BzzAgent is very active in the MITX community here in New England and we were excited to be asked to contribute to their 2011 Perspectives Blog Series.
Our thoughts on the future of social media appeared on the MITX blog today. Here is a cross post of that article.
Marketing in 2011 is about the power of the group. If there is one thing we learned in 2010, it was that the collective power of people connecting in social media can drive some serious sales. In the coming year, the social media practices of motivating consumers to get their friends, family, and followers to organize around a purchase activity will be the most effective way for companies to sell online. This won’t be driven by marketers looking for another way to push messages or hoping their viral videos take off — it will be driven by Social Media’s ability to provide unique group experiences and shared value. The message may come from the marketer, but the marketing comes from the people.
The perfect example of this is the group buying phenomenon Groupon. Everyone’s been talking about them this year – and for good reason. Forbes referred to them as fastest growing company in history. It is always fascinating when a hot company turns down billons from Google, but what makes the Groupon story so important is how it has transformed social marketing and connected the web to massive retail store sales.
Group buying certainly isn’t new. (Remember Mercata?) Some of the earliest and most well-funded ecommerce sites on the web were attracting like-minded shoppers to get better deals in bulk. The problem was they weren’t social. The deals didn’t get people excited, and unexcited people tend not to share things too much.
The world is different now. The Internet has become a social marketplace. Groupon has cracked the local ad market and spawned countless numbers of imitators, but the next year will bring the expansion of this concept to a wide variety of new industries. Consumers are already sharing their latest purchases with each other for everything from scented soaps to Cisco servers. The companies that can reach a targeted audience with valuable, exclusive offers can turn that buzzing into buying.
Plenty has been written about Groupon clones and high-profile sale sites like Rue La La and Gilt Groupe. But the underlying trend is spreading fast. eBay is bringing group buying to gift giving with GroupGifts, GotGroupBuy.com is offering all types of electronics, and brides can join forces for great deals on jewelry and honeymoons on a new Knot.com site. In China, Mercedes sold 205 Smart cars in 204 minutes on a group buying site. I predict this kind of innovation will crop up in whole new verticals like insurance, financial services, and even health care, to improve the customer buying process. Look for companies to break down the walls around how groups coordinate to buy these products in 2011.
Sites like these are not about advertising. They use a promotional approach to create the kind of buzz that gets a group of people talking and buying. It takes much more than just a great deal. Here are 4 keys for “we-commerce” success in 2011:
1. Value – Provide an incredible value and consumers will line up around the block.
2. Scarcity – Nothing gets people talking like something they can’t get their hands on.
3. Exclusivity – Exclusivity is the velvet rope of social media: everyone wants to be special enough to be on the right side of it.
4. Status – Nobody wants to be anonymous. Our personal value is derived from status, and the more public it is the better. The key to status is everyone wants to share it, especially if you make it easy to highlight what they know or have accomplished.
Social media isn’t just about relationship building anymore. It is also about activating groups of people online to collectively buy products. This requires a direct response mindset, and the marketers that adopt these practices in 2011 will be the companies we’ll be talking about this time next year.
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