Building Social Capital via Online Social Networks
The Facebook Era
I just finished reading a book called “the Facebook Era: Tapping Online Social Networks, to Build Better Products, Reach New Audiences, and Sell More Stuff” by Clara Shih. Shih works for salesforce.com, so if you can get past her slobbing over how great of a product her employer offers, she does do a pretty good job of painting the landscape of social networks and who they appeal to. She then offers up valuable insight into the future of the online social graph and how to use it to grow and manage your online presence. As someone who has been on Facebook and Twitter and who works with younger, technology savvy students on a daily basis, this was a good exercise for me to supplement what I already sort of figured out on my own and also provide some new perspective on the value of what I have already been doing.
The book inspired me a bit so I will write a series of articles on some of the topics I found most interesting. I don’t want to make any promises so I’m not going to say how many articles will be in the series, but in this first blog I am going to talk a little bit about Social Capital.
Every individual has an inherent immeasurable social value or capital. This can be divided into two types of capital: Human capital, including talent, charm, charisma, and other personality traits that may be valuable to our success, and social capital, which is basically the value of our relationships. According to Robert Putnam, a professor of political science at Harvard, “social capital can be measured by the level of trust and reciprocity in a community or between individuals, and is an essential component to building and maintaining democracy.”
One of my good friends who we will call “Neighbor Joe” works in a ticket office at a major venue in a big city. Over the years, Joe has acquired a great deal of social capital by building relationships with other colleagues in his industry. Joe can get free hockey tickets to just about any game he wants through his job. He likes hockey, but he’s not a die hard fan. He is, however, a big music fan so he uses his social capital to barter and trade his tickets for tickets to concerts at the different venues around the city. He also might give free hockey tickets to a bartender friend and receive free drinks at a bar some time.
Joe has a strong network of closely nit interpersonal ties. He fosters these relationships by offering free tickets and trades with his friends. He uses his social capital to obtain free tickets and builds it by offering tickets for free. No matter what though, the people he is trading with; friends, co-workers, family, neighbors, will continue to be his friends, whether he provides the tickets or not.
We all also have an extended network of relationships known as weak interpersonal ties. These are more casual acquaintances; perhaps people you knew from high school, someone you met at a conference, or a friend of a friend. Nobody has the capacity to remember everything there is to know about every weak tie relationship they have, nor the prescience to know which ones might become valuable in the future.
In mathematical sociology, these strong and weak interpersonal ties are defined as information-carrying connections between people. Weak social ties, it is argued, are responsible for the majority of the embeddedness and structure of social networks in society as well as the transmission of information through these networks. Specifically, more novel information flows to individuals through weak rather than strong ties. Because our close friends tend to move in the same circles that we do, the information they receive overlaps considerably with what we already know. Acquaintances, by contrast, know people that we do not, and thus receive more novel information. (1)
In Joe’s case, a weak interpersonal tie might be my sister, whom he met at my wedding. My sister lives in Chicago and Joe is interested in going to Lollapalooza, which is a large concert held in Chicago. If Joe were Facebook friends with my sister, he would know where she lives, and he might ask her on advice on where to stay, what to do when not at the concert, and perhaps where to eat. My sister might find it odd to get a random phone call from a person she does not know. Through Facebook, however, she can instantly match a face to a name, immediately recognize how she knows Joe, and Joe can communicate using a low risk, less intrusive manner.
Social Network Analysis has been around in some capacity since the late 1800’s so the concepts of the importance of fostering and maintaining weak tie relationships is nothing new. Thanks to online social networks that sort of specialize in weak tie relationships such as Facebook, LinkedIn, and MySpace, it has become socially acceptable to maintain those fringe weak tie relationships that we may not have had the capacity to maintain in the past. As Chah states: “By reducing the cost of interaction and the cost of maintaining a relationship, sites like Facebook and LinkedIn help increase our network capacity to include otherwise-forgone fringe relationships.”
So what does social capital have to do with small business? Ah hah! This is where I drop the hook, line, and sinker to get you to read my next article! Think about the Customer Relationship Management (CRM) aspect of a social network. Websites such as Facebook offer a low risk, low cost CRM solution. I used to send Holiday cards to my clients in December. Now if I befriend my clients on Facebook, I may know if a Christmas or Hanukkah is more appropriate. I now know when my client’s birthday’s are, their marital status, and how many children they have. I have a horrible memory so this kind of info comes in handy. When I see a client I can say, “So how is Joan and the kids? Johnny should be driving a car soon, no?” instead of “So how are the wife and kids?”
There are many ways to increase social capital using online social networks. Becoming a fan of a business on Facebook acts as free passive word of mouth advertising for that business. Online social networks can also be used as recruiting vehicles. Just having information about your business in your personal profile along with having a large group of weak interpersonal ties increases your social capital because you don’t have to shove your business down people’s throats for them to be aware of what you do. If you constantly provide status updates, actively participate in groups, and/or write blog entries (wow, look what I’m doing), these updates appear to everyone in your network, as a constant passive reminder of what your business is about.
I could probably write another couple of pages, but if you want to read more, I would recommend buying the book or another similar piece of literature. There are many people writing on the topic… I think the next social networking article I write will be about hypertargeting ads on social networking websites. The idea is sort of like PPC on steroids. With sort of a saturated Pay Per Click market out there, especially on search engines, the value of targeting your advertising to very specific criteria becomes more and more important.
