August 2009 - Social Networking

As an American living in Europe I am still not used to taking advantage of all the holiday time allotted to me each year. After appeals from my manager and a grueling 4th quarter, I decided to take three weeks of vacation in August. We have pets which combined with family commitments condemned us to stay home and work around the house during the holiday. This turned out to be very dangerous.

In order to understand the danger, you need to know that I have been going online for business and social communications since 1971. My first experience aside from the rotary dial telephone was communicating via a Remote Job Entry (RJE) terminal to a central mainframe doing the administrative tasks for the city high schools of New York. As none of the school's administrative staff understood the RJE station, the Computer Science students did most of the terminal work. When not running attendance or scheduling jobs we would send messages to the other students running the other jobs in the other high schools. I now wonder if the Analyst in charge of the IT system counted on the students to aid the adults in the deployment of the system. Getting back on track, over my holiday I wound up using my free time by going online and addicting myself to one of the Social Networking sites.

I have been hearing a lot of buzz around how Social Networking is going to Revolutionize CRM and each time I hear the word revolutionize I groan. Maybe it is the fact that I have been online for over 3 decades, but I see the evolution of communications technologies not a revolution (Give me a 3d monitor and I will talk about revolution). In one of my interest groups I received a video posting on my social Wall (for the video see Social Media Networking on YouTube) highlighting the Social Networking Revolution (there is that word again). In the video the facts highlighted the lightning speed adoption of popular social services is impressive and shows a shift in how people are staying connected. Yet the speed of which each technology or service is adopted is based on the convergence and advancement of communications, computing, data storage, and imaging technologies. It is obvious that the social networking marketplace is evolving to fill the social and professional needs in communities that are no longer defined by geographical boundaries. While many new products have come on the market few have survived by figuring out how to make money off of the service or product

Now I have been talking about social networking without defining it, and as the video mentioned that Wikipedia has become a reliable source for such definitions, I will reference their definition:

"A social network is a social structure made of individuals (or organizations) called "nodes," which are tied (connected) by one or more specific types of interdependency, such as friendship, kinship, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.

Social network analysis views social relationships in terms of network theory about nodes and ties. Nodes are the individual actors within the networks, and ties are the relationships between the actors. The resulting graph-based structures are often very complex. There can be many kinds of ties between the nodes. Research in a number of academic fields has shown that social networks operate on many levels, from families up to the level of nations, and play a critical role in determining the way problems are solved, organizations are run, and the degree to which individuals succeed in achieving their goals.

In its simplest form, a social network is a map of all of the relevant nodes between all the nodes being studied. The network can also be used to measure social capital -- the value that an individual gets from the social network. These concepts are often displayed in a social network diagram, where nodes are the points and ties are the lines."

At present it common to see in any major city a middle class household with children that is connected to the internet via a Mobile Phone or PC with someone in the house connected to a social network. Based on my three week indulgence on one social site, I came to the conclusion that much of the technology used in social rather than professional products sucks up a person's energy with little practical return.

Before I talk about Social Networking and CRM, I would like to relay a personal story. While I originally joined one site to understand how my teenagers where keeping up with their friends online, a recently retired associate of mine invited me to participate in his online mafia family. I had several weeks ahead of me with time to fill and my NY roots calling to me I accepted the invitation.

The first thing that I realized was the site that hosted the game was a hosting platform for many applications. That means they are setting application development standards, a fact that few people are discussing when talking about networking technologies. Unlike other game experiences I have had, there is no way to spend an hour dedicated to the game, instead the game is oriented to having you come back and check every few hours your progress (marketing people take note). In essence they have motivated me to check in on the site, which grew from checking in on 1 game to multiple games and other social minutia. In addition to games I took silly surveys to find how well I remembered Marx Brothers Movie Trivia and Brooklyn Trivia (my home town and I was on holiday). What I found most intriguing was the personality profiles that were available. While I have taken many such tests in the past, the results were never before posted to a general community or captured in a social database. The implications for how the information is protected and disseminated has already become a worldwide news item as some governments want access to the habits of their citizens.

In addition to hosting applications and retaining very personal information the service I was on provided the ability to buy game items, donate money to charitable organizations or purchase products using a number of reliable payment services, making them more than a social site, they are a marketplace for real as well as virtual products (talk about a way of making money virtual gifts). This represents a new market many traditional companies are not taking advantage of or even aware of. We are already seeing some governments trying to scramble and determine how to tax or if they should even allow the converting of virtual products into real money. Stories of rooms filled with people playing games to earn rewards that they can sell as gifts to other players is already being hailed by the media as a small industry doing well in Asia.

Aside from all of the personal information that can be mined from social sites the opportunity exists to tie Sales, Service, and Marketing processes with Social Network capabilities. Imagine the following scenario's.

I was having a problem with a new home network device and was not sure if the issue was in the operating system, drivers, or hardware. I had to go to several websites searching for a solution. Each vendor told me the problem was with the other company. I had to rely on social networks to find a solution. I burned many hours doing this and have avoided buying new products from both companies as their service support was unacceptable. If vendors consumer support sites tied into social networking sites, not only could customers more easily perform self service accross vendor boundries, vendors could also keep track of problems with products not being reported. Currently I rely on my social network to find and fix a problem and have less valuable contact with the actual vendor of my home products (and less future sales for them).

Once I have found solutions to my technical problems I went out and purchased additional hardware. I used the recommendations from the network to find the products that would suit my needs the best. In the past I would go to the individual vendors websites first and then pick the product. Now because many vendors are not providing adequate services and the technologies are getting more complex, I go to the network, get a recommendation, research that product, and make my purchase. The social network has become more trustworthy than the vendor having significant implications for sales departments if I am not unique.

Finally anyone in marketing not looking at how social networking sites work, is missing a huge opportunity to get their message out to a new generation of consumers. Understanding how users of a social site bounce between interests yet stay on the site presents new opportunities to conduct surveys, market research, and even promotions.

As is the case of evolution new products and services emerge some survive and many fail. Over the next decade the rise of new user interfaces made available on social networking sites will replace older technologies requiring a vendor to build the entire infrastructure supporting sales, service, and marketing functions and instead will tie their future to social networking platforms and integration standards.

The good news is, the move by large organizations to cloud computing and Service Oriented Architectures will make it easier to integrate traditional applications with new distribution channels like Social Networks. Strategic Analysts responsible for systems that touch a customer should become familiar with the opportunities available today so that they can capture the market before their competitors do.

To finish, I did a survey of my teenagers friends hanging out at our house and determined, they and their friends all participate in social networks. They are more than receptive to using the technology in more than social pursuits (I described a game idea that would teach them IT skills). They represent the consumers of the future and how they buy will be heavily influenced by the communities they participate in. My holiday is complete, next week I start a new class, and I am currently weaning myself off of my social network addiction. Or maybe I should start up a discussion group for other social network addicts.

Comments:

Very well written and interesting stuff

Posted by Atul Kuma on September 04, 2009 at 07:45 AM CEST #

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