The Social Networking Revolution

Everyone in retailing knows that the number one most-effective way to get new customers is through “word of mouth.” The simple act of one friend telling another, “Man, I got a great guitar at Jack’s Guitar Shack, you gotta go check the place out,” is the gold standard for growing a business.

Well, word of mouth recommendations may have to move over and take a back seat to its digital cousin: “word of mouse.”

A small but growing number of MI retailers have not only noticed the phenomena of social networking sites, but have moved to set up shop on them. As marketing expert and author Joanna Krotz says, social sites are exploding across the Web. She is on record as pointing out that visitors to social media sites jumped a staggering 774 percent between 2006 and 2007. “And the Pew Internet Study reports that some 50 million Americans are reading blogs. What’s more, adult interaction in social media is significantly on the rise.”

There are many social networking sites, and the most prominent appears to be MySpace. Collectively social networking sites are attracting millions. Businesses are eyeing those numbers, and are convinced that they can use them to boost customer loyalty, participation in events, and increase sales. Clint Page, CEO of Dotster, an Internet service company, has written: “We are in a new era of brand building where traditional media and one-way marketing communications aren’t working the way they once did. Customers are now relying on their communities to help them make purchasing decisions, and the companies who best understand and facilitate this are the ones who will emerge the winners.”

“Most young people are only online – it’s their primary choice for communications,” says Shaun Carman, who manages a MySpace page for Memphis Drum Shop. “A lot of younger people don’t like to pick up the phone – they even think e-mail is old-fashioned. That’s why it’s important to be on MySpace.”

Business in the 21st Century
Think of it as a way for your retail operation to socialize.

Having pages on sites like MySpace and Facebook allows customers to communicate in a less-formal way than through a retailer’s main Web site. The only downside in creating a two-way street is that, while it allows people to post comments of praise, there’s an equal opportunity for those displeased to rage. But as Yamaha’s Kurt Witt points out, this is happening out in the real world anyway, both online and offline. “At least this way we have a chance to see what is being discussed and have a chance to get the right information to the community,” he says. [See more of Witt's take on social networking on page 42.]

Krotz, a New York-based consultant and small business expert, is the founder of Muse2Muse Productions, a custom content company and the co-author of The Microsoft Small Business Kit, a guide to launching and running a business. She has written that social media marketing is a fast-growing innovation, allowing owners to tap into the rising influence of user-generated communities. By its very nature, social networking sites create “clubs” of people who bond over shared interests. Within this club a certain amount of trust develops between virtually connected friends and she says all of this results in powerful “word of mouse” referrals.

What this means for the music retailer is if the store is able to be part of a club, or better yet, start one, the retailer can position itself as an opinion-maker and authority figure. Leads are generated. Customers are gotten. And ultimately, products are sold to people who otherwise wouldn’t step through the door.

Krotz offers one important tip: however tempting it may be, she advises against assuming a fake identity to talk up your store. “It’s bound to boomerang.” Otherwise, for small business owners, “the social media horizon is broad indeed.”

“It’s been proven in study after study, more than an endorsement, more than a TV ad, more than a print ad, more than anything else, purchases are influenced by someone you know, and that’s what social media does,” Krotz says. In the analog world, friend Joe tells friend Jane about this MI store that has awesome guitar teachers; the words leave his lips and that’s it. In the digital world, Joe responds on the MySpace page and not only does Jane hear it, but there it is in for others to see. The personal word of mouth recommendations linger in definitely.

“Trust and influence – those are the two operative words.”

Krotz dispels the myth about who are using these sites: “There’s a misconception in regards of who is using these sites. It’s not just ‘Gen Y.’ The Financial Times of London has a social networking site. You have to pay to be in it, and it’s a high-end exclusive club, but people of all ages are drawn to these. It’s a much larger universe out there than many people think.”

The Cool Factor
“We sell stuff on it, tell people about events, and help promote local bands,” says Paul Decker of his MySpace page. “People like being on our site.” Decker bought the Music Villa in Bozeman, Mont., in 2000 from his dad, but the store itself has a history going back half a century. Currently he’s operating very much in the 21st Century.

“We wanted to have it be just for bands,” he says. “We only approve people if they are in a group or are actively making music. So we have a lot of local and regional bands on it, and really, musicians from all over who come through on tour. It’s a great way to get bands involved with your store.” He adds that MySpace has become such a prominent place for musicians that many don’t even bother with their own site anymore, finding it more effective to just use a MySpace page.

But you have to keep up with it, and their maintenance strategy is doing a little bit every day. One of Decker’s employees checks it every day and responds to emails if someone is asking if something is in stock, along with approving “friends.” “A lot of inquiries are just junk, and we just don’t approve them to be on our site. That’s what’s cool about it.” Currently their friends number over 1,700, and those who happen onto the site for the first time get to read comments posted like, “Thanks for fixing my mandolin,” “Music Villa is the best!” and “Thanks for the guitar, guys. I absolutely love it.”

“It’s less about selling, and more about building a community, and letting people know when we have events going on,” he says. “Like this Friday we have Billy Sheehan coming in. We were able to let those who would most be interested in seeing him know about it.”

There’s no downside to it for Decker.

“I have friends who have music stores, and I tell them to get on MySpace, but most aren’t interested,” Decker says. “I don’t understand why – it doesn’t cost anything and just takes a little bit of time.”

Stan Smith actually started Stan’s String Shop on MySpace. He worked at a local music store in Natchez, Miss., and launched his own store as a side project on the site four years ago. Smith was encouraged to do it by the singer in his band “who is younger and hipper than me,” he laughs. At first he used his MySpace page to post guitar lessons and make himself better known as an area teacher. “When I started to give free lessons on the site, I found that people could really understand the lesson.” Now that the two entities are one, he uses the social networking site “as a way to meet more customers.”

When the owners of the 2,000-square-foot brick and mortar store he worked at recently retired, he stepped in and took it over, renaming it to match what he had started online. Now he uses the search tool to seek out potential customers. “I hunt for friends, and look for people in the area who play,” Smith says. He admits he’s slowed down doing that, as it can be time-consuming. “Maybe I should get fired up again and go back at it!”

Pitfalls and Benefits
Some find it cumbersome. Tammy Schmidt, assistant manager of the Music Loft in Cedar Rapids, Iowa, points out that MySpace is set up to be used by individuals, not businesses. “I wish it had more options for businesses. I think it would be nice if they could expand it so businesses could sell stuff – eBay has just become so congested.”

Because of the step-by-step way the operation of the site is organized, there are limits to how it can be designed. “It would be nice to have pictures in a different spot, as opposed to having to click through the photo icon,” she says. “I had to get help from a graphic artist to set it up.”

The pluses outweigh the negatives though, and she does like the way she can use it to communicate with the local musicians. She’ll spot someone on the site who is a bass player and write a note about a new bass amp she’d think they’d like, and encourage him or her to come in the store and try it out.

“I like talking with all the different people,” she says. “We’ve gotten local musicians from this town to come in the store just by chatting on MySpace. And I’ll hear of a local artist, look them up, and contact them that way. Sometimes they end up coming in and buying things or using our recording facility. One musician I did this with didn’t even know about us until he saw us on MySpace.”

Memphis Drum Shop has created a MySpace community with over 3,000 friends – though owner Jim Pettit will take none of the credit. “My guys did it, because I tend to hire the 20-year-olds and then listen to them because I don’t want old stick-in-the-mud guys like me making all these decisions,” he laughs. While he himself admits he “doesn’t spend much time on those kinds of things,” he says they initially jumped into the social networking world in a big way and saw some results.

Currently one of the hands on the social networking deck is Shaun Carman, who had his own Internet consulting firm. But he is also a drummer, and eight months ago he joined the five star drum shop full time. “There were concerns from the beginning about doing this because of many issues, including security,” he says. “But we went ahead and created it a few years ago as primarily just another way to advertise. We’ve experimented with it over time.”

It’s most effective in keeping the Memphis area drumming community up to speed about what is happening at the shop. “MySpace really gets the word out about events and clinics. We used to just put events on our own Web site, but that assumes that people regularly come to your site. With MySpace, we can push an event to a wider audience. It’s more effective.” They actively go to the MySpace section that is just for musicians, and then search out drummers in their area.

Their site gets a lot of traffic – but Carman admits the simple name of the store helps a lot. “Drummers find us by simply searching for ‘Memphis’ and ‘drum’ – it’s a beautiful thing that that is our name!”

He doesn’t see direct sales from it per se, but “I look at it as not only a networking and community building, but also a branding opportunity. You’re keeping in touch with your market, and it’s nice to participate in conversations, and answer people’s questions.”

Carman agrees it’s an important two-way street of communication.

“I absolutely think it’s a great thing for us because it caters to our specific market and demographic,” he says. “So many drummers are on MySpace promoting their band, and we’re on it too, so it’s a perfect match. It would be different if we were a furniture store … but for us, our community is right there and we just tap into it.”