Every company I talk to these days wants to embrace social media applications such as Collaboration, Blogs, Wikis, Forums, Ratings, Reviews, Facebook and LinkedIn type applications, third party widgets etc. in some form or shape across their web properties on the intranet, extranet and internet.

Social capabilities such as Blogs by employees and customers, product technical reviews, ability for customers to review and rate products etc., certainly help in increasing mindshare and provides valuable feedback that could be used for product development and managing perceptions of a product or a service etc.

It is however imperative that companies must evaluate the benefit of using such social media tools and understand the strategic alignment of such applications with their business process before jumping headlong and implementing a social media platform.

The benefits of using such social tools depends on several factors such as the industry vertical the company is in, and the type of goods and services sold by the company, its distribution channel and selling process – whether the product is a “Made to Stock” item or is it a “Made to Order” or “Engineer to Order” item, including the cycle time from order to delivery.

For example, new age products such as gaming gizmos or companies in the services industry such as travel, hospitality, media and entertainment industry can reap great benefits from social participation through customer reviews and ratings. 

However a company selling industrial consumables or undifferentiated commodities may not be able to get as much benefit. This is because the buyer would know the exact technical specification of the product and would engage in a transaction only if the product conforms to or surpasses the stated standards. Think about this – would an 87 octane gasoline differ from one manufacturer to another? Adding a blog or a rating and review system may not in any way impact the sales of the product.

Likewise, industrial buyers also usually go into a long term arrangements with their suppliers and deliveries are made to predefined schedules. With Just-In-Time supply strategies, ability to configure the velocity of the manufacturing to the velocity of demand etc., social tools may provide only limited benefit.