Power to the People

How to succeed when customers are in control

by Kate Pavao, August 2008

In Groundswell: Winning in a World Transformed by Social Technologies, Forrester Research principal analysts Charlene Li and Josh Bernoff define groundswell as “a social trend in which people use technologies to get the things they need from each other, rather than from traditional institutions like corporations.” Blogs, wikis, and other Web 2.0 tools are a critical part of the groundswell—but just a part. Li talks to Profit about the power of conversation and why executives need to join the groundswell.

Profit: Where did the idea for this book come from?

Li: Companies are struggling with the whole concept of social technology—the approach, the mind-set, the new kinds of relationships they need to form. There was a bigger story to tell than we could do in our typical reports.

We needed to get this new mind-set out there. We thought the best way to do this was to tell it from the perspective of people. People are at the center of this movement, and people are at the center of the book. Also, there was a lot of data that we wanted to get to people. We wanted to give them a framework for thinking and, in particular, give them the ROI [return on investment] of doing this.

Profit: What is the biggest mistake people make with social technology?

Li: The biggest mistake is focusing just on the technologies. They’re focused on putting in a blog or using a wiki rather than thinking about what they are trying to accomplish. If you keep in mind what it is you’re trying to do, then the technology options lay out in front of you.

Profit: Is traditional marketing dead?

Li: I don’t think so. I think traditional marketing smarts are still very much in play here, which is to keep your customers at the center. Traditional marketing tactics—such as one message for everyone—haven’t worked for a long time. Shouting at your customers, or engaging in one-way conversation, still has its place, but it has always been fairly limited in terms of effectiveness. New technologies offer companies some very engaging ways to talk to customers and employees. One of the key objectives is talking, which implies listening as well.

Profit: Toward the end of the book, you say that strategies based on deception are doomed. How has the groundswell made honesty so important?

Li: Because it’s so easy for people to do fact-checking on you. What I mean by deception isn’t overt deception; it’s the sort of mild deception, the white-lie stuff. Can you really say, “We’re the best that’s out there”? Nobody’s going to buy that. They want evidence. They want other people to tell them that you’re the best. They want to hear it from their peers—the people who have the same opinions and look at your products and services from the same perspective.

Profit: What do you want executives to learn from your book?

Li: The groundswell is here, and you can’t ignore it. There are quite a few people who still think it’s a fad, that it is something they can live without, that they can deal with it in two years. I don’t think you can wait. Even at a basic level, you need to listen to what the groundswell is saying to you, because you ignore your customers and your employees at your own peril. If you don’t listen, people turn on you.

To read an excerpt from the book, visit Profit Online at oracle.com/profit/addedvalue.


Kate Pavao is a writer based in Northern California.
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