The Importance Of Social Media In Conducting Business

Social Media Marketing and Improved Consumer Loyalty

Discuss about the Importance of Social Media in Conducting Business.

The importance of social media in conducting business in a highly competitive world can never be overstated. While on the one hand, the efficient use of social media sites such as Facebook and Instagram help the emerging companies gain recognition amongst the consumers, it also assists already recognized companies increase their traffic to their official websites. Since the inception of social media sites, these sites have been utilized by the business organizations to build relation with the consumers and keep them updated about the new products and services. However, presently, the advent of professional sites like LinkedIn has also simplified the job of the Human Resource Managers of an organization, helping them attract talented workforce without spending huge amount of money or long hours tryng to get in touch with the deserving employees.

There can be no gain stating the obvious fact that social media marketing is no longer an optional matter, but an integral marketing strategy. It is indeed an essential way to reach out to the customers, gain valuable insights about their attitude towards the brand, and build the brand reputation (Aral et al. 2013). However, despite the potential advantages of social media marketing, there are certain intricacies of social media marketing which can prove to be hard and challenging to manage. For example, lack of security on the information shared on these sites, difficulty in controlling negative feedback of clients, and time-intensive marketing procedure requires much supervision over the social media activities. Hence, there are both advantages as well as serious disadvantages behind the use of social media.

Social Media Marketing and Improved Consumer Loyalty:

One of the principal marketing strategies each organization wishes to incorporate in its business plan is to attract potential clients as well as to retain the existent customers. However, most of the companies in today’s world encounter cut-throat competition and find it hard to retain its clients. Herein lays the importance of social media marketing. According to the survey report by Sensis, 90% of the Australians belonging to the age group of 18to 39 years have daily access to the social media sites out of which 95% of them use Facebook on a daily basis (Ngai et al. 2015). Similarly, research reports also suggest that in Australia, there are approximately 5,000,000 active users of Instagram while as many as 14,800,000 people daily watches videos on YouTube.

Gain Insights into Customer Needs

Figure 1: Use of Social Media in Australia, 2017

Source: (Rodriguez et al. 2015)

It becomes clearly evident that large number of people uses social media and thus advertising a product on these sites will help in attracting attention of the consumer towards a new brand or a new offer of an old brand. The use of interesting, emotional and catchy stories in the form of videos on YouTube can also help the customers become aware of a brand, even though the consumers themselves may not realize that a brand name was endorsed in the process of playing the video. Often many companies share pictures of their new products, offer discounts by engaging consumers who are their followers on these sites and respond to the consumer grievances and queries via social media sites like Facebook Messenger, Twitter, etc. This form of continuous interaction with the client helps in building relation with the consumers.

Gain Insights into Customer Needs:

In order to make better business decisions as well as to ensure longer sustainability, business organizations need to understand the changing needs of the consumers. Each new day, there are approximately 500 million tweets, 4.5 billion likes on Facebook as well as 95 million photos posted on Instagram, and a company can easily understand its position in the competitive market, by analyzing the number of ‘likes’ and ‘shares’ its posts and pictures receive each new day (Agnihotri et al. 2016). Further, it should be noted that most of the earlier studies have focused on the benefits of social media tools and have overlooked the significant use of social media analytic tool like Hootsuite Insights, that help in gauging customer response to these social sites, as well as critically analyze the interaction of the consumers about the specific brand over the social media sites (Holt 2016). With the help of prominent graphic visualizations, this analytical tool helps in informing the company about the changing behavior of the customers.

Social Media Aids in Targeting Relevant Audience:

While targeting relevant audience is a matter of primary importance, creating customized clients and sharing advertisements exclusively with them is important. The use of popular hash tags on Instagram and Twitter can always attract the relevant audience, for example, #glasses can help in attracting sunglass consumers. Since the Facebook newsfeed becomes overcrowded with multiple adverts, organizations seeking immediate consumer attention can also employ the use of Google+ and Sprout that enable demographic or interest-based audience targeting, which in turn enhances the visibility of the adverts (Scott 2015).

Social Media Aids in Targeting Relevant Audience

Use of Blogs in Marketing a Product and Enhancing the Brand Image:

While discussing about social media marketing, it should be noted that most of the organizations focus on the well-known and most popular social media sites like Facebook and Twitter. However, many companies fail to develop consumer awareness simply because they ignore blogs and review sites which also help in enhancing their visibility. This is the reason why companies, especially the small and emerging ones, which are present on Yelp and Pinterest, are able to network and promote their business much more effectively (Tuten and Solomon 2014). Besides, many companies use online blogs to attract strangers, turn them into regular visitors and ultimately sell them products.

Figure 2: Diagram Showing how Blogs Work

Source: (Fuchs 2017)

As evident from the above diagram, engaging bloggers to write blogs for a company help in enhancing the traffic coming to the company website, ultimately helping to convert the traffic into leads.

Social Media as a Recruitment Weapon:

Although it is less acknowledged a fact, social media does assist an organization attract talented workforce as well. According to research reports, 61% of the employees use social media sites to research about a company, and hence the presence of an organization on social sites helps in creating the employer brand (Treem et al. 2013). Hence, having an established social media presence is highly important. Besides, needless to state that many potential employers connect with the suitable and deserving employees via professional social media sites like LinkedIn.

Cost-efficient Marketing Tactic:

Endorsing a product or developing the brand image via social sites was never so cheaper with traditional media such as newspapers or television and radio adverts. According to research reports, social media sites like Facebook and Google are not only going to overtake a major part of the TV audience, but also enables business organizations to endorse their products absolutely at free of cost. Unlike any other media, social media allows an organization reach out to a huge number of people at once with no cost other than installation of social media sites.

Social Media is Time Intensive:

Although the social media sites have been considered to be efficient tools for marketing, the use of social media marketing takes a lot of time. In fact, the idea of social media site is based on two-way communication process (Okazak and Taylor 2013). Hence, a marketing manager will have to actively monitor the interaction over the sites, respond to each individual comment, as well as handle customer queries about product information, price details, and others with much time and patience.

Use of Blogs in Marketing a Product and Enhancing the Brand Image

Social Media as a Cost-Intensive Medium is a Myth: 

Social media marketing can also get very expensive. First of all, since social media marketing requires constant engagement with client, it is important to hire at least a couple of marketing managers who will be entrusted with the duty of sharing posts or responding to consumer queries. Although content marketing helps a company to increase traffic to its website, each new day at least 500 new websites are being created writing blogs and articles and promoting various products. In order to stay in the competition, companies have to spend huge amount of money for paid advertisements, and as per the recent IZEA survey, 61% of the marketers pay a higher amount to an external marketer for promoting their products (Hays et al. 2013). Opening up an account on these sites is easier, but without paid advertisements, attracting new consumers is almost impossible.

Social Media Sites Often Lead to Negative Reputation:

Consumer dissatisfaction is not a new issue, and in fact a earlier times also, consumers used to complaint about the product or service they did not like. However, the problem arises when these unhappy customers get an opportunity of giving a company one star rating, poor review openly on the social media sites (Rokka et al. 2014). This negative feedback can instantly malign the reputation of a company and dissuade its potential customers to stay loyal to the company. In fact, the negative feedback, information leaks or hacking remain some of the most potential drawbacks of social media marketing.

Social Media and Hacking Issues:

The social media sites can also prove to be intrusive to the privacy of many companies. A variety of malware, spyware, adware and ransom ware can lead to hacking issues. In case the official account of a company is hacked, it can lead to the offensive customer reactions and failed marketing efforts (Georgescu and Popescul 2015).

Identification of Literature Gap:

Although most of the literary articles and business journals reviewed, state the importance of the social networking sites in enhancing brand reputation and increasing sales, the number of research articles discussing the limitations and drawbacks is very limited. Further, most of the literary articles have primarily focused on the most well-known social media sites such as Facebook, Twitter and Instagram. However, some of the less known social media sites find no mention here.

Conclusion:

To sum it up, it becomes clearly evident that the social networking sites are of much use to help a company in its marketing efforts.  It is a well-known fact that the social media is critical to the marketing and customer service success of any organization operating in any part of the world. Reduction in the price of marketing and promotion, easy access to a larger customer base, opportunity for direct customer interaction and customer feedback, as well as improved ranking on search engine websites definitely boost the sales and brand reputation of a company. However, social media tools used for business must be managed well in order to ensure marketing success as there are potential drawbacks as well.

Reference List:

Agnihotri, R., Dingus, R., Hu, M.Y. and Krush, M.T., 2016. Social media: Influencing customer satisfaction in B2B sales. Industrial Marketing Management, 53, pp.172-180.

Aral, S., Dellarocas, C. and Godes, D., 2013. Introduction to the special issue—social media and business transformation: a framework for research. Information Systems Research, 24(1), pp.3-13.

Fuchs, C., 2017. Social media: A critical introduction. Sage.

Georgescu, M. and Popescul, D., 2015. Social Media–the new paradigm of collaboration and communication for business environment. Procedia Economics and Finance, 20, pp.277-282.

Hays, S., Page, S.J. and Buhalis, D., 2013. Social media as a destination marketing tool: its use by national tourism organisations. Current issues in Tourism, 16(3), pp.211-239.

Holt, D., 2016. Branding in the age of social media. Harvard business review, 94(3), pp.40-50.

Ngai, E.W., Tao, S.S. and Moon, K.K., 2015. Social media research: Theories, constructs, and conceptual frameworks. International Journal of Information Management, 35(1), pp.33-44.

Okazaki, S. and Taylor, C.R., 2013. Social media and international advertising: theoretical challenges and future directions. International marketing review, 30(1), pp.56-71.

Rodriguez, M., Peterson, R.M. and Ajjan, H., 2015. CRM/social media technology: impact on customer orientation process and organizational sales performance. In Ideas in Marketing: Finding the New and Polishing the Old(pp. 636-638). Springer, Cham.

Rokka, J., Karlsson, K. and Tienari, J., 2014. Balancing acts: Managing employees and reputation in social media. Journal of Marketing Management, 30(7-8), pp.802-827.

Scott, D.M., 2015. The new rules of marketing and PR: How to use social media, online video, mobile applications, blogs, news releases, and viral marketing to reach buyers directly. John Wiley & Sons.

Treem, J.W. and Leonardi, P.M., 2013. Social media use in organizations: Exploring the affordances of visibility, editability, persistence, and association. Annals of the International Communication Association, 36(1), pp.143-189.

Tuten, T.L. and Solomon, M.R., 2014. Social media marketing. Sage.