Companies Ignorant Of Social Networking Sales Impact

Consumers increasingly rely on information gleaned from online social networks to make decisions about new purchases, but companies have been slow to switch-on to this phenomenon, says analyst group Gartner.

In a report, “User Survey Analysis: Consumer Marketing Using Social Network Analysis, Worldwide, 2010“, released this week, the analyst explores how consumers use social networks to research new purchases.

The analyst said that it based its findings on research conducted late last year, which identified the different roles that social network contacts can play in influencing buying behaviour.

“Our survey results showed that one-fifth of the consumer population is composed of ‘Salesmen,’ ‘Connectors’ and ‘Mavens.’ These are three roles that are key influencers in the purchasing activities of 74 percent of the population,” said Nick Ingelbrecht, research director at Gartner. “Salesmen and Connectors are the most effective social network influencers and the most important groups for targeted marketing based on social network analysis.”

Connectors And Salesmen

Gartner identified “Connectors” as those who bring together disparate groups of people. “Salesman” influence large groups of users and “Mavens” are essentially experts in given specific fields.

The analyst said that it is vital that retailers and distributors understand how social networks affect their sales and marketing operations.

“Companies attempting to use social networks should develop relationships with key customers over a period of time and progressively refine the social network profiles of those individuals. In this way, the most suitable individuals can be targeted with the right information, products and promotions in the most cost-effective way,” said Ingelbrecht.

The analyst added that the tactics to make the most of social networks were very similar to those already employed by many small business owners.  “Retailers who run small shops have instinctively done this with their best customers for years, with the intention that these ‘VIP’ customers will not only buy the new products but recommend them to their friends,” added Ingelbrecht.

Facebook, Twitter

Computer users spent 22 percent of their time on social networks such as Facebook, Twitter, YouTube, Wikipedia and other such websites in April, according to data from Nielsen released in June.

The research firm found social network or blog sites are visited by three-quarters of consumers who visit the web. Moreover, the average visitor spent almost 6 hours on these social websites in April 2010 compared to 3 hours, 31 minutes during April 2009.

Last week is was announced that social network giant Facebook now has more than 500 million registered users, just six years after it was first launched. Facebook founder Mark Zuckerberg described this as “an important milestone”, and thanked users for helping to spread the site around the world.