As the economic crisis moves beyond the financial industry and begins to affect all business, the need to communicate efficiently and cost-effectively with consumers is more crucial than ever.  Without doubt, the best way to do this is via the internet.

The internet is the largest marketplace the world has ever known, with close to 3 billion people in the same space.

Simply having a website isn’t enough anymore – a strong presence on social networking and media sites has become essential.  It announces that you and your business know where the action is and are hip enough to participate in this intimate, up-close-and-personal-world where anyone can scrutinize you – and more importantly – contact you directly. 

Social networking is very real. A study by the University of Southern California found that 55% of Americans feel as strongly about their online communities as they do about their real-world counterparts. As businesses, Social Networking Sites are, finally, financially real too. MySpace is about to break the USD 1B revenue mark; Facebook has recorded some 300M in revenue; Tencent in China, a publicly listed company, is showing USD 500M. Revenue sources are still primarily advertising based (which is belatedly showing more sophistication and hence success), but in addition there are a number of very interesting and varied revenue streams (stay tuned… next post for that as this is not the topic of this article…..) 

So what the hell does social networking have to do with my business?

At EXICON we have been doing some studies into the core “essentials” of social networks in our work with corporate customers and mobile operators. If you look at these features it’s easy to see that they are relevant to businesses.

Profile: Name etc

Display Connections:  Not just your colleagues or your buddies: suppliers, vendors, partners and the groups, committee’s and initiatives you are a part of

Messaging:  Exchange between users and groups can happen publicly or privately

Psychographics: Here you can provide more insights into your objectives, missions, targets and your role within the organization

User Generated content: How many presentations are created, shared, downloaded; whitepapers drafted, reports compiled, research performed, and interoffice memos distributed? This is UGC  and the venue for sharing is perfect.

Combine these features with Social Graphs and News Feeds and you are increasing communication and obtaining instantaneous insights right across your product, consumer base and, just as importantly, within your own organization. Basically you’re moving at internet speed.

Several models exist purporting to show the monetary ‘value’ of maintaining a strong on-line presence. Most of them show a very healthy financial upside.  But if you don’t buy this then consider the reverse: what happens if you are not participating?  Internet speed is phenomenal in spreading the word, but it doesn’t distinguish between truth and lie.  You need to monitor your company’s online profile if only to exercise damage control should something begin to spread ’virally’ that is not in your interest.

And if you still think that social networking and media sites aren’t important in creating brand loyalty and getting your message out, well, you could always ask Barack Obama.

The new reality: forget mass market strategies. Establish a Social Media niche and then become either #1 or #2 in that space. Start your own conversations, be honest about listening to the conversations that go on around you and be brave enough to join in and put yourself out there.  You might be surprised to hear what they’re saying about you – and how you can use the information to improve the service or the product that you’re offering.  Add value, create a better experience and focus on establishing a tight-knit community. After all, those are the business activities that have always beaten recessions.