Friday, April 24, 2009

Social Networks: Utilizing Leverage of your companies

I came across this great article from one of my Tweeps (Twitter People). It cites a study done by UC Berkely Haas School of Business Marketing Research which looked at the influence people have on their "friends" on social networking sites.

They found that people who have fewer contacts were actually MORE influential than those who had many contacts. The conclusion was that those with a few close contacts/friends were more influential because their ties were actually stronger and so carried more weight.

"For word-of-mouth or 'viral' marketing, companies would actually be better off trying to diffuse their product through those with a small number of strong ties, instead of those who appear popular, with many weak ties. This is interesting, considering many people (and companies) would assume that diffusion could be maximized by making a product successful with popular people. It turns out that the best strategy is to market to those with the closest friends."

It comes down to the old adage that marketers have been using--it's quality, not quantity, that counts. Work develop strong relationships with your core/target customers and focus your time and efforts on pleasing them. The Pareto Rule comes into use here: 80 percent of your revenues come from the top 20 percent of your customers. Keep those 20 percent happy and satisfied.

More on the study can be found here: http://www.newswise.com/articles/view/551499/

That's all for now. You can follow me on Twitter at: http://www.twitter.com/pjend

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