Social Networking: UK Buyers Beware

One thing about the Gartner Group folks is they don't mince words:

With more than 60% of Fortune 1000 companies planning to establish their own online communities by 2010, IT research organisation Gartner warned that many will be wasting their money and eroding customer value through unplanned initiatives, reports FinanceWeek.co.uk.

"Rushing into social computing initiatives without clearly defined benefits for both the company and customer will be the biggest cause of failure," said Adam Sarner, research director at Gartner. Social networking investments should focus primarily on customers' online buying processes, and be based on a defined business case where it can deliver a direct return on investment in terms of sales, awareness and customer loyalty.

This warning seems directed at the B2C folks, especially those with e-Commerce sites and more likely to be influenced by the word, free, as in free software. No mention is made of collaboration, the stuff of B2B implementation, but since most of the action is on the B2C side it may be covered in a separate paper?

Here is the advice from Gartner:

Every project should start with the basic questions:
• Can the company make money from social initiatives?
• Is social networking going to be critical to the way it manages customer relationships, or is the organisation merely jumping on the bandwagon?
• How much investment is required in time as well as in budget?
• Who exactly are we trying to reach — internal or external audiences?
• What legal, financial and reputational risks will the project expose the organisation to?

The study warns, "If customers feel that they're being "used" as part of the process, they will stop participating and will shun an entity on Twitter or Facebook if all they receive in return are untargeted advertising. "

A more thorough reading of the report is in order, but one thing that is important to keep top of mind is that social CRM is the important word combination. Without tying efforts on the Web to your database(s), it's PR, not lead generation and the folks out there listening do NOT want to hear the drumbeat of advertising.

One final note from the story:

I think social media and social networking get tossed into the same conversation and mixed up together. Not a good idea. I don't think the term"social applications" helps matters and it seems hard to believe but I don't think Gartner Group, as big and important as they are in the IT world, really convey an understanding of Web 2.0 and the shift in power to the consumer in this study.

I could be wrong.