Switching costs and social warfare

Every marketer tries to build in switching costs into his product, something that makes the decision to change a bit more difficult. These switching costs have 2 elements:

    1. Real costs,  like contract penalty clauses, loss of use of some useful feature that needs to be replaced, physical costs of going to the bank and closing/opening accounts, pulling out a piece of machinery, and so on.
    2. Emotional costs, and these are the killers in consumer categories, the loss of “cool” the loss of relationships with a brand and other adherents, the perception that by not using brand A, you no longer have something of value to your “tribe” a sense of belongingness.

So how will the much hyped Google+ attract Facebook users?

The hype says that Google+ has lots of features that social media wonks want, and it may have, certainly seems there are some good ideas, but what it does not have, and will possibly never have is the emotional investment that users have sunk into  Facebook. To move your social identity to a new platform means you have to move everyone else in your network, and replace the manner in which the interactions occur, ands make it better. Seems pretty unlikely to me no matter how much better Google+ may be.

Myspace has just been flogged by Rupert Murdoch’s News Ltd for $33 Million, which is a huge bath. A purchase price of $900 million in 2005, and accumulated losses that could run into billions, and despite the advantage of  first mover in the social space, it got mowed down by FB, which now has an “installed base” of users of 750 million, with all the links and networks that number implies.

Short of Google+ having an “app” that enables the downloading of all material and links a FB user has on his site, something I cannot see FB allowing, Google+ will be starting from scratch., and who needs a second social site that is just a “bit more” that the familiar FB? will the attraction of limited free video confering be enough? Myspace has proved probably not, particularly as it is unlikely FB will sit around wondering

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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3 Responses to Switching costs and social warfare

  1. Pingback: Google + on air, an anti-facebook bomb? | Strategyaudit's Blog

  2. Pingback: Momentum and Initiative. « Strategyaudit's Blog

  3. Pingback: Facebook & Skype, the “twins of free” meet old economy « Strategyaudit's Blog

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