Effective use of social networks (SN’s) is closer to sales than it is to marketing. You want to build momentum in the network, and marketing alone will not provide that.
There’s a lot more to SN’s than better demographics, and given the abysmal value advertisers are are placing on Facebook (suggested $0.32 CPM vs. $1.15 for average online CPM in 2007 as per CPM Advisors LLC), demographics just aren’t cutting it.
The alternative SN’s should looking to is helping companies sell to their networks. With all of the embedded relationship information, any salesman would love to get their hands on that data for companies they are selling to.
As SN’s age and continue to fill in, this becomes a reasonable opportunity (LinkedIn is already there). In the meantime, SN’s have to provie value to retails scale vendors. Since the per-sale return from using a sales team is likely to be negative, they need to place their bets on individuals likely to get others to buy too.
In other industries, we’ll use pharmaceuticals as our example, market research teams will do extensive survey work to determine the most influential figures in decision making relevant to their products.
Even after the enormous expense of conducting these 6 month or more research projects, and taking into account all of the known problems with determining influence with surveys, pharmaceutical companies often dedicate a specialized sales team to act on the data. One company analyzed in a current paper showed approximately a 20% increase in revenue from this collaboration between marketing and sales.
Unfortunately, survey based methodologies become prohibitively expensive when moving from a 1,000 to 10,000 doctor network to a 10 or 100 million customer retail market.
The good news is, SN data is better and more accurate than surveys, and the data already exists. You have the actual relationship matrix, rather than skewed survey information. That alone provides quite a punch to sales. Marry that with frequency of communication data, and you’ve got a goldmine for sales.
[Photo by: Beth and Christian]