Nobody’s actually asked me that in the last 6 months but this issue has stopped almost every commercial social networking project in its tracks.  I’ve lost count of how many businesses have come to me with dubious enthusiasm to push their product or service and gone home sour after picking apart the fundamentals.  Now hopefully this isn’t a reflection of my character and more so a reflection of the relatively intangible value and uncertain path to leveraging social networking for commercial outcomes rather than individual benefits.

So what’s the problem?

I think the need for fundamental mindset shifts are coupled with marketing challenges to form two significant barriers.  That and of course the wad of cash needed to build something like a Facebook application.

When people group together to derive value from one another online I think there’s a point where a critical mass must be realised.  There’s a point where the return is clear and self sustaining – I call it social momentum.  Facebook has done it, but just because there are lots of users doesn’t mean they want anything to do with your business.

I’m concerned about how we get through this phase of web interaction from a commercial standpoint.

There’s a broad spectrum of ways of taking advantage of this movement.

• Some people want to build Facebook-style functionality into their sites to hold richer member or customer profiles and let them do status updates, blogs, comments, and ratings… but do people really want this?  It can look great for you i.e. ‘you care’ and want to give ‘freedom of speech’ to your members or customers – but – how many of us users really want to have accounts across tens or hundreds of sites in order to contribute?  I don’t!  And so I wonder what business value is there in simulating functionality that exists all over the place anyway?
• Another example would be a brave commercial entity devoting effort to setting up a simple forum – knowing very well that this could be a political and media nightmare that damages them.  Well is that where the customer is going to put a complaint (or maybe praise) or will they vent it through rating a Google search result or some other highly visible and highly trafficked area?  In this case the brave organisation may end up with a disused forum that has moderation staff allocated to it…  It is tough to know where you’ll get the value from.
• If you were a real estate company you could build a Facebook application that let prospective home buyers display and rate properties they were considering from you.  But I don’t think these things work for commercial entities because the data is so limited and consumers don’t work in such narrow channels – they’d want to list properties from multiple agencies.  So if you were a real estate company you’d be better off investing in building a universal application that showed your competitors too.

So we hit on a nerve here.

To do something successful you may have to shift your thinking and be open to abuse, criticism, supporting your competitors, sharing secrets and so on… and maybe give benefit to someone other than yourself.  But that’s kind of the essence isn’t it?  If you’re doing something in the social sphere then you need to play to the need of the masses and not that of your organisation.

Will the brave be the ones that are rewarded for their risks in this open new world?  I think so.

If I could give you advice on this problem it would be to play to your own strengths as an organisation and not fear competitors working alongside you.  Use your brand credibility to build something interesting and of social value and the seemingly intangible return will be channelled via increased exposure and association with something hopefully cherished by your customers.  But what that is exactly will need great consideration and advice.

Considering that blogs, forums, and feedback tools are cheap functions to buy then it has to be worth a punt at face value.  Just don’t expect it to work without a serious marketing push, a well seeded base from which to operate, and some ongoing investment.