The Secret Of Customer Loyalty.

No great surprise to read in this report that "Nearly 40% percent of MySpace users keep profiles on other social networking sites such as Friendster and Facebook. Loyalty among the smaller social networking sites is even lower, with more than 50% of all users actively maintaining multiple profiles."

Ease of entry generates all sorts of innovation for sure, but it's not so helpful in terms of creating the barriers to entry that have traditionally been at the heart of any sustainable business. Build and they will come, but you have to keep building or else someone else will jump in. First mover advantage is dependent upon not making a mistake and some might say that the corollary of living in beta could be that customer loyalty is denuded.

But for me, the lesson from this is not about technology but rather that loyalty in social networks (and in most businesses) is devoted to the connection not the method of connecting. It echoes the age-old argument in media industries about whether you should focus on content or distribution for competitive advantage. If you own distribution you can monetise even your worst programming runs the theory, but, in reality, you can't monetise it much because if it's bad programming, nobody wants to see it. The connection isn't strong enough.

Build and they will come, but build well and they're more likely to stay. That is message that risks getting lost in the hype. For loyalty, read customer value. The value to the media consumer lies in the content above and beyond the distribution. The value to the social networker lies in the social connection not the connector. Focus on providing your users with great value - their definition, not yours - and loyalty will follow.