Feature Story

"Socialnomics": When Word of Mouth Goes Global

Author Erik Qualman Says Social Media Is Here to Stay, and Companies Must Embrace It.

April 5, 2011

By Laurence Cruz

We’re starting to see news stories speculating on Facebook’s eventual demise. By one account, the social networking giant won't be around five to 10 years from now -- or at least won't be recognizable.

But even if Facebook turns out to have been a fad, it’s hard to imagine the greater social media movement grinding to a halt. According to Erik Qualman, author of “Socialnomics: How Social Media Transforms the Way We Live and Do Business,” social media may be the biggest shift since the Industrial Revolution – and one that businesses ignore at their peril.

Qualman, a social media guru, blogger and speaker in the Internet and marketing community, coined the term “socialnomics” to describe the way social media amplifies word of mouth to global proportions – what he calls “word of mouth on digital steroids.” It’s the collective power of this digital word of mouth to influence consumer behavior that forms one of the key tenets of Qualman’s creed. Consider, for example, that the Internet hosts some 200 million blogs, with one in three expressing opinions about products and brands, he says. Or the fact that 78 percent of consumers trust recommendations made by their peers, he says, versus only 14 percent that trust ads.

As a result, Qualman says companies must allow consumers to take ownership of their brand – because, thanks to social media, they’re going to anyway. In fact, he says consumers will soon take ownership of companies’ products and services, too.

Terrifying? To some, maybe. But Qualman sees an upside. Businesses will be able to take money they would have spent on traditional push marketing and plow it back into the product or service itself. It’s also a wake-up call for companies to sharpen their focus on their brand. Qualman says he urges C-level executives to survey their employees on three questions: What is the company mission? What is its reason for being? And how does it differentiate itself?

"We don't have a choice on whether we do social media. The question is how well we do it."

— Erik Qualman, author of "Socialnomics"

“Historically, you should have been doing this anyway,” he says. “But now you have to, because if you can’t get the people in your building to get these three answers right, how can you get the consumer who’s going to take ownership of your brand to get it right, and to take that brand where you want it to go?”

A Core Competency

One company that Qualman says has used social media well is Ford. In an effort to generate buzz for a new Fiesta model, the company launched a grassroots social media campaign dubbed the Ford Fiesta Movement. Ford chose 100 social “agents,” gave them six-month Fiesta leases, and left them to share their experiences with the car through Twitter, blogs, video and events – all without spending a dollar on traditional media.

It's unclear how many Fiesta sales the effort yielded, but Ford reported the campaign generated millions of YouTube views and Twitter impressions, and turned up some 50,000 interested potential customers, almost none of which owned Fords. In addition, a sizable chunk of Generation Y members – 37 percent – became aware of the new Fiesta but not from traditional marketing campaigns.

 “Social media is not a technology play, it’s a people play,” Qualman says. “It’s going to touch crisis management, customer service, public relations, marketing, sales – every facet of your business.”

Under CEO Alan Mulally, Qualman says, Ford is pushing the social media envelope in the auto industry by doing things like allowing drivers to listen to Tweets and text messages hands-free while they drive, and he’s also taking his message of the car as digital cockpit to events like the Consumer Electronics Show – an event not normally associated with automobiles.

Social Media Strategy

So what makes a good social media strategy?

For starters, Qualman emphasizes it should not be part of the overall company strategy. And he says the success of any social media campaign is likely to be temporary if there’s no plan to enable long-term engagement with customers.

A case in point, Qualman says, is the social media campaign involving the shirtless “Old Spice Guy.”  Consumers sent questions via Twitter to the hunk, who responded with personalized YouTube videos, racking up 180 different 30-second replies in a week. The effort generated 50 million views on YouTube and Old Spice sales increased 107 percent. But Qualman says the approach lacked a sustainability plan that would have earned the campaign an A grade instead of a B.

Qualman also cautions against unrealistic expectations. Companies likely won’t get it right the first time, and should be prepared to learn from failure. Nor should they expect an immediate return on investment.

“This stuff’s not easy,” he says. “It’s going to take some hard work, it’s going to take some people power, so adjust resources accordingly.”

Finally, Qualman asserts that social media is here to stay. It became the most popular activity on the Web in less then three years and appears to satisfy a profound human need to understand what the majority of people are doing, despite the fragmentation caused by the Web.

“We don't have a choice on whether we do social media,” he says. “The question is how well we do it.”

Laurence Cruz is a freelance writer in Los Angeles.

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