Yes, Please, And Thank You!
Adapting Businesses For
The New Economy
“Our grandparents are more suited to be successful in social than we are, because we’re going back to “small town rules”. Marketing is about to get really fucking hard. It’s about to get really one-on-one.” – Gary Vaynerchuk
Marketing as we know it is shifting, changing and evolving.
Gone are the days that a single person could only do limited damage – or benefit – to a brand or business.
And gone are the short-lived days of the sterile business being so unrelatable and untouchable. Who ever thought we’d have a personal relationship with megalithic companies like G.E. (General Electric)?
Today, more than ever, brands must operate as “human” in a space increasingly dominated by businesses that never forgot how to be personal, friendly, and connected to their audience in a true and authentic way.
Welcome back to the days of the small mom and pop businesses that I grew up in (at the heels of my grandparents) reminding us how to connect with and serve our community… and so long to the stark and sterile industries that were prevalent in the 80s, 90s, etc.
Welcome back to the days of knowing your community – taking care of them – and if you do things right – letting them take care of you.
And it’s from this transition back, that I hope, not only to expose you to the ideas of some successful marketers, but to show you how these ideas fit together into a bigger picture that plays a huge role in how we proceed in social marketing.
Even if you don’t integrate all of these ideas into your business – knowing that they exist puts you a BIG step ahead of your competition.
And in many ways it opens doors for smaller businesses to out-compete and out leverage larger businesses that are not quick to connect with their communities.
Let’s jump in!
The Connection Economy
According to Seth Godin, we’re leaving the old industrial economy and entering the new connection economy and:
There are four pillars in the connection economy:
- Trust – This takes times and effort, but earning trust with consumers is a must in the connection economy.
- Permission – Based on his permission marketing approach, Godin says it’s a privilege to talk to people who will listen to you.
- Exchange of Ideas – The environment of connection fosters attention and idea sharing.
Godin says, “what happens when we create an environment of connection, we create enormous value by combining all four of these things (coordination, trust, permission, exchange of ideas) into a network of people who want to pay attention to one another.”
From Here To Where?
Understanding that we are moving into a more personally connected economic structure again is only the start of what you need to know.
It sets the foundation for eventually being able to monetize on the efforts you have put in.
It’s rarely enough – today – to just jump into a market and throw out a product and sit back and wait. Nor is it sensible to build a community without leveraging it in such a way that you can create more things that make their life better, faster, easier, or more enjoyable.
There will always be that small percentage of buyers that will buy without knowing you – and for them you should have goods and services available easily – but to overlook the larger audience that needs to get to know you, trust you, and love you first is to throw away the bulk of your money.
There is really two pieces to this puzzle and they have to fit hand in hand if you want a thriving business today.
Understanding The Differences
“A gift economy, gift culture or gift exchange is a mode of exchange where valuables are not sold, but rather given without an explicit agreement for immediate or future rewards. In contrast to a barter economy or a market economy, social norms and custom govern gift exchange, rather than an explicit exchange of goods or services for money or some other commodity.” via Wikipedia
“Barter is a system of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is distinguishable from gift economies in many ways; one of them is that the reciprocal exchange is immediate and not delayed in time.” via Wikipedia
Gifting Does Not Equal Free
Marie Goodwin makes an important distinction between our traditional ways of thinking of “free things” and the way in which we must approach the gift economy:
“If you are confusing those words, stop! Our culture defines giving a gift as something we do either anonymously or as giving without any return expected. Both of these definitions remove the opportunity for a connection between giver and receiver and denies the creation of the web of connection that undergirds true community. When you work in the gift, what you are doing is asking the receiver to decide on their own level of gratitude rather than you, the seller/creator, dictating it for them by attaching a price to the transaction. You are also asking them to choose the timing of the return gift. The idea that gratitude is created in a business exchange is a novel way to view buying and selling but is the very crux of gift economics.”
Pay It Forward
“When the film Pay It Forward was released more than ten years ago, the concept of the gift economy entered the mainstream. In recent years, skill-sharing, open-source coding, time banks, and WikiLeaks are some of the ways the gift economy has emerged. The only obligation participants in such an economy have is to give as much as they can and pass it on.” via Tikkun
In fact, if you hang around this blog often – it’s likely that many of the projects you rely on – stem from this very concept.
WordPress is a great example of a community created project that relies on donations of time, donations of skill, donations of press, and donations of funding to provide us with the amazing tool we know today. And it’s this participation that make YOU part of the greater WordPress Community.
Alex Gendler explains the foundation basics of a gift-driven economy in this Ted Talk excerpt.
Even if you feel that you have a great understanding on how reciprocity drives our psychology, I highly recommend that you read (or re-read!) Influence: The Psychology of Persuasion by Robert B. Cialdini which is a fantastic book that should be a staple of your reading library.
The Thank You Economy
Wine Library TV’s Gary Vaynerchuk gives his no-holds-barred take on how modern businesses must adapt to thrive in a social media-driven culture. (Note: Video contains adult language.)
“Renowned entrepreneur Gary Vaynerchuk reveals how companies big and small can scale that kind of personal, one-on-one attention to their entire customer base, no matter how large, using the same social media platforms that carry consumer word of mouth.” You can read more from Gary in his book, The Thank You Economy.
“Until your businesses become human and have relationships and create true context with users and extend those for the marathon instead of the quarterly report sprint, it’s going to be difficult to succeed going forward.” -Gary V.
Ryan McLean wonderfully breaks down some of the key points of Gary’s book, “The Thank You Economy“, in a post over on his blog. Worth a read although I ALSO suggest you get a copy (physical or digital) of the book itself.
We Are All Inbound Now
Best-selling author, renowned speaker, and entrepreneur Seth Godin, at Inbound 2013’s keynote address, asks ‘Are you and your company prepared for the epic shift every business will face?”
“[Permission marketing] is the idea of creating anticipated, personal, and relevant messages to people who want to get them. Here’s the simple definition: that email that you’re going to send next week – if you didn’t send it, how many people would complain and wonder where it is? Cause if they’re not complaining when you don’t show up you don’t really have permission.” – Seth Godin
Connecting With Your Fans
Debra Russel does a great job of reminding us that it actually takes a HUMAN approach to make these valuable connections.
“In order to do that – you have to listen. You have to ask questions. You have to know who they are and understand what their needs are. And that takes actual work that has nothing to do with your music. It has to do with getting online and reading their stream and asking them questions. It has to do with responding to their questions in a way that is genuine and real. It has to do with seeing someone, for example, ask for information about a realtor on Facebook and going to your stream and finding a realtor to recommend to them. Or reading about them having a tough time in their lives and offering compassion and empathy. Sometimes it just means responding to their joke with a real laugh of enjoyment and sharing it.”
Want to learn more about asking some of the right questions? One of the best books I’ve read on the topic lately is ASK, by Ryan Levesque.
You can find some more tips from Gary V. on how to connect with your fans here.
Bringing It Together
This was all great in theory but seemed to simply to lack the “where do we go AFTER we build a tribe” components.
For me personally, after having been aware of the above information for quite some time, it took a few more things to happen to bring this to the forefront for me.
1) An artist’s real-world high-value example
2) Tech tools maturing to make it easier
The tech tools for fan funding are something we’ll discuss in another blog post, but lets jump into the story that took me further down the rabbit hole…
The Art of Asking
Amanda Palmer is best known not for her musical work as the Dresden Dolls, but for her controversial approach having a very intimate connection to her community and pre-funding her creative projects by way of fan funding.
Don’t make people pay for music, says Amanda: Let them.
In a passionate talk that begins in her days as a street performer (drop a dollar in the hat for the Eight-Foot Bride!), she examines the new relationship between artist and fan.
In addition, you won’t want to miss Amanda’s audiobook “The Art of Asking” (which was an audiobook and then transcribed for kindle). It really paints a much larger picture of the internal way she came to conclude that ASKING was right for her and her community.
It’s All In The Tone
From an article in the Guardian, Amanda points out just a fraction of the duality that artists and creatives today face:
“Perhaps the stickiest problem when comparing art and business is that the definition of “success” becomes muddied when you opt for a career in music. On the one hand, you’re told you haven’t “made it” until you’re a megastar – making a living at your art isn’t enough – and, on the other hand, musicians aren’t supposed to be concerned with profits if they’re “real” artists – Didn’t you get into this job just for the love of it?”
I’m sure you’ve heard both of these arguments made by detractors of your own business!
A music lawyer, John P. Strohm, tackled the issue in his own article, and raised another very important dilemma:
“Older artists – that is, artists from my era or before – tend to shun the idea of fan funding because it feels like begging. They tell me that they respect and appreciate their fans, and they’d never cheapen the relationship by begging them for money. I think this perception is in part because many DIY artists conduct their fan funding campaign in a manner that really does feel like begging. I’ve unfollowed scores of Twitter feeds comprised of relentless, increasingly desperate pleas for donations. Updates like “Come on, we’re at 52%…only FIVE DAYS LEFT to pledge – we NEED your support” several times per hour. This sort of pressure has colored how we feel about fan funding.”
Amanda Palmer says, “Sometimes it’s just about TONE. How you ask. I know that my TED talk was inspired DIRECTLY by watching artists APOLOGIZING for crowdfunding. I couldn’t stand seeing one for Kickstarter video that started with the lead singer of a band saying: “hey guys! so this is the embarrassing part where we come begging you for money!”
I wanted to grab those people and shake them and say “It’s OKAY. Just ASK. Just ASK. Stop apologizing, you’re making us all look bad when you cower and apologize. JUST ASK.””
And indeed it’s true – yet how we’re taught that asking somehow means we’re unable to “man up” and do it ourselves and are some burden on the rest of society. NOT TRUE!
(Want more discussion from the community on the difference between asking and begging? Be sure to check out her blog post here.)
The Contrarian Route
This whole route runs so counter-culture to the mainstream idea of “get popular, get a label, get more popular” that it has received a LOT of push-back for Amanda.
In fact, in her industry, people in the press have gone so far as to call her “the most hated woman on the internet“. Fortunately, that seems to have passed but not without her having had to have stood her ground through some really yucky times.
Trent Reznor, who formerly toured with Amanda, and whom you may recognize as the front man for Nine Inch Nails, who released their new album “Hesitation Marks” through the Columbia label had this to say when asked in an interview by Spin:
“Nine Inch Nails feels bigger than it ever has,” says a bemused Reznor. “Is it because we’re on Columbia? Is it scarcity? I don’t know, but it doesn’t feel bigger in the sense that we’ve desperately adopted some new clothing style. It feels organic, and it feels good not to be worrying about whether or not we shipped vinyl to the cool record store in Prague. I know that what we’re doing flies in the face of the Kickstarter Amanda-Palmer-Start-a-Revolution thing, which is fine for her, but I’m not super-comfortable with the idea of Ziggy Stardust shaking his cup for scraps. I’m not saying offering things for free or pay-what-you-can is wrong. I’m saying my personal feeling is that…
Bemusingly, you can actually stream the new album legally for “free” if you are an Amazon Prime member via Amazon Prime Music;)
The Freedom of Choice
I think Amanda Palmer sums up the beauty of flexibility that is really available to us today in this (condensed) quote:
“I also think the most important thing we have to keep in mind is that there are as many paths as there are musicians. I’m never going to hold it against NIN, Radiohead, Prince, Regina Spektor or Miley Cyrus for doing what they want…even if I’d never do it. […] and it also goes for business systems. Do I hold it against One Direction for having a huge label? Hell no. […] Do I hold it against people who charge $20 for album downloads on Bandcamp. Nope […] No system is NOT allowed. This is the only way forward. Not one answer. Millions of answers, and respect for every artist’s’ decision.”
The Spiritual Aspect
There is also a rather technical conversation (here) between International Economist, James Quilligan and Charles Eisenstein, author of Sacred Economics. Charles Eisenstein also speaks to those concerned with “right livelihood” and how to live according to those ideals in a world seemingly ruled by money.
“Art is the work of a human being doing something personal, and real, that matters, and that might not work.” -Seth Godin
Seth Godin’s ideas hinge on a combination of generosity, which we’ll talk more about here, and on simply doing the work (to create the stuff/art), a mantra we hear over and over from Steven Pressfield in “The War of Art: Breaking Through Blocks To Win Your Creative Battles” and “Do The Work: Overcome Resistance And Get Out of Your Own Way.“
And don’t think that these ideas are ONLY reserved for “traditional artists”… no.
The work you do, the content you create, the connections you foster, and the life improvements you provide your audience ARE art… as long as they are not the generic, canned, items that are so easily mass produced which make YOU irrelevant.
Amanda Palmar reminds us, “Asking is an act of intimacy and trust. Begging is a function of fear, desperation, or weakness. Those who must beg demand our help. Those who ask have faith in your capacity for love and in our desire to share compassion. On the street or on the internet, this is what makes authentically engaging an audience, from one human being to another, such an integral part of asking. Honest communication engenders mutual respect. And that mutual respect makes askers out of beggars.”
Where To From Here?
Once you’ve done the work as laid out by Gary V and Seth Godin in the earlier parts of this post, you’ve built a thriving, happy, excited community that eagerly looks forward to your work.
At that point, lots of monetization options open for you, be they in traditional sales or in crowdfunding.
Lawyer John P. Strohm includes, “I prefer the term “fan funding” to “crowd funding” because in my experience the only projects that succeed in this space are projects that actually have fans. A fan-funding campaign that’s done well is really just the pre-sale of a product that has yet to be produced.”
Leveraging asking is probably best gotten used too at the smaller scale first (mostly to help reduce your own level of fear).
But once you get there, opportunities in fan funding give you both small scale and large scale ways to create more, share more, do more, and connect more with your audience.
Here are some crowdfunding tips from the team over at Social Media Examiner.
However, be sure to take heed of Seth Godin’s warning:
“Kickstarter campaigns fail when the tribe of people who believe in the idea is too small
It’s worth taking a moment to parse that out–it will help you understand how the whole thing works and where some campaigns fail. You either need more belief or a bigger/louder/more influential tribe.
Kickstarter appears to be a great way to find fans for your work. You put up a great video clip and a story and wait for people who will love it to find you.
But that’s not what happens. What happens is that people who ALREADY have a tribe, like Amanda Palmer, use Kickstarter to organize and activate that tribe. Kickstarter is the last step, not the first one.”
It’s important to remember also that many crowd-funded ventures only have value for the business when you look below the surface but have great value to society. Examples of this are the “Panera Cares Cafes” and other variations of the “Pending Coffee” idea. (Which isn’t to say they don’t have value for the business – just that it is not the component that is in your face.)
Other businesses select a barter system to supplement their primary stream of sales. They collect sales from those who can… and for those that can’t they offer barter options. This enables people that have great talents – but not the cash flow – to provide them with things they NEED – while making their art more readily available to people. It’s a win-win as long as both sides of the barter are something the person and business need or want.
There are as many right answers to how to integrate this information in your business as you could possibly dream up.
How Not To Screw It Up
“Marketers ruin everything!,” says Gary V. in many of the presentations.
But why is that true, how does it happen, and what can we do about it?
At its core, marketers move into hot areas of interest and over-push and swamp the community in push marketing, until the audience learns to tune us out.
If you turn ANY marketing channel into a push channel you’re quickly going to see your results come to a halt.
You can learn more about how to balance your “right hooks” and your “jabs” in social media, in Gary’s really great book, “Jab, Jab, Jab, Right Hook“, which will teach you more about social marketing the right way than many high dollar classes will.
In another post, I will elaborate on some of the fan funding tools, as well as some of the changes that I will be implementing in my business that will take advantage of what I’ve learned from this.
More importantly though, what will YOU do with this information?
How might this help you shape, build, or connect your brand and business?
Are there parts of it that you disagree with or resonate strongly with?
Lets discuss in the comments below!
~ Kim ~
Smart Tech For Smart Marketers
PS: One more quote from Seth Godin, “Build your tribe before you need it, give the tribe something that they want, and make it easy for them to believe it’s actually going to work. [Crowdfunding] looks like a shortcut. It’s not. It’s a maximizer.”
Additional Related Posts:
“How to Run a Business in the Gift Economy“
by Marie Goodwin
“To Build Community, an Economy of Gifts”
by Charles Eisenstein
by Charles Eisenstein
by Genevieve Vaughn
Women and the Gift Economy
edited by Genevieve Vaughan
by Lewis Hyde
by Lee Schneider
Gifting It: A Burning Embrace of Gift Economy
directed by Renea Roberts
The Gift Economy: A Model for Collaborative Community
by Adam Segulah Sher