Traditionally, marketers are taught that the marketing mix is based on four Ps –essentially, four things that affect someone’s decision to buy. These are:

  • Product
  • Pricing
  • Placement (or distribution)
  • Promotion

I’ve always felt a bit uncomfortable about this, because while true, this reflects an adversarial model where the person is ‘targeted’ by marketing. Yes, the person is at the centre of the four Ps, but it feels like it’s for the wrong reasons.

About ten years or so ago, we had the rise of a ‘new’ kind of marketing – one-to-one marketing, driven primarily by people such as Don Peppers and Martha Rogers.

The basic tenet of one-to-one marketing is that organisations have to create individual marketing campaigns to each individual, by understanding their needs as individuals.

This is essentially how the owners of corner shops operate. They know Mrs Miggins by name, they know when her birthday is, they know the kind of tobacco her husband smokes, the brand of penny chews her children eat – and probably what she had for breakfast. Indeed, the shop owner is almost as much a friend as Mrs Miggins’ real friends – except he gets to sell things to her. He can do this easily, by suggestion. When Mrs Miggins calls, the shopkeeper knows what she’s likely to want. What’s more, when new products come out, he knows which ones she’s more likely to want to try – and he’s in a trusted position, more likely to get her to try something, than the product’s manufacturers.

So, big businesses began collecting massive amounts of data about customers, hoping to know more about them, become their friends – and thereby sell more to them. By and large, it didn’t work.

It didn’t work primarily because although it’s called one-to-one marketing, it isn’t – it’s still many to one. And quite frankly, when I call my mobile phone company and someone I don’t know from Adam asks me about my birthday, it’s not endearing, it’s creepy. I accept that if I shop at Tesco, my Club Card information tells them more about me than my brother knows – but I don’t like it, and Tesco isn’t going to become my friend because of it.

But in the rapid rise of social networking, one-to-one marketing has finally found a place where it can work – if companies actually understand what it is that makes social media work.

We’ve been working with quite a few companies on social media initiatives, and the ones which see it as just another broadcasting mechanism aren’t getting that much back from it. No surprise, it’s pretty much the same as my bank starting to have a conversation with me by telling me about its latest interest rates. That’s not social. It’s not a conversation. It’s just a different kind of billboard.

For social networking to really work, it has to be – well, social. Individuals talking to individuals – creating relationships, sharing, having fun. Breaking down the barrier between being a supplier and customer in the same way that Mrs Miggins’ corner shop owner did.

This is unnerving for large corporations, because in practice this means that marketing is largely unbranded, unpoliced and not tightly controlled. Johnny from sales talks to a key buyer from a large client – great, some business follows. But they also start going to football matches and barbeques together. They hit it off – or they might fall out.

It also creates issues – when Johnny leaves, who ‘owns’ the customer? ‘Customer ownership’ is a big deal to companies, and contracts of employment routinely enforce poaching clients when moving jobs. But if the client is a friend, then the loyalty is more likely to stay with Johnny, despite his past employers throwing a tantrum.

But this is the way that social media works. It’s about people. When we’ve seen companies put in place tightly controlled, policy heavy social media strategies, they simply fail. Not totally – but nearly. Yet when companies cut loose a bit, social media really works.

We have a situation where large corporations are disadvantaged by a global media tool, because they have onerous HR policies, lots of marketing red tape, boatloads of restrictions, dictates for how social media can be used – and tight controls. Plus, they have the fear of what can go wrong when Johnny and Graham fall out, or if Johnny leaves.

Small businesses have none of these issues. Business owners wade in and get on with it. Free from red tape and policies, they run rings around bigger companies – making contacts and doing business in a way that only serves to confuse their larger rivals. And it’s for one reason – they can be a shopkeeper; they can learn about their customers; they can build real relationships – and they’re not targeted relentlessly on sales alone. They can make marketing and sales loose, fun and effective.

We think this has the potential to be a seismic shift in how marketing works – the Internet has already undone a lot of the traditional ‘I take my message to customers’ approach of marketing, with customers deciding to ‘go to where they want to buy’. The net result of this effect is companies are spending less on off-line marketing and focusing more on being visible on the Web. Social media could have the same kind of impact on how companies sell.

Where big businesses are still using social networking as a billboard, small businesses are making it social – they put people at the centre of their marketing and sales, not by promoting to them, but by getting to know them.