Whether looking for staff or seeking finance, social media is changing how we network
Only a little while ago, networking for most growing businesses meant squeezing a few hours out of an already busy day to attend an indifferent lunch with a few other business people of various kinds in a nearby hotel or restaurant.
Not any more. The social media revolution led by Facebook and Twitter that has transformed how people stay in touch with each other is starting to take hold in the business community.
Research suggests that companies that have embraced social media are more likely to have seen their turnover and headcount grow than those that haven’t. Consumer-facing businesses, notably retailers and entertainment groups, have been particularly quick to see the benefits of being able to contact their customers more regularly and more intimately than was previously the case.
This is just as well, since it is clear that traditional, officially supported networks for smaller businesses appear to have little appeal or effect. Fewer than a quarter (21.7 per cent) of the UK’s business owners surveyed by the information technology company Sage Group for its new business index thought the Government was doing enough to provide sufficient support andadvice for those starting a business, while only 14 per cent viewed business information and advice made available by the Government as something they would particularly rely on. Past experience suggests that recent changes to Business Link – though they might make the service less confusing – are likely to have little effect.
About 40 percent of those questioned for the index launched in February said they used the internet for research. There’s certainly no shortage of websites that claim to offer entrepreneurs and owner-managers of growing businesses the support they need.
For example, LinkedIn, the social mediasite for professionals has among many of its user groups OpenCoffee, a forum where small businesses can discuss issues of concern to them, share problems or just ask for information. A similar role is performed by yoodoo.biz, an online support service for start-ups established by Tony Heywood and Nick Saalfeld to offer users free advice and access to specialist help thanks to backing from Lloyds TSB, office supplies company Viking Direct and others.
The advent of ever more sophisticated smartphones expected in the coming months is likely to bring about a rapid increase in the adoption of social media. This is because a new group of operators is appearing in the wake of Facebook, Twitter and the rest to take connectedness to new levels. Businesses such as Gowalla.com, Loopt.com and Foursquare.com use the GPS functions on mobile phones to offer location-based social networks. At their most basic, they enable friends on the same network to meet up because they know where their friends are. But retailers, restaurant groups and others are starting to see the value in encouraging people to visit particular locations.
According to Stylus, a London-based trend-spotting and forecasting service, such services can combine old-fashioned loyalty programmes with the virtual world of social networking sites. To some this will have echoes of Big Brother. But so far, because users volunteer the information, the practice is not seen (at least by younger consumers) as an invasion of privacy, with the rewards creating exciting opportunities.
For the moment, the biggest issue facing many businesses is dealing with so many different aspects of the networking revolution. Unless they are involved in the technology sector or have technological people in senior positions, they may have trouble grasping what is going on – until rivals have stolen a march on them. To some extent, this issue is being addressed by the growing band of enterprises monitoring and analysing what social networks are saying about different businesses. For example, comScore, a company that specialises in measuring digital business has launched a social media intelligence service for the company’s clients that provides detailed, real-time insights based on what consumers are saying about their brands and products on the web.
Likewise, Meltwater Group, a global software company, recognises that businesses in all sectors and of all sizes are experiencing a number of social media growing pains and has developed tools for helping companies monitor what is being said about them in social media and then how to engage better with their clients and customers. One of its services, Meltwater Buzz, is specifically designed to provide a platform for advanced social media monitoring and analytics. “We track content from the whole of the social web – essentially anywhere on the web where people can post comments, reviews, and share opinions and information. In reality, that’s over 200 million (and counting!) blogs, forums and message boards, micro-blogs (such as Twitter), social networks (such as Facebook), review sites, video sites, and wikis,” says PR director Dan Purvis.
The use of social media between businesses has been slower to take off. However, the coming years will see that change rapidly. Gartner, the technology research company, says in a recent report, “Business Gets Social”, that savvy businesses and IT leaders are getting smart about social media and are seriously exploring and possibly exploiting the opportunities thrown up by the growth of the technology.
Hitherto, the best-known business social media service is probably LinkedIn (see box). But other sites are appearing with increasing frequency. For many smaller businesses, the attraction of these lies in the ability of owner-managers to avoid “investing” time in building networks and get straight to the point of obtaining what they need for their business – whether people, funds, specialist advice or just information – and at a time (often late at night) when it suits them. The internet also allows access to advice, information or assistance from way beyond a company’s own locality – as has traditionally been the case.
One of these is growvc.com, a site that takes the notion of angel investment in start-up companies to the extreme by providing individuals with the opportunity to fund entrepreneurs for as little as $20 a month. In the UK, the just-launched Crowdcube works in a similar way.
The use of networks in this way is the latest example of how the internet is helping to reduce the advantages traditionally held by large companies over their smaller counterparts. By using the internet – increasingly via mobile devices – small businesses are able to gain access to the sort of resources that would traditionally have been beyond their means. The more willing businesses are to share information and to collaborate the more they gain from such networks.
For example, Rachel Armitage, co-founder of Zoombu.co.uk, an online travel service that provides users with the best means of getting from A to B, has explained how she and her fellow founder Alistair Hann had recruited IT specialists for their development work from eastern Europe by making use of online groups.
However, for all these developments, not all networking has to take place online and in the dead of night. Many networks are increasingly hybrid. Members of organisations as varied as the Royal Society for the Encouragement of Arts, Manufactures and Commerce and the UK Angel Investment Network make use of both the internet and more traditional events. Indeed, the latter makes much of being “a forward thinking company that combines the efficiency of its internet platform with the more traditional methods of our events”.
The key for business owners and managers looking to make the most of networks is to be clear about what they are trying to gain from them – information, leads, advice or just companionship (it can, after all, be lonely at the top). Then they need to decide on what form of network is likely to be most effective. And they need to be honest about appraising that effectiveness. For example, an owner-manager might feel as if they are being groundbreaking spending a lot of time on Facebook or Twitter. But if they gain no leads or helpful advice from this, they might be better off going back to those old local business meetings in the nearby pub.
Moreover, for all the advantages offered by the new technology, there are security risks that cannot be ignored. And there is also no substitute in many businesses for personal contact. And that requires a lot more than turning up at events and handing out business cards. As Scott Ginsberg, an expert on public speaking, says, sometimes you just need to be prepared to get on the telephone and wow people with your story.