What businesses need to know about social media...

After I finished Here Comes Everybody, I was talking with the good folks at Penguin, and one of them asked me a question I should have asked myself.

The the preamble to the question was, roughly "If new forms of group action are going to affect every part of society, one of the places that effect will be strongest will be on business (because business relies so heavily on group effort" and the question was "What do people in business need to know about social media?" I thought about it for a few days, and here's the answer I mailed them back:

What do businesses need to know: Businesses need to know that the old simplicities of dealing with their customers are disappearing, because customers are now able to coordinate their actions in groups. The old model of engaging with your customers involved two modes -- en masse and personal. Messages were sent out over mass media, in hopes of affecting the behavior of individuals.

Now, thanks to social media, customers are part of active groups, groups that form and dissolve quickly in response to people's interests or needs -- most messages in this media flow within social groups, rather than from businesses to individuals.

Sometimes these groups are creative, as with the group that has created Wikipedia almost literally out of thin air. Sometimes these groups are oppositional, as with the amateur group that has brought the airline industry to heel with new laws regulating their treatment of passengers.

The airlines spent millions trying to prevent that from happening, and they failed, beaten down in less than a year, by a bunch of loosely coordinated amateurs with no budget to speak of. What the amateurs had going for them was that they now have media like weblogs and mobile phones that let them join together and take action quickly and effectively.

There is both opportunity and threat in this environment. The opportunity is getting these groups to amplify your message or help improve your product. The threat is that the group can upend your strategy, or even abandon your offering in favor of self-created material. (It's a bad time to sell encyclopedias.)

The good news is that both the opportunities and the threats rely on the same underlying change, the rise of media that is accessible to amateurs and ideal for group action. Understanding this change is the key to avoiding the threats and taking advantage of the opportunities.