Business 2.0

Starting today is Director’s first weekly ‘Business 2.0’ blog feature. Appearing here every Tuesday, the feature will look at ways the internet and emerging technologies can benefit businesses in Thailand, and the world over.

This inaugural post looks at an example of the benefits embracing social media can have for businesses.

The world has focused on Twitter of late, the micro-blogging service which has gained a considerable following in Thailand, with Bangkok in particular a hotbed for Twitterers. Essentially Twitter allows its users to message other people using 140 character (the length of a standard SMS) whilst following other people’s updates.

Despite recent growth Twitter is relatively new to Thailand, so new that many businesses are still unsure how it can be used – a similar situation to Europe and the US when Twitter first broke in the west.

Recent business news from the US throws up an excellent example of how companies can use social media. Zappos, the US shoe company, was purchased by Amazon on 22 July for more than USD 900 million in cash and stock, Amazon’s biggest acquisition in its 14 year history.

So what is so remarkable about Zappos?

The company has taken an ‘open-house’ approach under the stewardship of chief executive Tony Hsieh. The company has found fame, and fortune, encouraging its employees to build a social media presence by joining sites, with Twitter a particular Zappos favourite.

Although this is nothing new for the west, the degree and approach with which Zappos has embraced social media certainly is. For example, while many companies prefer employees to keep their social networking personal, Zappos actively encourages its employees to link their social media presence to their job, with freedom to discuss any aspect of work.

By giving its employees total freedom to talk about their jobs over social media, Zappos has handed control of its brand management over to the employees. While most companies would fear this scenario (access to social networks is banned from many workplaces) the Zappos approach has attracted media headlines, consumer admiration and trust, not to mention more than USD 635 million net income in 2008 alone.

Of course, this social media policy alone is not responsible for Zappos’ success. Popular policies, such as free shipping and free returns, to combat the initial scepticism of buying footwear online, along with innovative management and this ‘open house’ communications tactic, have made the company a poster-child for innovative, modern day business – perhaps best demonstrated by Amazon’s pursuit of the company since August 2005, according to the New York Times.

Surprisingly, the company was formed in 1999 – when the internet was far different, and social networking barely existed. Rather than growing up around social media, it has evolved the medium into its business today.

The example of Zappos shows that social media is not just for start-ups. Any business can use the medium to gain consumer and media attention, so long as the company is brave enough to embrace the medium, which must form part of its long-term strategy.

Further information can be found in Director Thailand’s recent social media article which is available here.