Small World Labs

There’s been a lot of excitement around social networks lately. MySpace currently has 275 million members and Facebook claims more than 70 million. Those are big number numbers that no one can deny. Is this just hype? How does this affect your business?

The interesting thing about social networking that makes it different from other hyped industries is that its growth is end user driven, rather than investment driven. What I mean here is that sometimes the media can get enamored with a technology that just isn’t ready for the market (remember the Newton?). You end up reading a lot about it, but there really isn’t a true business impact or customer adoption. However the accomplishments of social networks and online communities have truly been an end user driven, bottom up success story. If you talk to people that use social networks, you’ll social networks are here to stay.

Businesses and organizations have started using existing social networks. In 2006, Burger King ran a successful, well known advertising campaign featuring a MySpace profile for “The King.” Over 140,000 people added The King as a friend. However, using existing social networks has a downside. If you search for “Sierra Club” on MySpace you’ll find several groups related to The Sierra Club. Unfortunately for The Sierra Club, you find not only “The Sierra Club” group, but also the “Anti-Sierra Club,” the “sierra club sucks” groups. Obviously, this isn’t a place where the Sierra Club would like to send its supporters.

In the face of this, many organizations and businesses, such as AT&T, Scottrade, The Dallas Morning News, and CMP, as well as the Special Olympics, The American Cancer Society, and Save the Children have decided to create their own social networks for their constituents. In creating and managing their own online communities, these businesses can take the lead in creating and managing “community” for their customers, employees, and members.

In the business world, the common types of communities we’ve seen created are for: 1. Customers, 2, Employees, or 3. Partners. Below you can find some of the leading reasons and goals for creating and offering these three types of communities:

Customer Community Goals
• Better understand customer preferences and profile
• Increase awareness of your brand
• Facilitate sharing of best practices
• Increase adoption of your products and services
• Improve customer loyalty and retention
• Enable peer to peer customer support and communication
• Receive real time feedback from customers regarding wants and needs
• Increase persistent traffic to the website
• Solicit customer-driven innovation
• Empower power users and experts to find & fill job positions

Employee Community Goals
• Create a company culture of sharing and teamwork
• Increase intra-company communication and collaboration
• Facilitate the finding of pockets of expetise
• Improve employee retention and the bond between company and employee
• Discover new ideas and accelerate innovation
• Encourage cross-functional inputs to drive better decision making
• Bolster minority and special interest group programs

Partner Community Goals
• Enable general communication with partners
• Facilitate sharing of best practices & creation of a knowledge base
• Encourage co-innovation to better serve joint customers and markets
• Increase sales through real-time market intelligence
• Provide a central repository for partner communication
• Enable opinion sharing and recommendations

As time goes on, you’ll see more and more websites incorporate “community” into their overall web presence. Those that do will begin to actively participate in the word of mouth marketing benefits that their customers give them. Those that don’t move first will likely see a competitive necessity to react as their competitors start to take advantage of this arena.