The Business of Social Networking

During the past few months, I have been at several meetings for various organizations where the impact and importance of social networking was debated.  The consensus is clear.  Organizations and the people that lead them believe that there is power in social networking.  Yet, no one has been able to really tell me the quantifiable impact of social networking.  Until now.

Stephen Woessner, my colleague at the UW-La Crosse SBDC and author of “The Small Business Owner Handbook to Search Engine Optimization” has done scads of research on this, enough to work on a new book, “Increase Online Sales through Viral Social Networking.”  

According to Stephen, “Social networking, if done correctly, can represent over 20 percent of a Web site’s traffic. Plus, the Web site’s conversion rate of online sales from traffic referred from social networking sites can be as high as 22 percent versus the typical 2 to 4 percent, which translates into a 500 percent increase!” Bottom line: social networking can deliver significant business benefits.

Stephen has provided me with several tips to help you work through the process of building your networking strategies.  There are three keys to using social networking effectively. They are: 1) creating Conversation, 2) building Community, and 3) generating Commerce. These are the three Cs of social networking.

Getting involved in the Conversation is the first step to effective social networking. The way to begin is set-up your free Facebook, LinkedIn, and Twitter accounts. There are over 900 social networks to choose from but Facebook, LinkedIn, and Twitter offer the fastest growing memberships and represent the greatest opportunities for businesspeople to be the most efficient with their time.

Begin experimenting by filling out your profile(s), send some friend requests, chat with some people, and write some Wall posts to get used to the technology. And yes, you will likely make some mistakes as you get started. However, you will probably be pleasantly surprised at how easy it is to get involved in the social networking conversation.

As you invite more people into your social network, you actually begin to create a Community that revolves around you or your business. A community is simply a collection of people who share common interests and communities can absolutely exist 100 percent online. As you send out friend requests, and accept the ones you receive from others, your community grows.

As you contribute to the conversation among the members of your community, a wonderful thing happens — your participation creates engagement between you and your members. However, it is critically important to always remain genuine and never disingenuous in your conversations with community members. Being fake with ulterior motives is very easy to spot.

Once community is established, it is time to generate Commerce. Provide some of the products or services you offer, or recommend other products you are passionate about. Then watch the conversations among community members develop. Follow this by placing a link to your Web site within a status update and watch your site traffic increase. And you will likely notice an increase in online sales assuming you have a product or service that you are already selling online. Use this simple ratio: make six personal or life-related posts or status updates for every one product or service-related post. By following the 6:1 ratio, you will keep your conversations genuine and avoid the temptation to turn your community into a selling free-for-all, which would be a major mistake.

In closing, social networking represents an opportunity to increase Web site traffic and online sales, but communications must be genuine and not overdone. Most SBDCs provide advising or training on optimizing search engine and strengthening social networking.  Check out the SBDC website (www.wisconsinsbdc.org) to find one in your area.

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