Word of Mouth, Social Communities and the Web: Money savers and Influencers

Leveraging Social Capital has become a target for corporations; for one it helps interact and appeal to customers,  on the other hand, the mass appeal of making connections online makes social networking an attractive channel for businesses that want to extend their word of mouth reach, brand awareness and influence.

Business social networks that are niche or vertical specific have an incredible potential that all businesses should profit from, however, many are still eating the dust and have not yet discovered the wonders of the Web 2.0.  At the same time, social networks that have highly influential people with loads of Social Capital within them, benefit from this presence.

Facebook, for example, is a phenomenon. People join the network mostly through word of mouth, recommendations, online reviews, for its coolness, for the pleasure of having your very own network, with your very own contacts and community.

Why do people stay in Facebook? The social network gives people freedom to express themselves, share information, poke eachother, write on people’s walls, invite people to events, etc. Networks grow, so does the influence, reputation and number of people who continue to join due to such success.

And this is particularly why I wanted to bring some facts to your attention. A new study from Rubicon Consulting gives us the nuts and bolts of why social networks and word of mouth are extremely influential factors in consumer purchasing decisions.

I liked how Marketing Pilgrim narrowed it down in a post and this is the well-supplied synopsis:

• The Web is the #2 resource for customer support information, after user manuals. It ranks ahead of calling the manufacturer or asking a dealer.
• Website categories that get the most daily usage are search, social communities like MySpace and Facebook, general news websites like      CNN.com and NYTimes.com, and online banking.

• The websites that Americans value most are (in order), Google, Yahoo, YouTube, Wikipedia, and Facebook.

• Although Yahoo’s financial challenges have generated a lot of press attention, it continues to have a very large and loyal following.

• Facebook appears to be ahead of MySpace in terms of number of users in the US, and perceived value of the site.

• Despite extensive publicity, the community sites SecondLife and Twitter reach only a few percent of US Internet users.

• Democrats are more active online than Republicans. Democrats are more likely to participate in online communities, and say they are more  heavily influenced in their voting decisions by information they find online.

• Young people (age 22 and under) account for about half of all the content and comments posted online.

I’d suggest you give a quick glance at Rubicon’s study, there’s a lot more to it and alot more interesting facts you could benefit from.

I’d like to close with a quote from Harry Max of Rubicon Consulting itself, he declares, “Many companies downplay the importance of online communities because only a few percent of all Internet users contribute to them heavily. What they don’t understand is that most other Internet users read those reviews and rely on them heavily when making purchase decisions. Taking good care of online communities can be a huge money-saver for companies trying to get more marketing impact from limited budgets.”

This entry was posted on Friday, October 24th, 2008 at 6:13 pm and is filed under Social Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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