Seven Social Networking Strategies for Smaller Businesses

From sourcing talent to building brand awareness to prospecting for customers, social networking can help you manage many aspects of your smaller business -- if you know what you're doing. Here's how to hit the goldmines and avoid the landmines as you pursue all those social networking opportunities

Rodney Rumford was not in the greeting-card business when he first explored Facebook. But Rumford, a Net-savvy consultant, hatched a new venture by setting up a business within the world's second most popular social network.

Since launching Cool Greeting eCards as a Facebook application, Rumford's applet has had 110,000 installs -- not a record but still an impressive start. "I have never seen a way to gather users faster or cheaper," says Rumford, CEO of Gravitational Media. For launch, his team of 10 workers created 100 new greeting cards, including high-quality audio clips, and now offers more than 150 cards.

Though Rumford has dabbled in the greeting-card business, he says "a number of people have approached us and wanted to purchase it." The lesson is clear -- social networks are a business and marketing platform with low barriers to entry and a bevy of potential revenue-generating possibilities.

For smaller businesses, social networking isn't a shortcut to success. However, it offers an intriguing platform for customer, employee, and supplier relationship management that can serve not only existing connections but also help to identify new prospects.

Not every firm is ready to exploit the advantages of engaging with customers in a social setting. Constant Contact, a 10-year-old provider of e-mail marketing tools, regularly held customer dinners in various cities to become better acquainted with its customers. Company representatives noticed that clients attending these gatherings had little in common beyond an interest in communicating with their customers electronically, but they were eager exchange business cards with one another.

"We wanted to make it easier for them to share information," explains Maureen Royal, director of community, Constant Contact. Those observations lead to the development of ConnectUp, online customer forums hosted by Constant Contact, where members introduce themselves and exchange advice about the best ways to use electronic communication channels.

And like a social network, Constant Contact provides greater recognition to its most influential and active participants. The site has 14,000 members, a fraction of a public social network, but a very healthy percentage of Constant Contact's customer base.

The key business advantage of ConnectUp is its role as a retention tool. "By giving customers a voice they feel like they are contributing to our product direction and they feel vested in our success," says Constant Contact's Royal. "The chances of them leaving are pretty slim because they feel they are helping [our product] to become special."

In a way, Constant Contact's experience is prototypical of smaller businesses: Most stumble into social networking. Unlike Constant Contact, however, few take the time to draft a formal strategy -- or even to identify business goals.

Assuming that no formal strategy is in place, then it's pretty much everyone for themselves. "Best practice No. 1 is management has to do it," says Tom Austin, a VP and fellow at Gartner. "It can't just be individuals."

One of the challenges of mastering social networking is determining where to invest your resources -- time, energy, and possibly capital, too. As you gain personal experience using Facebook, LinkedIn, or dozens of other networks, you can begin to identify -- and ultimately prioritize -- the universe of possible initiatives to enhance your career, your brand, your staff, and revenue.

Reviewing the commercial spectrum of social networking opportunities reveals seven gleaming goldmines and lurking landmines for smaller businesses that pursue social networking initiatives.

Seven Social Networking Strategies for Smaller Businesses:

1. Prospecting on a Social Network
2. Sourcing Talent On A Social Network
3. Building Widgets For Social Networking Sites
4. Encouraging Employee Use, Not Abuse, Of Social Networking
5. Building A Custom Social Network For Customers
6. Building A Custom Social Network For Employees Or Suppliers
7. Building Brand Awareness On A Social Network

Next Page: Prospecting on a Social Network

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