The Lifestyle Economy: Social Media’s Role in Marketing

We know social media is an extremely powerful tool. We now have the opportunity to hold two-way conversations with each other, brands, organizations, products, groups, etc. furthering relationships and building levels of loyalty that was once only thought as marketing porn. So, where does social media fit into the marketing world? What exactly is social media’s role in Marketing? To answer, I want to tell a story about the background of marketing communications.

In graduate school, I had the challenge to read and present on “The Experience Economy” by Joseph Pine and James Gilmore. In it they discussed how rising customer expectations and increased communications create shifts in the way we market our products, services, and brands; from the raw commodity economy to the experience economy in which we currently live. They had a great case study about Starbucks that illustrates their ideas extremely well. I want to take a couple sentences to highlight the main points of this case study.

***NOTE: as we move through this example, we need to keep in mind that customer expectations are continually raising, regardless of what marketers do.

The Starbucks Example.

Commodity: Starting at the very rudimentary level as the commodity, we, as consumers bought raw commodities, then processed them to create a usable product within our lives. This level of marketing had little communication between the company and the customer with very low expectations for the product.  (In the Starbucks example, this would be the raw coffee beans.)

Goods: As our expectations began to rise, we didn’t want to process our own raw commodities, but were willing to pay a little more to have a company do that for us. This rise in expectations created the Goods Economy, where we purchased processed commodities. This level of marketing had an increased level of communication between the company and the customer with higher expectations of the good. (In the Starbucks example, this would be the processed coffee beans – roasted and ground for us to make at home)

Services: Our expectations continued to rise and we were tired of brewing our own coffee. So we decided we wanted to be able to purchase it already brewed. This created the Service economy. We were willing to pay a company to brew coffee so we would have to. With this level of marketing our communication between the company and customer was increased, and we had higher expectations with the service. (In the Starbucks example, this would be coffee being served in diner’s and restaurants).

Experiences:  The rise of customer expectations, created a stagnant feeling about coffee. We wanted something more. Enter Starbucks…Starbucks came in and provided an experience around the act of drinking coffee. They created a tangible experience of walking into a chic coffee shop with amazing smells and artsy people clicking around on their Apple iMac’s. This amazing epiphany took our industry to the next level. However, the excitement of the Experience Economy, we see a tremendous increase of communication between the company and the customers, with exceedingly increased customer expectations.

So, as we can see, customer expectations continue to rise, and as they rise, we see a need for increased communication between companies and their customers. With that said, after graduate school, I made it my quest to figure out what was next. As expectations continue to rise, consumers will become stagnant with the experiences they are receiving and begin to want more. After years of research, consulting, and following trends, I had an epiphany…

Begin the Lifestyle Economy.

People want a brand that integrates into their own personal lifestyle. They want a brand to make their life easier, define that aspect of their personality, and communicate to them in ways where they feel like an individual.

Enter Social Media.

With this two-way communication, we can now, not only communicate on an individual conversational basis, but also provide enough relevant content to create a malleable brand; where consumers can take information, services, and products surrounding our brand, and mold it into their own personal lifestyle. This level of communication and engagement, builds a deep-seeded relationship of advocacy. Now as expectations rise, our conversations and relationships will allow us to adapt, react, and further integrate into customers’ lifestyle.

Social media is quickly becoming the glue that attaches all of our company’s communications. From sales to customer service; from Marketing to customer advocacy, we see companies and customers engaging together to complete the full circle of the integrated marketing theory.

image courtesy of Flickr - Design and Technology Student