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JonnyAnderson.com :: The New Business Paradigm :: Social Media & The New Business Paradigm (Part 2) – The Emerging Trends

2. EMERGING TRENDS IN SOCIAL MEDIA

As social media has become increasingly popular, several trends have emerged that change the way businesses should interact with consumers. These trends can be placed into three major categories: (a) Changes in Consumer-Business Relationships, (b) Changes in Market Research Practices, and (c) Changes in Consumer Expectations.

a. CHANGES IN CONSUMER-BUSINESS RELATIONSHIPS

With the advent of social media, consumers are increasingly affected by the opinions and reviews of their peers. A poor review of a product on a friend’s blog is more than enough to dissuade a purchase. On the other hand, the praising of a product through a tweet might be enough to convince a teetering customer to finally buy a product. This personalization of the decision-making process has devalued the opinions of professional product reviewers and has made it vital for businesses to interact with consumers on a personal level (Godara 146). Social media and marketing consultant Deborah Schultz, phrased it well: “it’s all about a new attitude: a behavioral and cultural shift” (Molander 39).

Understanding the new “attitude” is absolutely key for businesses. Consumers are turning to mediums like Twitter and Facebook to find out what their peers are saying about various products. Armed with that knowledge, businesses must enter the social media realm as well. Through social media, businesses have the opportunity to effect the opinions of their customers on a personal level. They are able to have one-on-one interactions with consumers in a way that was not previously possible.

b. CHANGES IN MARKET RESEARCH PRACTICES

Another benefit of social media for businesses is the tremendous power they are given when it comes to market research. Facebook provides businesses with a series of tools that can be capitalized on to understand market trends and individual preferences. Facebook Lexicon is a feature that allows businesses to track the frequency of certain keywords on users’ profiles. “Lexicon aggregates and analyzes millions of Facebook Wall posts every day to provide a searchable database of trends over time” (Facebook Lexicon). This allows businesses to monitor their brands among various demographics within Facebook. Lexicon also allows users to compare keywords against others. This is also beneficial to businesses because it allows them to track their relative performance compared to competitors. For example, a comparison of the keywords “Coke” and “Pepsi” suggests Coke is greatly outperforming Pepsi (Klaassen 25).

Another feature Facebook provides that essentially eliminates much of the necessity for independent market research is the Facebook Ads feature. In practice, there is very little that is different about Facebook’s ad features and
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those of Facebook’s competitors. However, the technology behind those advertisements changes everything. Instead of advertising to any random user that comes along (as most ad programs do), Facebook allows businesses to target specific demographics. When creating an advertisement, businesses can target select age groups, specific networks, and/or people with specific interests or hobbies. By utilizing Facebook’s features, advertisements are only sent to those individuals who are likely to be interested in the products or services of the business. This drastically reduces costs, increases efficiency, and improves brand reputation by reducing the frequency of irrelevant and often irritating advertisements.

As can be done with Lexicon, it is possible to monitor brand “buzz” through features on Twitter as well. Twitter’s search feature allows users to search keywords or phrases and display the most recent tweets containing those words or phrases. Third-party tools are also available to expand on this capability. Monitter.com is a great tool for monitoring keywords in real-time. Users select the words they want to monitor, the geographical region they wish to review, and then watch as the “Twitterverse” tweets about their selected keywords. This allows users to compare the frequency of various terms and monitor the positive or negative things that are being said in relation to those terms. Businesses can track what is being said about their brand and products and then quickly respond with appropriate messages.

c. CHANGES IN CONSUMER EXPECTATIONS

The addition of so many tools has also increased the expectations of consumers. While consumers may not expect a personal message from a company’s CEO, they are starting to expect some sort of personal communication with a company representative. Social media has also focused a lot of attention on privacy and the protection of personal information.

A recent change to Facebook’s terms of service sparked great controversy when users of the popular site felt their personal information and property were being violated. Consumers expect their information to be protected and so the changes to the terms of service, although small, were enough to excite debate. The changes were, in most ways insignificant, but since they were not heavily publicized, “[Facebook] appeared to be sneaking an unpopular change into its terms of service in the dead of night” (Stylman 14). Facebook failed to recognize the new consumer expectations and received heavy reprisal from its users for the poor judgment. Facebook did learn from the mistake and instituted some revolutionary changes. This will be discussed later.

Continue reading Part 3.

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Social Media & The New Business Paradigm (Part 2) – The Emerging Trends

2. EMERGING TRENDS IN SOCIAL MEDIA

a. CHANGES IN CONSUMER-BUSINESS RELATIONSHIPS

b. CHANGES IN MARKET RESEARCH PRACTICES

c. CHANGES IN CONSUMER EXPECTATIONS

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