Social media technology’s impact on old economy businesses

Nandini Vaidyanathan highlights the role that social media can play in spreading awareness and marketing products

What is social media technology? To understand its simple essence is to understand its far-reaching impact. Social means, a human collective. Media means, it is published. Technology obviously refers to the internet. In other words, it is a group of people who consume something published on a platform, app, blog/vlog, video, etc. – which are internet-enabled. Over time and with improved technology, social media has transformed itself from being a tool to stay in contact to becoming a reservoir of big data that can be used to not just observe human behaviour but to modify it.
This article is not about the ills of social media. On the contrary, it carries a positive note about how social media enables better business models, practices and protocols and therefore leads to business growth. This in turn, needless to say, impacts the health of the economy.
Why do businesses – old or new – use social media? The answer is very simple. It is so that they can identify their potential customer, single him out and reach out to him and keep him interested and engaged. It is seduction without selling an arm and a leg (or worse, a kidney). In other words, businesses can acquire customers, engage with them and let them share their experience to entice other customers –all without any leakage in the marketing budget.
The three main attractions of using social media for customer acquisition are low cost with near zero wastage, continuous engagement to monitor not just delight levels but any undercurrents of dissociation or disengagement (there is a beautiful English phrase called ‘voting with your feet’, which means quietly quitting) and most importantly, ‘Everything in real time, not post fact.’
The fact that you as a business owner know what is happening even as it is happening gives you such tremendous power to quickly step in, course-correct, and influence behaviour. Nothing in management is as empowering as this.
New age businesses took to social media like a duck takes to water for two main reasons. One is that by and large, they are all youngsters, who are addicted to social media in their personal lives. Two, they do not have the wherewithal of traditional businesses to delineate a sizeable marketing budget.
But since they understand the nuances of what ‘reach’ means on social media without a huge spend, they gravitate naturally to this medium.
Traditional businesses, on the other hand, have relied on four channels, which are: Word-of-mouth (especially in civil, engineering and construction business); printed medium (newspapers, technical journals, magazines, and listing in trade directories); television, and exhibitions. The last three are very expensive media and mostly medium and large companies can afford to even have it as a line item in their budget allocation.
Traditional businesses are traditional either because they are family businesses or because they involve old-world products such as a foundry, a cold-rolling steel mill, or a cotton baling factory. Such businesses, either because of their legacy nature (This is the way my grandfather did his business and I see no reason to change it) or because of who their customers are (either B2B, or legacy businesses like their own or industries that have no glamour quotient in their product line, like an ordnance factory), rarely even think of the possibility of using social media to grow their business. It is a simple mindset: what I don’t understand (social media) can’t work for me and my business.
When we mentored several generations of family businesses, our biggest challenge used to be in convincing the older generation that ‘their’ way may have worked well in ‘their’ time, even continue to work now, but if they need to future-proof themselves, they have to start embracing all aspects of technology for all aspects of business. It is interesting that most of them are quick to adopt new technologies for production, but do not have the same enthusiasm for customer acquisition!
So whilst you have a plethora of case studies of new age businesses and their success stories after using social media platforms, especially Instagram and Youtube (Facebook once upon a time, but with the tsunamic entry of Instagram, FB has lost its sheen), there are hardly any of the traditional businesses raving about how their businesses have grown with social media. A few here and there are more for their not-for-profit activities which aim to promote ‘brand-building’ as opposed to brass tacks like customer acquisition.
Imagine a scenario like this. Farmers in Indian villages use a platform like YouTube to create awareness about the problems they are facing such as shortage of water, or soil erosion or scanty rainfall or pests attacking the crops. The reach would not only be within the village or even the State but the entire country as well. Who knows, an idealistic entrepreneur, sitting in some corner of India, might decide to develop a solution to one of these woes. Better still, who knows, a farmer in another corner of India might reach out to say how in his village they had the same problems and how they addressed it. The biggest and most underrated part of any business is sharing of experiences and disseminating knowledge.
If I may borrow from Indian epistemology and migrate it to the context of social media and traditional businesses, the latter will benefit from social media in four distinctive ways: one is Pratyaksha or first-hand experience and sharing of it; the second is Anumana or inference which means deducing outcomes based on either one’s own or other people’s experience; the third is Upamana or comparison of both problems and solutions and arriving at what works for you; and the fourth is Shabda or testimonial from industry experts that offer you guidance.
To become a global economy we all have to embrace the good that social media brings to our doorstep. We are almost there; we have already set a huge example to the world as to how India can adopt digital technology to get ahead of the curve. We need conviction for the last mile to reach the goal post.
I am waiting for the day when an electronic cheese-cutter manufacturer based in Peenya Industrial Area in Bangalore posts a video on Instagram of how his cutter cuts cheese without mauling it and within half hour, 10 chefs from all parts of the world order it!

The columnist is a published author, entrepreneur, business consultant and mentor to startups.


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