The Groundswell Effect Part II

Introduction
This article is Part II of a three part series which is based on the marketing book Groundswell: Winning In A World Transformed By Social Technologies. In Part I I had discussed what exactly a groundswell is, the changing rules of the free market, outlined the concept of the sum being greater than individual parts and added some personal reflections on these topics. In this article I will address why a brand is dictated by customers and not by an individual or company providing the product or service representing the brand.

Traditional Marketing
Traditional marketing was based upon a company developing an advertisement and said company would release their advertisement to the public via print media (magazines, newspapers, etc.), radio commercials, or television commercials. This was one-way communications where the company who was marketing the product or service would push the information to the general public in hopes that sheer repetition and timing would increase the likelihood of someone making a purchase of the advertised product or service. The consumer would accept the advertised product but had little influence concerning the shaping of the advertisement for the product, the product development cycle or the product itself. Given the explosive growth of the Internet, social media, and online communities this concept is dramatically changing.

A New Way Of Thinking
Yesterday in The Groundswell Effect Part I I had mentioned that institutional power is being challenged by the groundswell. This has all come about due to a convergence of three forces which are people, technology, and economics. People are being connected more thoroughly and rapidly than ever before through such avenues as social media. Technology serves as the enabler of people due to the rapid advances in technology and connectivity. Finally, the economics of the Internet is traffic = money. The collision of people, technology and economics create the groundswell.

As discussed in The Groundswell Effect Part I the groundswell is changing the way the free market operates. No longer are manufacturers of products or suppliers of services defining the rules and pushing information to the consumer. The groundswell has allowed for two way communications, and  even in increasing regularity the consumer is defining the brand for the manufacturer or supplier as a result of interactions occurring in the groundswell. The discussions occurring in social networking communities such as Facebook and Twitter, definitions posted in such open source forum as Wikipedia, and even dialogue prompted by independent bloggers  such as myself are all defining individual brands and the world in which we interact.

The Groundswell authors, Charlene Li and Josh Bernoff provide numerous examples of this hijacking of brand identity within their book. I will not reprint those here but I highly recommend their book if this is an area of interest for you; the point is – this is happening with increasing regularity and there are documented examples. As introduced yesterday in The Groundswell Effect Part I, the rules are changing – crowds are more powerful than individuals and the crowds are redefining the rules and reshaping our products and services. This is bad news for some but a tremendous opportunity for others.

Is The Groundswell A Threat Or An Opportunity?
There is no doubt that the groundswell is a threat to traditional business. Individuals and companies operating in the old way of thinking will undoubtedly have difficulties, and although I hate to revisit the overused mantra of “change or die” prominent in so many business books I believe in this instance it is true. Web savvy consumers will no longer accept poor product or service quality coupled with superb marketing. The Internet allows people to discuss products and services effortlessly with the whole world to see, therefore the product or service delivery must be flawless from beginning to end.

On the other hand, there are an abundance of opportunities for those who embrace the change brought about by the groundswell.  In my opinion the organizations with the most opportunity are startups. Since startups do not have the baggage of a traditional organization they can start with a clean slate and begin building their processes for optimal execution within the groundswell. On the other end of the spectrum are the traditional, established companies who have a greater challenge as change within an established firm is often the most difficult – there are opportunities here though, it just depends mainly on people’s willingness to change.

Other opportunities lie in the area of product or service development.  The Internet allows for a greatly increased product development cycle of rapid prototyping, failure, and adaptation. As such the Internet allows for a greatly increased rate of evolution than has occurred in the past. Rather than researching the feasibility of an idea for a long duration, developing the product for another year or greater, and then releasing the product, the new method will be, release the idea to the public and monitor the groundswell chatter. The feedback from the groundswell will be used to improve the idea, which will next be prototyped and the cycle repeated. Increased feedback frequency and product and service development cycles generally equal faster time to market and increased profit.

I ask you to consider one final point. Groundswells and the Internet are also changing the way customers behave in regard to the manner in which they make their purchases. In the past customer loyalty was nearly guaranteed, as people operating offline generally do not change behaviors quickly. However, the groundswell creates an environment of fickle, uninhibited customers, as when operating online, people may often change as soon as they see something better. Take the points of increased rapid prototyping and change in customer behavior and magnify this across millions of people across the Internet and you can imagine the impact this has on business and society.

To Be Continued…
In Part III I will conclude this series by discussing the growing importance of relationships and how relationships are impacted by the groundswell.

Individuals and company brands must evolve to meet the business evolution brought about by groundswells!

–John R. Sedivy of Cape Cod Branding