| In a sluggish economy, companies of all sizes are | | | | specific product or service can chat with each other, |
| slashing marketing budgets, yet the need to build | | | | with only limited involvement by the company's |
| relationships with existing customers and reach out to | | | | employees. This is probably one of the most |
| new customers is stronger than ever before. In | | | | cost-effective ways to build consumer interest and |
| response, many companies are turning to social | | | | generate brand loyalty. |
| networking tools and reaping rewards in terms of | | | | However, the corporate use of social networking tools |
| sales growth and profitability. | | | | can backfire. Whenever businesses open the lines of |
| Social networking tools, also known as Web 2.0 tools, | | | | communication with their customers in a social |
| offer a low-cost way to facilitate relationship-building, | | | | networking environment, they need to be aware that |
| communication, and regular interaction among | | | | any comments, whether positive or negative, can be |
| customers and companies. Companies are choosing to | | | | seen by any member of the public. If a customer uses |
| use these new tools in different ways and, | | | | Twitter to complain about a poorly performing product |
| consequently, are achieving varied results. | | | | or a bad in-store experience, other potential customers |
| For example, the online shoe-and-clothing store heavily | | | | can access that information and use it to make their |
| uses Twitter and Facebook to create interest and | | | | own purchasing decisions. However, the company's |
| buzz around its products. Almost one-third of Zappos' | | | | response is also public, so if a business responds to |
| employees are using Twitter on behalf of their | | | | the complaint promptly and adequately, the interaction |
| employer, and the company's CEO, Tony Hsieh, has | | | | may actually work in the companies favour, stimulating |
| more than one million followers, making him one of the | | | | additional sales and building a reputation for good |
| most popular users on the site. | | | | customer service. |
| Yet, perhaps surprisingly, Mr. Hsieh and other Zappos | | | | Negative comments on social networking sites can |
| employees don't use Twitter to share information | | | | come from within an organization, too. Disgruntled |
| specifically about the company's products or pricing. | | | | employees who are passed over for a promotion or |
| Instead, the employees are encouraged to tweet | | | | don't receive an expected bonus can use social |
| about their daily life, their work on the company, and | | | | networking tools to try to take revenge and harm their |
| their thoughts about just about anything. In this way, the | | | | employer. The anonymity of blog comments and |
| company is trying to establish more personal | | | | tweets tends to encourage people to use more critical, |
| relationships with its customers, responding to their | | | | negative language than they would normally do, and |
| comments and expounding on their interests. People | | | | things can quickly spiral out of control. |
| are interested in the inner workings of the company, | | | | It's important to remember that angry customers and |
| and follow the tweets as a way to satisfy their | | | | disgruntled employees will always have the option of |
| curiosity. Apparently this translates into sales, because | | | | turning to social networking tools to voice their |
| the company's sales figures have continued their | | | | complaints. If a business is also using those same |
| upward trend, despite the current recession. | | | | social networking tools, it will at least have the ability to |
| Other companies take a very different approach in | | | | respond and try to turn the situation around in its |
| adopting the use of Twitter and other social | | | | favour. |
| networking tools. Larger, more established corporations | | | | In the end, the decision of whether a business should |
| like Dell tend to use Twitter and Facebook to send | | | | use social networking tools boils down to whether it |
| customers information about new product | | | | fits with the organisation's corporate culture and can |
| developments and sales promotions. Some companies | | | | advance the business's other goals. If and when the |
| even send coupon codes to their loyal followers. This | | | | business decides to use social networking tools, the |
| is a less personal approach that doesn't necessarily | | | | next step is to establish a clear policy regarding who |
| develop a comfortable rapport or build customer | | | | will be responsible for the accounts, what type of |
| relationships, but it can encourage brand loyalty. | | | | information should (and should not) be shared, and the |
| Social networking tools also let customers interact | | | | consequences for violating that policy. This provides a |
| directly with one another. Some companies, such as | | | | solid foundation for the company to move forward |
| IBM, harness the power of Twitter and Facebook to | | | | and venture into the bold new world of social |
| create groups where customers interested in a | | | | networking. |