September 15, 2008, 11:08 AM — Get those customersâ€™ profiles and their networks to work for you as their online identities are usually in more than one social network.
More than mere communication and content sharing platforms, social networks are a source of relevant information to marketers and CRM professionals.
From the most focused ones to those that cater to as many groups as possible, social networks map out the connections that exist among the millions of members and those of their networksâ€™. As a result, the information that social networkers provide on their profiles allow marketers to generate a database of potential customers as well as provide CRM professionals new ways to handle customer feedback.
The importance of understanding how social networks serve the marketing and CRM needs of a company is described by Foster Provost of NYUâ€™s Stern School and Chris Volinsky of AT&T Labs Research in their paper titled, Network-Based Marketing: Identifying Likely Adopters via Consumer Networks, published in May 2006 in the Journal of Statistical Science.
"Consumers are far more apt to buy a companyâ€™s product if they are â€˜network neighborsâ€™ with existing customers. Mining data from â€˜social networksâ€™â€”who talks to whom or who emails whomâ€”could allow companies to pinpoint likely customers who otherwise would be overlooked.
"We provide strong evidence that whether and how well a consumer is linked to existing customers is a powerful characteristic on which to base direct marketing decisions. Our results indicate that a firm can benefit from the use of social networks to predict the likelihood of purchasing."
"Network neighborsâ€”those consumers linked to a prior customerâ€”adopt the service at a rate three to five times greater than baseline groups selected by the best practices of the firmâ€™s marketing team," the study finds. "In addition, analyzing the network allows the firm to acquire new customers who otherwise would have fallen through the cracks, because they would not have been identified based on traditional attributes."
So how do companies build their customer database?
Read on the ways at: www.executivebrief.com/article/crmsocial-networking-extending-customer-contact