I had an interesting meeting with a
customer last week regarding the use of social networking. This is a large
broker dealer with several thousand financial advisors across the country.
The IT department is getting
pressure from the business users to allow the use of Facebook, LinkedIn and
Twitter all of which they currently block. When I asked them why the business
units wanted access to these sites, they gave me three
reasons:
- The financial advisors
are telling them that referrals they get through Facebook and LinkedIn tend to
convert to clients at a much higher rate than any other channel. This resonated
with me - at FaceTime we constantly remind our salespeople to leverage their
social networks for prospecting. It is well know that human beings are tribal by
nature and are more likely to respond to someone who is "connected" to them in
someway - even when you have millions of connections!
- Their marketing group
is focused on the 35-45 year old demographic since this is where people hit the
peak of their earning power and start thinking about financial planning. Getting
clients in their late thirties means you can hang on to them 20-30 years. Turns
out that the over-35 demographic is the fastest growing user group at Facebook
and the largest segment for both LinkedIn and Twitter.
- Finally, the company is
finding that their ability to recruit at college campuses and MBA schools is
enhanced by their Facebook and Twitter presence. As we all know, college kids
live with these technologies and businesses that block access are seen as old
school.
I am hearing similar reasons from
other customers across all industry groups. Enterprises are recognizing the
power of social networking to recruit new customers, stay in touch with existing
customers and enhance communication with their employee base.
Of course there are several
challenges that need to be overcome. In a survey FaceTime conducted in June of
this year, organizations identified their top three concerns as content leakage,
regulatory and corporate compliance and reputation
damage.
"I am not worried about the guy who
wants to steal information" the IT manager at a large services firm said to me.
"I am worried about mistakes. People don't realize that competitors can also see
your status update on LinkedIn and if you're talking about working on a
particular project, you've just told the world." The inadvertent leakage of
content is a common concern among the security managers I speak
with.
On the compliance front, regulatory
authorities are increasingly focusing on the use of these networks within
regulated industries such as financial services, energy and healthcare. For
example, FINRA, the Financial Industry Regulatory Authority, recently
formed a Social Networking Task Force to look into the compliance challenges posed by social
networking sites.
Finra CEO Rick Ketchum said, at the SIFMA Annual Meeting "Social networking
sites such as Facebook or LinkedIn provide new ways to connect, inform and
interact with customers... They also raise new regulatory challenges. For example,
as currently designed they may not allow you to archive and maintain the
communications on your own books and records."
Reputation damage is another concern
for large enterprises. How do you track what employees and customers are saying
about your company? The CIO of an electric utility company noted that they used
Twitter to communicate information about outages and other emergencies to their
customer base. "I worry that a disgruntled employee or customer could hijack our
Twitter account and start spreading
misinformation".
Another customer, a large bank that
ran into some problems integrating an acquisition, talked about how customers
were blasting the bank on Facebook and Twitter. "Because we block the use of
these sites within our company, we were caught off-guard and didn't understand
how we should respond to these comments." The IT manager noted. "Our marketing
group is now formulating a strategy on how to leverage these platforms. We need
to be more savvy about these channels."
Notwithstanding the challenges, it
is clear that enterprises recognize the value of these sites and are motivated
to overcome them. (Shamefaced sales pitch follows) FaceTime recently announced
USG 3.0
which
is designed to address these challenges and allow enterprises to leverage the
benefits of social networking.
I would be interested in hearing
your views on the use of social networking in your business. Do you agree with
the above reasons? Are there other reasons?
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