Not many are oblivious or ignorant of social media and networking, nor don’t use web 2.0 technologies, despite most not realising it. Anyone who has logged into a website, shared personal information online or uploaded any data to the old “internet machine”, in the immortal words of Will Farrell (Blades of Glory for those that know not of what I speak), has participated in social media. True, this particpation may not have taken a direct, or extroverted, form, such as blogs or (registered) networking sites, but those forms are only a sub-set of a much larger category of social media.

But, despite this prevalent and pervasive use, regardless of the ignorance of the masses to its use, a pressing question has arisen…

What is the business model? Well, the revenue potential is still an allusive and debated model, but the value of social media is not…

I recently caught up with an old colleague I hadn’t seen in years, Andrew Jenkins, a value adding strategy consultant. Thankfully, he tracked me down through LinkedIn, contacted me, and we met up for a coffee; using the i-phone google latitude app to locate one another- another form of social media I might add. During our extremely interesting conversation about the value of social media, Andrew told me a great story. The actual (Business Week) story is here, but the “moral”? Social media, in this case twitter, is a critical tool to respond, real-time, to customer comments, negative or positive.

I left my (very interesting) conversation with Andrew, wondering if there are other stories of social media playing a vital role in not only responding to the customer experience, in real-time, but also leveraging web 2.0 to proactively manage the internet  perception of a company’s product and service, directly impacting the bottom line. I didn’t wait long to find the answer is… yes.

A July 5th, 2009 New York Times article, “Twitter Comes to the Rescue” lists four separate, and equally impressive, examples of the use of twitter to respond real-time, mitigating bad publicity and poor customer satisfaction, in a few cases reverting the situation to a positive customer experience. Certainly the article references the fundamental flaws, and misuse (potentials) of twitter. Irrelevant information, eg. do I really care you are “having a coffee” or “enjoying the sunshine“, and the limit of 140 characters per tweet limiting what can be properly communicated, are two of the more prevalent issues with twitter, but the power of the real-time response far outweighs the limits. Real-time response that can turn disgruntle customers to “uber“- advocates for a company’s product/ service.

“Disgruntled customers, tend to be the biggest opportunities“, Morgan Johnston, JetBlue spokesman and twitter account manager

And the value? The revenue opportunity? The profit margin? Well, it could be argued the comment: “I now go out of my way to use UPS—and I bought shoes the next day at Zappos” (from the Business Week article above) demonstrates intent to re- buy, and extroverted commitment to a brand. Powerful stuff.  And funnily enough, the comments on the article use social media to refute the positivity of the outcome. There in lies another customer to monitor, contact and create an authentic customer experience.

Is there a price tag on this? Certainly, yes.

Less certain is, how much? But that’s innovation isn’t it? The economics come far after the social good that innovation can bring. And that’s a business model, dare I say, that is without value? Both priceless and low cost, organisations that ignore not just web 2.0 and social media tools, but the correct use of those tools, will be left behind in a new type of value creation and measurement. Understand and leverage the tools. Consumers, particularly a ‘next’ generation that will be ‘wired’, connected and educated, are using the [social media and web 2.0] tools as a primary source of purchase decision considerations. It’s about as salient a source as an organization could ask for. Every comment, good, bad and bizarre, is a vital piece in the immediate analysis of a company’s market position, from a perception standpoint. Equally, and here’s the true value, the tools provide almost guaranteed “first warning” of changes in consumer perception.

Well, I suppose that’s only of interest to an organization that was looking to lead market & product innovation, capture market share and expand customer profitability…

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