Social Capital

Why is social so important to the business?

In a recent study of purchasing managers by IBM, it was found that 57% of the decision-making process had been concluded before the purchaser had even engaged the vendor(s). So where are people getting their data ? From this point in time forward, any customer or prospect will be able to pick up the phone and do a reference check through a trusted source in their network on every person, product and company . This level of transparency in the market will demand new levels of product and service excellence from the enterprise. In fact, company stock market multiples will depend on it.

People, products and companies that deliver real, measurable and reference-able value will wield a major competitive advantage in the marketplace. Their brand will resonate strongly and quickly through taught professional and social circles. Time to market will be dramatically impacted. Case in point, the rate at which iPhone and iPad penetrated the market . Great product + great network = record revenue growth in record time.

Organizations must pro-actively identify, engage and nurture critical relationships with customers, prospects and partners. They need to establish connections and enhance brand at both the organizational level and at the individual employee level. Fostering relationships at these layers will increase opportunity pipeline, reduce sales cycles, increase initial customer commitments and reduce the selling general and administration cost of sales; driving profitability and shareholder value. These relationships are an enormous asset and can range into the millions for large enterprises. For smaller organizations with fewer relationships, each relationship is even more precious. In many ways these relationships are a leading indicator of an organizations “goodwill” and brand presence in the market.

Alternatively, companies that do not create value will face increasing scrutiny and the accompanying risk to their business. Their social brand can diminish quickly, their sales cycles lengthened because of lack of trust, initial customer commitments will be reduced, cost of sales increase and profitability and share holder value eroded.

It ia a strategic imperative that corporate leadership identify, grow and capitalize on these assets in the marketplace across three major axis. Hiring, marketing and selling.