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On Corporate Social Media

October 9, 2008

Broker and blogger Bill Lublin often has very wise things to say, and this post is no exception:

A study created by Adam Sarner, an analyst with market research firm Gartner, indicates that more than 75 percent of Fortune 1000 companies will have a social-networking initiative for marketing or customer relations purposes. However Sarner predicted that 50 percent of those campaigns will be classified as failures because of a disconnect between the goals of the companies and the communities they attempt to serve.

To those of us who are active in Social Media but are not corporate marketing executives, perhaps its easier to understand the path of the relationship between participants. The identity that we build from our profile establishes a reputation through our posting, sharing and commenting which becomes the basis of how we are perceived by other participants in the social arena – hopefully earning their trust so that when they need our product or service they think of us.

I think Bill is right on the money here (and so is Adam Sarner, the Gartner analyst whom Bill quotes). Thing is, I’ve been a corporate marketing guy, and arguably, I still am. And I’m active in “social media” (again, I am reminded of the quote from Princess Bride… I do not think it means what you think it means, but that’s neither here nor there). I don’t believe that the disconnect between the goals of the company and the community is a fundamental one, but I do believe that both sides have to understand that.

Without a background of agreement, connecting is impossible.

Early on in my career, I remember a senior executive saying, “You want to know what the consumer wants? He wants everything for free.” There’s a lot of truth to that. At the same time, what a company really wants is for customers to pay them money for nothing. Those are the two extremes from which any discussion of “goals” has to start. Because few people are willing to pay good money for absolutely nothing, and few companies are willing to give away everything for free, usually both sides end up inching towards the middle where people give money to companies for something of value. (Granted, last couple of years have produced a bewildering array of counterexamples to both of these things… but those consumers will be out of money and those companies will soon be out of business.)

The fault does not lie, IMHO, solely with the Big Bad Corporation. Their customers must come to recognize that much of the fault of the disconnect lies with them.

Both sides have to recognize that their mutual goal is for the company to make money. That is the basis of the relationship, if you will. While every company knows that, not every customer does.

Corporate social media works when the company, its brand, and/or its products are seen as being valuable enough to its customers that they willingly part with their hard-earned dollars.  In some cases, that can become an intensely emotional relationship — just take a look at Appleheads willing to line up for hours to buy the latest iPhone.  Any social media strategy Apple puts into place is likely to work, because the goals of the company and its customers are aligned: make money for Apple.

In contrast, when the customer sees the company as being not much more than a ripoff artist, no social media strategy of any kind is going to work.  For example, no amount of blogging or Twittering or FaceBooking is going to get me to engage with the local used car salesman.  I just don’t trust the dude.  My goal — to avoid getting scammed — is directly in conflict with his goal — to make money.

What Mr. Used Car needs to do is to first turn around the whole basis of the relationship.  He needs a level of transparency that is going to be frightening for him — the commercial equivalent of going full monty on his business.  He can tell me (via his blog, or whatever), look, this is what I paid for the car, this is my cost to store it, clean it, refurbish it, etc., and this is the profit I need to make.  Are you okay with me making that much profit on this deal?  If my answer is no, then he should rightly de-friend me on FaceBook.  I’m no customer; just a vulture.

Real estate brokerage has issues that we are working out as an industry.  We’ll all have a giant hangover for the next several months as we recover from the party that was 2002-2006.  During that time, and frankly into much of 2007 and 2008, more and more consumers came to view realtors as bloodsucking leeches just scamming home sellers and buyers alike.  The level of trust is so low that it isn’t really possible to say that the goals between brokers and customers are aligned right now.

I think this will turnaround.  And I think social media will have a large role to play in it, as agent after agent, and broker after broker starts the painful process of transparency.  The best are already doing it; some are even “firing” their clients if they don’t get it.  I am hearing from more and more industry leaders that agents need to present facts and data about pricing trends, and if the seller still refuses to list at the appropriate price point, that the agents need to walk away and refuse to take the listing.

We still live in a (nominally) capitalist country.  Customers are rational people for the most part.  When presented the facts and information, and asked if an agent should make money helping them with a home purchase, most will answer affirmatively.

And doing social media with those people, the ones who think you should make a buck or two for your time and energy, is a very different thing than trying to do social media with people who think you’re just a scumbag realtor.

-rsh

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