Business Solutions with SAP

Social Media

Today’s IT landscape is filled with hype around Web 2.0 and while collaboration is a key forward looking initiative for any organization social media requires a specific purpose and goal. Without a clear direction and purpose for social media initiatives they are at best a distracting fad, and at worst an enterprise disaster.

When I look at today’s “Twitter” and “Facebook” applications I see them as a fad. Popular today, and they will be around for a while, but like all “social” outlets they are waiting for the “next big thing.”  MySpace was eclipsed by Facebook and text messaging, while still popular, has been knocked down a couple of pegs by Twitter.

Is social media important to the IT organization and future? Yes, but ONLY in the context of a genuine and legitimate business purpose.

Social Media Study Shows Current Tools Have Little Value In the Enterprise

The other day, while on a flight to a client site, I picked up the back of the seat airline magazine and read through a Harvard Business Review synopsis of an experiment done with Facebook at an Austin based company.   This was a marketing experiment to see if social media like Facebook could be used to increase customer loyalty and therefore influence customer spend, or acquire new customers.  Although the Harvard Review article was very upbeat about this experiment in social media there was little evidence of consumer behavior changes that could be attributed to their Facebook experiment.  First, a little over 2% of the thousands of existing customers the company contacted actually joined Facebook and became “fans”.  The ones that did were already “raving fans” of the company.  The existing customers who joined did slightly increase their overall spend BUT, it is not known if the increase in spend was related to the Facebook offers and promotions or if the use of the social media channel had any influence (in other words, would other marketing channels to provide similar offers have produced similar, or even better results?).

This Harvard supported study showed that new customer conversion was low, the bulk of “fans” were those who were already dedicated customers, and very few new customers were added through Facebook over the 3 months of the experiment.  The rate of gaining new customers was not enough to make it a significant marketing medium for this company.

It is questionable if the medium had any bearing on changing customer buying behavior beyond other types of marketing–, it’s efficacy as a sales source is debatable.   So, in the end, Facebook and other social media outlets may just be all hype.  For this particular experiment there was a specific business purpose, and there was promotion and coupon activity.  So if in the end it turns out to be an effective marketing medium it must be looked at as a small part of an overall marketing portfolio with limited appeal to customers who are already some of the best buyers.  The next question would be whether or not there is any cost / benefit.

The Facebook study confirmed my suspicions about the “value” of these type of social media outlets in the enterprise. That does not mean that some types of social media do not have a clear place in the enterprise, only that today’s hype is overblown and risky to business.

Social Media and Collaboration Must Have a Specific Business Purpose to Have Any Value

In a nutshell, as I have written:

“Collaborative initiatives that are divorced from a specific business purpose are disasters waiting to happen.”

I will say Twitter as a social media platform is interesting because of the ability to gain access to individuals who particpate there that you might never be able to gain acces to any other way.  As a sounding board for media types it is also interesting but there are still very few (if any) great business models on Twitter’s cost effective use to gain, retain, upsell, or cross-sell into your customer base.

From Collaboration to Innovation to Market – Toward a Working Model

I’ve been working with collaboration technologies as a Knowledge Manager for about a dozen years now. I started with collaboration tools in the enterprise long before the hype and the Web 2.0 fervor and I say a lot of the hype is HOGWASH!

Based on my years of collaboration experience, a short excerpt from a recent post:

ERP III – Is the Integration of Collaboration the Future of Enterprise Applications

Too many organizations undertake the introduction of social media for the purpose of introducing social media into the enterprise. Again, this is like having information without the context of application and experience. That information is NOT knowledge, nor are collaboration tools which are divorced from a specific business purpose very productive (if at all).

Niether consultants nor business has learned how to use social media to drive business value. There are few consultants out there with a coherent or even minimally functional method for business to use collaboration tools to propel a company’s key value propositions.

What say you?  Are you considering social media in your enterprise?  If so, does it serve a specific business purpose or objective?

I am VERY interested in any of the social media marketing types and their perspective.  Can you help me with ways to gain concrete business value from the use of social media?


Contact me today through our site contact form ( ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175
Bill Wood contact


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