It's All About Who You Know......CRM 2.0

However, these types of activities are only one side of social networks, and as many successful businesses have come to realise, online social networks can be the hubs for the application of far more effective business practices than in the past, including marketing. At the heart of this is the fact that business is a social activity, and those involved in business are social animals, seeking to belong to communities of interest and practice, as well as geographic communities. We see examples of this traditionally in industry bodies, chambers of commerce, and trade organisations but now, with social networks, the customers can join too.

It is a given that it is far easier to do business with people you like, as friendships mean that a relationship of trust can be built and sustained. This applies equally to customers and suppliers, and underlines the importance of CRM 2.0. Nurturing relationships with those with whom you do business has always been vitally important, and now social networks offer the tools to do this more efficiently online.

Those groups of people (your potential customers) in social networks may well share photos and videos, but they also make recommendations for products and brands, where to eat, shop, stay, as well as sharing contacts. A social network can be a honeypot for finding not just customers, but also contacts who may help you run your business more efficiently, provide services you need, or expand your product range.

However, the downside of this word of mouth/mouse activity is that it can also generate the type of negative criticism of a business which can spiral into a fall in sales or brand reputation very quickly, and hence the behaviour of your business within this space must be exemplary, and any negative 'chatter' needs to be monitored and reacted to ...fast.
There are many aspects of social networking that a business can harness to grow its' community of contacts and customers, and to develop strong relationships with its customers. This is the new form of Customer Relationship Management, where Conversations, Relationships and Meetings are more important than the old school ways of CRM 1.0 – such as maintaining a customer database, dealing with complaints efficiently, sending a Christmas card, etc.

The most successful businesses using the social networking space are those creating communities. The members of those communities are loyal and often vociferous in their support of a brand or product they endorse, and can become an efficient sales and marketing force if encouraged. Try finding someone in Innocent's community of Smoothie lovers who has a bad word to say about the product or company......

Metcalfe's Law states that the power of the network is the square of the number of its members. In other words, the more people you know, the stronger is your network. So, the most vital point about social networks comes from that age old adage: it is not what you know but who you know, and the more people you know and have relationships with, the better.