Should Business Embrace Social Networking?

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New Players Aid the Enterprise

New companies are cropping up to help social work within an enterprise setting. These include Bright Idea, which manages innovation for companies using social media technology; Lithium Technologies, which creates online community sites for companies to use as customer-support vehicles; and NewsGator, which uses RSS and data services to leverage knowledge inside a community at an enterprise.

Part of the reason for the boom lies in the financial results achieved. Fair Isaac Corp., a credit-reporting agency, achieves higher sales from members of its community. Its MyFICO experienced a 41% increase in spending from online community members as a result of implementing a customer community from Lithium Technologies. Communities also informally communicate what companies sometimes cannot. By law, credit agencies cannot give out advice on boosting your credit score, but members of the community on a site have no such restrictions, so users can find the advice they seek without leaving the FICO community.

In addition, companies see a significant reduction in call center volume because customers find answers to their support questions online through customer forums, helping enterprises to save an estimated $5 to $10 per call. HP, Caterpillar, Barnes & Noble, and Pitney Bowes all are Lithium customers with customer help forums.

Sanjay Dholakia, CMO of Lithium, points out that there is a high level of enthusiasm at companies for the medium, saying it is not uncommon to see a corporate press release about a new community they have launched. “A lot of folks know they need to do it, but not how,” says Dholakia. Once a community is deployed, says Dholakia, “Content creation follows a 100 to one rule at some sites,” meaning that 1% of the people build as much as 100% of the content. He explains, “Because we know that, we have built a Reputation Engine, which helps grab and elevate that content.” He points out that the primary goal is to make it useful to the customer, concluding, “You are only part of a community if it’s useful to you.”

Bright Idea’s mission is to unlock the good ideas that get sidelined by the structural problems inherent in a large organization. Deploying an online brainstorming tool known as WebStorm, the company gathers ideas from within an enterprise and from its customers, filters them through a voting engine, creates an idea pipeline, and serves up the best ideas for management to consider. Customers include Cisco, American Express, Bristol Myers Squibb, Bosch, Astra Zeneca, and the U.S. Department of Defense. Matt Greeley, Bright Idea’s CEO, says, “The silos in companies are not as connected as we’d like them to be … and [companies] want people to talk with people outside of their silos or organizations.” Greeley says that once a new idea portal is launched, “It’s really amazing as you start to see people inside and outside the company just talking.” He points out that to keep them informed, “Employees get an email with the new ideas created, and it is just like a morning cup of coffee.” The talking leads to some concrete concepts that enter a real product development pipeline. He has seen at least one client in the pharmaceuticals industry take the pipeline of new projects to the Wall Street analysts to argue for a higher company valuation.

The benefits of using new social media technologies often relate to the management of new content by getting it to the right people at the right time. J.B. Holston, CEO of NewsGator, decided years ago that it was important to build a smarter RSS feed: “We took a look at it and realized that RSS was just slinging content around the internet.” So they set to work on a system that would deliver a real return on investment to the enterprise and came up with a piece of technology that Microsoft has licensed to become part of SharePoint. The system builds profiles that make it easier for employees to learn about one another, tracks trends in news and feeds that are moving around the enterprise, and enables social bookmarking. The social bookmarking allows people to track one another’s blogs and feeds to be certain everyone on a team has access to the same knowledge.

Areas where companies save thanks to NewsGator offerings include lower licensing fees from the need for fewer seats on such tools as Salesforce.com or Factiva because the system will transmit the information employees need on sales leads or transmit interesting articles found by a single user on one of these paid systems. Holston further explains that a drop in email volume is not an insignificant cost savings; on average, “A 1% drop in email volume saves as much as $1.3 million per year.” In addition, NewsGator reduces the need for people who administer portal content, saving on company intranet labor costs.

Part of the reason enterprises need the services of a company such as Newsgator is companies such as Associated Content, which has a user-generated content model enabling it to churn out new content faster than anyone at a whole department of people would ever be able to read it. Taking the promise of Web 2.0 to the next level, CEO Luke Beatty says, “Associated Content is like eBay for content. We allow anybody to create content and then we create an economy around that.” Taking content for pay from wide array of contributors, the company then sells that content to expand the online presence of newspapers, beef up the web presence of corporations looking to expand their brands, and provide content to a wide array of special interest sites serving communities that need more content.

The idea seems to be gaining traction; Associated Content is taking on a dominant position not only in social media but also in media in general. Boasting 8 million unique visitors a month, Beatty says the company is among the top 100 media sites, and the fourth fastest-growing media property.

Rules of Engagement

Alan Scott, SVP and CMO of Dow Jones Enterprise Media Group, says that using social media for marketing was truly necessary to keep the company close to the customer. Scott says that the Dow Jones philosophy follows an “outside-in approach … we go where the customers are.”

Scott, who is a frequent speaker at conferences on the subject of new marketing, sounds a bit bothered when he relates hearing the question, “How much of my budget should be in social media?” He quickly points out that it is important not to go into social media without a customer-centric plan. “Otherwise, you are just doing social media for the sake of saying you are there,” he states, going on to refer to a type of rodent that is known for jumping off cliffs en masse. However, he admits that Dow Jones too has had to refine its approach over the years from covering every “cool site” to finding a focus that is  geared primarily toward the specific sites where wealth managers or public relations managers congregate.

Scott says that using social media has changed the way he views markets today: “We see conversations as markets.” With that logic, any missed conversation is a missed market. Hence, for Dow Jones one opportunity is focused on creating and marketing tools to help in the monitoring of conversations that occur in the social web. Scott continues, “For example,
in February 2009 Dow Jones was mentioned more than 188,000 times.” He estimates that it would take five full-time employees to keep track of these monthly mentions and flag any upcoming media problems as they appear on blogs. So the company created another tool, Insight, that covers “social media metrics and measurement.” In addition, through the Business & Relationship Intelligence division, Dow Jones markets g2, which crawls millions of websites every day, extracting information about people, products, companies, and news.

According to Scott, Dow Jones social media approach was “unleashed” as early as 5 years ago, when the company issued a policy on blogging, not unlike the company policy covering use of email created more than a decade earlier. With bloggers such as Glen Fannick and Daniela Barbosa, both Dow Jones employees who blog and Tweet on technology topics such as semantic search or data visualization with the company’s blessing, Dow Jones is subtly extending its brand through the talents of its employees. “This blog policy opened the floodgates for our presence on the web as bloggers,” observes Scott.

Through all of the efforts in the Enterprise Media Group aimed at distilling and managing the new information now available through the social media, for product development and for internal purposes, Dow Jones estimates it has added 3,150 jobs located in 84 offices.

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