OPINION: Why business needs to get a social life

26 Jul 2010

Steve Garnett makes the case for how companies can harness social networks to get closer to customers.

Social networks are here to stay – and that’s something even sceptics have to accept. They’re also revolutionising communication and collaboration for companies: externally through the opportunity to be closer to customers, to rely on the “knowledge of many” and to gain expertise. Inside the company, their functional principle is revolutionising teamwork.

Companies know that customers’ requirements, markets and competitive relationships change at the speed of light. Customer loyalty wanes and the pressure to innovate grows.

The main driver of this acceleration is the internet, which forms the central channel for information and sales. But the web itself is changing, too: whereas it started out as a one-sided medium and its users were silent consumers, now people talk of the interactive web: users exert influence, creating their own content and interacting in ever more detail through growing networks.

Companies are feeling the impacts of these developments in various ways. For most consumers, the internet is the first port of call when they’re looking for product information or solutions to problems. Official websites and customer service often lose ground to search engine results or discussions on social networks. Companies’ ability to influence decisions is dwindling, since community members feel that information from fellow community members is generally more credible than statements from manufacturers. In addition to this emancipation of official information channels, target groups are also increasingly demanding a say on market strategy issues, such as product portfolios and design.

Many companies flounder instead of responding flexibly to changes and grabbing the resulting opportunities. They lack processes that are matched to the environment they operate in. Mature communication and collaboration workflows especially are often inefficient and do not keep pace with change.

Consequently, customised tools are needed that mesh seamlessly with the internet and enable companies to get closer to their communities and pick up on market developments quickly. At the same time, companies also need to be able to mirror the dynamism and simplicity of web-based communication internally.

The search for suitable tools shows how traditional software is not able to meet the demand due to its inflexibility and alienness as regards the internet. The right solution must be web-based too. The hour has come for cloud computing.

Advantage 1: closeness to customers and innovation

Social networks are of commercial interest to companies not least due to the tremendous potential they offer for feedback and innovation. With cloud computing tools, which integrate social networks such as Twitter or Facebook, for example, into web-based sales and customer service solutions, even global companies are now being given the chance for the first time to slip into the role of the small corner shop.

By tracking discussions that relate to their company and also getting involved in them, companies are able to get to know their communities better and can interact with them on an equal level. This new closeness to customers enables them to offer products that offer a custom fit like never before, cut R&D costs, reduce the time to market, optimise advertising activities and improve service. They also supplement their own knowledge with that of external experts and, thanks to the systematic monitoring of the internet, are able to tap into an effective early warning system.

A further option, crowd sourcing, ie, using the “wisdom of many”, comes from interactive, online forums in which interest groups such as customers, partners or employees are able to exchange, discuss and rate ideas and suggestions. The opinions and suggestions received are evaluated by the community itself: ideas that are considered good gradually move up the rankings; the creator of the survey gets first-hand information for potential improvements. Dell offers an impressive practical example of the power of this method: the hardware manufacturer has been using IdeaStorm since 2007, a co-ordination tool based on the Salesforce Ideas platform. When one of the first surveys revealed that customers wanted Linux-based laptops and desktops, Dell launched suitable devices onto the market in a very short space of time and scored a brilliant sales success. Since it was launched, just fewer than 14,000 ideas have been posted in total, more than 715,000 votes have been cast and around 90,000 comments made. By way of outcome, Dell has turned more than 400 ideas into reality in the last three years.

Advantage II: information finds recipients

Good co-operation reduces frictional losses and has a positive impact on business outcomes – this is a long-established truism. Classic practical examples include portals and system integrations between industry and their suppliers. Their future also lies in the cloud.

The example of the “Google Docs” cloud service, which enables documents stored on the web to be used and edited on a shared basis regardless of location, is just one way in which new ground is being broken in terms of office communications.

The greatest potential currently available for placing internal communication on a completely new basis through real-time communication, however, again lies in social networks. The key requirement for this is transferring its functional principle into a secure cloud computing environment, inaccessible to external parties.

The main advantage of a “company Facebook” like this is that the resource-consuming search for information in emails or at various storage locations is now a thing of the past. Pull becomes push. In other words, information is bundled and actively finds its users. Appropriate rules control access rights, with individually configurable filters preventing information overload.

The components of the service – just as in the case of social networks on the consumer web – are profile information, newsfeeds, status updates and groups. Users post and learn in real time about what’s going on in the projects they’re involved in. News from colleagues, documents and applications can be monitored on an individual basis.

This means that users can automatically learn about new versions of sales documents, for instance, or a client’s payment status. The complexity and costs of communication and collaboration are reduced and teamwork is simplified. Important data is sifted from ubiquitous information.

Used internally and externally, web communities – even in the commercial sector – offer new communication and interaction opportunities for exchanging information effectively and efficiently, learning about customer demands and promoting innovation. Using them not only makes companies faster and more focused, but it also takes them to the customer in a significantly more efficient and resource-sparing way. By utilising these tools, the company’s sustainability and focus on the future are made more credible to employees and jobseekers. Cloud computing solutions are the game changers in this field.

Steve Garnett is chairman, EMEA, with Salesforce.com