This is a guest post written by Natalie L. Petouhoff
In my many incarnations–as a Forrester Analyst, as an agency executive, and a PWC management consultant, the guidance I’ve been asked for really hasn’t change over the past 25 years–even though it spanned three cycles of major innovation in software–ERP, CRM and now Web 2.0/social media. The questions executives asked me were always about how to increase revenue and decrease costs. And about how best to do that with people, process, and of course technology.
In advising clients about social media, I’ve taken a cue from Geoffery Moore and Roger’s Diffusion of Innovation theories, and ask them, “Where are you on the social media adoption curve? And what’s your tolerance for not knowing the ROI for social media?” and developed my own Social Media Adoption Theory.
Innovators and Early Adopters
Those who have readily adopted social media are part of the innovators and early adopters. Innovators are technology enthusiasts. They love it so much they are always the first to buy, even at high prices. They are very tolerant of products that may not be perfect yet and are dying to be beta testers. They are the ones camping over night in front of an Apple store to get an iPad.
Early Majority and Late Majority
Those who haven’t implemented social media, in general, want proven, established products, based on industry standards. They only buy from established market leaders who have mature products, fully packaged and supported at a low price. And they want to know the business value of social media.
Is there an ROI to Social Media?
Where is your business on the Social Media Adoption Curve? Why is this important? Sometimes the more things change, the more they stay the same. For instance, when executives ask me what social media is, I tell them that its similar to what W. Edward Deming said years ago: “Listen to your customers and employees and integrate that feedback into your company and you’ll be successful.”
Now imagine a company that takes input from thousands–authentic, genuine, direct feedback and integrates that into their company. Imagine a company that does that on a daily basis. Then imagine a company that doesn’t–ever. Imagine both companies in 3, 5, or 10 years.
From this point of view, every single company needs to do social media. But will they? The Cluetrain Manifesto predicted there would be a time where the customer would be in charge of a brand and what’s said about them, and that there would be an enabling technology. We are here now. That is what social media is.
The success or failure of any business is their ability to continuously increase their share of the market. The best way to do this may be implementing social media. You’ve seen businesses that get a rolling start and then they seem to disappear (think Blockbuster).
I think that if more executives understood the business value of social media they would be more open to implementing it. In fact, they’d be crazy not to. And that’s why I think, now more than ever, social media ROI is paramount! The early majority wants and needs social media ROI to move forward.