Effects of Social Networking on Business Communications

This paper explores the impact of social networking sites on business communications. Social networking is defined by Pearlson and Saunders (2010) and the shift of social networking sites from a personal hobby to invaluable business tools. The importance of social networking as a business strategy is presented by Qualman (2009) and establishes the effectiveness and cost efficiency of the medium.

Other publications help to illustrate the widespread usage of specific social networking sites and how each has radically altered various business activities such as employee networking and recruiting, the use of messaging capabilities to build deeper customer relationships, and the potential offered by the opportunity to reach as many as 500 million customers worldwide in real-time. Keywords: social networking

Pearlson and Saunders (2010) define social networking sites as online services that allow members to create profiles with information about themselves and connect with other individuals that share common interests and expertise. While social networking sites began as methods for people to express their individuality and keep in touch with others, they have developed into communication tools that allow businesses to connect directly with the widespread audiences these sites provide and benefit from the immediacy and intimacy of these contacts.

This paper will provide information that illustrates the importance of social networking as a business communication tool and an overview of the features offered by three of the most popular sites (LinkedIn, Twitter, and Facebook) with examples of how companies are integrating the use of these sites into their communication strategies. Qualman (2009) establishes the importance of social networking by citing a 2008 study by internet research company Hitwise that found social networking sites had overtaken pornography sites as the most popular destinations on the internet.

The popularity of social networking sites provides companies with the opportunity to take advantage of instant two-way dialogue with millions of users in a more cost-effective (i. e. , free) method than previous one-way marketing strategies. For example, social networking sites are being used as massive focus groups to gather peer opinions on products and services to influence potential consumers as well as gathering feedback that provides a head start on problem resolution.

With the global reach of social networking sites, word of mouth becomes world of mouth. Qualman (2009) argues that if social media isn’t a part of a company’s operational strategy, then the company is not only behind the curve but also their competition. Social networking has also changed how working professionals share information and the methods companies use to find new employees.

LinkedIn provides users the ability to create profiles that outline their professional expertise and accomplishments, and Hempel (2010) outlines how both employees and employers benefit from the features of LinkedIn. Over 60 million members have LinkedIn profiles with details on their experience and the ability to reach out to peers to ask for advice or join groups of members with similar affiliations. This provides users the ability to network more effectively than they could through an exchange of business cards or resumes.

Employers have also discovered benefits to using LinkedIn to identify and recruit potential employees. LinkedIn provides highly detailed information on members, allowing representatives from companies such as IBM and Accenture to easily identify promising candidates based on member profiles and professional references while saving thousands of dollars in recruiting fees. Twitter provides its users the ability to stay connected by exchanging short messages of 140 characters or less, known as “tweets”.

These brief messages are designed to provide users the ability to quickly share information with a wide audience. Messages are posted to each user’s profile, sent to “followers” of a specific user, and made available to all users through a search function. Milstein (2010) has developed a “Twitter 101 for Business” tutorial to promote the use of the Twitter platform for businesses to share information, gather immediate feedback, and build relationships with anyone interested in the company.

Comm (2009) illustrates how companies such as Southwest Airlines and Whole Foods use Twitter to provide information on promotions, gather feedback on company products and services, and establish new lines of communication that reinforce each organization’s status as a leader in customer service. For those with something to say that need more than 140 characters to do so, it is very likely that Facebook, the world’s most popular social networking site, is the tool used to send that message.

Helft (2010) provides statistics that illustrate the global appeal of Facebook. The site has grown from 200 million to 500 million users in the last 15 months and has overtaken established competitors in India, Great Britain, and Germany as each country’s most popular social networking site. Although two thirds of United States internet users have Facebook accounts, 70 percent of the site’s members live outside the United States. Facebook’s own statistics page indicates that half of their users access the site every day.

The ability to connect directly with audiences of this magnitude provides unique opportunities for companies to reward loyalty as well as market themselves to new customers. Qualman (2009) illustrates a shift in a company’s use of prompts to send users to Facebook sites rather than their own websites. For example, CBS promotes its coverage of college basketball’s “March Madness” by directing viewers to the tournament’s Facebook page rather than the network’s site.

Companies ranging from local restaurant The Loop (3,668 fans) to global beverage supplier Coca-Cola (7,612,837 fans) have established pages on Facebook and encourage customers to become “fans” in order to connect with other fans, sign up for contests and promotions, and access exclusive content. The popularity of social networking sites has led to wholesale changes in how businesses communicate with consumers.

Companies are now expected to take an active role in the use of social networking sites to identify candidates for employment, promote their products, and engage customers in the medium and timeframe they prefer rather than dictating how and when communication takes place. Given that these sites provide free tools for companies to establish immediate, two-way dialogue with vast numbers of customers, it is imperative that companies develop effective social networking strategies to further establish and strengthen the critical relationship between company and customer.