Social networks - New breed of site baffles broking

Social networking sites' subscribers number in their millions, yet broking is not taking full advantage of the commercial opportunities that they present, writes Katherine Brandon

In August, social networking site phenomenon Facebook confirmed that it had 100 million active users. Mark Zuckerberg, one of the site's founders, reckons that over 30% of world's internet users are registered on the site.

The marketing industry has started to dip its toe into the world of social networking sites. In June, Visa paid £1m to promote its small business service on Facebook, while approximately 80,000 small businesses have profiles on the website. The credit card company is giving $100 (£51) in advertising credits to the first 20,000 US business start-ups that download its service through Facebook in an attempt to build awareness of what services Visa offers.

Specialist social networking sites have evolved for the business world, ranging from business communication-oriented Linkedin - which now has approximately 30 million registered users spanning 150 industries - to Sexyinsurance.com, which describes itself as "a network for insurance industry superheroes."

Mark Huxley, director at Lamb, a creative marketing and design agency, believes that brokers need to have a presence on social networking sites: "People are always showing interest in social networking but no one is doing anything about it. A lack of communication can lead to problems in generating new business. Everyone thinks they have 'the' online product but you need to find a new way to communicate with customers if you are to differentiate yourself in an already crowded marketplace. The Facebook-generation in five years time will be in very serious decision-making positions and they are used to dealing with social networking sites."

At the October Future of General Insurance conference in London, Andy Jones, associate partner at CSC, told delegates that he believes social networking sites could also help lubricate communications between insurers and their broker partners: "Social networking sites could change the way the supply chain is organised. They should be built into business processes to allow people to connect with one another. Staff could resolve queries by referring their questions to an expert that could be contacted immediately via a site, so reducing cycle times."

Strategy

One place a broker can go for help when looking to develop a usage policy for social networking sites is its software house. "Social networks are a technology that is not going to go away, so brokers need to find the upside of them commercially. We have reengineered version seven of our software to allow users to customise their desktops, including the option to log on to their favourite social networking sites. Not only does this allow access to these sites like normal internet channels but also management to monitor how they are being used," said Ray Vincent, managing director at Transactor.

Huxley believes that, when becoming involved in social networking sites, it is essential for brokers to consider their audiences. He told PB: "The key is in finding smaller groups within sites such as Facebook to communicate with; those that are made up of interested people who want to know more about your product. If you find the right audience, social networking sites can help people look beyond the corporate veneer when you appear to be sharing information freely. The customer feels that they can understand and trust the business better."

Preparation is key. Neil Johnson, fellow director at Lamb, argued that it is important for brokers to implement a strategy that is combined with other marketing approaches: "You need to get down and dirty and do your research to identify the groups you would like to talk to. The danger is, if you focus in on just one area, it won't work. Social networking needs to be integrated with other marketing mediums such as websites and brochures."

Wisdom

Caution is wise in your approach as social networks have their dangers. Libel laws can cause problems where staff use social networking sites excessively. "A lot of users don't realise what they are saying is in the public domain, so you need to retain a level of control. However, it is important to remember that they can be an incredibly powerful networking tool when used properly. Many companies think in negative rather than positive terms; they are always trying to protect (from) their problems rather than promote what they do well but people love referring others to services that they have found have worked well," said Huxley.

Vincent also warned of the dangers: "Social networking sites do offer low-cost brand awareness opportunities but their nature means you cannot manage the message. You need to be on top of the game and able to react quickly to developments if you are to be successful in the social networking game."

Alan Price, senior employment law adviser at Pennisula, believes that social networking sites can cause more problems than they solve: "Communicating with clients' social networking sites is not the right medium and we usually advise banning them during the working day. They are a distraction to the employees, especially in the current climate where businesses need staff to be as productive as possible."

A survey by Peninsula has revealed that 85% of employers admit to monitoring Facebook statuses to check the validity of employee absences, while 66% of employers have disciplined staff for bogus sickness after discovering the real reason for absence through Facebook.

Social networking sites are also playing a greater role in recruitment. Peter Done, managing director at Peninsula, said: "Facebook is beginning to be noticed during the recruitment process as employers look to find out more about potential staff. With the planning and preparation that goes into interviews nowadays, social networking profiles are seen as a good insight into a candidate's personality. Employers should be wary however, as they may risk losing a potentially good employee just because they have taken too much notice of what is written in a Facebook profile."

Useful

Vincent has used social networking sites for recruitment purposes: "(These) sites are great from an employment perspective. We recently contacted someone we wanted to talk to but lost contact with years ago by using the Friends Reunited website."

Price believes that, by using social networking in the recruitment process, brokers can drive down their costs: "Recruitment can be a significant cost, up to 15% of total costs, so releasing employment updates on a site like Facebook can do a lot of the work for you. However, brokers need to have an effective information technology policy so employees know what is expected of them and what will happen if they abuse these sites at work."

The rewards of becoming involved in social networking as a business are tempting but still very few people are joining in because of the risks. "The rewards are considerable for those brave enough to be involved. The time and cost benefits as well as improved relations with employees will often outweigh any potential quibbles that may arise," said Jones.

Vincent would still like to see more brokers pioneering a presence in social networking spaces: "Good news travels fast but bad news travels faster. Social networking will work for the good businesses but not for the bad, however, if as an employer you decide to ban social networking sites then you would also have to ban access to mobile phones, as most have access to the web nowadays. It's just not practical."

WHAT IS OUT THERE?

- Facebook - A free social networking site accessible to any registered user in the world. It has over 100 million active users.

- Linkedin - A businesses-orientated social networking site with around 30 million registered users spanning 150 industries.

- MySpace - A social networking website offering an interactive, user-submitted network of friends. MySpace.com attracts 230,000 new users each day.

- MSN Messenger - An instant messaging system. The service allows anyone with a Windows Live ID to sign in and communicate in real time with other people that are also signed in.

- Second Life - An internet-based computer game. The free-to-download client program enables its users to interact with each other by using their avatars (online alter-egos), providing a social network service combined with general aspects of an online world known as a metaverse.

GROUPAMA'S SECOND LIFE

Jamie Marchant, marketing and communications director, Groupama

"Groupama is taking a radical approach in France by joining Second Life. In France, approximately 90% of young people use social networking sites. Our brand is seen to be very traditional but the group wants to look at our image and expand by appealing to younger customers. Therefore, social networking plays an important role. We did not want to be resented as a corporate body that impinges on social spaces, therefore we have tried to infiltrate sites in ways acceptable to users. We are using our large sponsorships in France as a subtle way of raising the brand awareness."

First Published in Professional Broking Magazine Dec 08 - All Rights Reserved