Training Day

Impact of Social Media on Consumer Choice —Jeff Bezos' Interview With Charlie Rose

If you haven’t seen the interview Jeff Bezos gave on Charlie Rose, you can find it here

Even though the bulk of the interview revolved around the new Kindle, the most interesting topic to me took place at the end around min 36:27 when Bezos is asked about the impact of social media on consumer choice. Here’s his answer:

On the internet, word of mouth is more powerful than it has ever been before. On the internet, everybody buys ink by the barrel. Everybody has an opinion and they share them. In blogs, social networking sites, by email and text messages and so on and so on. I think this is a very powerful and positive phenomenon for society. Because, I think in the past, if you were making a product, the right business strategy not necessarily the right thing for society but business strategy, was to put 70% of your attention, energy and dollars into shouting about the product, marketing the product and 30% into building a great product. And so you could win with a mediocre product if you were a good enough marketer. And I think that is getting harder to do. That strategy, the balance of power is shifting away from companies and toward consumers

As you’d expect, with this shift of power, the reverse is taking place today due directly to the impact of social media and the internet. Bezos offers this different approach for companies:

The right way to respond to this if you’re a company is say: Okay, I’m going to put the vast majority of my energy, attention and dollars into building a great product or service and put a smaller amount into shouting about it and marketing it. Because I know if I build a great product or service, my customers will tell each other.

And finally an interesting point Bezos makes is how these social media and current tools at our disposal as consumers help the truth bubble to the surface. I take this with a grain of salt because the truth about a product could be very subjective but at the core of it all, yes with today’s technology it’d be very hard for a crappy —not just mediocre— service/product to even last on the surface regardless of the amount spent on marketing it. What I consider mediocre could be more than acceptable to others:

We’re moving into a world where the truth is more on the surface