Online networking: Make it work for you

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Writuparna Kakati | 18 Jun, 2009
Does online networking work for SMEs? Many small and medium businesses fail to identify the opportunities online networking can provide. A few, on the other hand, rush out to be a part of the networking craze but cannot get their head around the concept. They don't meet anyone ready to buy and stop attempting the 'difficult' dive.

So, is networking much ado about nothing! But surveys tell a different story. A recent survey, for example, conducted by Contact Marketing & Consultancy found that around 20% of the respondents claimed to get between 10% and 50% of their new business from online business networking while a further 12% stated that more than 50% of their business is the direct result of their online networking efforts. Many other surveys conducted at different times across the world has given the same picture.

Then why our SMEs often fail to reap the benefit of online networking? It is probably because they do not consider the opportunities online networking can provide. Most SMEs fail to understand that online networking does take planning, time and efforts. Online networking can absolutely help a SME grow but it takes time. With the right goals in mind, one can earn, over time, significant benefits from online networking.

Why online networking
Online networking has become a reality because of the ever increasing user base of the Internet. According to the 'Internet Usage and World Population Statistics' for March 31, 2009, around 23% of the total world population uses the Internet; globally, the number of Internet users from 2000 to 2008 has increased by 242.2%. In today's business environment, there are millions of potential customers worldwide and in this scenario, businesses ignoring online networking could miss a lot. For SMEs particularly, including those engaged in exports, which usually cannot afford to establish a wide marketing network, ignoring online networking could be a great blunder.

How to establish relationships
As a small business owner, you should understand that online networking can be used as a potent business-sourcing tool. By networking online, you can maintain close relationships with other enterprises located anywhere in the globe. Unlike physical networking, online networking enables you and your business to communicate with other enterprises on a daily basis. And the best thing about it: online networking requires hardly anything of your marketing budget.

How to choose a network
There are a number of different online networks (such as email lists, forums and chat rooms, virtual world networks, etc), and as a result, it can be difficult to choose the right network for your business. Of course, you can join in several networks but it may be very time consuming to handle so many. So, it is better to plan before undertaking networking for your business. You should have a clear idea about what you want to achieve and which networking format will be the right one that suits your purpose.

Find below some common forms of online networks:

Email and networking: Google Groups, Yahoo! Groups, MSN Groups
Referral and connection: Linkedin, Plaxo, Ecademy
Business networking: Ryze, Bizlink, BT Tradespace, Network 2012
Bookmarking and review: Sphinn, Del.icious.us, Mixx, Digg
Microblogging: Twitter, Plurk, Jaiku, identi.ca
Social Networking: Facebook, MySpace, Orkut, Hi5

Before starting with any of the above type of networking sites, it is important to understand what type of users uses the network. Placing an inappropriate message or advert in the wrong type of network may result in damage of your business reputation. It is therefore advisable to analyze a network thoroughly first before joining it.

How to use network for marketing
In online networking, most SMEs try to treat it as just another sales channel for marketing. This is a wrong concept. Every networking site has its own 'spirit' and it is important to feel that spirit to use a networking site successfully. For example, trying to push advertising and promotional messages to users of a social networking site may be inappropriate. You may consider different types of advertising to place on a online networking site depending on the nature of the target audience:

Email marketing: In its broadest sense, any email sent to a potential or current customer could be considered e-mail marketing. You may send emails to members of a networking site informing them about different special offers, discounts, promotional events, etc.
Viral marketing: Through this type of emails, one can try to increase sales and create brand awareness. Such emails use 'word to mouth' techniques and encourage users to spread the message throughout the network. Viral promotions may take the form of videos, flash, images and even text.
Banner advertising: This type of advertising typically contains static or animated images, as well as interactive media including audio and video element. When users click on the banner, they are linked to your business website.
Link building: It is the process of establishing relevant inbound links to your website. Some networking websites allow keyword rich links to be added. Such link buildings could significantly help in achieving higher ranking with search engines.

How to start online networking
As with all marketing tactics, online networking also requires proper planning and strategy. There are a lot of crucial factors to consider before you start making virtual connections and change your real world:

Planning: Before undertaking online networking, it is necessary to plan properly. You must decide your needs and joining which site will help you to satisfy those needs. At the planning phase, you should have a clear idea about what type of target audience you are looking for to communicate with, how many acquaintances you need, how many networking meeting you can handle per month, etc.
Finding best networks: As we have discussed earlier, finding the right kind of networks for your business is important to benefit from online networking. You should do some online research and try to find out networking groups and associations sharing information with whom can help you achieve your marketing goals.
Be patient: Networking does not ensure immediate results in to form of increased sales and profitability. It takes time to gain contacts and develop strategic relationships, and, as a result, benefits of networking occur over time. It is therefore better to prepare a long term strategy when it comes to online networking.
Get ready: Before you start networking, prepare yourself to answer to queries from other members of the network. Members may ask you about your business, how can you help them, why your products stand apart, etc. Be short and direct and clearly answer the queries. Also ask other members about their businesses, product and and try to collect market information which you think important.
Be selective: While networking, don't get obsessed with building relationships with as many members as possible. It is no use doing that. Just be selective about your efforts, focus on them and get fully involved. Once you make contact with someone, follow up the contacts and do not let the relationship lapse.

In this trying economy, perhaps more than any other time, it is important for SMEs to learn how to navigate online networking and make it work for their businesses. Marketing is all about relationships and online networking is a window of opportunity for SMEs to get millions of potential contacts only a couple of clicks away.