Friday, September 18, 2009
Business Models and Social Networking
We had a discussion on business models this week. We discussed popular models such as brokerage, merchant, manufacturing, advertising, affiliate, community, utility and subscription models. A business model is nothing more than a way to make money online and if a company is not profitable offline going online is probably not going to help. We identified that companies can be Click Only or Bricks and Clicks by having a store presence. The emphasis on multichannel marketing means that Bricks and Clicks is a more popular option than Click only. Most companies want to do business with their customers across multiple channels because multi-channel customers are more profitable. Our guest speaker Dana Van Den Heuvel from Marketing Savant gave us an update on social networking applications in industry. We have talked about how marketing is becoming a conversation and social media is defined as people having conversations online, although other technology such as pictures and videos are involved as well. There is a new standard of expectations that companies will be hanging out where their customers are. Some key social media platforms are blogging, photo sharing, podcasts, RSS (Really Simple Syndication) feeds and social media sites. Marketers should focus on what their business objectives are before engaging in a social media strategy. Many companies have a social media presence because these firms wish to have a passionate and loyal customer base. Most consumers are not creators of online content but rather consumers and most successful companies in social media target their efforts toward the majority. Some examples of successful companies in social media include P&G. By 'crowdsourcing' their new product development efforts, about half of their new product ideas are coming from customers now. Comcast provides customer support via Twitter and Dell not only engages customers but provides product promotions online. Coca Cola spreads conversations through its fans on facebook. It is important to have a good story to tell and have a sound company before engaging in a social media strategy. Micro metrics for social media include number of customer comments, referrals, issues addressed and implemented ideas. Some recent research indicates that companies that use social media well are growing at a faster rate than those who are not employing social media as part of their marketing strategies. Marketers can't ignore these media and students were encouraged to join linkedin and twitter and use these tools to participate in the conversation on marketing. By demonstrating their expertise and what they can contribute, students can become attractive to potential job seekers. Social media sites are also a great way to meet people that can help in the job search process.