Social Media Sites and Business

Are you handing your clients to your ex-employees and key-competitors on a platter?

The problems with social media sites for businesses is not how much time your employees are spending on their Facebook account…

If you are a business owner, you know your clients are the key to the success (or failure) of your business. Finding good clients, developing strong client relationships, and retaining productive staff is how you have built your business. It is likely that growing your client base and referral network takes up a lot of your “free time”.

So why are you just handing your clients to your ex-employees and key-competitors on a platter?

Social media networking sites such as LinkedIn and Facebook can be used by your employees and competitors to assemble a ‘database’ of your business network. Often, you even require your employees to establish and maintain professional social media accounts, effectively giving them direct permission to create their own network database.

The problem with these sites is that your network database – a one-stop-shop of all the people that make your business profitable – automatically goes with your employees when they leave. Even worse, on sites like LinkedIn your network is provided with an automatic email when your ex-employee updates their profile with details of their new job or business. Not only does your network know your employee has left (sometimes before you have told your network yourself), but your network now has your ex-employee’s new contact details.

An employer would never let an employee walk out with their client list, and then allow them to send a bulk-email to tell them where they are. But this is exactly what LinkedIn does. In any other context the employer would be running off to court to get an injunction.

Another issue with social media networking sites is that they allow third parties to get a very clear view of your business’ client and supplier network. This is contrary to the high level of confidentiality that business owners generally maintain for this key information.

Would you ever consider writing to each of your key competitors and telling them exactly who the key people you deal with are?

This would not cross your mind. For smart competitors in the same space as you, knowing who your key referrers are (the ones you are most ‘linked’ to) is pure gold. It enables them to target people they already know to be effective at referring the right type of business. A few long lunches later by your key competitor, and you may have lost a referrer.

Lastly, social media networking sites are becoming a key tool for recruiters in the search for talent – they are the people actually paying the sites real cash for your key information. What better way to poach talent than to find someone who is already working for a good business and offer them a tantalising new role? LinkedIn is a great example of this – it periodically sends job positions to each user based on their profile.

So by encouraging your employees on to LinkedIn you are effectively condoning them maintaining a permanent CV online, and receiving targeted and unsolicited job advertisements.

This is definitely contrary to your interests, given the costs associated with replacing an employee, (i.e. recruitment, lost productivity, training).

The overarching issue with all social media sites is that they use your information to make money for themselves. They are effectively ‘exploitative’. The big problem with business-based social media sites (or business accounts on other social media sites) is that instead of exploiting your employee’s personal information, they are exploiting your business information. That information is very often confidential, and valuable when assembled into lists and network links.

So what does all of this mean for SME business owners?

We are not suggesting that you abandon social media altogether – the reality is that it is still a useful marketing and networking platform for many businesses. But we are saying that you need to stay one step ahead of the game. That is, one step ahead of your employees and your competitors.

Here’s how we think you can do that:

1. Maintain a comprehensive and relevant social media policy

If your employees are going to use social media, which they invariably are, then you should have the final say over the terms on which they use it. Clearly stating what is acceptable and unacceptable for their social media profiles will ensure that you have recourse if an employee goes rogue. Also, setting out your requirements in relation to your employees’ use of business contacts, and what happens to those contacts if your employee moves on, will give you control over your business’ most valuable commodity.

2. Limit who can use social media within your business

Social media accounts with services that allow the user to build a permanent database of contacts can do a lot of damage if in the wrong hands. Accordingly, accounts with such services should be limited to senior employees or directors of your business. You may think that a junior employee will be unable to do much damage with your contacts because they cannot service your clients or referrers in the way you can, which may be true. But it is naïve to think that another business owner will not ‘mine’ your ex-employee for those contacts.

3. Disable notifications features

Those annoying emails that you receive about “great job opportunities for you” are also being received by your employees who use the same social media sites. Most of those sites have a function that allows you to disable certain notification features or otherwise ‘unsubscribe’ from notification emails. We suggest that you use this function to stop your employees from receiving blatant recruitment material.

4. Improve your business’ website

Redirect all your efforts into your own website. The beauty of your own website is that it’s yours: you own it, and control it. A number of businesses are going this way, and there is an increasing number of apps and add-ons that you can incorporate into your website to provide the same functionality as these sites – with a lot more control over the information. The more hits you can redirect to your website, the more powerful your website becomes. And that power is all yours.

LinkedIn and other social media networking sites have their uses, and can be good for ‘profile’ building. But the question is – can you afford to lose control of your business contacts and spend time building value for another business, the social media site?

Need help putting in place a comprehensive Social Media Policy, or need to update your employee contracts to deal with these issues? Call us on 1300 654 590.

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Published by

Andrew

Lawyer to entrepreneurs and investors