The Groundswell Effect (Business)

The Groundswell Effect (Business)
Major dimensions Strategy • Strategic management Marketing Strategy
Major thinkers Charlene Li  • Josh Bernoff
Concepts Business model  • Competitive advantage
Frameworks and tools P.O.S.T Framework

The Groundswell (or Groundswell Effect) is a social trend in which technology, specifically social technology, is used by consumers to obtain resources and information from each other as opposed to obtaining it through the use of traditional organisations. Groundswells can be formed through any form of online environment in which individuals create content, collaborate, interact with and react to content and share what they are thinking and feeling. While traditional forms of social technology such as Facebook are a significant force in the creation of a groundswell other forms of social technology such as blogs, online communities, virtual worlds, wikis, podcasts, and online ratings and reviews play a critical role. There are a variety of manners in which consumers interact with and participate in social networks. Some actively participate by creating content or interacting with content created by other people while others passively use social platforms only to consume content and gain knowledge. All individuals differ in the way in which they interact with social technologies and communities. The way in which they interact with online communities determines how businesses should interact with them. Businesses can use the P.O.S.T framework to benefit from and harness the power of a groundswell. The P.O.S.T framework is made up of four distinct sections; People, Objectives, Strategy and Technology^[1].

Synopsis

A groundswell (or groundswell effect) is a social trend in which people use technologies to get the things that they need from each other, rather than from traditional institutions like corporations. The Groundswell effect was first established in the book ‘Groundswell. Winning in a World Transformed by Social Technologies’, written by Charlene Li and Josh Bernoff, and has since become a prominent force in the business environment.  

The groundswell has come as a result of advances in technology and increased participation in social networks and communities. A groundswell is characterised by an uprising of emotion, opinion or attitude from the public which is promoted and enabled by the internet as individuals increasingly participate in and interact with online communities and social networks.  Groundswells are created by the transfer of knowledge and development of technology.  The Groundswell effect involves a shift in power from businesses to consumers, resulting from individuals attempting to get things and get things done with help from one another rather than utilising organisations. Businesses can harness the power of a groundswell in a manner which is beneficial to its overall performance.

History

The groundswell effect first emerged through the work of Charlene Li and Josh Bernoff, in their book ‘Groundswell. Winning in a World Transformed by Social Technologies’. The award-winning book explores and examines the impacts of new social technologies and the development of new social networking communities in the creation of the groundswell effect and what this means for organisations competing in the business environment. The book also outlines the P.O.S.T framework, which can be used by companies to implement and structure their strategy to allow them to harness the power of a groundswell.

Benefits and Consequences

Benefit

Companies which effectively tap into the Groundswell effect are able to benefit in a range of ways. These benefits include:

• Improved brand perception.
• Increased insights into the wants and needs of the target market.
• Open dialogue with consumers
• Strengthening of relationships with consumers.

Consequences

For businesses who experience a groundswell and fail to react in the right manner or react at all, there is a range of adverse effects which can be detrimental to the success of the business. These negative consequences include:

• Negative perceptions of the company among consumers
• Decline in sales and overall profitability for the business.
• Reduced customer loyalty.

P.O.S.T Framework

P.O.S.T is a systematic framework which helps businesses assemble their strategy and a method through which businesses can implement a groundswell strategy. The P.O.S.T method was first established through the work of Charlene Li and Josh Bernoff in their book ‘Groundswell. Winning in a World Transformed by Social Technologies’. The P.O.S.T method works to position businesses in a way in which they can adapt to the rapid development of technology.

P – People

The first step in Post involves gaining an understanding of your business's consumers and their online behaviours. This step aims to answer the following questions:

• Are your customers using and interacting with online social technologies?
• How are your customers using online technologies?
• Which social technologies are they using?

After a business has determined which social technologies their consumers are interacting with and how they are using them, they can categories the consumers into one of six technographic profiles each of which provides insights into how a business may be able to engage with them. The six technographic profiles include:

1. Creators – Creators are consumers who consistently produce content for online platforms. This content may include blog posts, web pages, video or audio content and any other form of content for online use.
2. Critics – Critics are consumers who conduct product ratings and review and respond to the content of creators. Critics are an integral part of driving online conversion and are of high value to a business's efforts.
3. Collectors – Collectors are those consumers who use resources in online spaces to acquire knowledge and express their preferences/opinions.
4. Joiners – Joiners are consumers who are on social platforms but only to maintain their personal profiles and relationships. Joiners also use online content to improve their knowledge base but not to the extent of collectors.
5. Spectators – Spectators are consumers who view content but do not engage with it. They use social platforms to acquire knowledge though they do not participate in any active manner. They are not involved in online conversions.
6. Inactives – Inactives are those consumers who are not present on social media platforms. The majority do not have online profiles, and if they do, they do not use them.

O – Objectives

In this step of the P.O.S.T framework, businesses must determine what their objectives are (what they aim to achieve). Once a business has determined what their objectives are, they must determine which of the following five tactics are most appropriate for achieving their objectives.

1. Listening – Listening involves monitoring and listening to what people are saying about your business online and the conversation they are having. All channels should be monitored in order to learn what people think and feel about your business.
2. Talking – The most commonly employed strategy. The goals of talking is to increase brand awareness and impact opinions by initiating conversions online with your business's audience. This can be done through the use of content creation and engagement in already existing conversions.
3. Energising – Energising involves creating a buzz around your business and its market offerings. This can be done through the use of rating and reviewing systems and encouraging consumers to create positive content regarding your business. This tactic relies on user-generated content, which is viewed as more trustworthy to external consumers.
4. Supporting – Supporting is used to facilitate support within online communities.
5. Embracing – Embracing is used to promote the collective knowledge of your audience in order to improve upon your market offerings. This involves asking your audience for their opinions and taking on their wants and needs.

S – Strategy

The third step involves creating your strategy based on the outcomes of the aforementioned tactics. Li and Bernoff have suggested that it is beneficial to begin slowly, allowing for growth and change within the online community.

Businesses must prepare for not only positive interactions but also negative. This may include negative comments or feedback which must be addressed appropriately. All strategies must involve a plan for responding to this negative feedback.

A business's strategy must also address the following:

• What resources will be needed to execute the strategy?
• Who will be in charge of leading the strategy?
• How will you measure the performance of your strategy?
• How often will you assess the strategy and its success?^[6]

T – Technology

The final step in the P.O.S.T strategy identifying which technology is most appropriate to use in executing the strategy successfully. The technology chosen must able to adequately adapt to the ever-changing nature of online communities.

Examples

Examples of the Groundswell

Ratemyteacher.com

Ratemyteacher.com is a website on which students review and rate their teachers. Students use this platform to learn about their teachers as they are able to access real time feedback from other students. This is an example of students using a social platform/community to provide each other with information rather than obtaining it through the use of traditional organisations.

Restaurants Reviews

A range of websites exist on which consumers can leave reviews of restaurants for other consumers to read. These websites allow consumers to rate restaurant food, service, and overall experience. Consumers will visit these websites before choose a restaurant. Negative reviews can lead to the loss of customers for the business.

Law Enforcement: Citizens Rate Cops

Rate my cop is a website which allows citizens to rate and review experiences that they have had interacting with a particular law enforcement officer. These rating can be positive or negative. This website is a good example of people using social technologies to get what they want from each other rather than from traditional organisations.

P.O.S.T Framework in Action

Dell

Dell experienced a groundswell resulting in them facing a range of criticism through negative comments on online networks after one of their notebook computers caught fire at a conference in Japan. The company employed a "blog resolution team" to post on social platforms and engage in online conversions portraying the company's side of the story. Using these social platforms to communicate with consumers and explain the incident, Dell was able to resolve the issue and alter consumer perceptions. The approach of Dell, which involved the establishment of an online idea community, is an example of what Bernoff and Li call "groundswell thinking" by which organisations open a dialogue with consumers.

Dunkin' Donuts

Dunkin’ Donuts, an American fast food chain, experienced a groundswell as images of unsanitary working conditions and equipment used to create the food were distributed on a blog, thus leading to accusations against the company which had a direct impact on consumer perceptions of the brand and their products. The company was unable to get these images removed from the blog and as a result of the controversy large news outlets picked up the story, thus, further damaging the company's image. Dunkin' Donuts ultimately sent its own statement to bloggers, rebutting the post though the groundswell they experienced has had large impacts on the brand.

Ernst & Young

Through the use of social platforms such as Facebook, the company Ernst & Young attracts applicants for graduate roles in their company. Ernst & young has created an open dialogue with students across the globe through the use of social platforms and are able to answer any questions that applicants may have, thus creating a relationship with potential employees and building a strong brand perception which is targeted towards the needs and wants of consumers.

References

This article "The Groundswell Effect (Business)" is from Wikipedia. The list of its authors can be seen in its historical and/or the page Edithistory:The Groundswell Effect (Business). Articles copied from Draft Namespace on Wikipedia could be seen on the Draft Namespace of Wikipedia and not main one.

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