Beyond Web 2.0 – The New Reality or from Customer-Focus to Customer-Control

It's been said the web changes everything - and it certainly has.

 

By L9.com

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Web 2.0 has become a fashionable term in the short period of about two years since it was introduced. Social networking, wikis, tags, tag clouds, mashups, podcasts, blogs, and user generated content are just a few of the many new buzz words in our ever-expanding web lexicon. The subject of this article is not so much about definitions but about the effect Web 2.0 has on us - in terms of business – and on our members.

Companies like MySpace, Facebook and YouTube are representative of the new ways people are choosing to communicate, consume and more importantly, produce media. Media consumption has transformed and moved online at a staggering pace. A whole new generation has already grown up with the web as their main source of news and entertainment, and their primary educational and communication tool. Children growing up now will know nothing pre-web. A new term, “information snacking,” has been coined defining the intensive habit of consuming news in ever smaller portions or snippets, compared to sitting down and reading a newspaper for an hour or more.

When Web 2.0 came and passed, so to speak, it did so without any clear definition. But the web was changing rapidly and people apply names to things as a way to understand them. In this case, it seemed to include all kinds of stuff of differing nature – meaning the web was changing in different ways simultaneously and a lot of those different things got clumped together under the misleading Web 2.0 label. There were big changes taking place in social networking – people talking to each other rather than just taking information down from web servers. More subtly, it was also about people changing information rather than just accessing it. Web interfaces were also getting dramatically better with improved immediacy and a term we will now employ, direct empowerment. If anything, empowerment is the key to the changes that have taken place and will continue to take place.

Congratulations! YOU were the Person of the Year
The editors of TIME - who last year selected "YOU" as person of the year, saw the dawning of a new era resulting from “the small contributions of millions of people” -- “You seizing the reigns of global media founding and framing the new digital democracy.” Powering this are “consumer-generated media,” “social media,” and other Web 2.0 buzzwords from the debate about the changing media landscape. But TIME’s selection elevates awareness of this trend from the hot story of the day to the scale of a full-fledged social movement. TIME has recognized a momentous social development relatively early in its life-cycle, as they did with “The Under-25 Generation” (1966), and “American Women” (1975). Unlike those cultural phenomena, however, “You” is not limited to a demographic segment of the country, but it is open to everyone.

Hype or Reality?
As with any new development on the web, there is always a bit of both involved. The hype exists primarily on the level of many individual start-ups claiming to be the next Google in order to get funded with venture capital or acquired by Rupert Murdoch for a billion dollars! But the reality is seen in how people are actually using the web and what tools are becoming available at an increasingly rapid pace. How will these changes further affect human interactions and communication and, therefore, business and marketing? It used to be about customer-focus, but in actuality it still very much a product-driven marketplace to this day. Marketers have always had a strong desire for control over the product, the packaging, and the message and to be effective, breaking through the clutter by segmenting and targeting. It's a military-like discipline with military-like terms. That world is changing, or has already changed. But often it seems organizations don't realize how profound the change has been.

At first, some businesses responded by incorporating social networking tools like blogs as a new corporate communications channels. Some even started their blogs without accepting comments, but have since corrected course. It was hard to let go of the old “We’re going to tell our customers more about us….” mindset of traditional marketing strategists. A handful of brands have attempted to use social media as a new tool to manipulate gullible consumers, creating fake blogs such as McDonalds’ Lincoln Fry blog or Wal-Mart’s “Wal-Marting Across America,” and Sony’s “alliwantforxmasisapsp.com” blog. In each case though, these companies learned that the blogosphere is closely policed by zealous ethicists. Disingenuous marketing tactics are not tolerated long in the social network; they commonly backfire.

Cutting Through the Clutter
As this social movement gains momentum, businesses must learn new skills. This is a daunting prospect, but one filled with opportunity. It's really not specifically about having a CEO blog, marketing podcast or online newsletter. These may be useful and sometimes necessary tools, but it's about much more than that. It's more fundamental. There is already too much clutter, too much information; adding to what many consider a cacophony of noise doesn't really contribute anything positive. Companies can no longer control their message. They can join the conversation or stay on the sidelines. It is now a conversation not only influenced, but directed by the customer.

The key concept for businesses to understand in this new environment is to listen to people’s voices – not their wallets. “Customer-centric marketing” has been a much talked about trend for a long time now. However, the advances in database marketing, predictive modeling, and lifetime value segmentation are really “money-centric,” not “customer-centric” approaches. Tracking purchases focuses marketers on the next product to sell and pushing it at the customer, while neglecting the relationship the customer wants to have with the brand. The collective “You” is demanding that businesses listen to criticism and complaints and honestly admit mistakes. Organizations need to be open to suggestions and participate in a collaborative process to build their brand.

This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

If you are interested in contributing an article on CreditUnions.com, please contact our Callahan Media team at ads@creditunions.com or 1-800-446-7453.

 

March 26, 2007


Comments

 
 
 
  • "When Web 2.0 came and passed, so to speak, it did so without any clear definition." It''s not gone yet. Otherwise a great article.
    Trey Reeme
     
     
     
  • If we''re not connecting with our members the way THEY want to be connected with they will connect with someone else.
    Virginia Scaccianoce
     
     
     
  • This is very timely - nicely augments the Callahan Webinar ''Blogging Basics: A new way to approach the Member Experience" March 14, 2007. That webinar was very educational in leading credit unions in the discovery process of new, even non-traditional ways to appeal to members and non members in a blogging environment. A few years ago the word cocooning defined the way people preferred to hybernate ''after work'' hours. Blogging allows us all to stay home, but develop relationships, build businesses, create dialog in a safe and trusted environment.
    Anonymous
     
     
     
  • I very much agree Joe. There has been a lot of talk about the role and opportunity for credit unions in social media (including blogs and other online community sites). To do this effectively we first need to be willing to surrender some contol over the channel and watch what happens...otherwise it will still mostly just be a one-way newsletter to our audiences-- no matter what we try to call it. A far cry from an online community.
    Scott Patterson
     
     
     
  • Tim O''Reilly''s take is that Web 2.0 isn''t dead yet, either. Wesabe gets a mention as an example (btw Wesabe is keen on working with credit unions) http://graemethickins.typepad.com/graeme_blogs_here/2007/03/tim_oreilly_say.html
    Trey Reeme
     
     
     
  • I agree Trey, the Web 2.0 is certainly not dead. It is continuing to morph, finding purpose, and evolving into the next phase of its development. Nothing in this game is static. Like Joe''s article, this referenced link speaks to the evolving nature of everything 2.0 (http://earlystagevc.typepad.com/earlystagevc/2007/03/web_20.html)
    Dave Mayette
     
     
     
 
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