The New Marketing:The Economy of Free

by francine Hardaway on March 10, 2008

I knew I’d only get to liveblog once at SXSW, because it’s such an intense conference, so I chose to liveblog one about the new ways of marketing to communities so they won’t be aware that they will be marketed to. (This is not telling and selling.) David Parmet’s moderating. The concept is really one of giving it away for free. Giving it away free builds a relationship. As I sit here, I realize I’ve been doing this all my life, and I have finally been validated. Until now, I’ve been the wacko who does all the volunteer work (when I had the PR firm) or runs all those dinners for entrepreneurs (Stealthmode). Every day someone asks me how I make money, because all they see is what I give away. And now this panel tells me I’m right!

Deb Schultz: Marketing is a way you look at your customer. It has nothing to do with technology or tools or swag. You have to get out of your office and meet your community. Find out about these people from a really authentic place.
Chris Heuer:What makes a community is the connections that are there. Social media changes how we relate to each other as humans. And it changes the company-to-customer relationship. A company’s community is its customers, its employees, its future employees, and the community in which it lives. We are making a shift from “Stop trying to sell me” to “help me buy.”
Jeremiah Owyang: companies that really let go and allow their customers take charge are the most successful. One company created an Embassy for its customers, and let the ambassadors take their product into the comunity and
Tara Hunt: marketing is the price you pay for creating mediocre products (Andy Sernowitz). The more you give away, the more I get.
That’s the concept of social capital, which is the value of the relationship. Online communities raise social capital.
This is the ancient theory of karma: how much you can give away determines how much you will get back.

How much can you give away, though, without going broke? You have to be able to sustain your life.
Tara Hunt: do things that bring goodness to the world as you sell them something.
Hugh McLeod: did a revolutionary marketing program for a small South African winery that had no marketing budget. So he started writing about it on his blog, and then he started giving it away to his friends. Sent out a couple of hundred bottles to bloggers, and suddenly the Stormhoek brand went from 50,000 cases a year to 250,000 cases.

Social networks revolve around things, which are “social objects.” People have conversations around phones, cars, houses, neighborhoods.

If you have customers, be out there talking to them. Jeremiah gives away a lot of his research free, and it makes his analyst colleagues nervous. But it acts as PR. Give 90% of your knowledge away for nothing.

Tara: a lot of traditional marketing tries to do a generic spread of message. But the great opportunity is in a small niche market to which you can provide a valuable service. Put on your reading list “Blue Ocean Strategies.”

{ 3 comments… read them below or add one }

Ellen Gerstein March 10, 2008 at 12:38 pm

Re: Hugh’s marketing – how in the world is giving away product “revolutionary”? It’s called sampling, and it’s done all the time. I’m not being critical of you Francine, but of his presentation, as if he invented something. Which was the way he presented it. C’mon, tell us something we don’t know, was my response.

francine hardaway March 10, 2008 at 12:49 pm

Well, Ellen, sampling is widely used by consumer marketers, but not in a community-creating way. If a guy in the street gives me a small package of cigarettes, or a sample of SunnyD, I’m not going to become a fan of the brand, I’m going to take the “free” thing, consumer it, and move on. Something more is involved besides just sampling. And that something was summarized as “intention” or “authenticity.” There’s sampling, and there’s sampling.

Ellen Gerstein March 10, 2008 at 1:03 pm

But isn’t that why you sample? To get someone to try a product, to then build a connection with a product, and then a preference/insistence for it? Maybe you don’t go into it that way at first, but isn’t it a means to the same end? I used to troll USENET and CompuServe forums looking for people talking about subjects that we had books about. I’d send them books, and often they would write things about us, sometimes not. Sometimes they woudl be customers, sometimes not. But in the end, I wanted a happy customer and most often got them. Hugh was going for the same thing. The statement at the session made it seem like the idea was revolutionary, and it by no means was.

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