In 2005 Mike and Frankie Schmidt bought a small farm in the Natal Midlands. The farming wasn’t doing so well and they needed something to cover costs. They’d noticed that no home-made ginger beer was being sold in the area. It was a drink they’d made in their family for years and they decided to give the local market a try.
Sales soared. They added different flavours and developed a catchy ‘Frankie’s Good Olde Fashioned’ brand. The business grew to employ 12 people and made 10 000l/day. Mike presented his range of drinks to Woolworths. It declined and he went back to supplying his local KZN market. He then got word that Woolworths was stocking a range of drinks almost identical to Frankie’s.
Mike and Frankie decided to challenge the company. Since Mike couldn’t afford to sue Woolworths, he turned to the ‘court of public opinion’. He went to the press, to the Advertising Standards Authority (ASA) and to his computer, communicating with everyone he could reach via Facebook, Twitter and any other site he could find.
Within days, Woolworths’ Facebook page was full of adverse comments about its behaviour. Then the ASA found in favour of Frankie’s. To cut a long story short, Woolworths took its Frankie’s look-alike drinks off its shelves, and apologised to its customers and to Mike and Frankie Schmidt.
There are many other similar stories – such is the power of the social media today! Yet many business managers consider Facebook, Twitter, LinkedIn and the myriad other social networking sites as youth-focused gimmick of little real value. But, as Woolworths found to its cost, it can be a real force in business, and it’s a phenomenon still in its infancy.
Every day, huge numbers of people are taking to their computers or mobile devices to connect with friends, post opinions and engage in conversations. It’s taken Facebook four years to reach 50 million users, something TV took 13 years to achieve and radio 38. Think of how easy it is to communicate with your employees via the humble SMS. Think of the marketing opportunities that exist, even for the smallest farmer, to tell people about your products. You can also conduct market research more quickly and cheaply than ever before. The advantages are endless.
In Harnessing the Power of Social Media, Caroline Firstbrook and Robert Wollan have this to say: “The impact of social media will be far bigger, not smaller, than currently anticipated. Businesses that use social media will transform their relationships with customers and create value in unforeseen ways. “Organisations and people stuck in a wait-and-see mode will fall behind and face bruising challenges when they do finally attempt to catch up.”
You’d better get with it!
Contact Peter Hughes at [email protected]. Please state ‘Managing for profit’ in the subject line of your email.