“WE often hear people talk about the concept of 'uberization', where a new technology completely turns an industry on its head and forces us to rethink the way things have always been done. No industry will remain untouched by these forces.” ― Klaus Schwab
In August 1989, people would have thought that another "normal" year was coming to an end. The World Wide Web went live, but there was no fanfare, global press, and fireworks. People around the world didn’t know about the internet, and even if they did, the usage was still like a drop in the ocean. Fast forward to today—where the internet is not only in most homes around the globe, but it is also the new normal way of doing business. Every company is fighting to get a piece of the pie, including the direct sales industry. In addition, with the constant change in technology use, it’s only natural to assume that things are not business as usual.
The use of digital technologies has contributed immensely to changes in consumer behavior and how purchase decisions are made. Through social media, consumers can share, contribute, and access information at their fingertips.
A few years back, the nature of doing business was different from what we know today. Stores were opened at a certain time, operated for X hours, and closed down by about 7 PM. If you didn’t make it to the store during working hours, you had to wait until the next day, never mind if you needed something urgently. Today, these same stores run for 24 hours a day to cater to the 24-hour economy. People hold more than one job and work longer hours than they did a few decades ago.
The demand for the convenience of having your goods delivered to your doorstep has also seen the rise of online shops that are now willing to go that extra mile for their client. Think about this—when you want to buy something, what’s the first thing you do? If you are like most people, you would probably search for information about that specific item on the internet, read a few reviews, and check whether the purchase is worth it. If you need more information, you would ask a friend, family member, or post a question on forums like Reddit, Quora, and Facebook groups. This change has greatly influenced how businesses operate, the level of unemployment, and how consumers buy. However, before we get to that and why network marketing may be a good fit for you, let’s first consider how technology has changed how we do business today.
SOCIAL MEDIA AND A NEW WAY OF DOING BUSINESS
I’m sure you have heard the phrase “numbers don’t lie.” According to various
statistics, social media continues to be the most popular online activity. It’s so popular that researchers have found that 22% of the time spent online is spent on a social media platform such as Facebook, Instagram, Twitter, and Pinterest. Let’s take a closer look at these numbers.
Research by Statista, a business data platform, shows that at least 78.2% of the US population was connected to the internet in 2010. In 2018, this number had shot up to 275 million internet users. Social media alone accounted for 79% of the online population in 2019, which was a 2% increase from 2018. This would mean there were approximately 247 million people on social media alone. The platform suggests that 317.1 million people will be connected to the internet by 2023, which will see the rise in social media use. Insane, right?
This overwhelming evidence has made businesses develop a strong online presence, with social media being the main focus because of the traffic it drives to a site. There is no denying that social media has changed the business world and consumer behavior.
For instance, people born between 1978 and 1994 were the first people to use the internet. Naturally, they expected to get information at their fingertips and to have the freedom to control the information they consumed. As a result, they stopped trusting traditional marketing tools such as TV and radio,and even frowned upon the use of cold calls.
Naturally, this led businesses to change how they did business and adapt their marketing strategies to meet consumer needs, meeting on social media platforms instead of
bombarding them on TV. This was also when people trusted Yahoo (Bing) and were only experimenting with Google.
With the launch of Myspace in 2003, Facebook in 2004, and Twitter in 2006, things took a different turn. More people started spending time online, and when Instagram came by in 2010 and Snapchat in 2011, things simply exploded. By then, the baby boomer generation was already online, and companies recognized the need to reach this “social media generation” if they wanted to push their products and services.
HOW SOCIAL MEDIA HAS CHANGED HOW BUSINESSES OPERATE
1. Through targeted marketing
In just a decade, social media has left an undeniable mark on the business world. You see, marketing and advertising are the most influential aspects of social media; this is because it has made it possible to put your products and services in front of the exact consumer you want to target.
Let’s think about this for a moment. You are seated in your dentist’s office waiting for your appointment when you notice a magazine article on forex trading. Out of curiosity, you pop the page open, but you are called in before you gather “enough” information.
Once your appointment is over, you do what anybody else would have done: look for the information online. After reading a few articles to satisfy your curiosity, you then head to Facebook to catch up on what people are doing, only to be bombarded by a couple Forex trading ads. A few days or a week later, these ads disappear into thin air.
Or, perhaps you’ve been thinking about refinancing your mortgage, so you’ve been researching. Suddenly, your social media is flooded with ads about loans and refinancing a mortgage.
Using the information gathered by search engines and social media platforms, companies target customers based on their interests and what they search for online. Before social media, businesses had to seek out websites and buy ad space, but now, all they rely on are the metrics provided by social media sites to reach you.
2. Consumers are in control
In the traditional business model consumers had to call the company if they had a question or complaint. After the introduction of the World Wide Web, emails became the new form of communication between consumers and companies, but even that had its drawbacks. For starters, companies could choose not to respond to complaints, and there was nothing consumers could do about that.
Social media has leveled the field, creating visibility for everyone. Companies are more in touch with their clients and able to answer questions in real time, which has increased customer satisfaction. In a way, this has taken power away from the businesses and given it back to the consumers. If you are an angry customer, you can voice your opinion for millions of users to see, putting the company on the spot. This transparency has forced businesses to invest in customer service, which is a good thing.
3. The rise of organic advertising
Online advertising is nothing new, but past models lik PPC ads seemed forced due to their in-your-face stigma. Banner ads were no better, and pop- ups were frowned upon.
Likewise, sponsored ads seemed “fake,” and people hardly paid attention to them.
With the rise of social media marketing, ads are now more organic, and they don’t seem to interfere with how someone uses them. For instance, you can scroll through your Facebook or Instagram feed and pass a few ads on your timeline that don’t actually scream advertisements. This non-interference makes them seem natural, and because they don’t bother anyone, people don’t really mind them.
Also, companies can interact with their audience and promote valuable content without appearing pushy and needy. This leads to brand growth and free marketing through word of mouth, sharing links, and tagging friends on the things that customers find exciting and valuable.
Another advantage is the availability to disseminate information through different forms, such as images, videos, text, and infographics. Because businesses are not restrained to formalities on social platforms, they can package their content easily and either formally or informally. Companies can also mix the latter two, depending on the occasion and communication being pushed out. This includes the use of memes, emojis, jokes, and even slang.
4. Leveled the competition field
Before the internet, businesses needed to have tens of thousands of dollars to advertise on mainstream media. Think of radio, TV, and newspapers —even today, these three are some of the costliest forms of advertising available. The disadvantage with newspapers, for instance, is that nobody buys them anymore. TVs aren’t any better because people either change the channel when commercials come on or find an excuse to rush to the washroom, pour another cup of coffee, or grab a beer from the fridge. When an ad comes on the radio, most people switch to a different station.
Besides those disadvantages, small businesses and startups could not compete fairly with multi-million-dollar companies. Consider that local bakery whose bagels are to die for; even though they have a great product, they probably don’t have the financial coffer to pay for ads that will run for weeks —sometimes months—on TV and radio.
However, with a fraction of that budget, they can learn and leverage the digital space to reach customers. Surprisingly, social media has a wider reach than traditional media, which makes it even more valuable.
TECHNOLOGY HAS CHANGED HOW PEOPLE EARN MONEY
When we were young, our parents told us to study hard, go to college, and secure a steady job, the latter specifically with good benefits being the best option. If we didn’t, our lives would be filled with nightmares as we scraped through life, wondering what the future held.
This fear made us work hard, get good grades, and go to college. However, it was time to look for a job, a different reality struck—suddenly, everyone had a college degree to show the unimpressed human resource manager. Quickly, we realized that we had to do something different, offer something different if we wanted to secure a remotely decent job.
Fast forward to when companies started advertising online. Blogging became a respectable income stream and Tik Tok and Instagram influencers started earning more than a regular office manager. That’s the power that digital marketing has had on the job market.
Tech skills are in demand as people, companies, and organizations crave websites and content. Consumers, on the other hand, are fishing around for the most valuable information and the company that offers what they need. If these two needs were to be merged, the company would make a killing by selling its products and services, and the consumer would receive what they needed. Then, the tech expert would also earn money by either linking the company with the consumer through ads or by facilitating what the company needed toreach the consumer through content.
This is kind of a win-win situation. What’s interesting, however, is that none of these people needed to be located in a physical store to make things happen. For instance, the company could have a virtual office, the tech expert could be working in their garage in pajamas, and the consumer could have been miles away and binge-watching Netflix while they made their order.
Heck, even Netflix became a revolution from buying DVDs and visiting movie theatres when their popularity spread by the internet and recognized convenience of watching movies at home. Sites like Amazon, Spotify, Ebay, and others have become a steady income stream for thousands of people. One doesn’t have to look too far—maybe even past their own mirror—to know someone who has morphed one of these opportunities into a profitable side hustle, or even career level income. They would rather travel the world and blog about it while making a six-figure income along the way, hence the coinage of the term “digital nomads.” Social Media Influencers have also revolutionized advertising. An influencer with a large following and high engagement rate can leverage this from companies by offering to promote their products and services.
Think of it this way—the company needs to get its products and services in front of their target market. The influencer has thousands of people following them on Instagram that fall within the company’s market niche. Naturally, the company would want to approach the influencer and ask for a “shout out,” so they can put their products or services on their timeline for a fee. This is by far more affordable for the company than it would be to schedule a TV ad for a few minutes a day.
The unemployment rate has increased with the recent COVID-19 pandemic, as companies and small businesses struggle to remain afloat. According to research by Fact Tank, the number of unemployed Americans has risen by more than 14 million between February and May 2020. Companies have also adopted working remotely to ensure their operations are not affected. The technology advancement we have has dramatically helped keep companies afloat and money in people’s pockets. Even those who have lost their jobs have dived into working remotely by selling their skills online. The number of freelancers has increased, as has the number of courses offered online. Experts at Just Answer say that freelancer income payout increased in April, which was 23% higher than previous months.
The number of experts on the platform saw the most prolific experts earn as much as $60,000 in a month. This includes lawyers, antique appraisers, and auto mechanics. Flex Jobs—another platform—reported that demand for experts increased by more than 24% from March to April. So, even though the pandemic has increased unemployment rate and affected millions of people drastically, remote work has seen a surge in both jobs and experts for task handling.
This is all how technology and its numerous opportunities have made earning—even in tough times—readily available.
TECHNOLOGY HAS BROUGHT A SHIFT IN CONSUMER BEHAVIOR
Using the traditional marketing model, consumers have followed a funnel when buying a product. The top was full of people who were just becoming aware of the product and brand; then, they eventually went through a few steps until they finally purchased the product. Customers” drop off” at each level, with only a handful making it to the final stage: purchase.
Although this process is still followed today, it’s safe to say that it’s no longer as linear a process as it used to be. Customers can now hop between stages of the funnel in multiple companies thanks to the internet. Buyers can move from curious prospect to purchase within minutes, or from trigger to consideration, then purchase.
However, even with this, we have to agree that customers still follow three main steps: first, the trigger, then the “ok I’m interested to know more,” and then, finally, the buy button.
The trigger—During this stage, consumers realize they need a particular product or service.
The first moment of truth—Here, the customer researches and gathers information about the product.
It can also be called the research stage. Today, it has become the most crucial part in the purchasing process.
The second moment of truth—Once you buy and use the product, you would then decide if you liked the product or not, now that you have experienced it. If you like the product and the service the company accorded you, you could become a loyal customer. If not, you may decide to keep looking.
Traditionally, you would have transitioned through these stages with the help of a sales representative—but today, the journey starts with search engines. You would now jump from one site to another; click here and there until you arrive at the answer you are searching for.
Granted, most of the searches online are from mobile phones, with Google reporting that 75% searches are credited to mobile devices as of 2019. Out of these searches, 65% will suggest shopping through mobile phones at least once a month. This information suggests that you would enter a store (online or a brick and mortar store) with the first two purchase stages complete; you didn’t need a salesperson. Throughout the process, your behavior would be influenced by certain factors. These include:
Personal factors, such as your interests and opinions. These are often affected by demographics, age, culture, background, profession, and gender. Psychological factors that look at your perception and attitudes, and how they influence your response to a particular marketing campaign. Your ability to comprehend information, how you perceive your needs, and your attitude will play a part in your buying decision. Social factors, such as peers, family, friends, and social media. Under this category, your income, education level, and social class will also play a role.
All this information is great, but how does it help us understand how consumer behavior has changed? Let’s look at one of the most popular factors: social factors.
Human beings are social. We always prefer to belong in a community of people and to have a “click” with those we most identify with, either as family or friends. Once we find this group, we imitate them in a bid to be socially accepted in that society.
These groups—for instance, your family—play a significant role in how you make purchases. There are preferences you developed since you were a child by watching how your parents, sisters, brothers, and uncles prefer certain products over others. Some of the products you buy may be a result of something you hated or loved when you were a kid. The role you play in society will also influence your buying behavior; if you are in a high-income bracket, your buying behavior will be influenced by your position. You may, for instance, splurge more on luxury items or prefer certain brands because of your economic status.
That would be the same way a staff member will buy a different brand from the chief executive officer, even though they work in the same company.
That’s why you will see your friend on Instagram doing something, and you will automatically want to do the same. If all your friends have good jobs and you don’t, you may start to feel segregated and left out when they discuss how work was or how Linda from finance made a nasty comment about Stacy. This information will land on every social media platform you are in.
For instance, you may join a job board on Facebook and comment on some of the jobs you are interested in. After that, perhaps you join LinkedIn and apply for a few jobs before doing the same on Twitter by following links to certain jobs. A few moments later, you might look toward Google for jobs you are interested in and apply to several posts there. Do this for a while, and your Facebook feed will have suggestions of job boards you can join, probably with the same job interests you applied for. LinkedIn will also send you notifications of jobs you may be interested in, and you may even see some ads from the companies you Googled.
All these started from seeing and hearing your friends talk about their jobs, which elicited feelings of want and inadequacy and a need to fit in. This is consumer behavior in action. Let’s look at another example for the sake of emphasis.
You log in to your Instagram and see a beautiful shoe, so you like it. As you scroll through, ads start appearing of the same kind of shoe or something similar. You double-tap on a few more, and now you can’t stop seeing shoes on your timeline. As annoying as it is, you told Instagram bots that you really loved shoes, and, naturally, they showed you more of what you loved.
So, even though you don’t talk to a salesman, your purchase will still be influenced by other people’s opinions. But where is the sales rep you used to rely on for information?
Today, a sales rep is seen as a trusted advisor and have become thought leaders in their fields. These are the people you would turn to when you can’t find answers on your own. These are also the people who write sales copy and lead magnets for companies.
That’s why businesses have realized that power is in the hands of the buyer. With the internet at their fingertips, buyers can conduct in-depth research that is replacing the need for companies to pitch products and services. Instead, it’s become more beneficial to build trust with consumers and provide them with useful and relevant information that’s easily accessible through whatever device they decide to use.
In this chapter, we have learned that:
Social media platforms have introduced a new way to conduct business.
Technology has opened up new avenues of earning money.
Technology has brought a shift in consumer behavior by giving power back to the consumer.
In the next chapter, we will talk about healthy lifestyles and choices, and
how they have affected the market.