Many companies have started to use social networking. Some have set up groups on Facebook and other existing sites. Others are starting their own social networking sites. These can be standalone sites or a tab on the firm’s web site. Last week I spoke with Catherine Brown, Director of Business Social Networking at Dotster, a provider of internet businesses services, on best practices for business social networking.

There are many benefits for a business to set up its own user community. It can be a demonstration of the firm’s commitment to customer feedback. It can be a listening post to what customers are saying about its products and, with their own site, the firm owns the data. It can enhance brand loyalty and provide increased self-help between its customers reducing customer service calls. Setting up a group on a site like Facebook leaves all control over transparency, ad selection, ad placement, features, and data in the hands of a firm with a different set of objectives as discussed before on this blog see - Enterprise 2.0 is not Web 2.0 nor is it an Oxymoron.

So what are best practices for setting up a business social network? Catherine said to start by developing a clear and comprehensive customer profile. What are their characteristics and concerns? Do more than promote product news. Define other issues that match the audience profile and add that content. Then define the business objectives of the site and select features to support these objectives (e.g. forums, blogs, wikis, etc.). Develop the site and engage in active promotion through channels other than the site (e.g. email, ads, personal connections, etc.).

You can make the site open to anyone who registers, This is best for fairly simple or straightforward products, especially when you want more exposure as part of the effort. You can also set up customer only, or even invitation only, communities for dealing with more complex products or sensitive issues. Developer or partner sites may fall into this category. One of the Dotster communities support exchange between divorced women. You can also set up your community to attract search spiders or have it stay private depending on your objectives. Catherine also recommends active moderation of your business community whether it is open or private.

I asked about the blogs versus forums on communities. Catherine said that they both have their place and can be part of the same communities. In their communities for divorced women, the forum is used to exchange information ad advice. Blogs are used as journals of individual experience. There can also be a company blog as information resource within the community. Catherine said that each community she works with is different and I think this is a likely the most important best practice to remember. Setting up your own site provides a lot of control. Make sure you exercise it. I am going to discuss the features of Dotster on the AppGap this week. They provide versions for both small businesses and larger enterprises.