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Aaron Bird

Guest Commentary: If you market to consumers, you will be out of business in 10 years if you don’t have a plan for deeply integrating social elements into your product or service. Social marketing itself is not sufficient; social must literally be embedded in your product or service.

Here’s what I mean when I say that a product is social. Old Spice is not a social product. They did run a highly social campaign, which was a great use of social media for an ad campaign, but in the end it was the campaign that was social and not the product. The campaign is over now and so is the social and viral impact. In contrast, Farmville is a social product. When you engage with the product by inviting friends to help tend to your farm, you are inherently spreading the word of the product to your friends. To effectively use the product Farmville, you spread the word about it through your social graph. This is a social product.

Just about all popular products used by consumers will be social products sometime soon. Imagine this: When I eat at a restaurant, it automatically shows up in my friends’ social feeds. If I put a Polo shirt on in the morning or pour a bowl of Lucky Charms, this information about the brand I’m engaging with is published to my social graph. This is where things are headed, and if consumer brands don’t move with the trend they will lose their business. Two irreversible factors are causing this trend:

  1. Social media is democratizing marketing, the same way the internet democratized store fronts.
  2. Social apps are giving brands programmatic access to word-of-mouth marketing.

Democratization of Marketing

Much like the internet democratized our ability to sell goods and services to consumers (previously you needed an infomercial, a physical store front, etc.), social media will democratize our ability to market to consumers. Today the most prevalent forms of customer acquisition on the internet are through digital advertising (search, lead gen, display, etc.). For the most part, the companies that get the biggest voice are the ones with the most money to throw at the customer. With social media applications, all brands are going to get an equal chance to programmatically spread the word through the most valid, time tested, and proven marketing channel ever – word of mouth.

This is going to democratize marketing and the companies with the biggest voice will be the ones with the most social and engaging product (not the biggest ad budget). All of today’s ad mediums (TV, radio, search, etc.) will pale in comparison to the effectiveness of viral marketing through social media. We are already seeing the canaries in the coal mine with companies like Facebook and Zynga coming out of nowhere to be worth billions of dollars within a few years. Zynga is the shining example of making purely social products and reaping the benefits from it. In 10 years we will look back on this like we look back on the software boom of the 80s and 90s and the SaaS boom of the past 10 years. Social products will disrupt all consumer products the same way software and SaaS disrupted the industries before them.

The difference: this is disruptive marketing, not disruptive technology. In Christensen’s Disruptive Technology, technology drives costs of goods down significantly and creates a new market for a new product. In disruptive marketing, marketing social products through social media is driving down the cost of customer acquisition close to zero. For example, what is the marginal cost to Zynga when you invite your friend to play Farmville with you? Zero. In this new world, effective companies will spend resources building inherently social products and services rather than managing the traditional marketing funnel.

The important Key Performance Indicator (KPI) will not be the marginal customer acquisition cost of marketing, but the viral nature of the product or service. Customer acquisition will not be a function performed by a marketing effort operating independent of product development, but an integrated product and viral marketing effort in which customer acquisition is a bi-product of social features built into the product.

API Access to Word of Mouth Marketing

The oldest and by far most effective marketing in the world is and always will be word-of-mouth marketing. Word of mouth is also the most elusive for brands. How do you get your customers to call all 100 of their friends and tell them how much they like your product? Wouldn’t it be ideal if given the customer’s permission, the brand could call all their friends for them? With social media apps, brands can now do that, and without even having to pay someone to make the calls. If you build social engagement into the product, the customer will “call their friends” without having to do anything.

I like the example of the sandwich shop in the first floor of my building. They have a loyalty card that entitles me to a free sandwich every 7 purchases. You might not think that a sandwich is a social product. If they had a digital loyalty card hooked up to my Facebook page, it could be social. Every time I buy a sandwich, it would show up in my friends’ social feeds. Imagine how much more business they would get if every customer inherently told their 150 friends about the sandwich shop every time they purchased something. Needless to say, the sandwich shop down the street without “social sandwiches” would soon go out of business.

And so will you, if you don’t make your products social now.

Aaron Bird is the founder and CEO of Gividend, a Seattle based social media company changing the way charities and schools raise money.  Contact him via email, linkedin, twitter, or his blog.

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