bMighty: Can social networking replace existing business processes, or is this a new tool?
Rothstein: The answer is a little bit of both. Social networks can change the way business is done. Business travel is an example. In the past, a smaller business that wanted to reach beyond the local market might travel to four or five trade shows each year. It costs $3,000 to $4,000 to attend each show and $15,000 or more each time you get a booth. By the time you're done, you've spent $40,000 or $50,000 on trade shows, and that's only going to increase with travel costs on the rise. Now with a social network, a business can make connections in nonlocal markets and develop partnerships. That doesn't eliminate the need to travel -- connecting via a social network can't take the place of cold calling -- but it is a way to maintain and cultivate relationships at low cost. So you might go to one or two trade shows each year rather than four or five and instead of bucking up for a booth, you might host a Webinar or a virtual trade show. It provides another way of building alliances and generating new business.
bMighty: What types of smaller businesses will get the most value from social networking?
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Rothstein: Every industry has different needs and there are social networks that cater to verticals. As for Sales Spider, we've done very well in a number of verticals, including real estate, construction, technology, printing, and financial services. In researching our user behavior, we find that the members who are exclusively and narrowly local, the neighborhood dry cleaner for instance, are not as active as those trying to reach broader areas or nonlocal markets; I suspect that's because their presence provides them with the network they need.
bMighty: How do you see the difference in the social networking opportunities for large enterprises vs. smaller businesses?
Rothstein: Social networking can help level the playing field for smaller businesses. If your company is on the West Coast and you want to sell on the East Coast, you've got to hire people, you've got to get on a plane, and that's expensive. Social networking provides a way for businesses to establish connections and alliances in new areas quickly and at low cost. Big enterprises have the resources to throw bodies at new regions and customers. What smaller businesses can do it move more quickly and be more responsive to change -- social networks are a way to establish new connections quickly and harness those already in place.
bMighty: How should smaller businesses integrate social networking into their business processes?
Rothstein: Most social networks are free or very low cost, so there's no investment to make [Sales Spider is free]. But to see results does take a commitment of time. The members we see succeed, are very systematic -- they assign employees to focus on specific sales group or regions and set targets for the numbers of sales leads each week. It's important to start the pipeline early, even before there's an identified opportunity; you can't start going after something three days before the deadline. Developing contacts and alliances in new verticals and new regions, starts building that pipeline so it's ready when the time comes.
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