transparency, and sincerity.”

Social Media is about breaking down barriers to engage in conversations

Doc Searls says: I’m not only a co-author of The Cluetrain Manifesto, but guilty of being the guy who foisted the “markets are conversations” line on the world in the first place. For all the good intentions behind that line, it’s still woefully misunderstood.

Because we weren’t just talking about “transparency”. We were talking about turning markets into places where buyers were not just seen by sellers as cattle to be herded into walled gardens, as “targets” for one-way messages, or as tools for other marketing purposes.

What Is Your Aim?

We don’t want a relationship with people and things that aim a “marketing gun” at us and target us with advanced technology and slick messages. If you want to know what we really want you’ll have to engage in a conversation and listen to what we’re saying. By the way what we are currently saying is targeted at you, your message and your methods. Be careful because being shot by the customer is not a good thing.

Get it? What say you?

If you think the wave of social technology adoption has been high just wait a little longer. Business leaders, academia and old Media are now coming around to the recognition that all this “social stuff” is becoming a requirement for business leaders or they may not survive.

Major media publications are writing about the impact of blogs, social networks, social media and all the related buzz words around all this “social stuff”. Academia is now launching entire research divisions to study all this “social stuff” and its implications. Everyone seems hungry to learn.

What Are They Learning?

UMASS Dartmouth University conducted numerous studies centric to the social web and particularly blogs. Two studies of interest titled: Behind the Scenes in the Blogosphere: Advice from Established Bloggers and another study titled: The Hype Is Real shares perspectives and practices that point to the wave of user generated content and engagement that continues to create disruptive changes across all markets.

The author’s state: “Blogs will make or break your business. They have the power to disseminate information and host global conversations on any topic. Every publication from Business Week, Forbes, and the Wall Street Journal to online white papers from Marqui (www.marqui.com/blog) warns businesses that blogging is not an optional endeavor. Those that don’t will not survive. “

“With over 40 million conversations going on 24 hours a day, the question becomes how does a business enter and thrive in the blogosphere? The answer to this question is that smart businesses will seek guidance from the experts.”

What Are Smart Businesses?

Previously we discussed “Why Do Business Blogs Fail?” And “Why Do Business Blogs Fail: Part 2?” In both these post and the results of the studies mentioned above there is a single smart theme which consistently tells the story and provides the pathway to all this “social stuff”.

The single theme isn’t really anything new just forgotten. The theme is that relationships create and influence your economy. Relationships with people whether they are labeled employees, customers, suppliers or entire markets. The common thread is relationships with people. People are tired of the marketing hype, the corporate speak, slogans and exhortations trying to motivate them to do something, anything and everything. People are tired of being treated as objects, wallets or targets for your offerings. Chasing people the old way is going to kill your business and marketing the old way is just pouring your money down the drain.

Business runs on economic gains. The gains come from having good relations first. Markets are conversations. Transactions within a market come from having conversations with those that relate to you. How can you relate to people if you don’t understand what it takes to create and keep a relationship? The social web thrives because it is about people having conversations with people about anything, everything and about your business. The conversations fill the needs and enable people to get what they want.

Get it? What say you?

Everybody seems to like attention. Getting attention comes from many different activities, some good and some bad. Sales, Marketing and PR for businesses is all about getting and keeping your markets attention. After all if you don’t have the attention of your market it means someone else does.

Traffic to your web site, social network, blog etc. reflects to some degree your ability to get peoples attention. Once you have people’s attention then the challenge becomes one of keeping the attention so the people will come back, again, again and again. In the world of social technologies everyone is vying for everyone else’s attention. The competitive factor for business is the how, why, what, where and when of getting and keeping their markets attention, the people.

How difficult is it to Get and Keep Attention?

In the world of “human connections” the dynamics of getting and keeping peoples attention are centric to knowing and understanding human nature and the fabrics of healthy relations. Everyone wants our attention. The proliferation of information overloads our brains ability to pay attention to the valuable and important matters, whether personal or professional. The social web has accelerated this overload with everyone everywhere wanting to connect with anyone anywhere. Connecting via a social network and becoming “virtual friends” or connecting with our stories and message whether it be our blog, twitter or the host of other “social media” proliferating throughout hundreds of communities vying again for more of our attention. Then we go home for dinner with our family and wonder why we can’t get each others attention. Getting and keeping ones attention can be but shouldn’t be this difficult.

Attention Comes at the Point of Need

As we watch the activities of online communities the successful ones have “created an art and science” of filling the needs of its members. The art is centric to facilitating conversations and the sharing of relative information that helps community members fill a need “when” and “where” it becomes the thread of conversations. The science is centric to “how” technological tools are used to organize the conversations so they fill known and unknown needs of the community. Knowing “why” people would be attracted to your community and “what” would keep their attention in your community is about possessing the knowledge and skills relative to the art and science behind the “when, where and how” of human attention.

How Good is Your Business or You at Fulfilling Peoples Needs?

The irony of watching major brands jump into all this “social stuff” is they seem to focus on the value an online community can provide to themselves, not the community which is nothing more than a swarm of people with needs. Most corporate-sponsored online communities are virtual ghost towns according to Ed Moran, a Deloitte consultant who just completed a study of more than 100 businesses with online communities.

Not surprisingly, these sites failed to gain traction with customers. Thirty-five percent of the online communities studied have less than 100 members; less than 25% have more than 1,000 members – despite the fact that close to 60% of these businesses have spent over $1 million on their community projects. “A disturbingly high number of these sites fail, says Ed Moran”

In other words they failed because they didn’t know how to fulfill the needs by paying attention to and understanding “why” people would be attracted to their community and “what” would keep the attention. Just maybe they should have first gained the knowledge and skills relative to the art and science behind the “when, where and how” of human attention. Oh yeah, one last thing, gaining the knowledge and skills first would have not only saved them $1 million but enabled them to gain the markets attention and avoid the embarrassment of building a ghost town.

If this article gets your attention and you need anything just ask. What say you?

Small businesses frequently suffer from growing pains caused by “the people problem” - too many tasks, not enough people. Making the decision to add blog marketing to your online strategy may be a great idea, but what to do next is not always so clear. To successfully execute your blog marketing strategy, you will need to have someone available to manage the blog. How do you decide if you have the resources in house to manage the blog on an ongoing basis?

Here are some questions that will need to be answered before you can launch and manage your own business blog:

How frequently do you need to post?
You should post at least 2-3 times each week. Regularity is critical to building readership.

How many hours per day/week need to be dedicated to posting to the blog?
For a solid post of 300-500 words you can expect to put in 2-3 hours per post. Some posts can be shorter and require less time, but without valuable information posted to the blog regularly you may find your traffic to the blog flat.

Who will update the blog?

This is an important question. For many small businesses, this is dictated by the amount of time going into it. If you have multiple people in marketing, you can share the responsibilities among your team and get it off the ground quickly. Keep in mind, the person writing the posts needs to be able to form the concept, do the research, and write the post.

What is the general tone of the blog?

Is your blog going to be a direct marketing tool? Will it be more focused on building a community with customers? Is it more of a PR tool, or an extension of your SEO efforts? Maybe it’s a news and tips resource for customers or prospects? Hopefully, it’s all of the above.

Do you have the technical resources to integrate a Wordpress or Movabletype blog into your website?
This is the most difficult for most companies. Integrating the blog into a subpage on the website is important. It needs to be an extension of your brand, and carry on the message to a more personal level.

In an earlier post  we discussed “Free Inc”. and asked “Could Free Be An Organization?” We mentioned that theories of business have shifted over time as globalization sparks more competition and technology fuels innovation but the three fundamental elements remain the same: people. processes and power.

We’ve witnessed the era of the knowledge worker, the “free economy”, the networked world and social media with the collective influence re-engineering business as usual and everyone’s thinking everywhere. Will changes brought on by the web create a new virtual organization model?

What Would the New Virtual Organization Look Like?

The new virtual organization would be the interlocking social structure that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, personal and professional connections through which work gets done and relationships are built among people who share a common organizational affiliation or cluster of affiliations. It consists of a dynamic set of personal relationships, social networks, communities of common interest, and emotional sources of motivation. The virtual organization evolves organically and spontaneously in response to changes in the environment of opportunity, the flux of people through its porous boundaries, and the complex social dynamics of its members.

The Virtual organization affords access to a multitude of talents and disciplines from resources geographically spread but with each bringing a value add to anyone particular project or engagement originated by anyone of the individuals affiliated with the organization. A virtual pool of experiences, talent, discipline and relationships representing virtual any market anywhere.

The Key characteristics of the Virtual Organization include:

• evolving constantly
• grass roots
• dynamic and responsive
• excellent at motivation
• requires insider knowledge to be seen
• treats people as individuals
• flat and fluid
• cohered by trust and reciprocity
• difficult to pin down
• essential for situations that change quickly or are not yet fully understood

The Virtual Organization provides the means, methods and medium to cope with the three dynamics that traditional organizations have had difficulty managing. These are rapid growth, learning and coping with the never ending demand of new ideas. Emerging knowledge gained from concepts andl strategies adopted by traditional business mindsets have demonstrated the value of leveraging the three dynamics further described below:

1. Rapid growth. Starbucks, which grew from 100 employees to over 100,000 in just over a decade, provides structures to support improvisation. In a July 1998 Fast Company article on rapid growth, Starbucks chairman Howard Schultz said, “You can’t grow if you’re driven only by process, or only by the creative spirit. You’ve got to achieve a fragile balance between the two sides of the corporate brain.”
2. Learning organization. Following a four-year study of the Toyota Production System, Steven J. Spear and H. Kent Bowen concluded in Harvard Business Review that the legendary flexibility of Toyota’s operations is due to the way the scientific method is ingrained in its workers – not through formal training or manuals (the production system has never been written down) but through unwritten principles that govern how workers work, interact, construct, and learn.
3. Idea generation. Texas Instruments credits its “Lunatic Fringe”—“an informal and amorphous group of TI engineers (and their peers and contacts outside the company),” according to Fortune Magazine—for its recent successes. “There’s this continuum between total chaos and total order,” Gene Frantz, the hub of this informal network, explained to Fortune. “About 95% of the people in TI are total order, and I thank God for them every day, because they create the products that allow me to spend money. I’m down here in total chaos, that total chaos of innovation. As a company we recognize the difference between those two and encourage both to occur.”

What is The Value to Participating Individuals?

No one individual can possibly have all the required disciplines, knowledge sets and experiences to effectively grow a business never mind serve clients at optimum value. For any one individual to effectively serve a client they need a team of diverse talent, skills and knowledge. The Virtual Organization provides individuals with access to a resource pool to be called on “just in time” to serve the demand of the markets.

Additionally the Virtual Organization affords individuals the power and force of marketing, identity and reach given the power of the collective group of individuals contributing time, talent and revenue required to present the organizations brand to the global market. The organization does not maintain a “brick and mortar” presence nor does it have the traditional overhead that accompany historic organizational models.

Operating as one brand the virtual organization serves the needs of the individuals, the end clients and the entire market at much lower cost that the traditional organization. Next we will cover the economics of The Virtual Organization. Stay tuned and get ready to join or use “Free Inc.” to your benefit. As the markets migrate to the social web the Virtual Organization can and should play a vital role is helping markets adjust effectively and efficiently.

What say you?