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Social Networking

Some of the most widely used social network software tools, leaders and companies include:

• LinkedIn - www.linkedin.com
• Tribe.net - www.tribe.net
• Facebook- www.facebook.com
• Ryze Business Network - www.ryze.com
• Spoke - www.spokesoftware.com

Of these and the many others, LinkedIn is ostensibly the one that offers the most career related value.

ERP Relationship

These services offer huge potential in the recruiting and HR space. Simply defined, the problem that Social Networks address is effective utilization of relationships. In Employment, the single best ROI new employee source is ERPs or Employee Referral Programs. As a benchmark, good ERPs generate 40% of hires. How valuable then are well developed social network tools if they empower recruiters and job seekers alike with the same type of success?

Social Networks Defined

Essentially, social network software tools such as those provided by these companies provide ways for people to meet each other via introductions from 3rd parties. Example: one of the people in my sphere of friends, David, sent me a note from one of his friends, Bruce, who wanted to meet one of the members of my circle, Andrew, for purposes of networking with him for a job. I can respond directly to David, his friend Bruce or to Andrew within my own sphere to see if Andrew wants to take an email, call or appointment from Bruce. The questions I have prior to facilitating an introduction are essentially privacy and trust related issues. I am separated from David's friend by one degree of separation. In this case, I don't know Bruce. Bruce is separated from my friend, Andrew, by two degrees of separation.


Since Andrew is a high level acquaintance of mine, a President of a company that Bruce would ultimately like to work with, I have some concerns about forwarding his message. One of these concerns includes privacy, and maintaining Andrew's confidence so he is not bothered by "sales" calls that he might not be interested in. Another concern is that David and I are being used in that we receive no direct positive benefit by having enabled or facilitated the communication transaction. This latter concern would be mitigated if David, and more importantly, if I received some benefit by enabling the transaction.

The Value of Referrals/Testimonials

The good news is that David can attest to me on the integrity of his referral, Bruce, who is asking me for an introduction. Ultimately, the best referrals then are those where the proposal value is clearly articulated to all parties concerned. Referrals and testimonials are also about building "relationship capital". Do you have an account? What is your relationship net worth? Have you over used your relationship capital and have negative assets in your account, are you bankrupt?

What's Lacking in Networking and Sales Calls (Recruiting Calls)

Mostly, it's common sense - a basic understanding of "What's in it for me?" Further, if the interest is expressed as an ongoing transaction, where the connection or relationship is perceived to be mutually valuable and capable of growing, then a basis for an ongoing relationship is established - let's call this the "relationship reciprocity" principle. The relationship reciprocity principle applies just as much to situations with one or zero degrees of separation. Today, we all know you can call somebody you know, but there is no guarantee they will call you back. You must have a compelling value proposition.

Exchange vs. Request

Another way of positioning inquiries or requests for introductions is to look at them as an exchange vs. a request. If I call you and explain that I am collecting valuable information of mutual interest, and that I would like to meet (you or) some one in your sphere of influence who is also likely to be interested in the information collected, and promise that I will give you and that person the results of my data collection, then I have created a scenario of mutual benefit. This relationship building technique works very successfully when the transaction is viewed as an ongoing process vs. a one shot request for information, with no expectation of return.


Social networking companies are multiplying rapidly like rabbits and somewhat reminiscent of the dot.com days in that in several cases, the big question relates to "where is the revenue stream?" Google has developed its own social network software, Orkut, and Yahoo and Microsoft are establishing their own social networking technologies. The coming years will be telling in terms of which companies will be the long term survivors. Most of the "Relationship Capital" companies derive revenues from advertising, events, or complex enterprise/server technology. The CRM and ERP folks are all interested in who the surviving players will be and are looking to align themselves right now with these companies. Ultimately the question is, "Is this an example of technology in search of a viable revenue stream?", and "do they offer true value in sales process coordination and acceleration". Try one or several of them, you might like them...

Thank You & Good Luck!

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