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The New Symbiosis of Professional Networks:

Social Media’s Impact on Business

and Decision-making

A Research Study by theSOCIETY FOR NEW COMMUNICATIONS RESEARCH

With the support of

Leader Networks

and

SAP

Researched and authored by SNCR Fellows Donald Bulmer of SAP

and Vanessa DiMauro of Leader Networks

February 2010

© 2010 Society for New Communications ResearchAll rights reserved. Printed in the United States of America.

SNCR PRESS

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Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Detailed Survey Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

About the Research Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

About the Sponsors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

CONTENTS

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ACKNOWLEDGEMENTS

The team of SNCR Research Fellows included Donald Bulmer of SAP and Vanessa DiMauro of Leader Networks. We also

thank our Research Chair Dr. Nora Ganim Barnes.

The Society for New Communications Research thanks its volunteer Fellows for their work on this project and

SAP and Leader Networks for their support in making this study possible.

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PREFACE

The convergence of the Internet, Web 2.0, and mobile technologies has created a disruptive shift in busi-ness. The era of Business-to-Person (B2P) communications driven by all things social (social media, social networks, and social influence) has emerged as a new model for engagement, and Social Media Peer Groups (SMPG) have evolved to take important and influential shape in a new business and economic environment.

This shift has disintermediated many long-standing marketing, communications, and selling beliefs that have traditionally guided how companies interact, support, and collaborate with their customers. We now work in an environment where companies have diminished control over the reputation of their brands, products, and services as the wisdom of crowds increasingly dictate the rules of reputation management and selling. Through the use of social media, customers and prospects now have an almost instantaneous platform for discussion of their ideas, experi-ences, and knowledge. Increasingly, the use of social media is playing an important role in the professional lives of decision-makers as they utilize the tools and mediums before them to engage their decision-making processes. The social nature of decision-making has increased with impressive strength, connecting generations of professionals to each other—changing the dynamics of customer relationship management, marketing, and communications—forever.

In today’s global environment of a vast network of seamlessly connected devices (one billion people con-nected to Internet and four billion mobile phones), information has the capacity to travel at a business velocity never before seen. More than four hundred million people are sharing billions of pieces of content and experiences each week via online exchanges. Communities of practice, professional networks, email, and SMS are among the tools that enable multi-channel access for individuals (employees, customers, partners, and suppliers). We are finally a part of the long-promised global virtual and collaborative work environment.

Online communities and professional networks have arguably changed the way we do business and are, in themselves, new ecosystems, virally creating communities within communities that drive brand recognition and brand experience—beyond the control of most companies to manage. Professional networks facilitate vast interactions, connections, and networks of people by enabling collaboration anywhere and at any time.

Through this research, we focus on professionals’ use of social media—and it all comes back to the strength of the relationship. Human relationships and peer-to-peer decision-making are inherently interrelated. Traditionally, we make decisions about who we trust in work settings based on a number of factors—one often being proximity. With social media, proximity is often superseded in the trust factor by relativity or like-mindedness. Is this person knowledgeable, credible, believable? Do we share the same views and networks—online or offline?

Because belonging to a peer network or online community requires us to perform publically, to share our background by way of a profile, to display our professional connections and networks, trustworthiness is, in many cases, more tangibly determined. Peer groups can now be formed by idea sharing and virtual collaboration as easily as the proximity-based groups that often form in office settings.

Enter the era of Business-to-Person (B2P) communications and the emergence of Social Media Peer Groups (SMPG) .

Through the use of professional networks and online communities, decision-makers are connecting and collaborating with peers, experts, and colleagues far and wide in an on-demand environment, about the issues that keep them up at night. The impact of these far-reaching business networks is becoming clearer every day as mil-lions of consumers, partners, suppliers, and businesses discuss and share their professional experiences with each other with increasing levels of trust and reliance. It has long been known that peer endorsement is the single greatest decision-making accelerant. Through social media, peer influence cycles are happening at a velocity never before seen and, in many ways, companies are losing the ability to control their messages. They need to get back into the relationship cycle, but on the terms set forth by the SMPG. Participating in the SMPG relationship requires a behav-ioral change on the part of organizations—one dominated by valuable content and genuine contributions, transparent honesty, and a commitment to follow where the decision-maker wants to lead.

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A great deal of attention and research have been devoted over the last few years to evangelizing social media as a new form of customer-centric relationship building. Building a network or using social media to deepen customer intimacy has become the mantra of today. However, what is often overlooked is the impact of social media to change behaviors, and the potential to use social media to impact a professional’s decision-making processes. While everyone is endeavoring to capture the mindshare of the buyer, few understand what success truly looks like.

In an effort to begin to better understand the impact of social media on business, we conducted research to examine the role that social media has on decision-making among business professionals. Specifically, we sought to understand the following:

• Is social media typically regarded as a trustworthy source of information for professionals? • Does social media offer effective tools to access information, advice, and engage in professional col-

laboration? How do they compare to traditional off-line networking? • What are the tools and sources of social media that professionals rely on to make decisions? • Will social media change the business and practice of enterprise-level operations?

The methodology for this study involved a mixed-methods approach supported by quantitative data gathered via an online survey, which was completed by 356 professionals. The survey included questions designed to help the researchers better understand respondents’ perceptions of and experiences with social media in support of their decision-making.

Following the survey process, in-depth telephone interviews were conducted with 12 professionals using a semi-structured interview guide. The researchers used an ethnographic research process to explore the role of decision-making to better understand the survey results in context.

The demographics of the respondents included:

• 23 percent of respondents identified themselves as CEO of their organizations; nearly 50 percent as “Director” (24 percent) or “Manager” (24 percent)

• Company size ranged from less than 100 to more than 50,000 full-time employees• The age of the respondents was well distributed, with the greatest proportion in the 36- to 45-year range• 25 countries were represented, with 58 percent of respondents living in the U.S.• All respondents were either the decision-makers or influenced the decision process within their compa-

nies or business units

Which of the following categories best describes your professional role in your organization?

EXECUTIVE SUMMARY

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Which of the following best describes your responsibilities in making decisions on products and services in your company or organizational unit?

Key findings included:

• Professionals tend to belong to multiple social networks for business purposes• The “Big Three” social networks, LinkedIn, Facebook and Twitter, have emerged as professional

networks• Mobile is emerging as a frequent professional networking access point• Traditional decision-making processes are being disrupted by social media • Professional networks are an increasingly essential decision-support tool• High levels of trust exist in information obtained from online networks• Changes are taking place in organizations’ internal and external use of social media• There is a recognized need for peer input in decision-making.• Connecting and collaborating are key drivers for professionals’ use of social media.

Additional findings included:

• Final decision-makers are more likely to indicate that they conduct research via a search engine (82 percent vs. 70 percent of Decision Supporters)

• Those professionals with more networks are more likely to gather opinions through their online network, read blogs and query the Twitter channel as early steps in the decision process

• Younger respondents are more likely to read a company blog and to query the Twitter channel vs. older demographics

The following report details the data that support these findings.

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Professionals Tend to Belong to Multiple Social Networks for Business

Online communities and professional networks are not just for teenagers anymore; they are finding their way into the C-suite and decision-makers’ work practices more frequently. This is evidenced by the sheer number of professionals who report belonging to online professional networks. Half of all survey respondents report participating in three to five online professional networks. Another three in ten participate in six or more professional networks.

Interestingly, in examining the reasons that motivated respondents who belong to three to five professional networks, as compared to those who belong to six or more networks, there was a noticeable trending difference. It appears that many of the professionals who chose to participate in fewer networks also engage online in search of exclusive information, content, and peer connections as opposed to those network “collectors” who are seeking expo-sure for marketing and brand-building purposes.

The interviews also revealed that early adopters tend to join many networks in order to learn about them and see if there is a “good fit” for their business needs. This trend suggests that one’s online professional behaviors are largely shaped by individual goals that are not too dissimilar from many professionals’ in-person networking behav-iors: Some choose intimate groups for idea exchange and peer connections, while others focus on larger venues to achieve wider exposure and increased marketing velocity.

The Big Three Social Networks Have Emerged as Professional Networks

The emergence and dominance of the popular Internet sites LinkedIn, Facebook, and Twitter have taken shape as vibrant professional networks of mass “individuals” sharing experiences and collaborating around personal and professional issues, ideas, and interests.

DETAILED RESEARCH FINDINGS

“I find that I will network offline at events and meetings where I establish connection with many people and I use online tools to follow up and maintain contact. I may meet 20 or so people at an event and then immediately then put them into Plaxo or LinkedIn to keep and maintain connection. I try to maintain my status and activity regularly to keep engaged and keep people informed.”

Alan McNabb, Worldwide Vice President, Customer Advocacy, NCR

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These “networks of people” or Social Media Peer Groups (SMPG), as we have defined them, are changing the dynamics of social and professional influence.

● More than 90 percent of respondents indicated that they use LinkedIn and half reported using Face-book.

● Interestingly, Twitter and blogs were frequently listed as “professional networks.” ● Hundreds of other networks were mentioned, many by only one or two respondents.

An overview of key membership and usage statistics of the top three networks provides an interesting picture of growth that supports these findings.

● LinkedIn: LinkedIn has approximately 50 million users worldwide in 200 countries. Member-ship in LinkedIn is growing at roughly one new member per second. When LinkedIn launched in 2003, it took 477 days (almost a year and four months) to reach its first million members. The last million took only 12 days. Executives from all Fortune 500 companies are LinkedIn members. (source: http://blog.linkedin.com/2009/10/14/linkedin-50-million-professionals-worldwide/)

● Facebook: Facebook has more than 400 million members, with 200 million who log in at least once per day. The fastest growing demographic on Facebook are 35 years and older, and according to Facebook more than five billion pieces of content (Web links, news stories, blog posts, notes, photos, etc.) are shared across the network each week. (source: http://www.facebook.com/press/info.php?statistics)

● Twitter: Twitter has more than 75 million members with the segment of 45- to 54- year-olds being the top demographic, and 25- to 34-year-olds following closely behind at second.(source: http://themetricsystem.rjmetrics.com/2010/01/26/new-data-on-twitters-users-and-engagement/#comment-1562)

The remaining group of professional networks identified by respondents in the study identified hundreds of more specialized networks associated with role and function (e.g., CIO, CMO, and developer communities); industry associations; and multimedia groups that have formed around sites like YouTube.

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Mobile Is Emerging as a Frequent Professional Networking Access Point

The convergence of the Internet, Web 2.0, and mobile technologies has taken significant shape over the last 18 months as people increasingly rely on 24/7 (anywhere) access to information, relationships, and networks all around the world.

As smart phone technology, bandwidth, and mobile applications evolve, the impact on social networking will be dramatic. Today there are more than four billion mobile phones in the world vs. one billion people with Internet ac-cess. Facebook reports that there are more than 100 million active users currently accessing Facebook through their mobile devices. People who use Facebook on their mobile devices are almost 50 percent more active on Facebook than non-mobile users. There are currently more than 200 mobile operators in 60 countries working to deploy and promote Facebook mobile products. (source: http://www.facebook.com/press/info.php?statistics)

The survey research findings include:

● Nearly all respondents access social networks on a PC or Mac. ● Close to half also access social networks using a mobile device. ● Those who use multiple networks are more likely to access them using mobile devices. ● Younger respondents are also more likely than older respondents to indicate that they access net-

works through a mobile device.

What devices do you typically use to access social networks? (check all that apply)

The research findings also suggest that usage of professional networks is increasing as professionals who engage in multiple networks report greater decision-support activities online. Essentially, those who engage online more frequently tend to report greater returns from their peer network than those who do not engage online as fre-quently. As with any relationship-building activity, returns come over time as relationships and trust are evolutionary and efforts must be expended in order to reap the rewards.

Three quarters of the survey respondents reported that they visit their social networks at least daily, and 40 percent visit a network for work reasons many times each day. All respondents indicated that their usage has increased over the past three years. The research also found that those professionals who belong to other online professional networks are more likely to visit many times per day.

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Traditional Decision-making Processes Are Being Disrupted by Social Media

The research also suggests that the use of social media/social networks to inform decision-making plays a starring role in the process as professionals increasingly rely on their networks to inform and validate their deci-sions. Prior to the emergence of online communities and professional networks, decision-makers were limited to information gathering mainly through the people they knew and trusted. Other steps taken have been to research by either contacting the company directly or searching for them online, or through secondary sources such as industry analyst reports. The actual customers or clients a decision-maker contacted was limited to either the reference list supplied by the company itself, or through peer word-of-mouth. There were few occasions where a decision-maker could query customers or clients in a quick and transparent way—until the advent of social media. Now, if decision-makers want to learn more, they can either go public via networking tools like Twitter to broadcast a request for information, or they can leverage private-gated communities such as a group within LinkedIn or an industry-practi-tioner private community. This information-gathering channel now accelerates and clarifies the answers to support the decision.

Be it crowd-sourced or the ability to access trusted peers quickly and globally, the decision-making process is fundamentally different due to social media. The reliance on online networks to support decisions is especially significant for people who utilize multiple networks of three or more.

Additionally the research found that:

● Final decision-makers are more likely to indicate that they conduct research via a search engine (82 percent vs. 70 percent of decision-supporters).

● Those professionals with more networks are more likely to gather opinions through their online networks, reading blogs and querying the Twitter channel as early steps in the decision process.

● Younger respondents are more likely to read a company blog and to query the Twitter channel vs. older demographics.

These trends represent a clear indication in the shift of company control of messaging (e.g., Websites and blogs) as decision-makers broaden their reach to peers, networks, and community to support their decision-making process. For example, one interviewee described her process of utilizing professional networks to explore a deci-sion point.

“My online social networks certainly influence my thinking about trends and issues that are important to me. There is also a great indirect influence on the decisions that I frequently need to make or issues that I need to address.”

Alan McNabb, Worldwide Vice President, Customer Advocacy, NCR

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She reports:

“I go in search of who in my professional network would have information that I’m looking for, and then I search on the company, see how their business is doing, see some of their recent press releases or product awards. I take all those pieces and put them together to make my decisions.” Tanya Laughlin, Marketing Manager, EMC

Professional Networks are an Increasingly Essential Decision-support Tool

Consistent with the longstanding notion that peer endorsement is the single greatest decision-making ac-celerant, the research found that colleagues and peer networks rank as among the highest forms of influence to any decision process, with three-quarters of the survey respondents reporting that they rely on professional networks to support their business decisions. This question was designed to isolate the importance of professional networks in general and did not distinguish online vs. offline.

Nearly all respondents indicated an increased reliance on professional networks over the past three years with approximately 40 percent of respondents reporting that seeking peer referral, reading blogs, gathering opinions through an online network, and looking the company up on a social network are all steps taken to inform their deci-sions.

The effects of the economic recession that began in 2008 subjected many companies and business lead-ers to unprecedented circumstances and pressures as they worked to adjust to new business realities and changed market landscapes and new customer buying behaviors (business and consumer). This research cannot attribute the increased reliance on professional networks to support decision-making directly to the recession, however, it is clear from the supporting interviews that accessibility to industry colleagues, peers, and customers (online and offline) to exchange ideas and experiences have been extraordinarily important to adapting to new business reali-ties over the past 18 months.

“I recently relied heavily on an online professional network to help me solve an internal technology issue that otherwise would have cost me several thousand dollars to fix. I approached solving the problem by selectively contacting people whose opinions and experience I value. It is great to get fast and timely insights that I can’t get any other way.”

Perry Hewitt, Director, Digital Communications, Harvard University

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According to one interviewee, social media usage in a professional domain has been accelerated by the downturn. He reports, “The recession has accelerated the importance for us to use social networks to engage with customers and understand their issues and challenges. Our customers are pushing us into this space,” said Alan McNabb, worldwide vide president, customer advocacy, NCR. This sentiment was echoed by many of the respon-dents in various forms throughout the interviews. While use of professional networks was growing and becoming more widely adapted before the recession, its use has potentially been accelerated due to a need many organizations have to innovate without increasing expenditures.

“The recession has opened the minds of executives and administrators at many companies and institutions. The world has changed and has required organizations to look at and think about things differently. My mandate is to develop a strategic, credible and thoughtful approach to a world where communications is turned on its head.”

Perry Hewitt, Director, Digital Communications, Harvard University

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High Levels of Trust Exist in Information Obtained from Online Networks

The research also indicated that offline networking is strengthened by online engagement as an activity to extend relationships and collaborate; many of the interviewees described how they often “blurred” the lines between online and offline networking and collaboration. Some spoke about how they “met” a peer in an online community forum exchange and then met them in person at an industry event; others described how they typically use LinkedIn to connect with someone after an initial in-person meeting in order to sustain connections. Interestingly, there was interplay between the different networks as well. Those who connected with peers on Twitter often reported following up the online interaction with a LinkedIn search to research that person’s background. Others mentioned the impor-tance of the profile feature in gated online communities as a way to look up and learn about peers in context as many profiles within gated communities also list a person’s discussion posts and article contributions. Therefore, one could learn about colleagues in the context of their work. Perry Hewitt, director of digital communications at Harvard Univer-sity expounds on this idea:

“At this stage in my career I really care about connecting with smart people who I might not ordinarily get a chance to interact with at the more traditional offline conferences I attend or associations I belong to. Many of the best contacts and professional relationships that I have established over the last few years I have never met in person. They are people I have met through various online forums or groups. I really care about good content.”

Analysis of the research indicates that information obtained from offline networks still has the highest levels of trust with a slight advantage over online (offline: 92 percent combined strongly/somewhat trust; online 83 percent combined strongly/somewhat trust).

There is a Need for Peer Input in Decision-making

“Being able to get to information and reach people who I trust—quickly is the benefit of online profes-sional networks for me!””

Perry Hewitt, Director, Digital Communications, Harvard University

“In one’s professional life, it becomes even more important to get endorsements or positive user reviews when making a work decision—because it is usually a huge ticket item and your credibility relies on it, your job relies on it.”

Mia Dand, Social Media Manager, HP

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Respondents also revealed a strong increase in trust from information obtained through online and offline networks. This increase in trust can be explained as people engage more and gain comfort with online community and professional networking. These data reinforce the reality that online is not a silver bullet by any extent and that online strategies need to complement offline activities. They necessarily go hand-in-hand. However, it is also clear that offline engagement is strengthened by online engagement—to extend relationships and collaboration. Informa-tion obtained from offline networks still has the highest levels of trust with a slight advantage over online informa-tion—92 percent of respondents strongly or somewhat trust offline information, while 83 percent of respondents strongly or somewhat trust online information.

One unique finding from the interviews was the way in which professionals use online networks to estab-lish or reinforce professional credibility. Different social networking tools are used by the sophisticated online col-laborators to determine various information sets. For example, many commented that LinkedIn is the place to look to reveal someone’s professional background—who are they and where have they been in their professional life. Meanwhile, industry-specific online communities were frequently cited as the place to learn about what someone thinks—what is their thought leadership footprint or platform, and to find out if they are trusted by other profession-als. And, finally, Twitter was often cited as an exemplar place to learn about who a person is—what is their “human-ness?” What are they really like as a person and a professional?

Victoria Harres Akers, director of audience development for PR Newswire expands on this idea. “For me personally, it is a huge help if they have an appropriate bio on Twitter. Also, if you look at their last 10-20 tweets, quite often the Twitterer’s knowledge and credibility comes through. Does this person sound like they are speak-ing just off the cuff or do they think about what they are saying? The kinds of responses they offer go a long way in determining credibility online.”

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Connecting and Collaborating is Key Drivers for Professionals’ Use of Social Media

An important aspect of this research was to better understand the behaviors that professionals associate with most when collaborating online. Respondents view online connections are best used for collaboration rather than sales and marketing. This is a stark contrast to the notion that respondents also expect their companies will increase their use of social networks for sales and marketing purposes. Respondents also most appreciate the ability to reach out and connect with others to gain fresh insight, ideas, and actionable information through online connections. Many reported a persistent need for social media to become more integrated into the business and not just a program or a campaign.

During the phone-based interviews, respondents were asked to define what they felt were attributes of suc-cessful professional networks. The responses uniformly suggest that relevant information and content, along with a willingness for people to share ideas and insight were among the most important attributes of a successful profes-sional network and a prerequisite to successful online collaboration. Many reported that they joined communities for content and access to thought leadership, but stay or return over time due to the relationships they were able to form. Moreover, online communities need to be easy to use and understand, unlike their consumer-focused counterparts—fewer features and more selective content sources to meet a busy professional’s need to connect on-demand. Like-minded peers were also frequently cited as a draw to join a professional network—if a peer referred them to join or recommended the network, they would be more likely to join and participate than through a direct marketing message.

Through the interviews the issue of the size of networks was widely debated—what is the right size for a professional network or online community for a decision-maker? Discussions revealed that the purpose of the partici-pation—the business goals, more than the size—determined the relevance of the network. For some, the wisdom of crowd was very important when validating a decision and therefore larger communities or networks like LinkedIn or Twitter gave them the breadth of information gathering to feel comfortable with a decision. This was most frequently the case with the decision-supporters rather than the top decision-makers. So, for example, middle managers within a corporate structure were more likely to use a large network to validate their decisions across the board.

“People who join a professional network are typically much more interested in the connections they can make and in the people that they can learn from. You need to have some content and some issues to focus a group on. But it’s really more about the networking that can take place between people.”

Alan Alper, Editorial Director, Cognizant Technology Solutions

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Meanwhile, interviewees who were senior decision-makers from the C-suite more frequently reported seek-ing out closed networks or smaller peer groups for professional idea exchanges. Reasons ranged from confidentiality issues (they couldn’t have the world knowing what they were researching or thinking about for competitive reasons) to lack of trust in strangers. In closed communities or smaller work groups, the members are more likely to be known personally by the decision-maker so the responses and idea exchanges could be put in context and therefore were ultimately deemed more valuable by senior decision-makers. It is important to note that mid-level decision makers reported either being in charge of relatively smaller decisions or were in search of decision-validation, whereas the senior decision-makers often had to originate a concept or idea for decision.

Changes in Organizations’ Internal Use of Social Media

“If I’m going to join a group or join a community, I want to be somebody who is contributing value. I want to be seen as someone who is helping the cause, not just siphoning... A lot of people want to take and not give, and I like to balance it. I want to give as well as I get.”

Alan Alper, Editorial Director, Cognizant Technology Solutions

“We use social networking tools to build internal peer groups and social communities to maintain a level of engagement with and among employees. As companies took to reduce operations costs in travel and operations, it is important to improve employee community and engagement. We use wikis, collaborative technologies effectively for this.”

Alan McNabb, Worldwide Vice President, Customer Advocacy, NCR

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The research explored the expectations that professionals have for the use of internal social media tools within their companies to increase over the next two years. The research findings identified a clear expectation that social media tools (formal or informal) will see increased adoption, with more than half of respondents expecting their companies to increase social media use to share more content and conduct more company-wide communications in the next one to two years. Less than ten percent of respondents expect to see no increase in their company’s internal use of social media tools.

Not surprisingly, the research found that those respondents with more networks are more likely to predict a number of changes. They believe that their company will increase its use of social media for forums and discussion use, greater competitive intelligence, as a replacement for email, and for more content sharing.

Changes in Organizations’ External Use of Social Media

In an effort to understand how companies will use social media outside of their organizations, we asked the respondents to identify how they expect their companies to use and apply social media for external purposes. More than half of respondents suggested that their companies will use social media for increased marketing programs and content distribution in the next one to two years, and none foresaw a reduction in social media investment.Interestingly, this finding is a clear contrast to the notion that professionals see the use of social media and social networking as best for collaboration and sharing of information for their own decision making support and not for sales and marketing.

“I am using social media tools to understand and to drive us to become more aware of our custom-ers and their environments. We see a lot more of our customers—primarily in the consumer space—doing much more in this area and we need to keep up with them as a matter of maintaining their own expectations of us.”

Alan McNabb, Worldwide Vice President, Customer Advocacy, NCR

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Other notable findings include:

• CEOs and CXOs are more likely to predict an increase in the use of existing professional networks for sales.

• Those with more networks are again more likely to predict a number of changes. They believe that their companies will increase the use of social media for viral/WOM programs, crowd-sourcing prod-uct and service ideas, and using existing professional networks for sales contacts.

• Those with fewer networks are more likely to indicate: “We do not use social media.”• Younger respondents are more likely to predict increased use to research job applicants.• There were no significant differences in predictions of future external use of social media by com-

pany size or decision responsibility.

“There is no question that digital relationships work, but there is a question of whether they work if you have never met or collaborated together on something. If you think about the number of people you have met at various events, you probably maintain contact with about one to five percent of the people you have met. Social media changes that and can make us more efficient.”

Paraic O’Toole, CEO, Automsoft

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CONCLUSION

What Does this All Mean?

Social Media Peer Groups (SMPG) have changed the way we do business as professionals (customers, partners, prospects, and employees). We use social media as a platform for discussion of ideas, experiences, and knowledge-exchange.

As we enter the era of business-to-person (B2P) customer relationship systems, those organizations that harness Web 2.0 technologies and SMPG platforms to enable B2P communications will be the winners. Laggards who do not understand the value of social networking and its appeal to the emotional side of customer relationship management will lose competitiveness and, ultimately, market share. Perhaps most importantly, they will lose the abil-ity to connect and learn from their customers.

Professional networks and business-focused online communities are becoming the new strategic mandate. Effective customer relationships are the core to any successful organization, and the strength of any organization is largely dependent upon the company’s ability to deliver the right products and services to its customers in a timely way. Knowing what customers want and understanding their current and future needs is paramount to increasing revenue and exceeding customer expectations.

Online communities provide a prime opportunity for organizations to get to know their customers more intimately and keep the finger on the pulse of their needs and behaviors. The time is now for companies to embrace communities to help them serve their clients better, faster, and in more cost-efficient ways. Through the use of online professional networks, companies now have an opportunity to forge a dialogue with their customers actively through-out the lifecycle—not just at the point of sale—to learn what they like and don’t like about a product or service.There is nothing more dangerous to an organization’s lifeblood than a group of dissatisfied customers. Yet, often-times, an organization may not even be aware of clients’ issues until they have incurred reputation damage or a trending loss in revenue. By cultivating meaningful relationships online, product development leaders can work with clients to share roadmaps and plans collaboration—and to get early input from the people who would be their buy-ers at a later stage. Marketing can learn what messages are most effective with their constituents and have greater opportunities to educate and inform the customer, not just with shiny whitepapers and marketing newsletters, but by bringing them into the discussion and process of product and content co-creation. Professional networks also offer opportunities to make heroes out of users, enabling them to share best practice and learn first-hand from each other. This is especially effective with enterprise-level support when the key buyer is a C-level executive: Information-shar-ing could result in strategic growth opportunities for all involved.

The era of B2P marketing harnesses the new and deep connections that are forming between customers, products, and their suppliers. SMPGs, associations, and other social networks are now one of the most powerful influencing mediums in the world.

The greatest opportunity business has is to engage in “collaborative influence” via the immediacy of impact through social channels.

Great opportunities exist for many companies to engage with customers in social networks to test, elicit and validate ideas through various forms of “collaborative influence.” This can be an extremely powerful way to capture insights to improve existing products or services and identify needs to that support innovation and business opportu-nities. The move to social or “collaborative influence” requires a shift in sales, marketing, and development philosophy for many companies, however.

Further, it is clear from our research and experiences that challenges will face many marketers and com-municators who endeavor to manage or control social media network content. Companies should be mindful that a primary reason professionals participate in social networks is to collaborate not to be sold to. Marketers should develop social media strategies that do not break or breach the social contract that professionals have when work-ing within their social networks—by avoiding overt sales and marketing campaigns and programs. This is not to say

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that professional networks can’t be leveraged effectively for such purposes, but a shift in behavior is required. Those that embrace transparency are the conversations that customers desire. Consider for example, the power of a gated community for key decision-makers that brings together customers of a product or service together with strategy leaders from within the company. Together, innovation ideas can be tested and explored with the customers and roadmaps built based on the actual needs of the buyers.

No longer do companies need to guess what the decision-makers want, or engage twice-removed customer research projects to find out what the customer thinks. In trusted online environments where the audience is vetted and the rules of engagement are clear, as is the case with most professional networks and online communities for business, companies have an opportunity to make informed decisions for the future-collaboratively with the con-stituents that matter the most to them. The implementation of collaborative influence strategies designed to interact with customers and prospects will find better results in using social networks to effectively build brand experience, opportunities for innovation, and sales opportunities.

Finally, this research suggests that many professionals are collaborating more outside of their organiza-tions as a result of social media than within their organizations. This is a significant and sad realization for many companies and executives who do not fully understand or appreciate the value that can be derived via the adoption of social media tools and strategies for internal use. Companies would be wise to embrace the desire and expecta-tions by their employees to collaborate by implementing social media tools for internal (behind the firewall) purposes to enable greater connections between employees, encourage sharing of practices and experiences, and streamline communication.

“Social media is the new thread in the fabric of everything we do. Not something that is separate that we can grasp and let go of it. You have to deal with it—it is part of everything we do, and must be considered with everything we do. We’re not going to launch a product or PR campaign without social media. If we are not making use of it, need to weave it through all we do.”

Victoria Harres Akers, Director, Audience Development, PR Newswire

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ABOUT THE RESEARCH TEAM

Don Bulmer

Don Bulmer is a 2009-2010 Research Fellow of The Society for New Communications Research (SNCR) and Vice President of Global Communications at SAP AG. As part of the global communications management team at SAP, Don is responsible for leading the Industry and Influencer Relations organization, which includes: IT Influencer Relations, Business Influencer Relations, Global Customer Communities, and University Alliance programs. Don has more than 15 years of multi-national experience leading award-winning marketing, communication and business development programs with measurable effect in accelerating the sales and competitive strength of enterprise technology, Internet start-up, and professional service companies. Don’s expertise includes designing multi-faceted marketing, communication,

and public relations programs to support the launch of companies and the introduction of new products and services that have led to the creation and redefinition of several multi-million and multi-billion dollar, third-party validated market categories. Don joined SAP in 2001. He holds a B.A. degree from the University of the Pacific and a Certificate of Professional Development from The Wharton School at University of Pennsylvania.

Don also serves as a member of SNCR’s board of directors and was inducted into the PR News Hall of Fame in 2009.

Vanessa DiMauro

Vanessa DiMauro is 2009-2010 Research Fellow of the Society of New Communications Research and the CEO of Leader Networks. A pioneer in business-to-business commu-nity building, Vanessa has been creating successful online communities and networks for more than fifteen years. Vanessa is a popular speaker, researcher and author on the top-ics of online communities, social and professional networking, and Web 2.0 for business. With a research background, Vanessa takes the approach of a cultural anthropologist to help businesses effectively use social media to get closer to their customers, generate

revenue, innovation, and tangible ROI. She has both founded and run leading online professional communities, such as Cambridge Information Network (CIN) for Cambridge Technology Partners, Computerworld Executive Suite and CXO Systems’ Peer Visibility Network. She consults with many organizations on Web 2.0 for business, and has a blue chip client list that includes Cisco, Cognizant, EMC, LexisNexis, The Palladium Group, and SAP. Vanessa also serves as an Executive-in-Residence at Babson College, for the Olin School of Management. Women in Technology International (WITI) named Vanessa DiMauro one of “Boston’s Most Influential Women in Technology.” She holds both a B.A. and an M.A. from Boston College.

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Society for New Communications Research (SNCR)

The Society for New Communications Research (SNCR) is a global nonprofit 501(c)(3) research and educa-tion foundation and think tank focused on the advanced study of the latest developments in new media and communi-cations, and their effect on traditional media and business models, communications, culture and society.

SNCR is dedicated to creating a bridge between the academic and theoretical pursuit of these topics and the pragmatic implementation of new media and communications tools and methodologies. The Society’s Fellows include a leading group of futurists, scholars, business leaders, professional communicators, members of the media and technologists from around the globe – all collaborating together on research initiatives, educational offerings, and the establishment of standards and best practices.

SAP is the world’s leading provider of business software, offering applications and services that enable com-panies of all sizes and in more than 25 industries to become best-run businesses. With more than 92,000 custom-ers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol “SAP.” For more information, visit www.sap.com.

Leader Networks is a strategic research and consulting firm that specializes in helping clients harness the power of new digital rules and tools to drive measurable business benefits from social media and social leadership. We work with companies to create the strategy for online communities and professional networks, create rewarding business models, and shape the operational best practice and user engagement to help companies launch and grow a business focused online community or professional network.

ABOUT THE SPONSORS

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