Squeezing some value out of Twitter…

I have been avoiding mentioning Twitter on here on the basis it may well prove to be a passing fad. My chief concern with the businesses attempting to network or communicate via 140 character messages (other than the sheer time-wasting aspect), was that I couldn’t see much value in it from a competitive advantage perspective.

This story about small-scale wine-makers does shed light on one potential productive use. Several wineries have found it a very effective mechanism to connect with wine-buffs, and open up new markets and retail channels.

Making such connections is crucial for differentiating oneself in this very noisy and overcrowded marketplace. Trying to communicate a message about the subtle points of difference of your wines can be expensive and time-consuming if it requires engagement with the wine media (let alone broader mainstream media). This scenario represents a considerable barrier to expansion for new entrants and smaller players.

Twitter may serve to break down this barrier. It seems especially promising with respect to connecting independent retailers and small wineries. The former have a strong incentive to find less accessible but marketable wines (as a point of differentiation from bigger chains and their buying power). If small wineries can communicate consistently about the progress of their winemaking, about successes, customer feedback, special deals etc, this can only help.

Twitter will work best for any business when it reduces the costs of doing business, increases information flows and learning, and if it can serve to replicate (or capture sufficient elements of) existing selling points in that market.

I just spent a couple of days visiting cellar doors in the Barossa. Engaging directly with the winemakers (and the wines of course) is a huge bonding mechanism. Regular tweets could go some way towards simulating that experience.

What other businesses could benefit from this sort of customer engagement?

Microbrewers?

Bands?…

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Tags: Australia, Barossa, business, differentiation, entry barriers, finance, social networking, Strategic management, Twitter, vintners, wine, winery, wines