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Business Applications Of Social Media Inside Organizations: Social Networks
How do organizations really use social networks? Is social media useful to acquire new customers or just to maintain strong relationships with existing clients?
Photo credit: Kheng Guan Toh
The answer to whether social media are good for customer engagement or relationship building is: "Social media is good for both".
As long as you do not get too greedy or "salesy" in your business approach, social media proves to be very useful to connect with your audience.
Social media is free to join, easy to use and, most importantly, it is "a way to supercharge the word of mouth", and as every marketer will tell you, a positive word of mouth is the best mean to convert prospects into sales.
Shel Holtz, summarizes well the impact of social media in business strategies:
"I see [social media] as a place to build relationships, but it is not for direct selling. That is not what people want to receive on Facebook. People are there to socialize, and if you can offer value through conversation, you can build relationships with those customers. If you pitch them, they will ignore you, or worse."
In part 3 of this report (Part 1 - Part 2), marketing analyst Josh Gordon shares interesting data to make sense of the penetration and main functions of social media inside the corporate world.
The Coming Change In Social Media Business Applications: Separating The Biz From The Buzz
by Josh Gordon
Business Applications of Social Networks
1. Sales Use of Social Networks
Top Uses of Social Networks
How organizations use social networks for sales
Top uses of social networks for sales are to maintain and build relationships.
The most common use of social media networks, such as Facebook or LinkedIn, is "Maintaining social contact with clients" (67.6%). After that, about half of businesses surveyed use social media to achieve a "Better understanding of client attitudes" (50.6%).
Sales Use of Social Media Networks
Sales functions organizations plan to adopt in the future
Sales use of social media networks could shift sharply toward an emphasis on customer prospecting.
As organizations look to the future, the same trend emerges as seen in the general social media and Twitter responses: a shift toward more customer communications and, in particular, toward prospecting.
The two sales prospecting options rise dramatically to become the top goals for social network usage.
"Sales prospecting by targeting 'self-identified' new customers" moves up to the top choice, from No. 5 currently, and "Sales prospecting by social networking" moves up as well, from third place to second.
Moving forward, it seems clear that social networks will be a top lead generation tool.
Practical Advice On Use of Social Networks
Put this information to work:
According to Brian Solis, principal at FutureWorks,
"Human interaction is still human interaction, and what it takes to be successful with it has not changed. What has changed is the places where it happens."Says Solis:
"Social media tools help you find conversations that can give you insight into what individuals in your market are saying about your product. This can give you an opportunity to engage people on their terms, not as a salesperson, but as a resource, and then get the sale because of it."I use social networks to find out who my clients really are.
We all vary our modes of conversation when we speak to different types of people: an intimidating boss, a pesky child, a policeman giving a speeding ticket, or... a salesperson.
Often, when I "see" two of my clients "talking" to each other on a social network, their conversation with each other is very different from my conversations with either of them, as someone trying to sell them.
But when I see clients "talking" to their peers, I learn what is truly important to them, and it is rarely about me or my product. I look for what they are passionate enough to write about, how they react to each other, what they are afraid of, and who their heroes and villains are.
Understanding a person's values and passions is a first step to understanding them, and a prerequisite to any sale.
Shel Holtz, principal of Holtz Communication + Technology, warns about being too "salesy" when you engage potential clients in a social media environment:
"I see it as a place to build relationships, but it is not for direct selling. That is not what people want to receive on Facebook. People are there to socialize, and if you can offer value through conversation, you can build relationships with those customers. If you pitch them, they will ignore you, or worse."Dan McCarthy, chairman and CEO of Network Communications Inc., shares that he becomes better at reaching out to new clients as they get to know him though his personal profile and postings on social media sites.
Years ago, McCarthy realized that the people with whom he had the best business relationships were also those who knew the most about his personal side.
Says McCarthy,
"If you connect the way you live to the way you make a living, you create an incredible degree of authenticity, which is what today's digital generation is looking for in the people they work with.My professional identity and my personal identity are very connected.
"Survey respondents also wrote in "other" uses of social media for sales, including:
2. Marketing Use of Social Networks
Promoting Organic Messages and Monitoring Customer Trends
Marketing functions organizations adopt now
Top uses for marketing functions are promoting organic messages and monitoring customer trends.
About half of the organizations surveyed actively promote themselves through organic messaging (56%), monitor trends among their customers (53.1%), and provide ways for customers to interact with their company (51.5%).
About a third use social networks to research new product ideas (34.1%), while about one in four advertises on social networks (26.7%).
Providing Ways To Interact With Customers
Marketing functions organizations plan to adopt in the future
Top marketing use of social networks shifts toward providing ways to interact with customers.
Looking ahead, we see the same trend repeated as organizations refocus their social media toward customer-focused programs.
The top choice moving forward is "We provide ways for customers to interact with our company," which is only the third most-used marketing function at present.
Marketing is part of the shift toward using social media as a way to connect and acquire customers.
"Understanding a person's values and passions is a first step to understanding them, and a prerequisite to any sale."
Please check all of the marketing functions offered by social networks-like Facebook, LinkedIn, and MySpace - that your organization now uses.
Practical Advice On Marketing Use of Social Networks
Put this information to work:
According to Dan Schawbel, social media specialist at EMC Corporation, and author of the book, Me 2.0:
"Social media tools are popular marketing tools because they are free, people are already using them, and there is an opportunity cost for not getting involved today.Depending on your line of business, certain social networks will work better for you than others. It is all about aligning business strategy to the use of each tool. Otherwise, you are wasting time and not reaching the right audience with the right message on the right network.
"Brian Solis indicates that there could be more going on in social networks than you realize. He poses the question, "If a conversation takes place online and you are not there to hear or see it, did it actually happen?" In fact, there might even be dangers in not participating.
Says Solis,
"Conversations are taking place, with or without you.If you are not part of the conversation, then you are leaving it to others to answer questions and provide information, whether it is accurate or incorrect. Or, even worse, you may be leaving it up to your competition to jump in to become the resource for the community.
"Monitoring and reacting to customer behavior is key. Ari Herzog, principal of Ari Herzog and Associates, learned that firsthand when a new pizza restaurant opened in his town. Herzog tried it, liked it, and wrote a positive review of it on the social media review site, Yelp.
A few months later, when he revisited the restaurant with his mother and sister, he was surprised when a waiter came by with a free order of chips and salsa as a thank you for the review.
What kind of impression did that make? Herzog shared the story with me when I interviewed him, and now you are among thousands reading about it here. Now that is good marketing!
Herzog 's enthusiasm is typical of what social media can do for any brand.
Says Dan McCarthy:
"The Holy Grail for a marketer is positive word of mouth. If you can capture this, it is the highest means of converting prospects to sales, and at the least expense. Social media is a way to supercharge word of mouth."Survey respondents also wrote in "other" uses of social media for marketing, including:
- Showcasing case studies,
- running a professional group on LinkedIn, and
- communicating with media outlets.
Link to an extensive list of social media marketing examples on Peter Kim's blog, "Being Peter Kim."
3. Public Relations Use of Social Networks
Public Relations Functions
Public relations functions offered by social networks
Social networks serve a variety of public relations functions.
The four most common public relations functions using social media are:
- Maintaining a company profile page (66.6%);
- using social networks to distribute press releases and news items (59.3%);
- monitoring and responding to mentions of the company and its products (58%); and
- interacting with bloggers and members of the traditional press (54.6%).
Looking to the future, organizations plan no changes in how they use social networks to support their public relations efforts, with future uses being identical in sequence and proportion to current use.
Practical Advice On Public Relations Use of Social Networks
Put this information to work:
Public relations professionals would do well to monitor social networks for activity about their organization and products. Shel Holtz, calls this essential:
"If you are monitoring, you can be part of the conversation.Social media is becoming the communication channel for breaking news.
Remember that the first reports of the US Airways flight that water-landed in the Hudson River were first reported on Twitter by someone with a cell phone on a nearby ferry.
If your company gets in the news, you may find out about it first by monitoring social networks.
"The other PR function unique to social media is the ability to post a company profile page. Some companies take this free service more seriously than others.
Annie Ta, from Facebook's corporate communications team, says:
"We encourage businesses to really engage with consumers on their profiles. For example, businesses should update their status, post videos and photos, and start discussion threads with their consumers.Public profiles provide a way for businesses to talk to consumers and understand them. Some of the most successful public profiles are those that create a genuine dialogue with their fans.
"Link to two great examples of company profile pages: Dell and Visa.
Survey respondents also wrote in "other" uses of social media for public relations, including:
- Updating fans and customers on company news;
- promoting company events;
- registration for events;
- maintaining an alumni group for past employees; and
- promoting a fundraising program.
4. Use of Social Networks For Internal Communications
Save Money Using Social Networks
Internal workflow functions that social network use and plan to use.
Organizations can save expense by using existing social networks to create work groups where documents, schedules, and communication are shared collaboratively, from anywhere on Earth.
While there are security concerns with posting potentially sensitive internal communications on a third party's network, the irresistible "free" cost for simple groups is motivation for many.
Currently, the top uses of these services are "Sharing documents" and "Maintaining communication with teams."
Looking ahead, the use of social networks to help internal workflow will remain similar to usage today with one difference: Fewer organizations will use social networks for file sharing.
Among current uses, "file sharing" is tied with "maintaining communication with teams" for the top use. For the future, it drops to fourth place, near the bottom.
Practical Advice On The Use of Social Networks For Internal Communications
Put this information to work:
The results speak for themselves here, and since not much is changing, there is little to add.
Survey respondents also wrote in "other" uses of social media for internal workflow, including:
- Training,
- building bonds with remote teams, and
- general social use with no professional communications.
Conclusions
This study is the first to document the coming shift in the use of social media - from a helpful tool for a variety of communication needs, to an essential tool for customer engagement.
As organizations invest in social media programs, incorporating this shift into the plans should be considered a high priority.
Skeptics might say that a more customer-centric approach is natural in a recession when business is scarce. But a recession is not just a time of slow sales.
More significantly, it is also a time when the pace of change accelerates, and the competitive landscape of industries is reshaped.
A research study done by Bain & Co. in the aftermath of the 2001 recession discovered that competitive change during the recession occurred at about twice the normal rate. In addition, companies that changed competitive positions against one another during the recession remained in their new rankings long after it had passed.
In 1929, rival cereal makers Kellogg's and Post were in a close race to win the emerging cold breakfast cereal market.
Through the Great Depression that followed, Kellogg's maintained an aggressive marketing posture, while Post slashed its ad budgets. When the slow time ended, Kellogg's had a market advantage over its rival that it maintains to this day-almost 70 years later. (More on that story here)
It would be a mistake to assume that this shift toward customer-centric usage of social media is temporary.
In fact, the shift toward customer engagement, and away from general communications, shows a more important role for social media use at organizations. As Peter Drucker, known as the father of modern management, said, "The purpose of a business is to create a customer."
On the same list as above, pick the one internal workflow function your organization is considering using in the future.
End of Part 3
Part 1: Business Applications Of Social Media Inside Organizations: An Overview
Part 2: Business Applications Of Social Media Inside Organizations: Twitter
Originally written by Josh Gordon for Social Media Biz Buzz, and first published on July 20th, 2009 as The Coming Change in Social Media Business Applications
About Josh Gordon
Josh Gordon is president of Selling 2.0, where he works to improve the performance of organizations and sales teams with research-based training and consulting services. Josh has written four books on the subject. For more information, visit www.Selling2.com.
Photo credits:
The Coming Change In Social Media Business Applications: Separating The Biz From The Buzz - Pjcross
Practical Use of Twitter - Andrzej Tokarski
Reference: Social Scoop [ Read more ]
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