Social Media: Risks and Reward for Your Business
This column was written in October 2009 for Smart Business Network.
Social media is in your organization whether you want it there or not. Online services are moving network access from geekdom into cubicles from the left coast to the right coast. I visited a client in the financial services industry not long ago. The company had a policy regarding popular sites such as MySpace.com, Facebook.com, and Twitter.com.
The policy was simplicity itself: Not on company time. As a further precaution, the company did not allow laptop computers at an employee’s work area. With the social sites blocked and laptops banned, the company's governance professional had solved the problem.
I saw employees with iPhones and BlackBerries. These devices are personal computers. My experiments with iPhones and iTouch devices made clear to me that these small, sleek gizmos packed serious computing and communications technology into an easily concealed form factor.
I watched two professionals at this organization whip out their mobile devices and post messages to Twitter.com. (Remember that the institution did not condone it.) The reality was and is that the personal device can and will be brought into the work place.
I asked one of the people with a BlackBerry if it was a personal device or one provided by the financial institution. He said, "This is my BlackBerry. I use it to keep track of my wife and two kids and check Facebook." This 35 year old did not show any concern when I mentioned the firm's governance policy. He chuckled and said, "Everyone uses these."
The “these” include almost any mobile device with a way to connect to a network. I have a Dell Mini 9 which is compatible with a Verizon USB wireless device. With a click, anywhere in the US, I can connect to the Internet via Verizon’s high-speed network. Very few people know that that computer, about the size of a paperback book, has the capability to surf the Web, transfer data from computer to computer, and perform most mainstream applications. The small size and the ubiquity of such devices renders it almost invisible.
Let's flip the problem 180 degrees. What happens when an organization successfully uses social media? Social media allow a company to create a relationship with its customers. One consequence is that individuals who respond to social media coalesce into communities.
One believer is Kristen Luke, who is a principal at small financial marketing advisory firm, Wealth Management Marketing, in San Diego.
She wrote in her Web log (http://kristenluke.wordpress.com/2009/03/18/a-social-media-marketing-success-story/):
“In the fall of 2008 I opened a personal Facebook account and a business Facebook page that named "Women and Money" http://companies.to/womenandmoney/. A couple of months later I opened a Twitter account www.twitter.com/curtisfinancial. Prior to getting tuned into all the different Social Media opportunities, my website had started to attract media attention. For example, a Dow Jones News Wire reporter found me on LinkedIn, she said she "scrolled for financial planning contacts" using LinkedIn, and when she came upon me and read my website, she loved it and decided to call. She has since quoted me in two stories in the Wall Street Journal. So I am a fan of LinkedIn, but Facebook and Twitter have opened up whole new worlds. I recently started experimenting with educational videos to post on my Women and Money Facebook page. Personal coach and videographer, Wanda Hennig (www.wandahennig.com) is working with me on this project. It is not only lots of fun, I am getting great feedback.”
In regulated industries like financial services, health care, and pharmaceuticals, the ban on social media can limit information leaks and help keep the organization within compliance boundaries. But ignoring social media can deprive a company of an important marketing vehicle. Sending messages to prospects, maintaining a Facebook.com page, or using Twitter.com "tweets" to advertise a sale can generate some sales and help slash some marketing costs. Keeping social media out of an organization can deprive management of some potent, new, cost-effective tools.
Social media does require time. But use of most of the social media systems is free or low cost when compared to traditional marketing methods. A manager, therefore, has to engage a social media trade-off analysis. When I was in university, that subject was not in the curriculum. Today, figuring out what to do with social media, how to control social media, and when to use social media is increasingly important.
The arsenal of information weapons includes social networks, online communities, Web logs, wikis, discussion groups, and any other collaborative Internet service. Each of these has considerable power. In combination, next-generation marketing is being developed with each creative use of social media. Some organizations are jumping into the social media fray.
Mashable, an online publication covering next-generation Internet services and applications ran an interesting article about large companies using social media in their marketing, brand, and sales programs. What interested me was not the use of Web logs and Facebook.com's business pages.
The fascinating aspect of the article was the list of companies the Mashable team had identified. Let me highlight five of the companies mentioned in the article: Burger King, Starbuck's, Zappos, Dell Computer, and Ford Motor Company. You can find the complete lists plus thumbnail summaries of what each of these marketing powerhouses do with social media. Navigate to http://mashable.com/2009/02/06/social-media-smartest-brands/.
The question to consider is, "What guidelines should a company consider when contemplating social media?" The Mashable list does not include companies in tightly regulated industries such as finance or health care. I have developed a series of five questions to help you determine if your firm should move forward with social media or hold back due to the risks that accompany social media use. I will present each question and offer a brief comment, which is designed to jumpstart your thinking about social media in your organization.
1 Is your organization regulated by a governmental agency and subject to guidelines such as Sarbanes-Oxley, HIPPA, or FDA regulations? Comment: The more tightly regulated an organization, the greater the risk from social media.
2 Do you have on staff or on contract a person who can be your social media tsar? Comment: If you don't have someone to handle social media functions, the value of the social media will be suboptimal. Social media must be maintained with quality content and timely, frequent information.
3 Does your organization have a message that will help create a community around your products or services? Comment: If you don't have a message, social media may be unfocused. Without a way to "magnetize" your social media efforts, you may not make an impact.
4 Do you have the ability to create a landing page (that is, a destination) to which your social media directs a person for more information? Comment: Without a way to get more information or take some other action, your social media initiative may not have a measurable payoff?
5 Have you used social media? Comment: If you are not familiar with these services, you may not be able to justify a sustained investment of time and effort in social media.
At my small company, we use social media in a variety of ways. We "tweet". We have a Web log. We used LinkedIn.com, a service for business professionals. The key to success is integrating messages across the different tools. I know social media pays off but I am feeling my way with regard to security and compliance issues. My suggestion is that you step back and contemplate the risks and rewards of what is shaping up to be a revolution in the way people communicate, market, and build customer relationships.,
Stephen Arnold, October 10, 2009
Stephen E. Arnold is the author of Google: The Digital Gutenberg. He is a consultant who supports clients worldwide. More information is available at http://www.arnoldit.com. Watch for his new, free, six-part video series “How to Make Money with Google”. Click on the video link from the ArnoldIT.com home page.