Understanding the true nature of the social media marketplace

OK … Stick with me for one minute.  We’re going back in time about 1,000 years but I promise it’s going to come back to a great lesson about social media and marketing. Here we go.

As far as scholars can tell, formal marketplaces were first created in Europe around the year 1,000 AD.  They solved a problem. Villages were competing with other villages for commerce. Unlicensed hucksters went from town to town and the whole thing was rather inefficient until a few rules were applied to the whole mess, usually by the local church leaders.

Here were some of the characteristics of these newly-organized markets:

It was highly personal and interactive. You stood face to face with your seller, looked them in the eye, and bought with a firm handshake. You purchased goods from people you knew and trusted. The market was transparent. The goods came from a farm or workshop right to the market.

There was immediacy.  If somebody felt wronged or cheated, you knew it right away. Feedback on quality, service, and pricing was constant and immediate.

Success depended on word of mouth recommendations.  There was no advertising, mass media, or marketing plans.  If you wronged a buyer, word would spread throughout your marketplace like a plague. So you needed to treat people right … and maybe even do a little extra for your power buyers.

There were severe penalties for cheating. Like getting hung. Or losing a hand. Stuff like that.

I think you’re starting to see where I am going with this?

The fact of the matter is that these values and expectations have been shared between buyers and sellers for centuries. We simply interrupted the natural course of business for about 100 years with the introduction of mass media. We learned that we can sell very efficiently by broadcasting ads through radio, TV and the Internet — and we still can — but we also created a digital divide between ourselves and our customers. The human side of business that people crave was disengaged when we turned to mass advertising.

The social web is simply bringing us back to our marketplace roots where personal connection, immediacy, and word of mouth validation are the most important marketing considerations.  And if you cheat, you may not get hung today, but you will certainly be hung out to dry by angry customers with the power to publish their reviews for the world to see.

I think this is a powerful analogy to help managers who have grown up in the mass media world understand what’s happening now. It’s not really anything to be afraid of.  The world is simply returning to a form of buying and selling that has been preferred for most of recorded history. Be human, be honest, be transparent, and pay attention to the feedback.

Make sense? Let me know what you think in the comment section.

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