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The Purpose of Social Networking in Business

I frequently have meetings with clients who say, “Should my business be on Facebook or Twitter?” Or they often say,”I want to be on Facebook and Twitter.”

Clients asking either question never really understand why their competitors are using modern social networking channels online. They also don’t really understand what it can do for them and how to use those channels themselves. Why should my business use Facebook? This is an interesting question. Should every business use Facebook or another form of social networking? I won’t answer these questions for you. However, I will tell you what I think the social networking model means in business and what it can do for businesses.

In its simplest form, social networking is good ol’ fashion list building. What is list building? Again simply, it’s the gathering of contact information from prospective customers. There are many ways to go about list building. You can purchase email lists online for bulk mailings. You can make a form available for people to assign themselves to your list; for instance a newsletter. You can pay firms who already have lists for access to their lists or to have them contact their lists on your behalf. Or, you can use a massive list of users already in one place like Facebook.

Why should I build a list?

These days it is not simply enough to open the doors of a business or launch a website. List building is a game of numbers. Let’s say 100 people know about your business. If you reach out to all 100 of them to offer them a deal on something you’re selling, chances are with any offer you’ll only convert on 1% or less. 10% if you’re lucky. That means less than 10 people will respond, take interest or take you up on your offer. If you typically convert less than 10% of the people who know about your deal, you can see how important it is to have as many people know about your deal as possible. When it’s your job to reach them, it’s your job to build a big list.

How can social networking help me build a list?

There are more than 800 million people actively using Facebook. Let’s say you’re a restaurant that serves Thai food. Let’s say 10 out of every 100 people like Thai food. Let’s say there are 400,000 people in your local area within driving distance of your restaurant that use Facebook. That means there are around 40,000 people on Facebook in your area that could potentially be interested in your food. Imagine 40,000 people seeing that you’re offering a deal this Friday night. If you were to reach all of them and convert just 1%, you have 400 people in your seats this Friday. List building is a numbers game and you have to be conservative with your numbers. You most likely won’t be able to build a list of 40,000 people. The local Brew Pub down the street from me in Bethlehem, Lehigh Valley has around 7100 fans on Facebook and they do quite nicely for themselves. I’m sure the beer has something to do with that. I’m sure their lists do as well.

How do I get people interested?

This is perhaps the most important question. You can’t just put up a Facebook fan page with a few pictures and your hours of operation. You need to be engaging. Engaging your users is how something becomes “viral”. The beauty of Facebook as a social networking channel is that you no longer have to do all your list building yourself. If you can provoke people to interact with your wall, friends of those interacting with your fan page are introduced by proxy. Posting, commenting and liking by potential or existing customers opens you up to all the individuals in their networks. The trick is to engage people. Get them to build your list for you.

How do I get customers to build my list for me?

There are a lot of ways to do this. I’m sure I’m not privy to all of them. Some businesses post funny videos. Some businesses are controversial. Some businesses bombard fans of their pages non-stop. Actually all of these techniques when done well are okay and can be helpful. The technique I really push with my clients is incentivizing. Incentivize your Facebook fan page! Before doing so please read Facebook’s terms of service.

The Purpose of Social Networking in Business

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