In ten years’ time we have seen social media developing from a simple tool to maintain your contact information to a set of tools that changed the way we communicate and do business. This article describes the development phases of social media and the direction it´s developing right now: frjom creating a network and personalized brand to supporting the business process and creating a new C2C informal economy.
When I was implementing the first CRM systems 10 years ago the maintaining of a qualified contact database was always difficult. Every time we had to setup a new system we needed migrate the old contact database and the quality of these data was most of the time very poor.And we needed to spend a lot of effort in updating and cleaning the contact information when setting up a mailing for a marketing campaign. The key advantage of the first generation of social media like Facebook was that you were able to access contact information maintainedby your contacts themselves when you have linked them.It also enables you to have access to both personal en business information which really helps engaging potential business contacts. The functionality around contact management has been improved significant and automatic interfaces make it easier now to access personal data although privacy is becoming more and more an important issue.
Second generation: what am I and my friends doing?
With you network now online available it became possible to communicate with you network and by this create your own personal brand. Twitter asked the simple question: what are you doing? By sharing this information and communicating with your community it became possible to create a view on yourselves how you would like others to see you. In this phase companies were also adding their profiles on social media to create brand visibility. With multiple social media tools becoming available it became important to take care your profile is consistent and not sending out conflicting messages. Although you can have a different purpose for using Facebook, Twitter or LinkedIn it´s important to take care your audience sees you as one. Everybody now has access to all these social media and can Google you and specialized tools to see all your profiles are easy available. By using social media in a clever way it´s became part of companies marketing strategy to influence the way others see them.
Third generation: how can I create value by using my network?
With a social network and personalized brand now in place next challenge was how to use this in your own advantage? Your network and your personal or companies brand have value, for yourself and for business purposes. For example for employees social media became animportant tool to communicate your profile on the job market. Not having a LinkedIn profile is nowadays suspicious, has to be explained and could even be a criterion not to be invited for a job interview. And when having a profile,not having the right skills and experience can also be a problem. Companies and government are using social media for their own purpose in a structured way. A marketing campaign without using social media is seen as not effective and introducing a new public service by government using Facebook en Twitter as communication channel is standard. Because of this social media were becoming interfaced with all kinds of business applications and mobile Apps. A CRM-system for example without an interface with social media will probably not been used as effective as an integrated one.
Fourth generation: how can social media improve our social and economic welfare?
With a network, personalized brand and supporting the business process in place next phase will be creating additional ways to improve the social and economic marketplace. In the current economic market a lot of activities are not done very efficient, take a lot of administrative and management effort and are more and more regulated by government. What we have seen since we started with social media is that we also do more and more business online through internet, both developments changed the structure of the business significant. You don’t buy CD’s anymore but use Spotify, buy books with Amazon and book a flight easier and cheaper using Trivago. This means a bigger scale for high volume B2C companies with less employees, management and margin and only a view big companies surviving. And always the risk someone else invents something which takes over your market share so you need to be innovative and sharp!And this is happening for one good reason: consumers profit from this trend and like it! With only 8 euro’s a month you can hear all music available or see a lot of movies online, I used to spend a lot a money on this the past. And booking a vacation was never cheaper and with the tools now available you can see before you travel what the quality of the location and service can be expected looking at user reviews. So the consumer is better off and can do more with his money than in the old world.
On top of this a new trend is changing the economic landscape quickly: with social media it becomes possible for all consumers to be active as client or supplier on the social media market without all the formalities of doing official business With a tools like Storenvy you can develop your own online store very quickly and with Alibaba it’s very easy to become both a buyer and a seller of products and services. A big shift from B2C to C2C is going on right now with these developments whereby the gap between the B and the C is getting smaller. Want to hire a room in Barcelona? Book on AirBNB. Need a plumber to repair something? Post it on Yelp or Croqqer! Want a cab? Book one on Uber. You see at this moment a lot of new Apps becoming available for supporting the C2C marketplace, with or without exchange of money, creating a new bottom up informal economy (and you will never know what is really happening there Big Brother!). Existing Online companies like Amazon.com are very interested in this market, June 2014 they announced to add location based services to their portfolio, a big growth market where they want to invest in and see potential.
Conclusion: social media enables everybody to become an entrepreneur!
Although it’s only 10 years now since the introduction of social media,the development has gone quickly end through different phases: it’s now impossible to imaginehow some businesses can be done without. There has been a negative impact for companies who did not adept to the new waysof doing business by making use of social media and integrate these in their business. For the consumer there are a lot of advantages which take care he gets better value for his money. He can profit from the new informal market which is now developing and act as both client and supplier becoming an entrepreneur and improve his own welfare. While the formal economy is growing only slowly this informal economy is growing quickly and becoming more and more important.