Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

Is social connectivity friend or foe to corporations?

In 1929, Frigyes Karinthy conjectured that anyone on Earth was connected to anyone else, on average, through just six people. Social networking may be increasing connectedness. Facebook recently studied connectedness among its 721 million active users, concluding that the average distance between any two Facebook users is now only 4.74 "hops" (down from 5.28 in 2008).

That connectedness has benefits for corporations, which can use social networking to provide easy two-way customer communication and facilitate targeted marketing. But increased connectivity has other implications:

News travels faster. Thirty years ago, dissatisfied customers usually told eight to 15 friends about their experience. Today they can (and do!) tell many more. The title of Pete Blackshaw's book says it all: Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000: Running a Business in Today's Consumer-Driven World . Moreover, according to Conversocial, many retailers fail to sufficiently monitor social networks ; it reported that several Fortune 500 retailers missed all consumer complaints on social networking sites during a five-day study in September 2011. Unfortunately, oblivious companies also miss the opportunity to address complaints before they spread widely. Reports of poor customer service can potentially result in numerous customer defections.

Even corporations with superior customer service can be trashed (or "bombed," in current lingo) by those who dislike their products or corporate policies. In an Amazon-bombing, for example, people coordinate an effort to give a product negative reviews. That's what happened to psychiatrist Carole Lieberman's book after she offended members of the gaming community by linking sexual scenes in video games to an increase in rape. Similarly, Google-bombing can trash organizational reputations through highly linked websites or social networks.

Stakeholders are connected. Everyone within your business ecosystem could potentially be connected: your customers, suppliers, bankers, lawyers and so on. (And any of them could be connected to your competitors.) Suppliers and customers could easily attempt to bypass you, thereby undermining your business and profits. Minimize this danger by treating your suppliers well. They are far less likely to bypass you if they feel you accommodate their business needs and enable them to earn a fair profit. The days of squeezing your suppliers are long over. Aim for mutual success.

Customers have more information. Retail customers do a lot of research before buying a product or service. Besides studying product features, many ask friends for recommendations. For major brands, the social-media link here is marketing tools like Facebook's Sponsored Stories program , which offers product comments and recommendations from a user's Facebook friends. Facebook contends that these stories increase customer engagement significantly over standard advertising.

Social connectedness should receive significant corporate attention. Besides improving its monitoring and response strategies, your corporation should set up a way to connect regularly with its employees, suppliers, customers and other critical stakeholders. By connecting early, it will be able to establish the initial tone and perspective when an issue arises and not be forced to play catch-up.

Connect early, connect often and connect effectively. Leverage social connectedness to polish and protect your corporate reputation and to enhance future success.

Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. Contact him at BartPerkins@LeveragePartners.com .

Read more about management and careers in Computerworld's Management and Careers Topic Center.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Amazon, Facebook, Google, Inc., Topic, Wikipedia
References show all

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Coverage
Related Whitepapers
Latest Stories
Community Comments
Tags: Facebook, internet, Internet-based applications and services, Management and Careers, social networking, Web 2.0 and Web Apps
Latest Blog Posts
Whitepapers
  • Optimised Data Protection for VMware® Environments with Symantec NetBackup™ Appliances
    VMware® remains the most widely deployed virtualisation solution. The explosive growth of VMware infrastructure in organisations both large and small has enabled corporations to more fully exploit their hardware investments. With multiple virtual machines running on few physical hardware nodes, hardware costs are reduced, as well as space, power, and cooling requirements. This white paper discusses in more detail how VMware environments can be protected with the NetBackup appliances. Read more.
    Learn more »
  • Consolidation Without Compromise
    Virtualisation of computer, storage and infrastructure is enabling the transformation of enterprise datacentres into private clouds. The impact is an unprecedented ability to consolidate infrastructure without compromise: no change to service level agreements (SLAs), no loss of performance or scale, and no regression in the organisation’s overall security posture. Read on.
    Learn more »
  • A whitepaper on Cloud Security
    Articles include: The cloud security checklist; Creating a governance framework for Cloud Security; Hackers, like vendors are embracing the cloud. Are you?; Want government cloud? Rethink security! and more. Read this whitepaper.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.