16. The Future of Social Business
Online social networking for business is still a nascent and rapidly changing field. Even in the short amount of time between the last edition of this book and this one, new vendors, user interfaces, and jargon have sprung up—along with new possibilities. Indeed, vendors and technologies might come and go—Six Degrees, for one, is long gone but left an important legacy. And many new players almost certainly will emerge in this space.
What’s critical isn’t the specific technologies of today, but rather the general shift in mind-set toward an increasingly socially networked world. To adequately prepare, we must rethink and evolve our relationships, interactions, and business strategies to account for a social Web. Just as the Internet fundamentally changed nearly every aspect of our personal and professional lives, the social graph represents a radical step that is already beginning to permeate many important areas of our lives.
Social media is a major disruption for how businesses market, sell, and innovate. The social Web is transforming how organizations and individuals learn, adapt, and evolve. Expectations and norms have changed regarding customer participation and how companies are organized. Companies today have no choice but to become transparent, responsive, and collaborative, or else risk going out of business.
With the Facebook Era, we move closer than ever before to becoming people-centric instead of technology-centric. Companies can get closer than ever before to their customers. Organizational strategies and decisions can be developed based on relationships and business goals instead of on technological limitations. Indeed, the online social graph at its best becomes invisible, fully ingrained in our online and offline tasks, transactions, and interactions. It makes our Web interactions and experiences emotional, interesting, and trusted.
Social, Personalized, and Real Time
Four themes will continue to grow in importance and dominate the customer experience in the Facebook Era: social, personalized, and mobile/real time.
Social
Companies are finally realizing the importance of social influence on purchase decisions and brand perception and are catering to these dynamics through their Web sites, email campaigns, Twitter accounts, and Facebook Pages. Within organizations, traditional enterprise applications that contributed to isolated functional silos are giving way to open, transparent systems that recognize that most business workflow takes place between individuals (that is, it is social).
Personalized
The ideal experience for a customer is one that delivers the right content to the right person at the right time. Over time, we have slowly gotten better at this, first with Google keyword search targeting and more recently with behavioral targeting based on past purchases and page views. Our social network profiles provide a key missing piece of our digital identities—who we are, where we’re from, and what we like. These elements combined are powerful for businesses to use in determining not only who is a likely customer, but also how best to approach and message to this individual.
Mobile/Real Time
A number of startups, led by Loopt, Foursquare, Gowalla, Booyah!, and newcomer Burbn, have built popular geolocation applications to let users share their real-time location with friends. Facebook, Twitter, Yelp, and social gaming companies such as Zynga and SGN are also rapidly adding mobile and geolocation features. These mobile, real-time apps provide users with proactive real-world recommendations and incorporate game-like dynamics, such as awarding virtual goods, property, and status for “checking in” to certain places.
For example, users on Foursquare receive a “bender” badge for bar-hopping four nights in a row or a “gym rat” badge for checking in to ten “gym” locations within 30 days. Checking in at a certain location more times than anyone else earns you the title of “mayor,” and some businesses now offer free drinks or snacks to the Foursquare mayor of their location. Gowalla is similar to Foursquare, but with fewer badges and more “items” to pick up and drop off in places (in other words, more gaming, less status). It is the second mover, but many people believe it has a better code base and product design. MyTown is GPS-enabled Monopoly with real physical places. Users can buy places and collect rent from others who check in to those places. Both Loopt and Foursquare are exploring geotargeted coupons. (For example, Loopt has partnered with Jack in the Box to serve up coupons when users are in the vicinity of a restaurant.)
Especially for local hangouts such as bars and restaurants where people like to socialize with friends, geolocation applications hold a lot of promise.
The ROI of the Social Web
Understandably, a large number of you are focused on return on investment (ROI) and might feel frustrated that no “magic bullet” answer can quantify the ROI of corporate social networking initiatives. The best parallel I can draw here is to rewind ten years to the early days of the Internet. It was as hard, if not harder, then to calculate the ROI of having email and a company Web page. The Internet was changing rapidly. (Of course, it is still changing!) Many businesses then chose to wait before going online. This was a mistake, especially for small businesses. Across almost every industry, new players emerged with more efficient, lower-cost models driven by the Web. Their competitive advantage was magnified as these new companies shaped and innovated new online models for their respective industries. Those who waited lost.
So what is the ROI of the social graph for business? What is the ROI of the Internet for business? This is the wrong question to ask because is too broad to adequately answer. The ROI depends on your business objectives and how you are using social networking to achieve them. The ROI in the sales context could be based on how many business contacts a rep can maintain, an increased close rate on deals, and a heightened capability to up-sell and cross-sell. For marketing, ROI might be measured via click-throughs and views, as is common today in advertising—or maybe a new metric of engagement is more appropriate.
As social networking technologies continue to evolve and our capability to tie social initiatives back to impact improves these next few years, ROI will become much more quantifiable and standardized. I encourage you to review the “Define Your Metrics” section in Chapter 9, “How To: Develop Your Facebook Era Plan and Metrics,” in developing your organization’s own social ROI model. Of course, if you need a starting point, you’re welcome to use the social customer lifetime value formula I conceptualized.
Trends in the Social Web
So what does the future hold? Only time will tell, of course, but important trends are already taking shape. Fewer new social networking sites are emerging. The online social graph is becoming better integrated with other emerging technologies, such as video and mobile.
First, social networking services appear to be consolidating. This is partly because of standards initiatives, such as OpenSocial, but it is also the result of the network effects governing online social sites—large sites get larger and small sites get smaller much more quickly. Therefore, we should expect that clear winners and losers will emerge in the coming years even more than they have already.
Second, an increasing breadth of applications has become integrated with the social Web. Facebook started largely with profiles, photos, and events but is growing to include games, commerce, and even customer relationship management (CRM). The future will bring the power of the online social graph to the cutting edge in information and communication technology, such as real-time interactions and tighter integration with mobile devices. Already we are seeing applications such as Loopt and Foursquare use GPS technology to let people check into their favorite places and see where friends are in real time. Another area that might benefit greatly from enterprise social networking services is videoconferencing and Web conferencing. What if, in real time, people on a video or Web conference could see one another’s profiles and mutual contacts? This might help establish greater rapport, especially among groups of people who are geographically dispersed and might not have met face-to-face. If efforts such as Facebook for Websites are successful, a few years from now we will think of Facebook less as a Web site and more as a social identity layer over other Web sites, covering perhaps a large portion of the Internet.
Third, as enterprise social networking and general social networking become the norm, we will see a sociological shift in people’s behavior toward relationships and interactions. More value will be placed on social capital. People who are well connected will be disproportionately favored. They will be more empowered than ever to accumulate and exercise social capital. This is true both within organizations and on the Web, where product “influencers” (such as people who get retweeted a lot) will be worth more to advertisers and may even be asked to become affiliates for certain brands.
Fourth, IT departments and technology vendors will have no choice but to incorporate social technologies into the applications they provide. Employees will demand that their business tools have the same user interfaces and experiences that they utilize in their personal lives. As discussed in the previous chapter, CIOs will need to balance the benefits of plugging into the online social graph with the risks of not having complete control.
Finally, social networks and advertisers will need to address unanswered issues regarding user privacy, especially when it comes to behavioral targeting. For example, some progress has been made so far with the Network Advertising Initiative, an industry cooperative of online marketing and analytics companies (that is, ad networks and behavioral data companies) to introduce checks and balances for responsible privacy and data management.
Final Remarks
We are very lucky. Not only do we get to witness one of history’s most profound technology and cultural revolutions, but we also get to shape it and directly experience it every day in numerous ways across our personal and professional lives. What exactly the future holds is anyone’s guess, but where we are now with online social networking is similar to where we were in the 1990s with the Internet. We don’t know specifics, but we do know that it will be big, whatever your company size or industry and regardless of whether you are in sales, marketing, product development, recruiting, or another business function.
Just as then, both extremes exist—the naysayers who believe this is a passing fad, and the yea-sayers who are eagerly jumping on the bandwagon and committing substantial resources without thinking through their business strategy and objectives. This book was meant to appeal to the vast majority of us who are in between, to help real companies with real customers understand the transformation that is underway and determine how they might adopt specific online social networking strategies to run a better business and please their customers.
Remember, this book is all about you. Please stay in touch and join the conversation as together we learn and invent the rules and possibilities of this new era:
• Facebook—www.facebook.com/thefacebookera
• Facebook for Websites—http://thefacebookera.com
• Twitter—http://twitter.com/clarashih