The impact of social media on business
In all the corners of the globe, critical players in the business industry are on the constant lookout of various ways that they can use to boost their business and increase the overall productivity of goods and services. This is done under the assumption that companies that are more exposed and those that able to reduce the costs of production as much as possible, eventually yield the highest profits. With the continuous development of technology and its adoption into most business models, it has become apparent that many more channels of increasing sales and exposure have been created and are being employed in boosting business. One of the ways with the highest impacts on business today has been identified as social media. Imagine a platform that has gained so much popularity over the past couple of years that most influential people and businesses have no choice but to engage it? This has been the global impact of social media, and in this article, we are in detail going to explore some of the most significant role of social media in the business industry.
In order to understand the impact of this tool and the various ways that it affects businesses, it is crucial that we understand what it is and what it does. Many of us are already social media users, and we do not even know it. This is a platform that has converted the world into a global village that can easily communicate and share information so fast, that information can travel all across the globe in a matter of seconds. By definition, we can say that social media is the different applications and websites that enable users to create and share content or to generally participate in social networking. Through social media, content can be shared in real-time, quickly, and efficiently. Some of the information that can be shared through social media includes photos, events, videos, opinions, and other things that people and businesses considered important to them. This has ultimately altered the way people live as well as the way that business is conducted. It is also important to note that most of the great businesses and enterprises have adopted this technology and most influential companies and business personalities are signed up on different social media platforms in a bid to conduct business.
In the modern world, social media is considered as one of the most essential communication tools by both businesses and individuals. For individuals, it is employed as a tool that helps to keep in touch with friends and family. Individuals also apply this tool for networking purposes and for finding career opportunities through finding individuals from around the continent with similar interests or business opportunities. In recent times, social media has also been used for personal businesses where individuals who for example, sell different commodities, use the platforms like Facebook to advertise their products or even distribute pictures of the things that they sell.
For business, the uses of social media seem unlimited since the platforms offer so many great opportunities, that it is close to impossible to touch them all in great detail. Business owners and companies are able to reach out to their clients as well as potential customers through the use of this vital tool. They are also able to gain the attention of more people through some of the advertisements that they place on their pages. Social media is also considered as an essential piece of the business marketing strategy as it creates the much-needed link with clients, propels the level of brand awareness, and substantially boosts the business leads and sales. This is one tool that simplifies life from a business point of view, and the use of social media can have significant impacts on the way business is done. Currently, more than three billion people around the globe are connected, and your business can easily reach them through use of a different number of platforms including YouTube, Facebook, Twitter, Instagram, blogs as well as other sites that have a content based on User Generated Content (UGC) as well as user participation. Let us explore some of the most significant impacts of social media in business.
Billions of individuals all over the world use social media for a wide range of reasons, including brand engagement. It is quite evident that more people follow brands and businesses on social media than those that follow celebrities, especially on platforms like Instagram. This is because of the fact that people are very interested in commodities and various lines of business in the industry. For businesses, failing to take advantage of this great tool is a lousy approach owing to the fact that it is considered as one of the most effective ways to reach almost half of the world’s population. Use of social media can have the following impacts in the business industry.
All marketers can testify that one of the most ideal customer traits is loyalty. Customer loyalty is the state where the consumers prefer to purchase the products of one brand over the other. Loyalty occurs when an enterprise develops a trusting and honest relationship with the consumers. Loyalty is essential to a business because it makes a significant contribution towards repeated buying by the clients, which in turn leads to more customer referrals and higher revenues. In essence, social media aids in the creation of a firm base of loyal customers as well as brand followers who will take the business to the next level.
Why Is Social Media Important for Business?
The vast majority of commerce occurred and seemed to go just fine before social media came along. So, you’re justified if you’re wondering: why is social media important for business? In order to answer that, you need to see social media not as any specific platform, but rather as a massive shift in the way humans communicate and socialize. It’s changed the way people think and act to a level that we are still discovering.
It stands to reason that the impact of social media on business would be immense, as the technologies of exchange have shifted to these digital spaces. And what do these new communication technologies enable people and businesses to do? They enable people to communicate rapidly using the vast spread of the internet. This allows greater numbers of people to be in touch more quickly and across greater distances than ever before. On the one hand, this presents an unprecedented opportunity. You can be in touch with larger markets all over the world virtually instantaneously. You can make new kinds of personal connections with customers. And you can harness the powers of virality and digital influence to accelerate your company’s reach. Indeed, many emerging companies today are largely or entirely social media entities.
There is another way to think about it that is even simpler. Think about how many people you know who use at least one social media platform. It’s almost everybody. So, why is social media important for business? Well, businesses need to engage with human beings at the end of the day. If almost all human beings in developed economies are spending multiple hours each day on social media, it stands to reason that social media is important for business.
Know Your Metrics
With that said, have analytics in place to understand the ROI of your social media marketing efforts. Some businesses place way way to much importance and sink a lot of money into created custom posts, with very little real return on their investment. If the benefit of social media for you is most branding, great – invest with that in mind. If you get a material amount of sales from your social posts, invest accordingly. The big thing is to have data to back up your efforts. This leads us into some other risks of social media.
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Risks of Social Media
While the scaling opportunities offered by social media are tantalizing, every business owner knows that opportunity is one side of the coin of technology and threat is the other. It is true and obvious that the impact of social media on business includes unprecedented new risks as well as new tools.
One primary risk is that of competition. Social media is a tool your competitors may successfully leverage to capture more market share. Conversely, we can all think of examples of local businesses that will likely never have a significant “social media presence.” These examples – the multi-generational mom & pop stores and the authentic ethnic restaurants, each perfectly adapted to fill its niche – illustrate that some businesses could potentially suffer from devoting too much attention to social media. At the end of the day, social media cannot replace an authentically satisfying experience. Notice that billion-dollar hedge fund managers and other high-powered financiers also seldom focus on social media.
This brings us to another one of the risks of social media: exposure. It was relatively easy to operate a business with some degree of discretion before the digital age. That’s harder to do now. Social media brings much more into the public eye. This can include intra-organizational conflict that disgruntled employees share. It can include an individual employee posting something inappropriate that gets shared broadly and becomes associated with the company. Ineffective use of social media by official company accounts can also be an issue. From inappropriate jokes to cringe-worthy attempts at relevance, it’s not at all unheard of for corporate attempts at positive social media engagement to backfire.
The Rise of Social Media and the Impact on Companies
The rise of social media has had a profound impact on businesses, as companies across all industries have had to factor their online presence into their business strategy. However, not all platforms were created equally, and some serve certain companies better than others.
The most significant impact of social media has been on marketing strategy, as it has been instrumental in bridging the gap between business and consumer, creating channels of communication, and helping businesses build lasting relationships with audiences. Social media, for many companies, is now fundamental in shaping their brand image, with feedback from consumers being near instant. It has also impacted recruitment practices, as well as educational and personal development opportunities within companies, as people and resources have never been so accessible.
3.96 billion people were using social media in July 2020, as 1 million new people join social media every day. This surge in online connectivity has provided companies with new opportunities to reach consumers through the creation and promotion of content. The most popular social media platforms currently include Facebook, Twitter, Instagram, YouTube, and LinkedIn.
However, there is a significant degree of audience overlap between the platforms, meaning a company’s content creation should be adapted depending on the social media. Posting content regularly on multiple platforms is likely to keep consumers engaged, however the aim should not be to reach new audiences through these different platforms, but to reach existing audiences in new contexts. Therefore, it is necessary for companies to develop a more nuanced social media strategy, where their content output is tailored to the strengths of each app- for example, Instagram’s niche is its visual nature, whereas LinkedIn specialises in professional content.
Depending on whether the business is B2B or B2C, different social media platforms can be considered more valuable for increasing engagement and awareness. For B2C companies, Facebook is considered the most valuable platform, having the largest user rate, closely followed by YouTube and Twitter. 58% of B2C companies reported that social media has had a more positive influence on the revenue and sales than B2B companies, reflecting how social media has a bigger influence on B2C customers’ purchasing decisions.
The rise of influencer marketing has been a significant change, especially for B2C businesses, as companies increasingly turn to influencers for endorsement and to reach a wider audience. According to estimates, brands are set to spend up to $15 billion by 2022 on influencer marketing- an increase from $8 billion in 2019. This would not have been possible without social media, with Instagram being considered the most suited to this form of marketing- 79% of brands turn to Instagram to build relationships with influencers. Sponsoring an influencer’s online content is often more cost effective than launching a traditional advertising campaign, and can raise brand awareness among targeted audiences.
The most valuable social media platform for B2B companies, however, is LinkedIn. LinkedIn, having been created specifically to generate leads and increase conversions, provides a forum for business professionals and companies alike to build relationships. With over 722 million users worldwide, LinkedIn accounts for 80% of B2B leads, and more than 50% of the total social traffic coming to B2B sites. 91% of executives choose to use the platform to promote professionally relevant content, and therefore it requires a different marketing strategy than that of other social media platforms- posts should be professional, predominantly informational (rather than a constant stream of sales pitches), and relevant.
It can be beneficial for companies to take advantage of LinkedIn’s features to build relationships with target audiences; Matched Audiences specifically retarget existing consumers that have already taken action with a brand, accelerating the transition between awareness and engagement. Founding and regularly contributing to LinkedIn groups can also help build engaged communities and establish individuals and their companies as thought leaders in their field.
Both B2B and B2C businesses can benefit from boosting engagement with their audiences through their social media platforms. A brand can shape its image through its social media profiles, highlighting its values and humanizing the company through creating a human connection with consumers. It also provides a forum for companies to engage directly with consumers, as platforms such as Twitter and Facebook allow companies to answer questions and respond directly to feedback.
Research carried out by the Harvard Business Review found that customers that engaged with a brand on Twitter and received a response to their tweet were more likely to spend more with the brand in a later purchase. This probability increased if the company responded within 5 minutes. Significantly, this still applied if the original tweet was a complaint, reflecting the degree to which consumers value the human connection social media has facilitated. This relationship is also beneficial in helping companies curate a successful brand image as, more than ever, they have a clearer idea of what appeals to consumers and what fails to garner interest.
Sources:
https://socialmediaexplorer.com/social-media-marketing/social-media-for-business/
https://managementconsulted.com/impact-of-social-media-on-business/
https://www.mrgpeople.co.uk/the-rise-of-social-media-and-the-impact-on-companies/
