I know these video’s are getting a little repetative, but if you want to know whether your business needs to take note of social media or not then please do watch this video.

What has suprised me most in recent months is how social media is creeping into my life. About 8 weeks ago I bought a camcorder from an reputable online retailer, but what made me choose the particular model that I eventually purchased? Was it the glowing description from the site with a list of the many features that this camcorder had? No, it was the reviews from the 20 or so people that had purchased it. I did not know a single one of these people and yet I trusted their combined opinion that gave the product  4.5 starts out of 5.0.

I think I may have been using “The wisdom of crowds”. This is a statistical principle that dates back to 1906. Joseph Galton, a statistician, was at a country fair and there was a guess the weight of an ox competition. For a small entry fee visitors could guess the weight of the ox and the nearest would win a prize. Galton hoped to prove that the average individual knew nothing, not just about ox weight, but life in general. His thining was that the grop would be made up of a combination of exerts and those with no practical knowledge of the subject. His ratonale was that this could be seen as an analogy or society in general. There were 800 entries and he added them all up and divided by 800 to get the average. The figure he, or rather the group, calculated was 1197 llbs. The actual weight was 1198 llbs. The people that entered had no prior knowledge and many of them had no knowledg of agriculture or oxen. Yet they cumulatively managed to get near the poverbial bulls eye, or should that be ox eye? Galton described this phenomenom as The Wisdom of Crowds.

We are all starting to get more involved in trusting our peers rather than advertisements when it comes to making choices about purchases. Traditionally an advert was the driving force to get you to purchase, now it is becoming the first stage in your decision making process. The next stage is for a business to show you how popular their product is with people who are just like you, because if people like you love this product then surely you will too, right?

It will be interesting to see how this new form of media will play out in the coming years. Personally I believe that Facbook may well adapt to become not necessarily a search engine but applications will be developed to specifcally enable users to recommend products to each other. The first sign of this has been the recent link up between Amazon and Facebook in which Amazon will recommend books based on the things that your friends have liked. Facebook fan pages already allow busineses to utilise their customers as walking, typing adverts for their brand. Twitter can really be he wisdom of crowds whereby you can put out a request and then use the responses to formulate a decision. I wonder how many businesses are aready doing this? I think the next time I want to make a purchase I will put this to the test and ask the Twitterverse for their opinion.

Businesses are going to have to find new and innovative ways to earn our trust. This is not just something for the businesses of tomorrow, this is for today. Those businesses that do not adjust to the new methodology that the public are, possibly unwittingly, using to make decisions will not have to worry about tomorrow.  They won’t have a tomorrow, they will be yesterdays news.

Do you feel that Social Media is changing the way that you make purchases? Leave a comment, one way or the other.