Revolutionary Measures

What follows Twitter?

The press and Twittersphere have been in tumult this week concerning the unexpected departure of five key senior managers from the microblogging site. Shares fell by nearly 5% as investors worried about the company’s strategy for growth, while CEO Jack Dorsey was forced to take to the social network to reassure the world that the departures wouldn’t overly impact Twitter.

English: Biz Stone and Jack Dorsey, co-founder...

Given that user figures stubbornly fail to increase beyond 300 million, and that the share price has dropped by 67% since last April, the executive exodus is seen as symptomatic of wider issues – particularly an inability to make money on the scale of rival Facebook. Bold ideas trumpeted to revive the network include extending the lengths of tweets from 140 to 10,000 characters, but it doesn’t seem clear how this will increase revenues. In a month that saw social media pioneer Friends Reunited finally close, is it possible that Twitter will eventually go the same way?

Twitter does have a number of problems – many of which revolve around the original structure of 140 character messages, all displayed in real-time. It is easy to meet messages of interest given the sheer volume of content on the site and the user experience is not as immediately friendly as the likes of Facebook (which has also done a much better job of collecting and monetising data on its users and their habits.) When I was in Singapore last year I was told that no-one really used Twitter as they didn’t see the point, and it is true that in the UK and US much of network’s high profile comes from its use by commentators, journalists, experts, and Donald Trump.

So, is Twitter doomed, and if so what will take its place? First off, it does seem strange suggesting that a business with 300 million users is on its last legs, but we live in a world governed by network effect and the likes of Facebook have much larger user bases. And of course, none of the 300m is paying to use the service. Twitter seems like a network that doesn’t have a clear purpose – people tend to use Facebook for personal social contact, and LinkedIn for business. Both of these have bulked up their offerings, with Facebook pitching itself as a channel for customer service, with Facebook Business on Messenger, and LinkedIn’s ability to write and share blog style content providing a channel for business insight. Essentially Twitter is being squeezed, and for many people has become just a signposting tool, pointing to content hosted elsewhere. I tweet all my blogs, and it provides a steady stream of traffic to my posts – although not as many as LinkedIn.

However, I do think Twitter has a role to play – but it needs to be simplified, made more user friendly and above all clearly monetized. Which brings me to a potential suitor/solution for the service – Google. There are three reasons for suggesting it would be a good fit:

  • Google is a master at collecting user data and turning it into a saleable commodity. You may hate the fact that it knows so much about you, but it has built an enormous business on its stated aim of collecting all the world’s information
  • Despite its relatively friendly and sensible design Google +, its own social network, has failed to gain any traction, and merging the two will bring the best of both worlds together. There are allegedly 500m Google + users, mainly because registering for other services automatically adds you to the network, providing a ready market for Twitter – and that’s before you start looking at the hundreds of millions that use Google search or YouTube.
  • Other tech companies, such as Facebook, Amazon and Chinese rivals Baidu and Tencent are offering more and more services. Google therefore risks being left behind in the long term as consumers choose to spend more of their online time with fewer providers.

So there is logic behind a deal – though I’m not sure what the new entity would be called. Gitter or Twittle anyone?

 

January 27, 2016 Posted by | Marketing, Social Media | , , , , , , , , , , | 2 Comments

Death of a (car) salesman

Like anything, buying a new car has positive and negative parts to the journey. The excitement of choosing and test driving a shiny new vehicle has to be balanced with haggling with a salesman in a dealership and painfully avoiding the add-ons and extra warranties that they want to burden you with (and co-incidentally give them a bigger commission than on the car itself).

Automobile dealership - service and repair are...

Yet, the internet was meant to remove middlemen and enable us to deal direct with the producer. It has worked in industries such as travel, where package holiday companies have had to reinvent themselves in an era of cheap flights, AirBnB and TripAdvisor. But for bigger ticket purchases we still rely on car dealers and estate agents rather than dealing directly with manufacturers or those selling their house.

The end of middlemen?
So why are these middlemen still here and will they survive for much longer? After all, most buyers now read car reviews online, check manufacturer videos on YouTube, get information on options from websites, and can arrange finance quickly at the click of a mouse. No wonder that the average number of dealers that buyers visit when purchasing a new car has dropped from 5 to 1.6 in the US over the last ten years. As in a lot of fields, more and more research is carried out online without needing to interact with anyone, let alone a sweaty dealer in an ill-fitting suit.

Illustrating this trend, upstart electric car company Tesla is looking to go direct to customers in the US, cutting out dealers altogether. Other manufacturers are trying more limited experiments with special editions sold online only or dealerships remodelled to be more like the Apple Store, with advisors providing information and help, but no hard sell.

The pace of technology change within the car also threatens to make the dealer obsolete. Modern cars are computers on wheels, streaming data back to the manufacturer and able to refresh their operating system remotely without human (or mechanic) intervention. Tesla regularly updates the software on its car over the air– with an upgrade in January 2015 improving the performance of its Model S, meaning it can match the acceleration of a McLaren MP4-12C.

However as a recent piece in The Economist points out, changing the system will be difficult. Dealers are a powerful lobby, and while they don’t make much money on each new car they sell, the ancillary products and ongoing servicing relationship can be extremely lucrative. It also provides buyers with the opportunity to get a better deal by haggling between rival garages – if you have the inclination to do so.

I think that there are more basic reasons for any middleman, whether a car dealer or travel agent, to survive – adding value, trust and ease. These are important concepts for any company in the digital age to embrace and it is worth looking at your business with these in mind.

1. Adding value
With the vast majority of information now a Google search away on the internet, and prices displayed for everyone to see, do you really add value or are you a hindrance to the process? Again, the Apple Store is a good example to follow. You can buy your iPad from one of a hundred shops or websites, but the help you receive and the ability to get your questions answered in a positive, unpatronising way naturally leads people to the Apple Store.

2. Trust
Do consumers trust you? Or more to the point, do they trust you more than the manufacturer you represent? One of the factors I think will hold back the demise of dealerships is that consumers trust car makers less. You only have to look at botched recalls and unreported faults to see why. Car makers are also much more distant than your local dealership, making it difficult to build a relationship of trust. That’s not to say dealers are safe – they regularly top polls of least trustworthy occupations, but in the kingdom of the blind, the one eyed man is king.

3. Ease
People have to do more and more with less and less time. In many ways the internet has made us more time-poor. Whereas before a holiday could be booked by marching into the travel agency and asking what they had available, it now takes hours of internet research, comparing the relative locations of villas on Google Maps and poring over TripAdvisor reviews. Those middlemen that still have a place recognise that they need to make things easy, providing a helpful service that cuts down the time you need to spend and removes roadblocks from the customer journey, without charging the earth.

Looking at your own business, do you meet these three criteria? If not, it is time to change, before pressure from consumers and manufacturers squeezes you out of the market.

August 26, 2015 Posted by | Marketing, Social Media, Startup | , , , , , , , , , , | 1 Comment