(This is Part 1 of a two-part series.)

Social networking may soon overtake virtually every other source as being the most important strategy for lead generation. Have you incorporated this powerful tool into your business?

(This is Part 1 of a two-part series. Read Part 2, "Which social network suits you best?")

Social networking may soon overtake virtually every other source as being the most important strategy for lead generation. Have you incorporated this powerful tool into your business?

What is a social network? According to Wikipedia, social networks are online communities where people can explore interests or activities that they share with others. The key point is that social networks allow participants to interact through chat rooms, instant messaging, traditional e-mail, video, video e-mail, file sharing, blogging and discussion groups. Wikipedia identifies three primary types of social networking services:

1. Directories such as former classmates

2. Means to connect with friends (Facebook, MySpace, Twitter and YouTube)

3. Recommendation systems linked to trust (LinkedIn)

For example, social networks are a great way to stay in contact with family and friends, as well as your clients. Many agents who have lost track of past clients and friends have found them through these networks. These sites also allow you to share pictures of your listings, videos, links to interesting articles, as well as important information for potential clients.

Granted, there are certain risks associated with being online. Whatever you post is there for posterity, even if you take it down. Identity thieves can check your work history. Nevertheless, the benefits of participating far outweigh the potential risks.

Marc Davison, in his column, "Today’s open social a legacy from the past," states that these Web 2.0 applications are now the primary way for today’s new generation of buyers and sellers to connect. Davison argues that many people fail to realize that Web 2.0 "is deeply rooted in good old-fashioned tradition. I submit that if applied correctly, blogs, Twitter and the like could very well be the vehicle by which those old-fashioned ideologies we honor so dearly can be resurrected."

Putting it a little bit differently, Web 2.0 is very much akin to the general store from 100 years ago. People came there to discuss politics, hear the latest gossip, and most importantly, find and maintain personal connection. The way that you participated was simply by being there. Davison’s contention is that places such as Facebook, MySpace, LinkedIn and YouTube serve the same function today as the general store did 100 years ago.

In today’s Web 2.0 environment, having a Web site with your bio, a branding statement and cool technology tools is no longer enough. Today’s consumer wants to get to know you through the actions you take online, not just through the static content that you post on your Web site.

For those who have not joined in the social networking phenomenon, it can be overwhelming. Where do you start? What social networks are really worthwhile? How much time should you spend and where should you spend it? Should social networking take priority over other real estate-related activities? Do you need a blog or is a profile on Trulia and Zillow a better alternative? Can spending all this time online actually translate into closed sales?

The answer to these questions depends upon what you want to achieve online, how proficient you are with technology, how well you write, and how diligent you intend to be in terms of regularly participating. Much like the individual who sits at home and avoids interacting in face-to-face activities, if you’re not willing to "be there" and be actively engaged in the social networking process, then this is probably not a good venue for your business development. On the other hand, given the huge proportion of younger buyers and sellers that frequent these various sites, not participating will cause your business to gradually erode as the next generation of buyers and sellers shifts to Web 2.0 solutions for their real estate needs.

The great news about the Web 2.0 environment is that most of the real estate-specific services are either free or very low cost. This means that you can experiment with different services and determine which ones are the best fit for your business.

The most critical factor in your success will be your willingness to contribute to those who visit you online. Bob Burg and David Mann in their book, "The Go-Giver," point out that you can’t expect to earn interest until you put money in the bank. The same is true in terms of Web marketing using Web 2.0 solutions. To attract business, you must provide service that your Web visitors find to be valuable.

If you’re ready to put social networking to work in your business, next week’s article will show you how.

Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate’s Discounters" and "Who’s the Best Person to Sell My House?" Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at www.LuxuryClues.com.

Ross will speak at Real Estate Connect in San Francisco, July 23-25, 2008. Register today.

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