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PARK Sung-Min

Corporate Social Networking - Discovering New Frontiers

PARK Sung-Min

Sept. 26, 2011

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Three New Ways to Use SNS in Business

There is no doubt that social networking service (SNS) is here to stay, becoming a fixture in not only our personal lives but also in how companies connect with customers. Among the Fortune Global 500's top 100 companies, 84 operate at least one SNS account, with usage and customer satisfaction rising fast. As such, companies are trying to broaden the scope of SNS activity beyond current methods of communication and marketing to finds ways to effectively utilize it in all aspects of management. Three uses seen in the US and Europe -- Social Funding, Social Supply Chain Management (SCM) and Social Indexing -- are now seeping into Korean business strategies.

Social Funding, also known as Crowd Funding, refers to projects where people donate money or their abilities. Participation and promotion are all voluntarily done via SNS. The process matches businesses on a one- to-one basis and also delivers a sense of social goodwill, closeness and familiarity.

Some participants gain more satisfaction in sharing in the development of projects and attaining goals rather than raising revenue itself. Therefore, creative projects, environmental issues, and projects that contribute to society are most popular.

Another aspect of Social Funding is that it has opened a new revenue stream for consulting work on SNS-based projects. With companies such as Kickstarter in the US and IndieGoGo in the UK, global funding platforms began appearing in 2008 and now more than 200 compete worldwide. Having arrived earlier this year, this type of work is at an infant stage in Korea. However, Social Funding is expected to expand exponentially here, given the widespread popularity of SNS and the government's interest in SNS as a way to promote one-person businesses.

Agents and methods of Social Funding are already diversifying rapidly in Korea. Even public institutions are trying it. Arts Council Korea set up its own Social Funding website (fund.arko.or.kr) and is enjoying great success raising concert money for small culture and arts groups in need.

Social SCM reduces the costs related to a supply chain and provides customer satisfaction by sharing information on the problems that can arise within the supply chain, from production to distribution and resolutions via SNS. Through a channel that is shared by all the participants of a supply chain, information is continuously exchanged thereby raising awareness of emergency situations, providing early warning signs and allowing for solutions to be established. It also meets customer needs by providing both business partners and customers with information on the delivery status of an order and facilitates pre-emptive action when a problem is foreseen.

With the direct and mutual communication function that is SNS, Social SCM also improves the efficiency of the whole supply chain process as it provides businesses with feedback from the various interest parties within the chain, including distribution and post-delivery service.

Best Buy, the largest home appliance retailer in the US, is improving customer satisfaction by having over 2,600 employees on hand to receive and help with customer inquiries and complaints in real-time via its Twitter account, Twelpforce. Furthermore, customer inquiries and related answers posted on Twelpforce are linked to the information-sharing website, BBYFeed.com, allowing people to share their opinions and know-how. After the SNS system debuted in 2009, Best Buy saw a 20% decline in customer complaints. Sales exceeded the annual target, rising 10.4% from the previous year despite the sluggish US economy.

Having recently been chosen as one of MIT's Top 10 Emerging Technologies, Social Indexing collects data on users' preference i.e. social index, via SNS. Prime examples are Facebook's "Like" button and Google's "+1" button. By pressing the "Like" button of a product at an online retail website, the information is automatically relayed onto Facebook where friends can see a person's preferences. The use and popularity of Social Indexing is rapidly rising as it allows users to express their preferences quickly and efficiently, giving rise to technologies that accumulate such data. In doing so, product recommendations can go beyond a specific retail website. That, in turn, can facilitate information sharing about a person's preferences, from fashion and culture to their interests and hobbies, allowing for tailored information and marketing pitches.

Among a slew of new marketing strategies is "Social Network Interactive Movies," which uses photographs of SNS users and their friends to change the story of an advertisement according to what the user chooses. Through such methods, companies can use SNS more effectively in an array of different areas. And with the growth of SNS related markets and increase in SNA (social network analysis) related businesses, companies will be able to discover newer, more effective ways in the future.

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