Retail or Referral Thinking?
July 18, 2011
If you’re involved in social media as a professional – hoping to gain some business benefit from social networks – then you have a decision to make. Often, that means you have to question a certain default marketing setting and decide what is the right approach for you.
Are you going to approach social networks with primarily a retail, or a referral, mindset?
A retail mindset, which dominates much of traditional marketing, is typically a numbers game. It’s about reach. More eyeballs, more customers, more volume, more dollars. Translated to social networks, that means more subscribers/readers/connections leading to more potential sales of something.
It’s not wrong. It’s how one part of the business game is played. If everyone is clear on the rules, it’s fine. And on our networks, we’ve refined a pretty effective freemium model (give some level of knowledge/consulting/e-product away as a taste, then charge for the deeper level).
If you want to sell ads, sell books, sell keynote speaking, or sell memberships, it’s quite legitimate. But bear in mind that it isn’t the only way to do business via social networks. It may be our default setting, leading us to crave more, more, MORE numbers – but there’s a different mindset that may be appropriate for the vast majority of us who are not going to generate revenue-by-retail.
The referral mindset focuses on depth and quality. It recognizes that much long-term business comes from a core group of committed fans and activists. This approach is not simply thinking of short-term revenue transactions (which, again, aren’t wrong), but is more concerned with building deep and enduring relationships with people who will influence the marketplace as continual sources of referrals.
In one case, the goal is a simple transaction – dollars for perceived value right now. It requires scale to succeed. In the other, the foundation is character, reputation, loyalty…dare I say love? It is providing the deep value of walking alongside a limited number of like-minded others and being personally invested in their business success. It’s radical, it’s daring, it’s long-term – and it is decidedly NOT the default setting of our short-term marketing culture.
Of course, large numbers of connections and building a referral network is not mutually exclusive. From the numbers come the individuals who become the advocates and collaborators. But in the referral approach, while having a large network could lead to some level of retail transactions, the primary goal is to exchange value at a deeper and longer-term level.
I have built reasonably large networks in the pharma/healthcare field, and in the general social media/marketing realm. Yet, my paying business really comes from a small handful of clients, and most new opportunities are driven by advocates who are committed to me as a person and a professional. Personally, I don’t feel a need for a bestseller on the NY Times book list. I just want to get to know the best people. They are my best sellers (and I am theirs).
Let’s face it – some people are really great at drawing crowds, and figuring out ways to retail things to them. And some of those folks also know how to work on the referral level at the same time. But for many of us, it’s worth questioning the default setting of more, more, MORE. Will your business grow primarily as a result of quantity, or quality, of connections? Answer that question, and your networking strategy will become clear.
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