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Business / Industries

Social networking sends a message to business

By Yu Ran in Shanghai (China Daily) Updated: 2012-11-26 11:20

Social networking sends a message to business

A man browsing Sina Weibo, a Chinese Twitter-like micro-blogging service. The majority of well-known brands and large enterprises have registered micro-blogging accounts to release updated information about themselves and their products to attract the attention of Internet users. [Photo/China Daily]?

Applying social technology into the daily operations of businesses is increasingly popular because it is seen as a great way to improve communications and collaboration between enterprises and customers at a reasonably low cost.

More than 1.5 billion shoppers around the world have an account with a social networking site and almost one in five online hours is spent on social networks, increasingly via mobile devices.

Whether discussing consumer products or organizing political movements, people around the world are constantly using social media platforms to browse and share information.

"The HR department started posting recruitment notices on social forums including Weibo, a Chinese Twitter-like micro-blogging service, and Weixin, a social mobile application, to attract more applications from the public without spending any money," said Zhang Guanjin, the manager of Shaoxing Jinyong Textile Co.

Zhang added that social applications have been widely used by his company for such tasks as organizing events among employees, communicating with foreign clients and receiving feedback from domestic customers.

The majority of well-known brands and large enterprises have registered micro-blogging accounts to release updated information about themselves and their products to attract the attention of Internet users.

Consumer-facing companies quickly recognized that social technology provides entirely new ways of connecting to customers and can be highly effective in gathering rich, unfiltered insights to guide product development and create precisely targeted messages and offers.

"With the Internet being recognized as the most convenient communication tool, it is time for enterprises to make use of social technology to develop higher profits and lower costs," said Zhang.

The impact of social technology on the economy and its potential to create value across industries is just beginning to be understood, according to a new report by the McKinsey Global Institute, McKinsey's business and economics research arm.

The report showed that while 70 percent of companies are using social technology in some way, very few are anywhere near achieving the full potential benefit.

By fully implementing social technology, companies can raise the productivity of "interaction workers" (high-skill knowledge workers including managers and other professionals) by 20 to 25 percent, MGI estimated.

"There's rightly a lot of focus on the big opportunities for companies to use social media to connect with customers. But we find the opportunities for companies that apply social technology across the organization are twice the size," said Chen Yougang, a McKinsey partner and head of McKinsey Global Institute in China.

Chen added when it comes to organizational knowledge, there is a huge amount of "dark matter" trapped in e-mail inboxes that can be made visible to the rest of the organization by using social technology.

Individual firms can gain even more.

MGI suggested that consumer packaged goods companies that embrace social technology across all value chain steps can increase margins by as much as 60 percent by using it to connect with customers and to generate sharper customer insights, as well as by using it to improve the productivity of knowledge workers.

"Capturing the full value available from the use of social technology will be a challenge for enterprises primarily because they will have to transform their organizational structures, processes and culture to become extended networked enterprises," said Elsie Chang, McKinsey partner and a researcher for McKinsey Global Institute in China.

Chang added that applying social technology is also a good way for small and medium-sized enterprises to minimize the expense of expanding communications with customers directly.

As a user of social technology, Huang Xiangxun believes it helped his company Shanghai Haobo Chair Co to continue to profit over the past two years despite the gloomy economy.

"Making use of social forums for building up the reputation of our brands was the first step we took to introduce our products. Receiving advice from the public by having an online survey with prizes was also quite popular," said Huang, who encourages his employees to adopt all kinds of social applications for work if they want to.

Huang added applying social technology is definitely a profitable method of helping enterprises to promote their products, extend the business networks and get closer to customers.

yuran@chinadaily.com.cn

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