Chapter 6: Connect

It’s been over fifteen years since the marketing aspect of social first started.^[1] So many brilliant people have been writing, speaking, and sharing marketing-related case studies during that time that if I only listed a few, I’d miss some really important thinkers. And if I tried to list them all, I’d hit the word limit on this book. But despite this outpouring of expertise, many organizations still find it ridiculously hard to do (if at all).

This chapter builds on the previous two; I’ve already discussed how to organize to create value (chapter 4) and how to deliver value (chapter 5). This chapter addresses how the third part of any business model—how you capture value via sales and marketing. The Organize/Deliver/Capture taxonomy is the way many people think of the three parts of the business models. But as you might notice by this chapter title, I think this part of the problem. As Philip Granof recently wrote, marketing has typically used a war metaphor to talk about sales and marketing.

In the Social Era, the way we complete the third phase of business model is to connect.

Some problems are technical, where the solution is finding the best expert in that field and then working to execute her strategy. But other problems require more than an answer to a known question and demand that we spend some energy figuring out whether we’re even asking the right question in the first place. Perhaps because marketing has been conceived of as “capture” rather than “connect,” we can say that solving what marketing needs to be in the Social Era fits into the second bucket. So, instead of assuming we have answers, let’s ask a series of questions about how to achieve reach and connection, in the hopes that we get smarter about the challenge itself.

Does Social Have to Be Chaotic?

The old model for customer relationships—that is, the one still used by many companies today—is built around a buying funnel that progresses from awareness to consideration to purchase to loyalty. Fundamentally, this is an information model in which companies provide the information and customers consume it.

The funnel is a favorite of marketers because it is linear, unidirectional, and transaction-centric. What this means is that there is a single path built around discrete actions by the company and responses from the buyer. It is not hard to determine where any particular consumer is in the process, so tracking and metrics are straightforward and easy to calculate. Where many marketing activities are hard to measure, this one is easy.

Yet the passive, obedient consumer and paternal, in-control organization have given way to a vocal, informed consumer and an organization struggling to comprehend what this all means to its bottom line. (Of course, the notion of a passive consumer was always as misleading as the idea of a “mass market”; consumers were never as passive as companies like to think.)

So social marketing experts will tell you that marketing has to become more conversational, more relationship-oriented. While most companies have now learned how to say hello and how to apologize, I would argue that few have accepted the fact that power has shifted. Power has shifted from a company-centered worldview where it was responsible for figuring out what to create and telling the consumer (loudly and often if it had money to do so) what to buy, to a time when consumers can co-create with one another and with brands. Brands that don’t recognize the shift in power use the technological tools but don’t act social. Are the persistent tweets that always apologize but never fix the situation really social at all? (I’m looking at you, @united, @att, and @comcastcares.) If that’s a “relationship,” it’s a rather boorish one and one that most of us would abandon.

Social has never been a technology trend, as it is often depicted by the experts. Humans have always wanted to connect, organize, and create value. Back when there were tribes, people had community and naturally had relationships in the marketplace. But our current organizational constructs have been focused on scale at the cost of connection. In truth, if we let it, marketing in the Social Era will look like any other relationship, perhaps like falling in love, following an arc of romance, struggle, commitment, and sometimes, co-creation:^[2]

• Romance. This first phase is about introductions. In purchasing, as in dating, people don’t want to think about big commitments when they are still trying to decide if they even want to get to know you better; this phase of connection is about exploring.
• Struggle. As we spend time together and get to know each other, there is a mutual effort to learn how both parties in the relationship are going to fit together. Each person has to realize it’s not all about him or her. After all, there needs to be balance if a relationship is going to last for the long term. In the business context, the parallel holds: both parties have to share in the outcome. For example, a local retailer in my area, Crimson Mim, recently directed me to buy a product online from another vendor because it would better complete my outfit, an experience that is seen by the consumer (me in this case) as generous. Consumers can contribute to the relationship by signaling their needs so that businesses can serve them, or by deciding to buy from companies whose values they support instead of shopping on price alone. For an organization, this can also be about making information available freely, knowing that it may not get picked as the vendor of choice, but the consumer will still get the best choice for her.
• Commitment. When the relationship stabilizes, each knows what to expect from the other and cares enough to be there, for better or for worse. While loyalty in a predominantly one-way, transactional exchange is fragile, commitment in a stable, bidirectional relationship is far more robust. You are willing to forgive one another for mistakes. Or to look past small annoyances because the benefit of being committed is worth the trade-offs. Just as we might hope a married couple would stay together through cancer or financial devastation, we hope that the parties in business can weather through the ups and downs that change brings. For example, when Toscanini’s ice cream (once deemed the “Best Ice Cream in the World” by the New York Times) messed up its taxes a few years back, its passionate community of ice cream lovers donated about $30,000 in one week in a spontaneous bailout.
• Co-creation. Just as not all relationships produce children, not all business involves co-creation. But co-creation produces a different level of ownership of both the product and the brand. In this type of relationship, a customer is no longer merely making a transactional purchase, but participating in the act of creating. If, for example, I design a T-shirt for Threadless, or contribute code to an Open Source Initiative, or correct an entry on Wikipedia, I am creating with the organization. If I purchase that smoking hot Burberry jacket that only fifty customers were allowed to order in a custom color, then not only do I love the jacket, I have created something unique with the brand and therefore have ownership with the brand. Kepler’s, an independent bookstore near Stanford University, underwent a similar closure and recovery as Toscanini’s, but the story went further. Now that community donations have streamed in to save it, the bookstore and its board—composed of community members—are planning to rebuild as a next-generation community literary and cultural center.

No wonder social marketing is so hard to get right. It is as complex as any relationship. And let’s remember this: love isn’t rational, but a combination of logic and emotional needs. In this construct, relationships certainly aren’t predictable. (Try applying any predictive metrics to your love life and see how it goes.) And, as anyone who’s ever been in love can attest, it’s not a linear path.

 To a company, this can feel like pure chaos. There is not a “thing” to manage. The metrics are new, evolving, and unfamiliar, and so they seem unclear. Social marketing still lacks a prescriptive model that one can put on a PowerPoint slide and show to the board of directors. Instead, like a relationship, it is fluid, not formulaic, with a measure of equality between consumer and creator.

Is a Business Built on Volunteers Manageable?

There are plenty of examples in the pages of HBR—along with other publications—of social business models that use volunteers.

One example is that of TED and TEDx. TED has its main conferences (TED in the United States and TEDGlobal in Europe) where people with relatively big wallets gather once a year to hear smart people give short talks, creating “ideas worth spreading.” These TEDtalks are released online and allow global participants to share in the spreading of ideas. In June 2009, TED announced a program called TEDx that allows many to organize their own TED-inspired conference.

By doing this, it got a benefit equivalent to a multimillion-dollar marketing budget by enabling a franchise of passionate users to do their thing. Volunteers coordinated events in places as near as New Jersey and as far as Estonia. There was TEDxKibera, held in Africa’s largest shantytowns in Nairobi, Kenya. The first two-and-a-half years of TEDx have resulted in 2,500 events in more than 110 countries.

This is social connection. Passionate people are co-creating because they value TED’s purpose. The social 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 organization to expand on purpose, the question is, at what cost?

 Certainly the Komen controversy showed the complexity of the issue. The Susan G. Komen Foundation is a community-based organization involving many who like a grassroots feel to their cause—finding a cure for breast cancer. In 2010, 1.6 million people participated in its regional “Races for the Cure,” staffed by over 100,000 volunteers. But when the foundation stopped its donations to Planned Parenthood, an organization that provides 4 million breast exams annually, it turned what many believed to be an apolitical issue into a political one. The community that provided the basis for Komen’s success turned on the foundation, as people began to question whether the organization had changed its purpose. In the Komen–community relationship, the community felt as if this was a major breach of trust. So the cost is that when you work with people, you need to take into account their shared ownership. 

The bottom line: the more an organization 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 implies 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 (at TEDx or McAfee) deserve to be paid for their work? These could lead us to ask, does this model have too many hidden costs?

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 6 million users but only five thousand paying customers, just an 0.083 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 focused on commitment, not transaction (what have you bought from me lately?) between consumers and the company, it fundamentally shifts power.

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 food to hairstyling. Where once usage came 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 organization 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 consumers do? Flexibility sounds good as a consumer, but it is terrifying to the brand (and the finance team that creates the budget). The MySQL story shows a razor-thin margin of adoption—and it was one of the successful ones.

 So, perhaps many organizations look at this social approach and ask, yeah, but what if not enough people choose us? That’s a definite risk, but not adapting to the changing phenomena of the Social Era is also a risk.

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 herd of nimble gazelles; an organization goes from being a centralized institution that competes through overpowering strength and scale to a set of relationships or interrelationships. Gazelles thrive and win by how they share power with one another. And, as a result, they can act fast, fluid, and flexible. For organizations, this is key to winning in the marketplace.

Make no mistake. Marketing in the Social Era is not easy. Being heard above the noise is a true challenge. But reach and connection allow for a different construct.

When customers are central to all we do, they are not easily controlled and they are not predictable. But remember, it is making mistakes—and the ensuing forgiveness—that gives relationships their resilience. This connection might take longer to forge than a transactional exchange, but its outcomes will last longer. Any vulnerability we feel along the way actually begets trust in the marketplace. And though they are difficult to forge, such robust relationships are more likely to endure the ups and downs the market inevitably deals any organization.

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