I recently spent some time IMing with a reporter about social networking in the corporate world – how businesses can reap great rewards, what potential landmines to watch for – and then I thought, “Hey… what’s in this for me? Why should she be the only one to fill up some blank space with my keen observations?” So here’s the gist of it…

Social networking is a huge opportunity for companies of all sizes to give customers a view of their company and culture. It’s a long-term marketing strategy that’s also low-cost and very efficient. If companies can get customers to identify with their brand, it becomes the ‘cool’ choice for their target market. The more customers identify with the company/brand, the less price-sensitive they become; they are buying the product for reasons other than strictly price, and they’ll leap hurdles to maintain their brand loyalty. And these committed ‘real world’ customers are the best salespeople a company can have – each one influences his/her entire social circle. People tend to put more faith into a recommendation from a friend or family member than they do in an ad or website from the company.

However, it’s got to be a soft sell. An obvious sales pitch is the wrong approach. Your corporate Facebook can’t be like a Sham Wow commercial. That won’t engage potential customers. At best, they’ll ignore it; at worst, they’ll laugh at it and gleefully heap scorn on your company and brand.

Companies who use Facebook and Twitter to put forward information, help their customers, and show a sense of fun and good humor will be the most successful. Of course, you have to make sure that you’re presenting the ‘right’ image for your company. For example, a whimsical and funny approach will work for Apple and many other companies but not so well for, say, Dow Chemical. But Dow could have a presence that is oriented toward their target market, like chemists and industrial purchasing people. Getting the right ‘tone’ initially is crucial; you’re creating your company persona, and if you’re 180 degrees off, that’s hard to fix.

Of course, the prospect of two-way communication with customers can be very scary – even companies that understand the power of social networking and know that they have to be in the game are proceeding cautiously. A clumsy, ‘hard sell’ approach could cause a consumer backlash. Any disgruntled customer can slam your product or service for all the world to see. You have to be able to take the heat and respond quickly. If you’ve used social networking to establish connection and loyalty, though, the community may rise to defend the company against unfair or random criticism. An attack on the company is perceived almost as an attack on the rest of the customer base.

Outward-bound employee communication can be cause for concern too. This is no-brainer stuff for high tech companies and their employees, but for many traditional businesses, it’s intimidating. The company has to have a very clear vision of their goals and what social networking can reasonably do for them. I suggest a staged approach, starting with what is most natural for the company. It might begin with a CEO blog and then run to employee blogs, then onto Facebook, YouTube, etc.

Sure, there will be missteps and unfortunate employee comments; good companies will respond quickly to problems and explain what they are doing about it. This can pay big dividends. To understand what I mean, think about what US Air did after that crash in the Hudson… I just read a story about how they mobilized 100 people to help the passengers out with hotel rooms, rental cars, cash for new clothes, etc., etc. They did a magnificent job and will reap the benefits. It’s the same thing with a company doing damage control after a bad blog; you can’t ignore it and hope it will go away. You have to explain your actions (or lack thereof) and show that you are listening to the community.  Most people are reasonable and will respond positively to an honest approach.

In short, the whole key is to understand your goals and present an image consistent with your company. I recommend approaching corporate social networking with “fiery caution” – understand what the medium can do for you and get into the pool, but don’t dive into the shallow end.