How to Use Social Media to Build Valuable Business Relationships
How to Use Social Media to Build Valuable Business Relationships
The invention of the ATM decades ago revolutionized the banking industry. ATMs could be placed just about anywhere, on relatively short notice and with relatively low resources. The most simple of banking transactions became much easier to accomplish and cash became much more accessible.
Today, social media is taking the world by storm. But "a location on every corner" is not enough to succeed in online business. In business today, meaningful relationships are the currency of the social media ATM. Consider the following three comparisons:
1. ATMs make it cheap, fast and easy to withdraw cash. Social networks make it cheap, fast and easy to exchange information.
2. There's an ATM on every corner. There's a social media bookmark or application on every laptop and smartphone.
3. Most ATM patrons look over their shoulder during transactions. Most social media users likely don't but perhaps they should.
The velocity of money and information
A brief economics lesson shines even more light on the comparison and its application for business professionals. In economics, the concept of the "velocity of money" describes the frequency with which a unit of currency is used. In essence, this is the number of times a dollar circulates within an economy over a certain period of time. In a different era, this measure was considered a viable indicator of the health of an economy.
The advent of the ATM increased the velocity of money significantly. Transactions took place more often, with money flying rapidly from ATM to pocket to cash register to business bank accounts faster than ever before. Where the speed at which money flew around the economy once indicated the health of the nation's business community, it became clear after the rise of the ATM that high velocity did not necessarily indicate economic health. Banks' ability to reach customers was greatly improved, but that did not necessarily create value for the customer or help the customer (or individual banks) to grow.
Developing Relationships That Provide Business Value
Developing relationships that provide business value
The same is true in online business communication. A business with thousands of individuals in its Twitter and Facebook networks (and thousands more on an e-mail distribution list) has incredible reach. What it does not necessarily have is meaningful or valuable relationships.
Similarly, innovations such as Twitter, instant messaging or mass e-mail messaging that allow a business to significantly increase the frequency of its interactions with customers also do not necessarily create value.
The ATM not only improved the reach of the cash withdrawal capabilities, it also increased the frequency of withdrawals by removing barriers that had led customers to keep bank interactions at a minimum. The most significant of those barriers was time. So, relatedly, just because a business can get a message through to a customer multiple times a day does not mean it should. Frequency, like reach, does not directly correlate with business value. In fact, overly frequent communication can slow down processes and inhibit relationship growth.
Developing relationships that truly provide business value requires getting done exactly what the customer wants to get done, in the fastest and most cost-efficient way possible. If the customer just wants to get cash, the ATM is perfect. If the customer wants to dispute a charge on the account, the ATM is likely not the customer's preferred channel to do so. This is when something such as automated customer service becomes a frustration rather than a help.
When a person chooses to connect with a company via a particular tool such as Facebook (and it costs them nothing to do so), it doesn't mean that they are a valuable revenue source. There are many reasons they may have connected; some may want only product news while others may welcome sales and marketing messages.
What This Means For Your Business
What this means for your business
The world of project management provides a good example of how the lessons of the social media-ATM comparison can apply in many business scenarios. Rather than reach, the focus should be on relationships and what transactions the customer wants to make.
As a project manager, there is no substitute for understanding your relationship with stakeholders and team members. Knowing what the relationship is, what your counterpart desires from it and how he or she wishes to interact is where the true value lies.
ATMs work simply because they were developed with customer preferences and goals in mind. They quickly, cheaply and efficiently meet customer needs. They are easy to use and perform a valuable function. Similar to ATMs, project managers must function with their stakeholders in mind. One crucial way to do this is to select the best tool for communicating with each customer. Each communication is a touchpoint, many of which are required to establish valuable relationships. In different instances, the touchpoint could be a meeting, a phone call, a one-to-one e-mail message, a mass e-mail message or a status update on an online social media platform.
Importantly, the correct touchpoint can change depending on the transaction details-even if the transaction is with the same person or people. At one point, an e-mail message might suffice. In another instance, a conference call is best. And for others, you'll need to arrange a face-to-face meeting, even if it costs more. Understanding the customer's needs and preferences enables managers to communicate effectively and build relationships. Those relationships turn the avatars on your company's Twitter "followers" page and the addresses in your e-mail database into customers that bring value to your enterprise.
ATMs do not have the capability to alter touchpoints for different transactional circumstances. Successful businesspeople do.
Reach Alone Cant Buy You Success
Reach alone can't buy you success
As the ATM did for the banking industry, social media and other Web communication innovations allow businesses to extend their reach immensely, potentially to an entire planet of individuals. It is tempting to think that interacting with, building or buying a tool with seemingly infinite reach will translate directly to results. Across industries, the race is on to improve reach both internally within companies and externally to vendors and customers.
The multimillion (or billion) dollar question for CEOs, CIOs, e-commerce strategists, project managers and tech geeks everywhere is, "What online capabilities does my business need?" The answer is that in the ever-evolving virtual world, there is no fixed, universal answer. However, if you're the one asking that question or if you're the one tasked with answering it, have hope. Think of the ATM.
For the successful project manager (and for countless other professionals), the impact of the ATM on the banking industry has taught us that getting the job done right depends on an understanding of the customer and the ability to establish a meaningful relationship. A tool that gives you the ability to reach the entire planet won't return anything on your investment if you don't understand what your stakeholders or customers want from their interaction with your business.
Getting caught up in the race for greater and more powerful reach is no way to succeed in the world of online business or social media. The true value for managers lies in understanding customers or stakeholders and leveraging that knowledge to foster meaningful relationships.
Mark Phillips is the Product Manager and lead spokesperson at Vertabase. Mark has presented to numerous professional groups on the subjects of software design, usability and project management. Mark has consulted for hundreds of organizations on project management and led the development of numerous Web-based and Rich Internet Applications (RIAs). Read Mark's blog about project management here. He can also be reached at firstname.lastname@example.org.