The 5th P: How social media has added People to the mix

Readings:

Made to Engage

Do You Trust This Face?

Does the Internet Make You Dumber?

Does the Internet Make You Smarter?

Secret of Engaging Customers in Online Communities

The internet has provided unfettered access to information, both good and bad. How individuals or firms leverage this information to their advantage essentially drives the final outcome(s). The internet and social media, for the first time have provided firms an unprecedented access into a customer’s mind- his likes and dislikes, needs and wants and finally his/her perceived value of a service/product. Firms in the past, spend millions in market research, product testing, segmentation, now have access to similar information and that too real-time through social media channels. Firms having spent decades working on the traditional marketing equation of 4Ps- Product, Place, Price and Promotion with little or no interaction with the 5^th P- People are now forced to rethink. The internet and social media has flipped this equation to let People be the driving force. Twitter, Facebook and Amazon provide a conduit for customers to praise or vent about a product helping form instant opinions about a firm’s product that are hard to erase. However, the upside for the firms is the ability to better segment the markets, refine their offerings and customize their products as needed in collaboration with the people who want it. Days of “Any color so long as it’s black” are long gone. The access to information is eroding the advantage firms had in the past- trying to sell the same product at different price points, offering products that are perceived to have “advanced” or “new” features and finally resorting to advertising gimmicks. Now potential customers have access to price information of the product and its competitors in the different channels and locations. Have detailed reviews of product features by real customers and don’t pay any attention to traditional media advertisements.

Has the internet made us smarter or dumber? Can we really pass judgment this soon on its impact? To me, internet is a tool- how you use it drives what you derive from it. The same internet that has given us Wikipedia, GNU and a collaborative search for cure to major diseases also gave us cyber stalking, pornography and the silk route. IS that to say all internet is good or all internet is bad- of-course not. As with any invention, the good come with the bad. Having a Facebook to connect with friends/ family and express opinions comes with all the associated privacy concerns and identity thefts. I am sure similar concerns were raised regarding children’s grades when the television became popular (http://www.csmonitor.com/1983/0819/081943.html) , did that keep its influence from growing? However, over time people realized the need to recalibrate and use it to our benefit.

The internet and social media has shortened the news cycle, redefined how we get our news and information about everything. It gives firms a unique ability to learn, cater, collaborate, influence and watch real-time how their customers react and use their products. It is hard to ignore the irony in this strip by Scott Adams on how social media and the internet have affected the way we do business and how it still is a quite a confusing landscape to navigate.