The Facebook Era: Tapping Online Social Networks to Build Better Products, Reach New Audiences, and Sell More Stuff

Preface

Introduction

“I am a firm believer in the people.”

—Abraham Lincoln

It was the spring of 2007. Smoking indoors hadn’t yet been outlawed, though this place might not have cared either way. These two older men, clearly regulars, sat in the back corner, bare, lanky arms hanging out of their wifebeaters, cigarette dangling out one side of their mouth and a toothpick out the other. They were gesturing animatedly, laughing, eating, smoking, chattering away in loud Cantonese about this and that.

I tuned them out to focus on my steaming bowl of wonton soup. Just then, out of the corner of my ear, I heard them just barely: “...blah blah blah Facebook.” I instantly sat up to listen. I had not been mistaken—these two men slurping down their congee at an anonymous diner tucked away in a corner of Hong Kong where foreigners never go, and probably don’t know about, were talking about Facebook. Their children who were in college abroad got them into it, and now they were hooked. I was floored. It was the moment I realized that if Facebook was not already mainstream, that it would become so very, very soon.

I flew back to San Francisco the following week and attended the first f8, Facebook’s developer conference. There, they unveiled a new platform that would allow third-party developers and software vendors to build applications that Facebook users could add to their Facebook pages, such as their profile. The keynote presentation and product demonstrations were novel and interesting—new Facebook applications such as iLike for sharing music and concerts with friends, Slide for sharing photos and videos, and so on and so forth.

Still, I felt like something was missing. Games and SuperPoking are fun, but where were the business applications? I was working (and still work) at an enterprise computing company, salesforce.com, which made its name developing customer relationship management (CRM) applications. But wasn’t relationship management at the core of what Facebook was offering, albeit in a more fun and casual and modern way?

That night, I went home and sketched out an idea for bringing Facebook to business. As a product marketer, I had been spending a lot of time on sales calls and saw that the most successful reps established immediate rapport with their prospects and had the strongest personal relationships with their customers. Meanwhile in my personal life, I saw Facebook help establish faster and better rapport with people I had just met, and help me maintain closer relationships with my friends. So I decided to bring Facebook to CRM.

With my friend Todd Perry’s help, I developed Faceconnector (originally called Faceforce), which pulls Facebook profile and friend information into Salesforce CRM. Instead of anonymous cold calling, sales reps and other business professionals could get to know the person behind the name and title, and even ask for warm introductions from mutual friends.

Fortunately, Todd and I weren’t alone. Enterprise start-up companies like WorkLight, InsideView, and Appirio evolved their products to include Facebook and other traditionally “consumer” social media. New companies emerged, like Mzinga, Socialcast, and Small World Labs, to build enterprise social technology from the ground up. My employer, salesforce.com, brought voting, tagging, profiles, feeds, and other Web 2.0 capabilities into its IT platform and CRM applications. Oracle announced a strategy around “social CRM.”

Our idea—bringing the power of community, trusted online identity, and user data on social networking sites to business—was a simple one, but has had powerful consequences. But it represented a paradigm shift: Facebook isn’t just for kids anymore.

Why You’re Reading This Book

This book is meant to help you understand online social networking and what it means for your company. Perhaps these situations sound familiar:

• You know online social networking is a big deal but don’t know what to do about it.
• You use Facebook in your personal life but aren’t quite sure how it fits with your professional life.
• Your boss has asked you to create a Facebook presence for your company ASAP, but you don’t know how or what to do.
• You are the boss and want to understand the social networking phenomenon and what it means for your bottom line.
• You want to hear how real companies are succeeding at sourcing leads, engaging new audiences, and transforming customers into a sales force on social networking sites.
• You understand that whether it’s looking for a job, closing a deal, or advancing your career, a lot of it comes down to who you know in your social networks.
• Increasingly, you’re being asked to do more with less, and want to leverage the power of your networks, your colleagues’ networks, and your customers’ networks to get the job done better, faster, and cheaper.

There are three main premises that motivate this manuscript. First, organizations are inherently social because organizations are only as good as their people and people are inherently social. Whether it’s relationships between a sales rep and prospect, recruiter and candidate, vendor and procurement personnel, or other partners, business success has always come down to personal relationships. Second, recommendations and referrals from those you know and trust are powerful influencers of purchase decisions. Last but not least, research shows that weak ties, rather than your most intimate circle of friends and family, tend to carry the greatest amount of social capital in business contexts. It is precisely in weak ties where Facebook and other online social networks can often make all the difference.

Welcome to the Facebook Era

We are witnessing a historic movement around the online social graph—that is, the map of every person on the Internet and how they are connected. It is the World Wide Web of people, a reflection and extension of the offline social graph—the friends, family members, colleagues, mentors, classmates, neighbors, and acquaintances who are important to us, who help shape us, and for whom we live. The online social graph empowers us to be better, more effective, more efficient, and more fulfilled doing what is inherent to our nature—communicating who we are, and transacting and interacting with others. Data from social networks, such as where people are from, what they are interested in, and who their friends are, with the right privacy controls in place can then be implicitly or explicitly mined to make business interactions more tailored, personal, and precise.

With the lightning pace of technology, we are living in a very different world than a few years ago. Today’s college students don’t use e-mail except with “grown-ups” like professors and potential employers—they send Facebook messages and write on each other’s Facebook walls. But it’s not just college students. Although Facebook may have begun after office hours, its power extends far beyond our personal identities into our professional ones.

150 Million and Counting

This very moment, over 150 million people around the world are logged in to Facebook, updating their status, interacting with friends, interacting with brands, providing valuable information for you to be able to understand them better, and learning about you in return. As a business person, you need to be where your customers are, and increasingly, customers are spending time on Facebook.

We can learn a great deal from Barack Obama’s 2008 presidential campaign, which used Facebook, MySpace, and other social networking sites to rally millions of supporters and help raise nearly $1 billion in grassroots campaign contributions. According to the Pew Research Center, ten percent of Americans (and one-third of Americans under the age of 30) used Facebook or another social networking site to get information about the presidential election. How many people will use Facebook to learn about or become engaged with your company and products?

It’s All About the People

Perhaps the online social graph was inevitable. Technology shouldn’t be—was never meant to be—an end in and of itself. It is only interesting and meaningful and valuable where and when it serves people. Technology-centric technology was the result of an immaturity of our systems and thinking. The online social graph provides us with a new way, a way to bring what most defines and differentiates each one of us—our history, our relationships, our memories—into all aspects of our lives, including the way we experience technology.

What the future holds is anyone’s guess, but what we do know is that business will never again be the same—whatever your industry, wherever you work, whether you are in sales, marketing, product development, recruiting, or another corporate function. We were in a very similar place of anticipation back in the early days of the Internet, and the PC and mainframe computing before it. Then, as now, some companies jumped blindly on the bandwagon, investing a tremendous amount of time, energy, and capital to implement technologies they did not understand, with no clear strategy and, ultimately, little to show for it. Others dismissed the Internet as a passing fad and were gradually outcompeted by online businesses or companies that used the Web to achieve more efficient and effective sales, marketing, recruiting, product development, and operations. But the smart ones took notice and began preparing for what an Internet era might look like. They thought through the implications for their business, and they adapted and thrived. This book is here to help you be smart about online social networking so that this time around you, too, can adapt and thrive.

If it’s true that we are separated at most by only six degrees, then you are not very far from any one of your customers or prospective customers. Read this book, and then go out and get them!

Welcome to the Facebook Era.

How to Use This Book

This manuscript is structured into three parts. Part I (Chapters 1 through 3) provides the bigger-picture framework from which we can develop a richer understanding and appreciation of the online social networking revolution—what is happening, why it’s happening, and what we can learn and apply from past technology revolutions. Part II (Chapters 4 through 7) takes a tour across four major functions in a company—sales, marketing, product development, and recruiting—and explores how each is being affected by online social networking technologies. Part III (Chapters 8 through 12) of the book is a practical how-to guide around implementing the ideas and possibilities presented in Part II. In all, there are twelve chapters in this book:

Part I: A Brief History of Social Media

• Chapter 1, “The Fourth Revolution,” talks about the significance of the online social graph in the context of the three digital revolutions before it: mainframe computing, the PC, and the Internet. It draws examples from Mutual of Omaha Insurance Company, JPMorgan bank, and Bloomingdale’s department store to show how past technology revolutions changed industry landscapes and what business decisions helped these companies establish a competitive advantage. The chapter concludes with a brief history of online social networking, including the rise and fall of popular sites, discovery sites used mainly for sales prospecting, private networks, and online gaming.
• Chapter 2, “The Evolution of Digital Media,” walks through the history of how our experience with and capabilities using media have changed as technology has improved. The PC Era enabled dramatic improvements in media creation and storage. The Internet transformed distribution capability, first with Web site communities and RSS readers, and then more recently with search engine marketing and behavioral targeting. Empowered by the online social graph, the future will be about “social filtering” and the ability to deliver precisely the right piece of content to precisely the right person at precisely the right time. The My Starbuck’s Idea online community on Facebook is provided as an example of how social filtering can help improve relevance and engagement. Chapter 2 concludes with a discussion on what attributes of Facebook make it unlike any other media site we have ever seen.
• Chapter 3, “Social Capital from Networking Online,” discusses the concept of social capital, how social capital is used to achieve business goals, and how online social networking transforms our ability to accumulate and exercise social capital to achieve our personal and professional goals. It explores how online interactions facilitate entrepreneurial networks, the crossover between offline and online networking, organizational flattening, and value creation from network effects.

Part II: Transforming the Way We Do Business

• Chapter 4, “Social Sales,” speaks to the power of the online social graph for a sales cycle, from prospecting and the first call through to customer references, navigating customer organizations, and enabling sales teams to more easily collaborate. It features a case study on how Silicon Valley start-up Aster Data Systems has used employees’ collective MySpace, Facebook, and LinkedIn networks to source leads and build personal relationships with customers.
• Chapter 5, “Social Network Marketing,” talks about the breakthrough new marketing techniques made possible by online social networks, including hypertargeting, enhanced ability to capture passive interest and conduct rapid testing and iteration on campaigns, social community engagement, and automated word-of-mouth marketing. Chapter 5 features two case studies, one from national retailer Victoria’s Secret, the other from nascent start-up Bonobos, demonstrating that businesses both large and small are achieving marketing success with Facebook’s new social advertising tools.
• Chapter 6, “Social Innovation,” describes how the four stages of innovation—generating concepts, prototyping, commercial implementation, and continual iteration—become more effective and efficient with online social networking. Online social engagement transforms the relationship between companies and customers from one-sided “build it and hope they come” to a partnership model. Businesses feel more empowered to go after new markets and audiences. Customers feel more accountable for providing input and more grateful when their input is incorporated in the design of new products. This chapter features examples of how brands like Dell, Gap, and YouTube are tapping into the wisdom of their customer communities on social networking sites to source new ideas and keep getting better.
• Chapter 7, “Social Recruiting,” applies these concepts to the ever-important task of finding, attracting, assessing, and closing job candidates. It features a short case study on how Joe, a Chicago-based headhunter, has used Facebook and LinkedIn to source new candidates, keep in touch with candidates who might not be ready yet to leave their current roles, and maintain personal relationships with successful placements. The chapter concludes with a short set of suggestions for job seekers on how best to use online social networking to find and land the right role at the right company.

Part III: Your Step-By-Step Guide to Using Facebook for Business

• Chapter 8, “Engage Your Customers,” guides companies through the first steps of any enterprise social initiative. It explains why anyone who is serious about investing in social networking must first start with business objectives and define a clear set of milestones. Using the example of Sanrio’s Hello Kitty brand, this chapter urges companies to first listen to what the community might already be saying about their brand, and then with that context establish a presence on the appropriate set of social networking sites to reach the right audience.
• Chapter 9, “Get Your Message Across,” is a step-by-step set of instructions on how to tactically execute on the social network marketing techniques described in Chapter 5. Featured examples include Wendy’s national fast-food restaurant chain, the Crash television program series, and Green Works natural cleaners.
• Chapter 10, “Build and Manage Your Relationships,” details how individuals set up a social networking account and provides tips for creating effective profiles, establishing friend connections, organizing contacts, and managing different identities across one’s personal and professional contacts. It also talks about etiquette for initiating or accepting friend requests, using online networking in conjunction with offline networking, providing or requesting introductions, and other interactions. Most of the examples from this chapter are from Facebook but can be generally applied to other social networking services.
• Chapter 11, “Corporate Governance and Strategy,” speaks to the challenges, obstacles, and realities of implementing social networking technologies in a corporate setting. Specifically, this chapter urges businesses to consider the risks around privacy, security, intellectual property, confidentiality, and brand misrepresentation, and the importance of partnering closely with legal and IT departments to put the right systems and policies in place to mitigate these risks.
• Chapter 12, “The Future of Social Business,” likens the status quo of online social networking to where we were with the Internet in the late ‘80s. Though there are plenty of unknowns, such as which vendors and business models will prevail, certain trends are already taking shape: flatter organizations, stronger offline communities, more small businesses, greater collaboration across organizations, and tighter integration with mobile devices. Despite the uncertainty, companies can and need to start thinking now about how this revolution will affect their business so that they can take the necessary steps to thrive in the Facebook Era.

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