Social networking sites have changed customer behaviour for good. Can companies harness this open attitude for business benefits?

Yes, I understand. You have a whole bunch of priorities before the financial year ends, and what with the madness of New Year and inflation, marketing budgets have been cut. Worse, little (if any) management bandwidth is available for anything that isn’t directly linked to demand generation.

I know; I’ve been there. In the past, it may not have been good, but it would have certainly been OK. So what’s different now?

Last year marked the entry of tools such as LinkedIn, Facebook, and Twitter that started changing the way people communicated with each other. It was also the year when the use of the Web declined, even as internet usage through applications went up. (http://www.wired.com/magazine/2010/08/ff_webrip/all/1)

And, all of this became relevant to India—there were more than 17 million Facebook users and 8 million LinkedIn users at the end of 2010. Small, of course, in percentage terms, but huge as a potential market and as an early-adopter, high-influence community. With the launch of 3G and inexpensive smart phones, the adoption is bound to accelerate exponentially, both of international social networking sites as well as home-grown ones.

I buy what my friend tells me to

Soon, this statement will also be true of the buying behaviour of rational buyers, not just of peer-approval seeking teenagers. You’re probably a bit sceptical about how a bunch (well, OK, millions) of people posting pictures online is going to make a difference to your business. Well, actually, it is a bit deeper than that.

When I wanted to find someone to build the Paul Writer website, I went to Twitter to find the best way to create a low-cost community site. Not only did I get some great technical advice, I also found my vendor there. And, I got my site up and running in under a month. I recently used this model to get advice on the best domain-buying agency as well. I use Facebook to figure out more personal stuff like where to shop or eat.

And it isn’t just relevant for individuals. A hospitality industry player runs a Twitter handle that is not very active. But it commented on one of my posts just when I was looking for a place to stay in Chennai. Well, it got my business, as did Mysore “insider tour” @royalmysorewalks.

It is now easier than ever before to connect with friends, acquaintances and long-lost classmates. True, it may be across different sites; for instance, Facebook for friends and classmates, and LinkedIn for business acquaintances, but you will nonetheless be soon ensconced in a loving cocoon, where it takes just one message to reach out to hundreds of well-wishers. You can use the network for your own search, as well as ensure that you are centred in an active crowd of well-wishers.

This is a great way to build your brand inexpensively. It is also soon going to be the only way. As 3G comes in, you can count on people to check online with their friends before any serious (or even unserious) purchase. And if you aren’t there, well, you’ll just lose the customer.

If the company says so, it must be true

While over 50 per cent of people globally trust what their friends and relatives say (Nielsen 2010 Global Trust Survey), around 30 per cent of folks are willing to trust what a company says on social media (emarketer.com). The belief is that there is an automatic truth filter applied to anything online, as the crowds vet information thoroughly.

Take the case of a client who markets ERP software for hotels. Its first blog (un-promoted) on a solution that was increasingly relevant to hotels—security—generated two sales inquiries asking for more information. What this trend does, though, is put pressure on companies to provide insightful content. Given that I am relying on my friends to tell me what’s important, it becomes doubly important that you create stuff that they want to share with me.

If I can’t find you online, I cannot buy from you

I was very disappointed to find that @whirlpoolindia and @samsungindia are not active on Twitter. It’s a great way to handle customer complaints, and generally, I’ve had far better luck getting service through these channels than through the old-fashioned IVRs.

For companies, too, this asynchronous channel should make life easier, more so, if it is linked to their sales system. True, today, there aren’t enough net-savvy users out there to make it a huge problem, but I know that I won’t be buying white goods in future without checking out their Twitter service levels in India. You can be a step ahead by starting now. Oh, I am not endorsing Twitter—but something a lot like it, perhaps SMSGupshup, will certainly rule in the years to come.

The truth is out there, whether ready or not!

A client’s biggest pain point was that it had an unfairly negative listing on www.complaintsboard.com. It needed to kick-start its online strategy to deal with the fallout of that. The problem with online posts is that there is no easy way to ensure their authenticity. I can complain about a product without any proof of actual consumption. That’s the downside, and that’s where having a loyal network of supporters who can come to your rescue is so important.

But what about the truth? The digital world gives employees and customers unlimited opportunities to share information. Your prices, salaries, customer data—everything can be out in the public. WikiLeaks shocked governments, but corporates will shortly face the same issue—nothing is secret any more. This will cause a change in behaviour—you can’t do things that count on A not knowing about B, whether it’s differential pricing, salary, or product usage.

We can either whine about this lack of privacy, or we can turn it to our benefit. The first wave of businesses that capitalised on this lack of interest in privacy was those like Facebook, Flick’r and LinkedIn. They provided platforms that allowed people to expose themselves.

The next wave of companies that will succeed are those which will be able to harness this open attitude for business benefits. For example, if a company created an account for every buyer on a feedback portal and updated details of service calls, it could show that a very small percentage of clients had a negative experience.

Every digital activity leaves a record—the trick is to utilise that in a non-invasive way. Read this piece in The Economist (http://www.economist.com/node/16910031) to know how Airtel has used call behaviour to identify “influencers”. Some of the characteristics include making calls late at night and getting quicker call-backs. That’s clever!

What can you do to ensure this year’s different?

I think the first thing to do is to ensure that you, personally, are active in the new digital media. Create a profile on LinkedIn, YouTube, Facebook, Twitter, Slideshare.net, SMSGupShup and maintain them for at least 60 days. At the end of that, you decide whether you want to continue or not.

Nothing is secret anymore. You cannot do things that count on A not knowing about B.