2/13/2014 | Erik Sherman

New technologies are always coming into existence. Social networking has been on the crest of the hype wave for a number of years now. Venture capitalists have poured money into the sector, which has seen three major IPOs: LinkedIn, Facebook, and Twitter. According to company-reported traffic numbers, more than a billion people check in each month globally, with audience growth still underway.

Social networks seem to offer opportunities for middle market companies, whether for marketing, customer service, support, or sales. But should your company adopt the practice?

The issue is complicated. There are many social networks, each with different uses, audiences, strengths, and weaknesses. The first question is whether social networking actually can help corporations or whether it's just a fad.

There is anecdotal evidence that at least some middle market companies have made successful use of specific social networks. For example, language learning products company Rosetta Stone reportedly saw a six-fold return on Facebook advertising spending, outperforming television ads, between 2011 and 2012. The extended test period included 300 campaigns focused on driving leads and sales.

Incentives and recognitions company Hinda Incentives had a strategy to use Twitter and LinkedIn to drive traffic to the company's website, its largest source of lead generation. Specifically, Hinda focused on sending people to its blog, which showcased expertise and acted as a PR tool. Social presence increased website traffic by 15 percent and resulted in significant sales opportunities.

Neenah Paper brought its marketing to social media because its target customer base of commercial paper buyers was always online. By 2011, the company already had 10 sales reps working their personal Twitter accounts to close new business.

According to a 2012 analysis of 290 midsized companies by market analyst firm Aberdeen Group, a strong majority of the top 20 percent of financial performers made effective use of social media.

  • They "improved sales capabilities by improving pre-sales support, understanding the needs of the customer, and involving appropriate employees at each point of customer qualification."
  • Top companies also "accelerated product development from their Social Business deployments, leading to increased revenue contributions from new products."
  • 43 percent of top companies increased lead generation "through earned media and the ability to better understand the needs of potential customers."

In one respect, adopting social networking should be as natural and obvious as email, websites, and telephones. However, there is a twist. New social networks regularly develop and appear on the scene. A middle market company has finite resources - where do you best spend them to create a social business?

Start With the Minimum Level of Engagement

You should have a Facebook page and a Twitter account. These channels have become default places consumers and companies look for businesses, though the latter is less of a mainstream play. Experimentation can show how well either might work, but not having them could send a negative signal to customers and prospects. You should also strongly consider a LinkedIn account, particularly if your company operates in the B2B space.

Next, Secure Accounts on the Next Tier of Networks

Get started with Pinterest and Instagram, for example, to secure a trademarked presence, even if you don't have the resources to pursue activity on all of them. Failing to get started here is like waiting too long to get onto the Web only to find that someone else obtained a natural URL for your brand.

Identify the New Social Networks Worth Supporting

Social networking is not static. Friendster and MySpace were once kings of the industry - now they're largely memories. Supporting any network takes time and effort because you have to learn its idiosyncrasies and how to make effective use of it.

One way is to ask your customers and prospects what networks they regularly use. Then you can focus your efforts on the networks where those people are most likely to hear you. Be sure to constantly update this information, asking about new networks as they come to prominence. Consider using a social media monitoring service, as well. Look for networks that discuss topics germane to your business and your competitors. By seeking guidance, direct and indirect, from the people who count most, you can know when it's time to move to a new social networking service: When those people say it is.

Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, Newsweek the Financial Times, Chief Executive, Inc., and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter and circle him on Google+.