The impact of social media on business has been enormous for years and is only going to grow. If you’re a business owner, a consultant, or a professional of any type, you’ll want to read on to find out just how deep social media’s impact on business really is. If your business’s social media operation is limited to one or two seldom-updated accounts, then there’s a good chance you won’t be poised to meet the opportunities or the threats the coming years may hold. Let’s start the discussion.
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.
Impact of Social Media on Business Communication
Another major consequence of the digital age is the impact of social media on business communication. Social media has totally transformed the ways that businesses and consumers communicate. In a way, one impact of social media on business has been to level the playing field when it comes to certain forms of advertising. Most social media accounts are free to create, after all. Many smaller companies with skillful social media presences are able to achieve forms of reach comparable to major television ad buys, without paying a dime (except perhaps the underpaid intern). However, corporate advertisement has transformed its advantages, too. Companies now pay “Influencers” sometimes staggering amounts of money to post about the companies’ products.
Social Media Customer Service
When you think of social media and business, you probably jump to the idea of using social media platforms to market your company. You share pictures, positive experiences, get sign ups for free events, post information about new products or services or sales, etc. But customer service is a business function that social media has redefined.
The impact of social media on business is certainly not limited to the marketing function. Social media customer service is a radically different ballgame from earlier eras of customer service. For one thing, social media has empowered everyday consumers to amplify their complaints in ways that were unheard of twenty years ago. This has forced many companies to step up their customer service game. Social media has also proven a powerful customer service tool for companies that choose to see it this way. It enables companies to create quicker, more human interactions with customers who have had a dissatisfying experience. Some large companies now have entire teams focused on monitoring their social media platforms with a focus on getting and reacting to feedback, answering questions, and solving problems for customers.
The impact of social media on business has been one of the most important economic developments of the 21st Century. Can businesses survive without social media? Many might be able to survive. But it’s becoming increasingly difficult to thrive, even if you are a small local operation. It’s true that this new business ecosystem comes with both new rules and new risks, and it’s up to each individual and business to choose what is best for them.
PS: While we’re on the topic of social media, are you following Management Consulted on LinkedIn, Facebook, Instagram, and Twitter? Get on it!