Social Networking and Business

Peter Durand asked this question over at linkedin.

I thought to myself, “I should be able to say something about this.” Here is my first crack. I think its ok. Its helpful to have someone with a practical question ask it to get me to focus.

My initial response raises more questions (which I’ll return to at the end.)

What is the most effective way for a professional service firm to use social networking apps? (After all quantity of connections does not equal quality.)

(1) What are the business goals behind the use of social networking Web 2.0 apps such as LinkedIn, Plaxo and Facebook?
(2) As volume of connections increase, how can integrity and authenticity be maintained?
(3) And, most tricky, how can the business value of social networking apps be described to senior leaders who tend to operate on the other side of the technology gap?

Great questions. I need to have good answers for myself. Some quick hits.

1) The goal for any particular business must be part of an overall approach to customers and relationship management. However, if a given business seeks or has one way, firm to customer communication, they will find lots of conflicts because most SNS have reciprocity built into them.
2) Facebook is an interesting case. Due to its initial growth exclusively through college domain name emails (bubba@college.edu) college students flocked to it creating a “network effect.” A network effect is when a product becomes more valuable as the network of users increases. The value of a carrot to me is not affected by the number of carrot owners. The value of fax machine goes up as more people have them. But, now that Facebook has thrown itself open, will the attractiveness of network effects offset the negatives of the lower baseline trustworthiness of the average user. The second half of that sentence is the predator fear. On MySpace, due to its low threshold for authenticating users, I don’t know who is a predator so newbies are vulnerable and power users are wary.

3) Short answer: how do they feel about this: Cluetrain.com elevator pitch. If they feel threatened, don’t bother. If they feel invigorated, than explain that SNS are a way to have more conversations between you and any one of your customers/stakeholders.

If that seems like too much of a cop out, especially for decision makers who feel threatened by conversations but can be convinced otherwise, I might try this.

Markets are about conversations. Even when you don’t see or monitor those conversations, it is the most natural form of communicating. In a brand-intense, information saturated economy, conversations are even more important, and the new scarcity, the new value driver is “real” conversations. For more and more people, they are choosing to substitute many-to-many forms of communication for the older one-to-many. That is the difference between a radio ad and a blog, between mass media and wiki media. We are not “adding” SNS to our lives, we are building our lives around them, and adding TV, print, radio as we need or want to.

Peter’s Blog response.

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Filed under Business, Networks, participatory technology, Social Network Sites

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