When Lyn Hill created a page on BT Tradespace in August 2007, she had little idea of what to expect. She had been told about the new social networking site by a BT partner, and thought it might be a good way to grow her online business, HedgePig. The company sells unusual gifts to consumers and businesses, and since it was formed in October 2006 had relied on visitors to its website for sales. It was doing well, but Hill is always keen to find new ways to grow sales.
After just one month, HedgePig’s BT Tradespace page had received more than 1,600 hits. Its website also saw a surge in visitors and sales, resulting in a monthly increase in turnover of around 20%. Many growing businesses like HedgePig are using online social networking as a catalyst for growth. But while they present clear brand building and marketing potential, it’s a fragmented market, with new, business-oriented networks being launched all the time. So choosing the right site and approaching it correctly is crucial to generating the kind of success enjoyed by HedgePig.
Referrals
Alex Batchelor, marketing director at Royal Mail, is convinced that online social networking can help businesses grow. “Our research shows that the battle for the home shopping pound will increasingly be fought and won in the aisles of social networking sites, where the power of recommendation rules,” he says. “If recommendation accounts for just 10% of the average company’s annual online spend of £1,221, then the total prize for retailers who tap into this social networking group is £750m. That figure will only grow. Retailers can’t afford to ignore this new generation of shoppers.
Those who tailor their sites to drive ‘word of mouse’, and understand how to interact with existing social networkers, will benefit.”
It is not only retailers that can benefit from social networks. Regardless of the product or service you offer, whether business to business (B2B) or business to consumer, sold online or offline, this new form of marketing could be relevant.
Rachel Hawkes, co-founder and editor of the Social Media Portal, a global gateway to social media sites, outlines the various ways in which you can use social networks. “You can create a
blog through which your organisation and target audience can interact,” she explains. “You can interact with other blogs, networks, forums and so on. You can make content available to download from your website and social networks where you reside. You can implement social networking aspects to your site through tools such as Google Friend Connect. You can create applications or widgets for popular community sites. You can also create your own independent community on or off a social network.” The possibilities, it seems, are only limited by the imagination of the business looking to market itself.
Sites abound
There is a dizzying array of sites to choose from. Richie Jones, creative technology director of digital agency Yucca, outlines some of the most popular. “MySpace is great for targeting trendy sub-culture 13 to
21-year-olds,” he says. “Facebook is now as credible as Google as an online utility, and is good for targeting
those niche demographics that are tricky to find. Flickr is a credible method of targeting the mass market and some of the Yahoo-type users who tend to be less web-savvy. And LinkedIn is gaining more momentum and credibility in the B2B world.”
There area many more. Ecademy, for example, was set up in 1998, and by 2007 boasted 3.4 million visitors a year to the 250,000 profiles on the site. Viadeo, a similar site, was launched in 2004, and now has more than three million business users in Europe and China.
Then there are virtual worlds, a radically different proposition from a conventional social network. Second Life is an online 3D world where you can hold meetings, conduct training, create a virtual office and even do business. Remarkably, the virtual currency is exchangeable for dollars. It was founded in 1999, and as of May 2008 had seen 13.6 million registrations, with nearly one million logging in weekly. Companies, including Nissan and Reebok, have a presence in Second Life and more and more smaller businesses are following suit.
Recently, there has been an explosion in the number of smaller, niche networking sites. One example, WeCanDo.Biz, launched in April 2008. “More than 200 businesses registered in our test phase and we’re on track to get tens of thousands of UK-based companies networking and dealing with each other through the service,” says its chief executive Ian Hendry. “Some people have got leads after spending less than 10 minutes on the site.”
The right site
With so many sites to choose from, it can be tempting to try to build a presence on all of them. However, Dan McGuire, managing director of online job advertising firm Broadbean Technology, recommends a more selective approach. He invests around £200 a year and half an hour a week in networking on LinkedIn. After only six months, he now has a network of 1,200 people. He has used this for hiring senior staff and getting introductions to potential clients.
“The best way into a new business opportunity is with a recommendation from a mutual contact, and LinkedIn is very useful for it,” he says. “However, it does take time, so I do very little on Ecademy, and have refused all invitations to Naymz, which seems to be becoming popular. You’re much better focusing in on one network and doing a proper job there.”
