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Social Networking, a boon for SMEs

Social Media MarketingOne 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, brand, staff and revenue.

Social networking sites these days are much in news to increase more contacts and help to stay updated. But what we really need to know is- Does social network really work? – especially to build smaller businesses stronger. A research on how social networking helps to grow SMEs would help us to gauge this better.

Rodney Rumford, into greeting card business owes his success to the well known social networking site Facebook. When he first explored Facebook he was not in greeting card business. Since the launch of Cool Greeting e -Cards 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 the launch, his team of 10 workers created 100 new greeting cards, including high-quality audio clips, and now offers more than 150 varieties of cards.

The lesson is clear–social networks are a business and marketing platform with low entry cost barriers 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 to 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 led to the development of Connect Up, online customer forums hosted by Constant Contact, where members introduced themselves and exchanged 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 Connect Up is its role as a retention tool. “By giving customers a voice, they feel they are contributing to our product direction and they feel vested in our success,” says 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.