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Why Social Marketing Is So Hard

BRANDS are spending a great deal of time and energy investing in platforms to get likes or pluses, and not really being social at all.

This is social marketing. Passionate people are co-creating because they value TED’s shared purpose. This shared purpose is not “build TED’s brand;” it’s “spread good ideas that matter.” While a social approach certainly lowers the financial overhead of the organisation to expand on purpose, the question is, “At what cost?” Certainly the Komen controversy showed the complexity of the issue. The more an organisation depends on others, the more expectations they need to wrestle with.

If people give to a cause, they expect a relationship, not a transaction. There’s a fine line between being a “volunteer” which has an asymmetric power balance, and a member of a community, which suggests something more egalitarian.

This all evokes many still-unanswered questions, such as: Isn’t it dangerous to have so many people believe they co-own the brand? Or, don’t these people deserve to get paid for their work? Can you make money this way? MySQL became a dominant enterprise software company by “giving away” usage but asking for payment for those that need support and maintenance.

There were six million users but only five thousand paying customers — just an .083 percent conversion rate. Yet that fraction garnered $34 million in revenues, making MySQL an attractive acquisition to Sun Microsystems (and then to Oracle).

Similarly, Evernote customers are known for declaring their “love” for the product as they buy — and buy they do. As the CEO of Evernote says, this approach increases the commitment of the consumer to keep Evernote around. When the relationship is commitment-focused, not transaction- focused (what have you bought from me lately?) between consumers and the company, it fundamentally shifts engagement.

The software and mobile app world is starting to seep into everyday culture. We’re starting to see this relational approach — pay me what you think it’s worth, after you’ve used my service or product — in everything from music to hairstyling.

Where usage used to come last, at the end of the marketing process, it is now more frequently starting the cycle.

This shift is perhaps the most terrifying and unpredictable thing any organisation can face.

This philosophical approach could change every aspect of the business from product design to engineering to marketing, sales, and support.

Sure it sounds good to say “Pay if you love it”, but what if not enough do? Flexibility sounds good as a consumer, but is terrifying to the brand (and the finance team that creates the budget).

The MySQL story shows a razor thin margin of adoption — and they were one of the “successful ones.” So, perhaps many organisations look at this kind of social approach, and ask, yeah, but what if not enough people choose us? How do we resolve these conflicts? We want innovation, but without experiencing failure. We want to embrace the new, but without risk. We want to act fast and fluid, but to maintain tight controls. We want to empower everyone but retain decision rights for ourselves. We want to experiment, but we also want predictability.

We want to be flexible to customer input, but remain ruthlessly efficient. We want to adapt, but we fear the death of familiarity.

This is why it’s hard to go from being an “800- pound gorilla” to a fleet of 800 nimble gazelles — to go from being a centralised institution that competes through overpowering strength and scale to a diffuse tribe that competes by being fast, fluid, and flexible.

Make no mistake. Marketing in the social era is not easy. But remember, it is making mistakes — and the ensuing forgiveness — that give relationships their resilience. Vulnerability begets trust.

And though they are difficult to forge, such robust relationships are more likely to endure the ups and downs the market inevitably deals any organisation.

(The author is a corporate director at a NASDAQ-traded firm and a lecturer at Stanford, formerly the founder and CEO of Rubicon. ) (Concluded)

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