Caroline Ritchie: Facebook can boost business

One evening last week I showed a friend of mine the Facebook page I'd seen for a new cosmetic product.
She had not yet ventured into the land of social networking, being extremely busy and not wanting to waste precious productive minutes ogling people's baby pictures and asinine posts.
When I pointed out the system, however, and how the Likes and Comments expose your business instantly and freely to a massive audience of interconnected social circles, the interest became a little more business like.
Social networking is well researched and well commented on, having taken off in 2004 with the advent of Facebook and some other also-rans. Social commerce, on the other hand, is really just beginning.
Savvy people have been mercilessly ramping their businesses, for free, through Facebook for years. The interface is free, friendly, professional and offers instant exposure to all your friends. In business, that's nice, but the real benefits come through those outside your immediate circle.
In commerce there is an old saying: "People do business with people they know, like and trust." To me, this could easily morph into: "People do business with people on Facebook."
It's simple. Befriending someone on Facebook usually means knowing, liking and trusting the other party as a given. And so the open-ended and potentially vast network of people conducive to your business begins to form.
Immediate pals like your widget out of support, their friends like it, their friends of friends like it too, and before you know it, you've got 33,309,733 "Likes" (correct number as at May 27) on your page and your name is Lady Gaga. Of course the "Like" button is more than just an expression of your personal opinion, it is a subtle and persuasive form of peer pressure and therefore something to be garnered when you're in Facebook to do business.
If all your friends Like something, there is a quiet undercurrent of pressure to Like it, too. The human instinct to belong to the herd- the most powerful sales tool known to man and unrivalled as yet in our evolution. Now, available to you on the internet through the power of Facebook.
Anyone still wondering how Facebook makes money need only look at the thing. Facebook has 500 million members, and growing.
Half a billion potential customers, already online, already classified and categorised through information the users themselves have voluntarily provided.
The ultimate global sales database is right there at your fingertips, for just a few small dollars per click. Social commerce is well and truly here to stay.
The "blending-in" of political commerce, community commerce, sporting commerce and charity commerce will not be far behind.
Caroline Ritchie is an NZX adviser for Forsyth Barr in Napier For sharemarket advice contact her on (06) 835 3111 or caroline.ritchie@forbar.co.nz.
The comments in this note are for general information purposes only. This article is not intended to constitute investment advice under the Securities Markets Act 1988.