The Value of Social Media for Business - Dissertation Example

? The Value of Social Media for Business: An Overview on the success of companies using social media platforms ID: Professor: Word Count: 4,784 Outline Outline 2 References 25 Introduction The proposed methodology is to analyze the various contribution of social media network in the growth of a company. How the strategic plans of any business can be achieved through the channels of online social community and why is it a growing trend in every industry to promote their products and services through media networks. This paper will project the importance of company's public relations and their use of social networking websites such as Twitter, Face book and YouTube. It is a rage now, for companies to constantly share information related to their products to the potential customers through these channels and it has been seen quite effective too. Some of the corporate gurus encourage this and often claim that this is an excellent platform for the visibility of any business. The aim in this paper is to highlight these facts through a rigorous study and the work is supported by some prominent books and websites. This paper is divided in to ten section where it is initiated by the chore objective of a business, and that is to get customers, followed by an introduction about the concept behind ecommerce and its evolvement over decades from ecommerce to social commerce and social media networks, reasons to support the participation on such platforms, pros and cons of this system of communication, eventually it moves on to the motive of this paper and that is to highlight the value of social media network in the growth of a company. The paper also presents some facts and figures pertaining to the study. Further an observation and conclusion is also added in the paper along with the references. Company needs ‘People’/ Customers E Commerce to Social Commerce Every business needs customers and every successful company wants to reach out to the potential customers by promoting their products using a medium and providing good service to their customers. Electronic Commerce is a term which is referred to a process of purchasing and selling of products using an electronic device or system. It began in the early 1970’s while E Commerce in its initial stage was referred to as a process which executed the transaction commercially and it was carried out by technologies like EDI (Electronic Data Interchange) and EFT (Electronic funds Transfer). This technology existed in the 1970’s and was widely used by Banks and other money exchange companies (“History of Commerce”). Figure 1.1 will project the evaluation of E Commerce. Fig1.1(“New Media”) - Year Events 1984 EDI, or electronic data interchange, was standardized through ASC X12. This guaranteed that companies would be able to complete transactions with one another reliably. 1992 CompuServe offers online retail products to its customers. This gives people the first chance to buy things off their computer. 1994 Netscape arrived. Providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer. 1995 Two of the biggest names in e-commerce are launched: Amazon.com and eBay.com. 1998 DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online. 1999 Retail spending over the Internet reaches $20 billion, according to Business.com. 2000 The U.S government extended the moratorium on Internet taxes until at least 2005. When the popularity of internet grew by the year 1993 and it was made commercial and available to general public, it actually took 4 years in developing the protocols of security like DSL and HTTP that eventually made it possible for the users to access the internet with rapid speed as well as an internet connection to be persistent. By the end of the 20th century; the technological advancement took a rapid turn and millions of companies’ world wide launched their websites to sell their products and services online. Many B2B portals allowed customers to reach directly to the supplier and vise versa. The definition of ecommerce gradually evolved for better and it is now identified as a process of buying goods or services that are available online through a secure connection and completing the payment online (“History of Commerce”). Ever since the threshold of globalization happened and the use of internet started, the possibility of the whole world getting connected through this wide network system grew by leaps and bounds (Ellis et al, 2011). Evolution of E Commerce By studying the following info graphics, one may understand how the evolution of ecommerce happened. The Development of this system largely depends upon the introduction of newer technologies and increased number of consumers online. The following info graphics will illustrates how the retailers have adopted new measures to reach out to the consumers. Fig 1.2a - (“E-commerce timeline”) Fig 1.2b- (“Emerald”) Fig 1.2b- (“The History of ecommerce”) Social Commerce Social commerce is a subset of ecommerce and it deals with the purchasing and selling of products by communicating through social media network or websites. In other words, it may be referred to as a fusion of social media and ecommerce where by both supplier and buyer interacts in a way that benefits each other. It has been studied that social commerce has many definitions but more or less they all derive the same meaning about this process. There can be many examples of social commerce like ratings, referrals, online shopping, recommendations, blogs, forums, communities and online advertisements and promoting the products or services (“Marsden”). Social Commerce includes many popular social networking websites such as Facebook, Twitter or YouTube. An example of the Social Commerce can be understood through Fig 1.3 Fig 1.3- (“social commerce”) Understanding Social Media Although more then understanding it theoretically, Social media is a practical process which is to be practiced in order to completely understand its usage and what purpose it fulfills for a business. According to Lon in his book The Social Media Bible: Tactics, Tools, and Strategies for Business Success, it is mentioned that Social media is a medium which is used for getting social or to socialize in very simple words, which quite short but apt. The rest of the story involves the tactics and methods from the company to lure and attract the customers. These strategies determine weather the tools and techniques that they applied were used effectively or not (Safko, 2012). How ever Dan in his book The Social Media Marketing Book has defined the social media in the context of the traditional media industry such as news papers, magazines, televisions and radio. If we observe closely, there is an analogy between the traditional media and the online social media network. If we are reading a magazine, or a news paper we can see many ads by a company selling products which may interests us. Similarly while we are watching our favorite daily soap, which is meant to be for women; we will be flooded with lucrative ads of several brands that are promising and specially targeting the female brigade. The companies play very smart, and they know their customers very well. The use of social media network by firms produces the same amount of curiosity among customers online (Zareilla D, 2010). When studying the online phenomenon it has been observed that today, the social media platform is proving to be very successful for companies because it allows the customer to deal directly with the producer and a feeling of belonging is quite prevalent which means that the companies treat their customers in a way that they feel they are a part of the firm and they actually feel and enjoy the growth of their favorite brand while being connected to it. Getting daily updates and to interact with several other customers too insures them that they are a part of a large happy customer’s community. They have a sense of pride in being a follower of a brand which has millions of customers and is an international rage. All this is carried within the confinement of their home or office, which enables them to be actively involve with their favorite service provider frequently and display utmost loyalty to them. This is what every business aspire to achieve and hence only those companies that are able to master the online techniques are the ones who successfully generate a stiff completion through social media network. According to Clere in his book Social Media in Telecommunication; social networking portals act as a community resource for customers and suppliers to come on the same platform and share similar interest, ideas and networking opportunities. He further states that online community is a popular medium for any company to interact with their customers in order to achieve their ultimate goal – expansion of their business. In some case they receive positive feedback as well as negative feedbacks directly from consumers and this allows them to immediately work upon strategies that could make their products better and avoid things that are not appealing to their target groups. These business owners have distinctive tools through which they promote their business; these tools may include online groups, media portals, blogs, slide show and video blogs. It is for the business owner to decide which media tool would be helpful in strengthening his business and how he can advertise the products or services he is providing (Clere H, 2010). Social Media for Business Companies globally prefer to use Social Media because they no longer have to disturb (bug) customers in order to draw their attention towards their marketed products. According to this book The Social Media Sales Revolution: The New Rules for Finding Customers, Building Relationships, and Closing More Sales Through Online Networking; the authors mention that the most important fact about the online world is that it actually belongs to customers. They are not only just viewing your products and offers but also analyzing your strategies, and at the same time deciding at once weather they are interested in the product or not. Today, the technology has changed the way any business is executed. Only one motive implies to the sales team of any business, and that is to generate online marketing strategies in order to get feasible amount of high quality sales which eventually results in the growth of their respective business (Chase, L. and Knebl, K, 2011). 11 Reasons for any Business to use Social Media Platform According to Mr. James Debono who is the co-founder of Big Thinking Online, which is one the leading online marketing agency; highlights the reasons why every business has the potential to grow phenomenally to new heights by using social media platforms. He discusses these reasons by supporting several facts and statistics which enlightens an entrepreneur with the possibility of getting successful with many online business strategies (“James Debono”). According to one of his article; there can be as many as ten reasons why going online to promote one's business through social networking is an option worth opting for. His reasons includes – 1. Social Presence Now a days, people are net savvy and they prefer choosing products and buying online within the comfort of their home or workplace, once a business is on a social networking site and has a strong presence there with huge number of followers; it is quite easy for any customer to built trust on the business and connect with its ideas at once. 2. It is more human We have live audience on the internet and they prefer a conversation that they can easily understand, adapt and follow. Corporate language is sometimes very difficult for most of the customers to understand and social media websites allows a business owner to interact with its customers on a more individualistic way, with a language and words that they can follow and understand and it is carried out within no time. It is fast, reliable and trustworthy hence these platforms are a good option to humanize one's product. 3. Influential people A business owner gets an opportunity to monitor the moves of a person who is already successful in the niche, which the business owner is engaged in. Through Social networking it is quite easy to get in touch with those influential and successful brands that have already generated a feasible amount of popularity and built trust among millions of users. It is a platform where one can easily study his competitors or learn from those who have already excelled in the respective field. 4. Competition A business owner can find his niche on facebook or twitter. These are the most used social networking websites and many small business entrepreneurs are using it to promote their business online. According to a report in 2011 by emarketer; it was estimated that facebook gets around $ 3.8 billion of revenues from advertisements. It also presented that almost 40 % of firms are selling their services and products through facebook and it is the only platform that they are using to promote their business. These facts are enough to realize that companies are paying more to these social networking websites because it is working for them. They are getting good results and getting good number of customers for their business. 5. Target Group If we start assuming these social networking websites as a virtual shopping mall then it won’t be wrong. People are enjoying a social life on these websites, meeting new people, interacting with them, sharing ideas, tips, joining social causes , shopping, giving advices and all what normally a person would do in his life. It will be interesting to observe an actual data from facebook- More than 900 million active users in the early 2012 Facebook uses more than seventy languages which means people from different countries and ethnicity are actively communicating on facebook More than 500 million users are actively involved in facebook through their mobile phone. But, these are just statistics from facebook alone, what about other popular networks such as twitter? Of course we can just imagine the market is growing at a very high speed. 6. The concept of Sharing and ranking by Google Google is a very interesting engine and it has a very intelligent work base where all the data is saved, so when a post is interesting and becomes popular; it is shared by number of users who may find it informative or entertaining. While, it is shared and clicked by millions of users, it creates several links which are closely monitored by Google. The Search Engine Optimization thus works upon the favor of business owners, when Google pays them for number of clicks on their links by millions of users. This is also an important factor why more and more small entrepreneur are diving in to this vast ocean of online marketing. 7. Exposure and Popularity YouTube is also one of the most powerful medium of promoting one's business online. It has several videos belonging to different niches and it is also becoming a very strong medium to get paid by promoting your channel. A business owner can create his own channel and upload informative videos pertaining to his niche. Number of customers who are following a brand can be guided towards their online store where they can place their orders after getting convinced about the authenticity of the brand. 8. The Virtual World of mouth In the virtual world of communications, it is just a matter of few moments when a particular product is 'liked' by a group of people who have already experienced services from a company. Today, people waste no more time in sharing the information about a particular product that they find is incredibly useful or appealing. That is another example of the new world of mouth marketing and this benefits the company a lot when more and more customers are discussing about their products and services with their family and friends online. 9. Social Media and Ranking It is observed that twitter, facebook and LinkedIn are considered to be hosting the top most pages online. According to online searches through Google and Bing, they generate the most popular pages online and it is not to ignore that the highest ranks of a page is a proof that it is being viewed by most of the users online which provides a chance to business owners to market their products in such websites where maximum number of people are engaged communicating with each other. The more ranking means more people and more people means more business. 10. Transparency While operating through such social media platforms, successful business owners are open to both praise and criticism. On one hand if a product receives positive feedbacks, then on another hand one can experience criticism and has to accept it openly because of the mere fact that a whole community is watching over. Successful business owners when accept such challenges and are open in adopts an alteration for betterment; then it results in positive reactions on the mindsets of its consumers that the company is to be trusted and is available to receive remarks from customers. This way, a social media network provides a transparency to these firms and it can actually help them built a trust level of understanding between them and their customers worldwide. 11. A fast and responsive Customer Care A customer appreciates the concern that he receives from a company. Through social media network, the response is quick, apt and to the point. On these websites, sometimes the burden of solving customer’s query is rather low on the company because there might be other members on the community forum who can actually guide a new member for the simple reason of their earlier experience with the same problem. This establishes trust and a feeling of belonging in the new customer who starts believing that he is with a good company that caters to the need of every customer (“James Debono”). The Pros and Cons of Social Media Network Social Media network can prove to be a very strong medium for any business owner to leverage its success online, but they do need skills and expertise to execute the marketing strategies. How ever, one should be careful in analyzing the positive as well as the negative aspects of these social media networks which might directly affect the business. According to an online document, a business owner has to consider both advantages and disadvantages before participating in any online marketing strategy. These are mentioned below- Advantages- Most important advantage of participating in social media network is that it requires less investment in terms of money. Most of these websites are free to access and one can create free accounts, post information and photographs. A business owner can enjoy all the services by these portals in a very less amount of investment or in some cases absolutely no cash is paid while their targeted customers join their forums, view their products galleries, place order and even share the information with their friends and families without costing any amount to the business owner. The pay-per click concept is also a boosting factor for many individuals who are actively involved in marketing their products online (“Tracey Sandilands”). Disadvantages- Social media involvement requires constant monitoring and only an experienced and responsible executive representing the company should operate the account because the one who has maximum knowledge about the product line and services will be able to satisfy the customers with their ongoing queries regarding the product. Since, it is an open platform there is a disadvantage of many rivals of the company who can disguise themselves and post negative comments about the company which can only be stopped by an experienced person who can actually devote many hours to this rigorous task. Regular updates are also very essential because social communities often replace the older posts with the newer ones and it is very important to insure one's visibility over the media constantly. There is also another disadvantage of fake accounts in the name of one's company which misguides any customer. To conclude, it is very important to select the right individual from the company to execute this online marketing strategy otherwise a company can very well be a victim of bad marketing strategy resulting in a failed online business operation (“Tracey Sandilands”). Facts and Figures Facts Tom Pick, in his article mentions that almost 90% of companies worldwide are on social networking websites. Almost 60% of users who often purchase digital devices; learn about them through social networking websites and approximately 48% of consumers respond to a company's offer on social networking websites. According to Emarketer; 90% of companies who have about 100 or more than 100 employees are engaged in marketing through social networking websites, while 83% are on facebook, twitter houses around 53% of retailers which is expected to raise even higher by 2014. Most of the bigger companies that are considered to be among the top 100 fortune 500 companies are also engaged in blogs but they are more corporate centric. 62% of such companies are active on Twitter and almost 58% of the companies have maintained their corporate facebook account. One interesting stats came through this article that almost 82 % of consumers say that they trust a company when it is more active on social networking websites while from the corporate inner circle , it is reported that almost 81% of the employees are certain that their senior who is active on such network is a better leader. Like wise under Human Resource, 92% of corporate are looking for a suitable candidate online through social networking website, and surprisingly 73% of people claim that they have been successful in hiring the right candidate for the job through these web networks. The effect of LinkedIn is quite evident as more than 95% of professionals have their profile on it and they get hired too. It is also reported that on LinkedIn; every single second two new profiles are created. More than 75 companies under fortune 100 use LinkedIn for hiring new professionals. Another popular medium is YouTube that accounts to be the third most visited website worldwide with approximately 2 billion hits per day. YouTube generates 10% of the total traffic on the Internet. Blogs too have a significant amount of popularity among corporate who share ideas together with other like minded groups globally. It is also to be noted that about 46% of all searches on many search engines are product related or service finders (“Pick, T”). Figures The following figures will enable a good understanding of the use of social networking websites by both consumers and suppliers and how effective they can be in the growth of any business especially small business. Fig 1.4- (“Mershon, P”) Projects the increased popularity of facebook over the years. Fig 1.5- (“Mershon, P”) the data projects that maximum number of internet users on social networking websites. Fig 1.6- (“Mershon, P”) it shows that approximately 44% of business owners depend upon their marketing strategies done through social networking websites. Fig 1.6- (“Mershon, P”) This is an interesting pie chart where it is quite evident that online marketing strategies done through social networking websites costs almost nothing and most of the business owners prefer to operate their accounts personally . Fig 1.7- (“Mershon, P”) As one can observe in the below data that almost 85% of entrepreneurs are using facebook to connect with their customers while 41% of professionals prefer LinkedIn, both are a popular social media websites respectively. Fig 1.8- (“Mershon, P”) In the below chart , the motive for participating in social media network is highlighted and it is shown that the most important reason for engagement in such networks is to connect with customers, increase the visibility as well as to promote their respective business. Success Stories of Companies using Social Media Networking There are number of inspiring examples of companies that have a success story which has been possible only because of their online participation on social media network, these are- 1. Jarvie's Photography Scott Jarvie is a photographer who rose to fame through social media network, he does brilliant photography and his innovative style has also been developed and counted as a unique style after his name. It is known as Jarvie Window. He shares his shots on his online portal where his work is liked and appreciated by people who are amateur photographers or fan of digital photography. Jarvie is definitely different from any other professional as he not only promotes his own work online but also encourages his followers to post their work on his personal forum which is a unique way of self promotion and art promotion; giving Jarvie, new heights of popularity and success all because of effective usage of social media networks. 2. Steve Kloyda He founded a consulting firm online helping the sales people to acquire the required skills. He also managed to create his own fan following through online videos and podcasts which created a phenomenal success through social media websites. He also created an iphone app through which all his content is distributed. He is also considered to be a perfect example of creating successful online branding. 3. Coconut Bliss Coconut Bliss is a company that is hugely popular because of its strong online presence; it sells organic desserts. The company uses appealing photographs to promote its products due to the fact the 80% of online users follow or appreciate products either through informative images or videos. The company focuses on two strategies and they are to create new contests for its customers and encourage them in partnership. 4. Software firm - SEOMoz This company also owes its success story to its well planned and effective participation on social media platforms. It offers services like search engine optimization and monitoring social media involvement. They have introduced a unique concept of gaming mechanics on their website, which offers rewards for participating online to its member and writers. 5. Orabrush This is a story to inspire many professionals, Dr. Bob Wagstff developed a unique tongue brush which he failed to market and then decided to promote it using social media network. He chose to participate on YouTube and started uploading videos about his product. He invested a mere amount $500 and uploaded his very first video which within just few years crossed more than 16 million views resulting in a successful generation of $1.6 million business sales , he is also currently in an excellent contract with Wal-Mart and other famous pharmacies (“Mershon, P”). Observation Through this rigorous study on social media platforms and its advancements, it can be observed that it is quite an old fashion now, to be dependant on traditional promotional methods to reach target customers. Today, the whole world is a virtual country where you can meet your prospective buyer directly, without spending money or investing huge amount and getting good results within no time. There have been many success stories of small and big business owners who have achieved their ultimate business goals through constant involvement on social media websites. It is a promising platform for any company and hence it is no wonder that every company considers it a necessity to open an account on facebook, twitter or YouTube. Today, it is very easy to reach to your customers within the comfort of his home and provide him world class services as well as take feedbacks from him to improve one’s services and products. Conclusion This methodology is about the use of social media platforms by companies and how it can prove advantageous and helpful in achieving the goals of any business. It has been studied that social media is a form of social commerce which is a subset of E commerce and how it has been evolved over the past few decades. It has been possible largely because of the technological advancement and globalization. The Internet is the driving force behind the advancement which has brought both the supplier and buyer on a common platform to interact and communicate with each other on similar likes and interests. Social Media platforms are very beneficial for small business owners as they don’t have to spend much money over it, at the same time it is also very beneficial for large enterprises as it provides them the opportunity to interact with their customers on a direct level and get aware of the shortcomings in their product so as to improve it and built a trustworthy relationship with their customers for life. Many examples of companies who have been able to create a success story through social media network have also been observed and it is quite easy to understand that the social media networking is not only beneficial but also a necessity for every business owner. References Chase, L. and Knebl, K. (2011) The Social Media Sales Revolution: The New Rules for Finding Customers, Building Relationships, and Closing More Sales Through Online Networking. United States: McGraw-Hill Professional, p.9-10. Clere, H. (2010) Social Media in Telecommunications. 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