Social Media Theory – Markets Are Conversations

Social networking can be valuable to businesses

Producing social media content is not an end in itself – at least not for business purposes. Ultimately, we are all here to sell. Social media is about selling through the mechanism of conversations. In order to understand how this works for business lets look at an analogy that demonstrates how “markets are conversations”

Trading – back when people had time

Some people have said that selling via social media is like selling as we used to do in the very early days of trading. Imagine, a roving fur trapper meeting a tool manufacturer in a local village. Both individuals would of course need each others items, but before any selling or buying took place, there would be a long exchange of pleasantries – perhaps over a camp fire. Each would tell the other stories about their exploits, their funny anecdotes and their hopes and dreams for the year. As the fire would burn down, one can imagine that only then, after common trust had been built, would the actual items be fetched out and examined. Eventually a bargain would have been struck and the traders would have broken camp, only to repeat the process with another set of traders in a different village for entirely different goods. If the bargain had gone well, it was likely that those traders would speak well of their experiences and so a positive recommendation cycle would be created. This is the way that most people would choose to buy and sell important items in their life if they had time.

The conversations that went missing

Unfortunately (or fortunately for some?), things have moved on! Following the move from items created on a local or craft basis, through to mass production (and mass advertising),  first we had “all purpose” grocery stores, then a collection of specialist stores and eventually huge supermarkets and shopping malls where individuals could buy anything. Finally, we had electronic communication and Internet shopping. But along the way something went missing. Some people found they actually missed the social interaction they were used to at their local grocer or butchers or post office. In fact, what had gone missing was the “conversations” that are at the heart of every buying and shopping experience. What the mass manufacturers and mass advertisers had forgotten is that people will talk. Whether this is recognised or hidden from the sellers, it will happen, one way or another. Customers talk about you and your brand whether you like it or not.

 “Markets are Conversations”

Smart internet retailers tried to recreate this conversational feeling by introducing areas where shoppers can record their experiences or recommendations. Indeed, buying items on Amazon and similar sites has transformed the shopping habits of most economically active people in Britain. It might seem that Amazon and the like invented this way of selling electronically, but the roots can be found in a seminal book called the Clue Train Manifesto* published on the Internet in 1999.  I would thoroughly recommend this book to any business man or business student that is genuinely interested understanding why and how Social Media networking is set to significantly influence the new selling environment on the Internet.

The book starts:

“Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations”,

The book introduces 95 Theses or key topics. The first of which is the most important in my mind: “Markets are conversations”. What this mean is that you first have to engage prospects (with a meaningful two-way conversation) before you can sell to them. It is unlikely that the inventors of Facebook and Twitter had read the Clue Train Manifesto, and more likely that it was the happy co incidence of two ideas coming together. Whatever, the outcome is that using social media based sales techniques is now a must for all businesses.

Not everyone can be like an Amazon, but any business can add back the missing conversations that will characterise the selling efforts of the most successful businesses in the coming years. The good news for small business is that using freely available Social Networking tools such as Facebook, Twitter and LinkedIn, essentially any business can “bolt on” the mechanism to promote meaningful “conversations” about their products – that eventually lead to sales.

* The Cluetrain Manifesto (Levine, Locke, Searls & Weinberger)