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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

The Good, Bad and Ugly of Social Media

Written By: Carol Roth | No Comments
When you don’t own the relationships, you don’t own the relationships

Nobody will doubt the impact that social media is having on businesses of all types.  It can be a valuable tool to help you reach potential customers and stay connected to build long-term customer relationships.  But what happens when things go bad?  When you use someone else’s media platform (whether it be Facebook, Twitter or otherwise), you don’t own those relationships.  And if things change, whether it be from a technical problem (ranging from hackers to glitches), competitors accusing you of rules violations or perhaps a changing of the tide to the new platform-du-jour, it puts your relationships at risk.  Basically, when you don’t own the relationships you are creating with social media, you don’t own the relationships.

Let me tell you a story of one of my clients, an independent rock band that learned this the hard way.

SAGE4 (www.sage4.com) was fairly early on the social media scene.  Being a band, they turned to MySpace in September of 2005 where they launched a MySpace site, complete with streaming audio of their songs, a blog to keep fans posted about their band updates and other key information about the band.   I know MySpace is sometimes regarded as a bit passé amongst social networking gurus, but it’s still an incredibly popular site and an important venue for bands.  Plus, the lessons from this story could be applied directly to Facebook, Twitter, etc.

Here’s the familiar situation- the band’s members spent hours each day on MySpace connecting and directly communicating with fans of their hard style of music.  They personally responded to every fan’s comments (which included 20,000 comments and thousands of private email messages.) This added up to thousands of hours spent marketing through MySpace, creating a personalized relationship with the SAGE4 fans.

The Good: Their social media effort made SAGE4 a very successful MySpace story.  An independent band without the backing of a major label, SAGE4 quickly built their fan base to over 54,000 fan “members”, who supported the band in their growth efforts.  Through this fan base and the band’s exposure on MySpace, SAGE4 maximized their social media bang-for-the-buck.  Their achievements ranged from winning retail chain Hot Topic’s national Battle of the Bands competition to landing a movie appearance and soundtrack deal in a major big budget horror movie.  Moreover, SAGE4 was being approached daily with new opportunities for radio play, gigs, magazine interviews and record label inquiries- not bad for an independent band.

The Bad: The band was in negotiations with several labels when they got the worst news they could imagine.  Their site (and all 54,000+ friends) had mysteriously disappeared from MySpace, with only a “dear John” form letter to compensate for their years of work building their fan base on the site.  Not that this was the first time that SAGE4 encountered issues with MySpace.  Their page had been hacked three times before and this was the second time it had been wiped out completely.  After the first wipeout, they sent a note to customer service, and although they didn’t hear back, the page was restored.  This time, after trying to contact customer service for a month and getting the same form email over and over, they lived with the reality that their work was totally gone.  The band learned that this was not a unique situation and connected with other bands that endured the same fate.

The Ugly: With no prior warnings before the site was taken down and no opportunity to address any potential hacker issues or correct any perceived wrongdoings, the band had to start their marketing again from scratch; something that they found difficult to do with much enthusiasm.  Every one of their followers was lost and the band now had no way to contact their fans to let them know what happened.

The Take Away: The take away is that while social media can provide an exciting platform for businesses to tap to build relationships, there needs to be a plan in place to migrate those relationships so that the business owns them.  Otherwise, you, as a business owner, are at the mercy of that third-party site.  If something goes wrong or if it goes out-of-style (which will happen to all the current “hot” social media sites at some point), you risk losing access to your relationships built on the site.

Third-party social media sites should be a part of a larger strategy, one that creates a path to gain ownership of the relationships.

In the case of SAGE4, they decided as part of their re-building strategy to go with a proprietary forum and mailing list that they now run on their own website.  While they acknowledge they couldn’t have built their following so quickly if it weren’t for a third-party platform, they know all too well the perils of not transitioning their “customers” to their own platform more quickly.

Article written by
Carol Roth is a national media personality, ‘recovering’ investment banker, investor, speaker and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett (Shark Tank, The Voice, Survivor, The Apprentice) produced technology competition series, America's Greatest Makers, airing on TBS and Host of Microsoft's Office Small Business Academy show. Previously, Carol was the host and co-producer of The Noon Show, a current events talk show on WGN Radio, one of the top stations in the country, and a contributor to CNBC, as well as a frequent guest on Fox News, CNN, Fox Business and other stations. Carol's multimedia commentary covers business and the economy, current events, politics and pop culture topics. Carol has helped her clients complete more than $2 billion in capital raising and M&A transactions. She is a Top 100 Small Business Influencer (2011-2015) and has her own action figure. Twitter: @CarolJSRoth