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Why Your Company Needs To Be on Facebook

Charlene Li is a Vice President and Principal Analyst at Forrester Research.

(For a different take on social media and business, read Tom Davenport's Why Facebook and MySpace Won't Change the Workplace.)

As an analyst, I’m often asked by people why they should bother with services like LinkedIn, Facebook, and MySpace, both from a personal as well as corporate perspective.

Let’s start with a fundamental premise – that all business is social and personal. Business involves people and communications and we all prize “networking” skills and opportunities. Businesses don’t strike deals with each other – people do. And we build bonds by talking about everything from sports teams and the weather to our families and hobbies.

So we as business people already engage in social networking every day, primarily through phone calls, emails, meetings, and events. The same activities take place on social networking sites – people share the tidbits and moments that build relationships.

Yet, many people when they first go and experiment with a site like Facebook, don’t find it relevant to their professional lives. There are two reasons for this: 1) Your professional colleagues are likely not actively using Facebook; and 2) Most of the applications today aren’t designed for a business context.

Let’s take the first problem – you may not have many friends in these social networks. This was my problem – it was only this past spring that people I actually know started using Facebook. My friends are posting links, book reviews, the events they were going to, and suddenly, I now find myself at a near addiction with Facebook. I went to an event because five friends said they would be there. And when I saw them at the event, I congratulated them on closing a round of financing and asked about their recent vacation – all of which had been shared on Facebook. What’s the business value of staying on top of your network? As we know from experience, priceless.

Now for the second problem. Business applications on services like Facebook have yet to take off, which is why people like Tom Davenport have a hard time seeing the business value of social networking sites. I don’t blame him – after all, the most popular applications on Facebook today include such frivolous things like playing Scrabble and Vampires (where you “bite” your friends – don’t ask). That’s because these applications are being designed by 20-something developers for their 20-something friends.

But remember: The notion of creating social applications is only 6 months old – we are in the early days here. Business-oriented developers are just now waking up to the possibilities, and the audience that would use these tools are just discovering social networking. It’s going to take some time for these two sides to find each other and develop an ecosystem for business applications.

Here’s an example – LinkedIn described to me a new social application that would show events in your industry that are coming up – and who in your network is going to them. It will also show you people in that city that you could connect with. So if you know that colleagues, suppliers, partners, funders, customers, etc. are going to be gathering, you’re going to want to be there too.

There’s one final business value that companies are already seeing – and that’s reaching the people who are using social networking sites. Advertising on social networking sites won’t work well – but communicating with people, talking with the “fans” of your products on Facebook makes a lot of sense. Victoria’s Secret has badges that its enthusiasts can download on MySpace on put on their profiles for their friends to see. Ernst & Young (yes, an accounting firm!) answers questions from college students on Facebook – people they are trying hard to recruit.

So don’t write off social networking sites as merely social playgrounds for the young. Your customers, prospects, and employees are exploring and extending their relationships there. Some of you will be bolder in creating business value in these networks while others will wait for the pioneers to carve out the paths. But ignore these new communities only if you believe your customers are not there – and there are few instances where this will be the case.

Does your business embrace social networks? Or is it taking a hands-off approach?

MORE ON SOCIAL MEDIA AND BUSINESS
Tom Davenport: Why Facebook and MySpace Won't Change the Workplace
Facebook (Case)
Friendster (Case)
A Practical Guide to Social Networks (HBR Article)
The Hidden Power of Social Networks: Understanding How Work Really Gets Done in Organizations (Hardcover)

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Comments

So is there no longer an implicit tension between social networking sites and commerce? My sense is that now that businesses and "interested" over-twenty-somethings are flocking to Facebook, young digital natives will migrate elsewhere.

- Posted by Cal
November 13, 2007 1:51 PM

My company, Serena Software has recently instituted something we call Facebook Friday. The Goal of Facebook Friday is to promote the use of social networking within Serena, and to reach out to partners, customers and even to the men and women who may some day be running this very company.

Why did Serena do this when most companies are actively banning social networking during business hours? Is it a gimmick? A marketing ploy to get press?

Well, perhaps in part, but we are serious about Facebook for a number of reasons.

First, Serena is a globally distributed company. We have offices up and down the Pacific coast, from Bellview to LA. We have a development office in Colorado and another just outside of London, contractors in India and Eastern Europe, and sales offices throughout Europe and Asia. Although I've been working for Serena since it acquired our little startup in 2003, I've never met most of the people with whom I work.

As Ms. Li points out in her article, business is personal. When I need some help from one of my co-workers in Singapore, is it more or less likely that I will get that help, that a co-worker will go the extra mile or work the extra half-hour or find the right contact if I have interacted with that colleague socially? That's a rhetorical question.

Additionally, we are more productive, happier and less likely to leave for greener pastures when we like the people with whom we work. When we feel or believe that our work environment is populated not just with our co-workers, but with our friends. For that reason alone Facebook Friday is likely to be a good investment.

However Serena has other reasons for encouraging the use of Facebook. We have traditionally been a very conservative ISV. We have tended to look to the past more than to the future. What was last-year's trend? Last year's technology? Last year's successful marketing program? That's not necessarily a bad thing as long as our customers continued to look to the past with us.

But we are now changing, looking forward as well as back. We are addressing a new generation of customers who are younger, more technically experienced and less likely to accept the top-down hierarchies so prevalent in business today.

Even as we transform our company to help these new customers, for the bulk of Serena employees, looking forward is a new experience. It is change. It is disruptive. It isn't what we are used to. You want me to think about next year's trend? Next year's technology? Next year's successful marketing program? What's that about?

What better way to give everyone a shake-up than to have us all start to interact with the chaos that is Facebook? On Facebook, you can learn anything about everyone. You can see my blog entries, the Pandora station to which I'm listening, or see my twitter-like status changes. You can find out that I'm friends with someone you would like to 'meet.'

So what, you ask? Indeed a number of Serena employees have asked just that: So what?

It matters because this chaos, this avalanche of minutiae, this odd mix of being detached and intimate at the same time, is the way society is evolving. Forrester recently published some data on Gen Y showing that these 18 - 27-year-olds expect immediate collaboration, instant communication, short sound-bites and constant interactions with their peers. Gen Y are going to be our customers in the not too distant future. If we want to understand their needs and hope to do business with them, we need to experience the world they experience.

And it might, just might happen that we learn something new and cool along the way.

So Facebook, LinkedIn, MySpace and myriad other social networking sites aren't a total waste of time, energy and resources. They provide a valuable way to connect to colleagues, business associates, customers and friends. They help us form relationships despite globally distributed enterprises. They can make the work environment more friendly.

They also help us keep tabs on the priorities and world-view of our future customers.

Maybe one of them can help me figure out how to turn off the dratted vampire notices in my news feed!

Kelly A. Shaw, Ph.D.
Analyst
Serena Software

- Posted by Kelly A. Shaw
November 13, 2007 3:04 PM

Business is very social, but also very personal nature. Though many business people have networks of people they do business with, there is a concern about keeping the terms of each business relationship confidential. That is the main reason most folks are weary of social plaforms. Facebook and LinkedIn for that matter are "social platforms".

The hybrid, and what business really wants, are "social or collaborative applications". For example, consultants have clients and subcontractors they do business with on a project. They want an easy way to connect these teams, but have concern about the confidentiality of the of each relationship. You don't want to expose what you are paying your subs to your client, yet you want the client to approve the hours reported by that sub. Conversely you want the subs time and project charges reported to the client, but not for the client to see what your costs are. A social application takes this into consideration and balances collaboration with confidentiality.

It is my belief that the emerging crop of social applications such as our site known as timeXchange.net will fill that void by specializing in a deeper understanding the needs for each relationship type. Relationships that involve transactions and collaborations will be solved by social nature of the Web, but not necessarily by Facebook or LinkedIn.

Joe Piekarz
President
timeXchange.net

- Posted by Joe Piekarz
November 13, 2007 4:40 PM

Social networking is not only a key-factor in a latin American country like Argentina, where I established my company five years ago, but also a kind of "privilege" that can be turn your business into a popular one, or in case of avoiding it, it can close your firm and your future dreams of success.
The new generations of natural networking people, are practically a profound need in our society, and in my own experience, as worked for Northamerican companies before and now, is a "must" if you want to survive in the business, whatever field we are in.
It would be great to count with more networking links and resources, but not for a copywriting or just to be linked with other organizations, better customers or effective sinergies, but to be able to create new ways of productive networks that stimulate our business and our regional standards of services, ideas, new companies, different models for the rest of the world.
Thanks a lot for Kelly´s previous useful comments and for sharing ours.

Mariela Rossi
Managing Director
The start Up Company Argentina
Relocation & Start Up services

- Posted by Mariela Rossi
November 13, 2007 5:50 PM

Cal: You raise a good point -- there is quite a bit of grumbling amongst Facebook's earliest members, but they stay with Facebook because they still get a tremendous amount of value out of it. Frankly, there's no where else for them to do TO -- sites like MySpace, Bebo, Hi5, t. al. lack the dynamic features and applications that Facebook has.

Also, they would have to defect en masse, which is pretty difficult for them to do. More likely is that IF they find that Facebook isn't as relevant to them, they will spend less time on it. But talk to anyone who's become dependent/addicted to Facebook (myself included) and you'll find that Facebook has done an admirable job keeping commerce at bay -- at least for the time being -- so that it doesn't interfere too much with the overall experience.

- Posted by Charlene Li
November 13, 2007 8:03 PM

Another factor that should be taken into the equation is the type of business "friends" you are after. A lot of the larger, more corporate firms, either through the nature of their employees or having banned social networking are not worth targeting for facebook for example but for a firm like mine - focused on digital start-ups throughout Asia - social networking tools have been invaluable. The key is to match the social network to your audience.

I meet 2 people a week that I have been introduced to, or found, on linked in, through facebook or a blogging community; I am presented with a new business plan every day or so; I have hired CEO's as I'm often aware of which of my network is less than enthused by their jobs (the status bar in facebook tells you a lot more than you might realise as a one off); I have increased my business profile, receiving requests for radio interviews and columns - all great for my company.

I'm impressed by firms that make it part of their culture to implement this kind of networking initiative but I suppose it is the next logical stage of asking staff to attend associations, drinks, conferences etc. I'd say we're about 20% of where I'd realistically like to be on that front - going to have to crack that whip harder:)

Cat Rust
Founder and Director, Catalist Group
Investing in Digital businesses, more than just money.

- Posted by Cat Rust
November 13, 2007 8:56 PM

A face does not matter to me; however, it's good having a facebook especially in this new work of technology. Maybe it's time do add a little more fun to our communication style.

James Celestine :)
E. Hartford

- Posted by jamesC
November 13, 2007 10:06 PM

In a country like China (I've been working here since spring 2006) where there are too many people you have to know before you can even think about doing business, Social Networks are an extremely valuable tool. I've been using all of them since 1994, but Facebook is the first one that gives me the impression that it can become a lot more than a series of dead links to people you never hear, see nor read after the link has been established. Adding a friend on Facebook after having searched within the profiles where you want to make friends is only the beginning. That's my experience after using it for 4 months as a real business too. Since i'm in advertising I even started an experiment for Duvel in China on Facebook (the best belgian beer)

- Posted by Jan Van den Bergh
November 14, 2007 12:24 AM

At the very least these sites allow you to track business contacts who have left your client company to go elsewhere. You don't have to be madly active and 'waste' time on 'bite me'.

- Posted by Steven Di Pietro
November 14, 2007 3:47 AM

Say you have a colleague who knows a lot about something you're working on. Instant messaging is an excellent way to get his help/feedback, right at the time and place you need it. Now say, you're connected to 30 experts and they're all on Facebook. You see who is online and who isn't. Let' say 20 of them are. Consider that you could use a Twitter app to send out your question to all of them. Moments later the expert feedback starts flowing in from dozens of people (with different perspectives, to add depth). This is learning in the 21st century. This is just one example. Technology has phenomenal potential to facilitate organizational learning.

- Posted by Ken Carroll
November 14, 2007 5:22 AM

I think social networking portals can be a good platform for exhibiting the nature of a Company. People can get an insight into the functioning and practices of a Company by digging into the details interactively. Also, a very healthy kind of business network can be established through the right application of knowledge.

- Posted by Vijay
November 14, 2007 5:32 AM

Facebook has really taken off online and has become my prime tool to re-connect to long lost classmates for free. However, for me Facebook is for me personally, it is just for fun and for private use.

For business I would use it to Market my products/service to a group of consumers by the use of "grassroot marketing", finding the opinion makers and have them market for me.

Facebook also has flip side:

1. Their Terms and Conditions are a farce - They assume the right to all your content you provide for any use they can see fit (a reason I say as little about me as possible - i.e. "how do you know Fred").
2. The terms and conditions can be changed when ever they want: that's not a contract you are to bound when you "accept", what's the point when they can change it when ever they see fit?
3. The Internet is global and therefore if you would like to use your legal right, you'd have to live in the US or make it only available to users from the US (limit IP Range to non-US users).
4. Facebook could be a reason you won't get that job! That's because the HR Manager can go online and check you and your friends out and any info you put on there is visible to everyone, in one way or another. So pics from your crossdressing Weekends or wild party photos from that trip/weekend is a reason they might just not employ you as you could be an embarrasment to the company.

What's should be more interesting to your business are the restricted Networks such as aSmallWorld.net, wiyo.net et all - that's where you would like to advertise to get the specific consumers and where the users are in a secluded network of trusted memebers.

So think again before going "Facebookie" for business or pleasure...

- Posted by Marx
November 14, 2007 5:37 AM

It would be very interesting to see the demographical profile (educational background, age range etc) of users registered in Facebook and LinkedIn and what % of them are active in both networks.

I fully agree with comments made by Charlene Li. You just cannot ignore what is happening. Advertising models are bound to change because of technology and consumer needs. Look what is happening to the music industry. Companies that to not embrace or forsee innovation and trends, will be laggers in a very tough and constantly changing business environment

- Posted by Marlena Sidhom
November 14, 2007 7:28 AM

good post, and thanks for reminding me that "social apps" have only been around for a few months, and to give them time....

- Posted by Mark
November 14, 2007 1:11 PM

Great post Charlene. agreed - I see significant business benefits to using Facebook. It is such an efficient way to distribute information to large number of people and the viral impact is real. As business applications are added to Facebook, these Facebook "websites" may become transactional. I anticipate significant corporate within the next 6 months.
mike
Leverage Software

- Posted by mike walsh
November 14, 2007 6:39 PM

This is very true, and perhaps social networks like the Facebook can reach some of your otherwise inaccessible customers.
We are a retail company, and are using Facebook Groups like the Maldivian Graffiti Artists to generate concepts and to design some of our advertising & marketing material, while at the same time communicating to thousands of prospect customers.
I beleive that a team of over 300+ artists can provide us with a better choice than a few designers working simultaneuosly on hundreds of projects sitting behind desks in a marketing firm.
Another importatnt thing to note is the opportunity to reach special interest groups directly through these networks. They are self segmented making it easier for us to understand the specific interests of each group.
I strongly beleive that social networks will play an important part in our marketing and advertising campaigns, regardless of their individual target market segments, because they will always have to have an audience, and an audience can only comprise of people, and that's exactly what we are looking for.

Majid.

- Posted by Abdul Majid
November 15, 2007 12:16 AM

While I understand the value of promoting social networking, I am a little concerned that we are foregoing true face-to-face (or phone) communication and spending too much time on Web 2.0 sites. These sites should facilitate connections, but they should neither be the majority of the connections nor replace true person-to-person dicussion.

- Posted by Erik
November 15, 2007 3:35 PM

I work for a recruitment firm, PositionSmart, and I must confess I have only recently started using Facebook. With today's technological advancements my line of thinking is a business should seek to maximise opportunities presented by every platform available. In the past weeks that I have used Facebook I've managed to crack up some leads from their marketplace. I would however like to be more creative as to how I can use such platforms (blogs and netwroking sites)to create more awareness of the company and our services. If there's someone who can direct me to articles or sites that can give me more insight as to what other companies are doing I would be very grateful.

Thank you all for your contributions, I am enlightened.

Keith Mutangara
Consultant
PositionSmart

- Posted by Keith Mutangara
November 17, 2007 5:47 AM

I like your approach Kelly A. Shaw

We have been asking the question, does it make a difference if you ban Facebook, and is this possible difference positive or negative in the long run? My personal view on this is one of productivity. Facebook gets banned because people spend too much time on these type of sites. Then I guess the questions of Facebook or not ends right there, the question becomes "why do the people in your company spend so much time on Facebook". If that question is answered, then the question becomes "How can we use the time our people spend on Facebook and the like to build a better company".

Interesting article Charlene, thanks!

- Posted by Nicholas Grobler
November 20, 2007 7:16 AM

Ms. Li has written an excellent perspective-builder piece on the WHY. I think most forward thinking entrepreneurs understand the why and would like more info on the HOW.

It would be great to hear from the group about tips, tools, and techniques that Facebook members can easily implement to market and promote their business as well as some of the Do's and Dont's.

Here's an example: I'm a business writer and author; after making about 3,000 friends on My Space, I made the grave error of posting a classified events ad inviting people to a free marketing breakfast with a link to my blog which contained an affiliate link. Shortly afterwards, with no explanation, warning, or recourse, My Space shut down my entire profile and I lost all my contacts.

Sharif Khan
HeroSoul.com
Business Writer, Book Consultant
Author of leadership book, "Psychology of Hero Soul"

- Posted by Sharif Khan
November 20, 2007 2:45 PM

Feedback is like a moral booster.When we give feedback to anybody
then we are involving into the matter.If we want good and fruitful result from anybody then we also have to provide feedback also.

- Posted by Abhash Kumar
November 30, 2007 12:18 AM

Feedback is like a moral booster.When we give feedback to anybody
then we are involving into the matter.If we want good and fruitful result from anybody then we also have to provide feedback also.

with Regards
"Abhash Kumar"

- Posted by Abhash Kumar
November 30, 2007 12:19 AM

If you're looking to advertise your company to over 100,000 people on Facebook who have self-identified themselves as 'GREEN' or 'MOM', email me and we can work out a deal that works for you.
elise@i2we.com

- Posted by Elise
December 6, 2007 1:55 AM

Couldnt agree more with Charlene. Having personally managed several online community networks, with thousands of members, I can visualise the enormous potential social networks hold for organizations, if only they will emerge from behind the cloud.

Any community social network is a mirror of that society and by its nature it allows you to test market any idea, product or service before launch. It also allows you to guage the response of members post launch. It allows you to market and subtly sell to a community. It builds a huge brand equity. It allows you to exhibit CSR. And all of it at a fraction of the cost one would spend through conventional media/methods. Maybe that is why it doesnt interest the big spenders at the moment.

Well managed social networks will undoubtedly be key to several organizational initiatives. But the first mover advantage is the key. If organizations wait to see the success or failure of competitors, then they risk an enormous lot as the cost building a me-too social network is many times higher than the first one off the block.

Tarun Hukku
Community Networks Hobbyist

- Posted by Tarun Hukku
December 31, 2007 3:03 AM

Business is very social, networking is the key for any business. Though many business people have networks of people they do business with, but these social networking sites help businesses in keeping live contacts with out bugging anybody too much. i would seriously feel that is good way of keeping live contact with any body and relatioship building
vikram
---------
Have you seen this? I wish there were more companies like this out there that were interested in making a difference! http://www.aboveallopportunities.com/100.html

- Posted by vikram
April 7, 2008 8:18 AM

Elise -

What sorts of companies are allowed to have facebook and myspace sites? Could http://www.firmtofirm.com get a page, for instance?

Susan

- Posted by Susan
April 7, 2008 8:36 PM

I think Sharif Khan makes an excellent point - I've got to the stage now where I'm convinced that Facebook will offer great opportunities for my company. However, I'm still unsure how I can get the most value out of it.

My company (www.lifesource-usa.com) is very new in the personal development field. We only went live a few weeks ago so, as yet, don't have a real network.

Any ideas on how I can use Facebook to develop a network rather than keep in touch with one I already have?

Thanks in advance!

Helen

- Posted by Helen Badcock
April 9, 2008 7:19 AM

A lot of the larger, more corporate firms, either through the nature of their employees or having banned social networking are not worth targeting for facebook.

- Posted by george tomas
June 24, 2008 5:29 AM

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