Platt Perspective on Business and Technology

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 7

Posted in social networking and business, strategy and planning by Timothy Platt on February 2, 2018

This is my 7th posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Social Networking and Business 2, postings 278 and loosely following for Parts 1-6.)

I have been exploring how these issues play out in two very different types of business scenarios, since Part 2:

• A new, young, small startup that seeks to leverage its liquidity and other assets available as creatively and effectively as possible, and from its day one when it is just starting to develop the basic template that it would scale up from,
• And a larger, established business that has become at least somewhat complacent and somewhat sclerotic in the process, and with holdover systems and organizational process flows that might not reflect current actual needs or opportunities faced.

And I have been discussing both of them since then, and basically finished my analysis of the established business alternative of the two, in Part 6. More specifically, I finished addressing a set of stage-specific questions there that are appropriate to an established and at least somewhat sclerotic business, that deal with how such an enterprise would effectively and beneficially institute operational change such as communications disintermediation and make this work for them.

My goal here is to turn back to reconsider my startup scenario, posing and addressing a similarly stage-specific set of questions for that too. I begin this with the fundamentals and add that I will parenthetically note how these questions would apply to an already established business too, in order to put them in wider perspective here.

• What is your business model for this startup and more specifically there, what is the purpose of this new enterprise? What is its defining value proposition that if effectively pursued will lead to business success?

These is also types of questions that the owners and leaders of a more established business should at least periodically ask, and certainly if their enterprise has become so set in its ways as to become at least somewhat calcified into them: sclerotic and with that showing. Then the basic question to be asked here is one of whether change in what that business does and in what it offers, or change in its markets and in what is demanded of them there, or change in its competitive context have led to drift, where they are pursuing an outdated understanding of what they are as a business and of what they should be.

Returning to the startup scenario of this posting:

• What are the core functional areas and process systems, and what are the core supportive resources needed to carry them out, that this new and still forming enterprise will need, and with high priority if it is to succeed in addressing the challenges of the two questions in the first of these startup-oriented bullet points?

I stress here that startups and early stage businesses always have very limited cash resources, so prioritization here is strictly and even stringently required with that in mind, and with a clear and sharp focus on building a foundation that this new enterprise can grow from. But at the same time, this is when and where a new business is going to start building and establishing a reputation, and a brand too, with all of the requirements and all of the consequences that this entails.

A more established business of the type that would fit the model of the second scenario as repeated above, has already drifted out of effective focus and for at least some of its core functional areas. That, as a matter of functional consequences is a measure of what “sclerotic” means here. Then the question is one of identifying where this has happened, and with that happening both from their not changing where they should have and from their changing but in the wrong ways when they do. And coupled with that, is the remediational question of how best to address this challenge.

It is not enough for a business: any business, new and forming or already established to simply develop and produce what should be competitively effective products or services. They have to be able to effectively market and sell them too, and with a realizable goal of generating brand loyalty and repeat business too – and with consumer driven viral marketing if possible, to help drive that too. This is where disintermediated, direct to customer, and direct with customer marketing communication enters in here, and certainly insofar as this can be both an effective and a less expensive way to achieve both positive name and brand recognition, and sales. So for the startup scenario:

• What is the best way to do this?

Those eight simple seeming words capture in them a host of issues and complexities that just begin with an imperative of knowing and understanding the potential markets and the consumers in them that a business (your business) would seek to reach out to. They of necessity include as an imperative that you face, you’re knowing what those participants in your market want and with you knowing and understanding what channels they preferentially communicate through – and where they would be more amenable to a sales pitch-oriented conversation. To take that last point out of the abstract, don’t try to sell lawn mowers on dating sites, and even if they are the dating sites that the demographics that you seek to connect with and do business with, would most likely use.

Let me follow that by at least seeking to dispel a myth. Direct, viral and gorilla marketing can be cost-effective and even inexpensive in comparison to more organizationally layered, traditional marketing and sales approaches. But they are more labor intensive and they do require a much more detailed and nuanced understanding of the marketplace that a business would target, and its consumer members. This approach can be a good trade-off for a startup with less cash at hand and less overall liquidity available, but that has a willingness and ability to put in larger amounts of time and effort to make their venture succeed.

How does this set of issues apply to a more established business? The answer is that it can apply there, and much more directly and specifically than might be expected. And this observation is particularly true if the at-least somewhat sclerotic business in question, has come to realize its current state because of drop-offs in incoming revenue and reserves – which can put them in the exact same place that the startup scenario presents as far as need to make a cash expense versus added effort trade.

The established business of Scenario 2 of above is just burdened with the types of process flow and functional-area to functional-area hand-off disconnects that I wrote of in Part 6, where the startup is trying to build from scratch, making any course corrections in this as it goes along. Both require ongoing review and business develop navigating skills, and a willingness to cut losses when necessary and try again.

Consider a move towards gorilla and viral marketing, as an attempt to capture new tech savvy markets among other things, as a test case of real potential value and for both scenarios, for better addressing the more generally applicable questions that I have been raising and at least selectively addressing here.

I am going to continue this discussion in a next series installment where I will more directly focus on those new and emerging marketing and sales options themselves, and on communications disintermediation as a goal in and of itself. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1.

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