Businesses grapple with social networking

02.11.2011

Still, social networking interactions with customers are useful, he said. Ten years ago companies would pay US$150,000 to get a focus group of customers together. "You don't have to do that anymore," Samano said.

The companies have had varying degrees of success in turning their social networking followers into sales. AmazonWireless, for example, doesn't find social networking tools to be particularly efficient in driving traffic that converts to sales on its site, Camp said.

T-Mobile, however, has had great success for some products converting social networking connections into sales. It launched Bobsled, a voice-over-IP product, initially for Facebook users and executed the launch by briefing only four high-profile technology media outlets. Those articles spurred 200 others, and T-Mobile began signing up Facebook users at a rate of 3,000 people per hour within the first hours, Samano said. He didn't discuss the impact of having to temporarily due to a potential conflict with Facebook.

Parallels, which offers virtualization software that lets Mac users run Windows applications, used social networking to turn a mistake into an opportunity that resulted in some of its best sales results for repeat customers. Last year it had planned a coordinated launch of a new version across retail stores, online merchants, resellers and catalog sales, Johnston said. But the product mysteriously turned up early on the shelf of a store. After a fan posted a photo online, customers began chattering about it on Twitter and Facebook.

The company decided to launch the product early just for existing customers and used social vehicles such as Twitter and its blog to tell customers about the early availability. The result was an upgrade rate that was more than five times better than for any previous upgrade launch, she said. In addition, at the official launch, the company had more new licensees than expected, due to the buzz, she said.