Social Media for Small to Medium Enterprises - Essay Example

Social Media for Small to Medium Enterprises Executive Summary Anoto AB is an appropriate example of a small and medium-sized enterprise that has positively embraced social media strategy. With the organisation’s presence on Twitter, Flickr and YouTube, this paper seeks to evaluate the reasons that modern SMEs run social media accounts. However, just like any other information technology tool, social media presents security risk. Additionally, it risks the spread of wrongful information on an organisation, which together with the limitation of control, hinders the presence of a majority of SMEs on social media. This paper offers social media strategy recommendations to ensure optimal benefits for SMEs. Introduction Small and medium-sized enterprises, SMEs play a crucial role in any national economy. They are a major source of employment and foster socio-economic expansion (Taprial & Kanwar 2012). To foster the achievement of their objectives, a majority of these SMEs leverage on IT-based tools to increase information content and creativity (Belo, Castela & Fernandes 2013; Laudon & Traver 2010). With this regard, many SMEs have incorporated social media strategy in their operations so as to realise the benefits that IT offers in their businesses. Joosten (2012) generally describes social media as technological systems that enhance collaboration and connection by creating personal and corporate profiles, sharing of opinions, activities and information and content creation. Among the many social media networks, Schwartz (2010) documents Twitter and Facebook as the most popular. SMEs have established their presence in a majority of these platforms. Anoto Group AB is an example of an SME that has embraced the use of social media in its operations. This Swedish high-tech company provides solutions for transmitting handwritten text from hard copies to digital media, intelligent camera surveillance and scanning printed text (Anoto Group AB 2013). To reach out to its customers and all other stakeholders, the company has presence on Twitter, Flickr and YouTube social media sites. With only 103 employees spread across Sweden, UK, US and Japan, the company is an example of modern SMEs that have adopted new IT features as change drivers to enable them gain sustainable competitive advantage over their rivals. Indeed, just like Anoto AB, many other SMEs have embraced the strategy of using social media to achieve their objectives. Meske and Stieglitz (2013) observe that 24% of small enterprises structurally use social media with another 20% using it informally. For medium-sized organisations, the percentages are even higher. Social media offers myriad of opportunities to SMEs for attainment of their business objectives but at the same time presents limitations and risks which call for proper controls so as to ensure optimal benefits. Why SMEs Increasingly Adopt Social Media One of the major reasons why SMEs would be attracted to adopting social media strategy in their business operations is customer care. As noted by Durkin, McGowan and McKeown (2013), customer relationship management, CRM, greatly informs successful globalisation for SMEs and thus their competitiveness. Even more crucial is the need for such organisations to foster transparency in their operations so as to enhance customer loyalty and also trust. A private dental clinic in Chorley, Lancashire known as Southport Road Dental appreciates this, having used YouTube when dentist David Hickey took over in 2010, to publicise the experiences of past clients. As noted by Hickey, this was beneficial in building customer trust, this being a critical aspect of in healthcare (Coleman 2012). Combining trust and feedback from customers, such SMEs, including Anoto, would be able to modify their products appropriately in line with customer needs, making them relevant in their marketplaces. Secondly, social media provides an effective opportunity for advertising and marketing. Traditionally, SMEs were compelled to use televisions, print media, radio and other conventional media to advertise and sell their products. The limitation with this as noted by Bulankulama, Khatibi and Herath (2014) was the fact that the cost was high, locking out a majority of SMEs, thus monopolistic and unfair competition. In the modern business environment, however, the significant number of fans on social media networks provides SMEs with a greater market reach through advertising and marketing at minimal costs. This would be appreciated more by considering the social media statistics given by Honigman (2012) which indicate that Facebook and Twitter, the most common social media networks, each have 850 million and 176 million users respectively. In the same way, Anoto AB enjoys the huge market of the over 176 million Twitter users, 490 million unique monthly visitors on YouTube and the viewers of the 3,500 photos uploaded each second on Flickr. Fallowfieds Hotel in Oxfordshire had its new owners, Anthony Llyod and Peta, aware of this potential. In 1993 when they took over the hotel’s ownership, they leveraged on Twitter to market their business cost effectively. Indeed, within 18 months, the business had attracted 1,000 followers and bookings had grown up by £150,000 of new business (Coleman 2012). This huge fan base on social media networks is what drives the cost effective advertisement and marketing on social media for SMEs. Finally, social media provides an efficient platform for communication to external parties. As documented by Kahar et al. (2012), social media enable small and medium-sized enterprises to pass across information on new products and services and innovative ideas that could appeal to customers and enhance transparency. Moreover, Holmes (2012) observes that social media has helped SMEs handle crises that face them. Crises could arise when confidential information leaks out to the public and further blown out of proportion by competitors. However, with a strong social media presence, such SMEs could easily and effectively assure their customers of being in control. This advantage of social media as a tool of communication is critical because of the high conversion rate propagated by the ease of converting one’s followers and friends. Honigman (2012) indicates that Facebook users have an average of 130 friends with a Twitter user averagely following and followed by 51 people. This is a significant number for SMEs when considering that people in the same social circles would easily influence one another into buying a product. As small as it may seem, Anoto AB has critical information on its website which could go unnoticed. The company’s website has its financial reports and news and events. If links are shared on its Twitter account directing its audience to such information, it would receive greater readership. Freshology Inc., a company in Los Angeles that is in the business of making and delivering calorie-controlled meals affirms the applicability of this with the founder appreciating that Facebook was one of the leading drivers of traffic to its website (Maltby & Ovide 2013). In the same manner, small organisations could attract more audience to its communications if links to such information are provided on their social media platforms. Risks and Limitations Social media being an IT tool faces the generic risk of security. It would be appreciated that using social media involves the spread of sensitive information across varied locations. This makes it easy for an inexperienced user to introduce a weakness that could adversely affect the system. For example, the use of weak passwords by administrators of Anoto’s Twitter and Flickr accounts could expose the organisation to cyber attacks. Cross site scripting, XSS, has been cited by Cross (2014) as a common form of attack where attackers introduce a malicious code to steal personal information. Furthermore, Fisher (2011) observes that despite phishing not being unique to social media, the fact that social media users use a myriad of mobile and immobile devices makes SMEs like Anoto AB with a presence in social media prone to phishing. An attacker sends information like it comes from a familiar person and uses the scam to obtain unauthorised information. Such an occurrence could harm the reputation of Anoto AB and any other affected SME paving way for the success of its rivals. Another risk that SMEs face with social media is the spread of wrong information about the business. Just as it has been noted that social media plays a beneficial role in communication, it could also negatively affect the business when such information is wrongful. This could adversely affect the performance of the affected SMEs to a great extent. The University of Oklahoma knows this well having been a victim recently when false information of gunshots in the campus that had caused its closure spread on social media with mainstream media picking up the conversation and propagating the falsehood. The true information as documented by Lane (2014) was that an equipment backfired creating a sound like that of a gunshot. Anoto AB faces a similar risk where any one of its postings could be misinterpreted and wrongful information spread through its social media networks, risk tainting its image. A significantly debated limitation of social media is time wastage. A majority of SMEs have been reluctant to adopt social media strategies in the pretext that employees waste a lot of time on these sites at the expense of working. Globally, these organisations have estimated employees to waste up to 45% of their productive time on these sites (Baker, Buoni, Fee and Vitale 2012). Indeed, if employees at Anoto AB have the freedom to access the social media websites when working, they could end up wasting a lot of time and making them less productive. With SMEs suffering from limited human resource and the need to keep expenses on the low, this could be great limitation. Recommendations As noted, there are numerous number of social media networks. Whereas it has been appreciated that these networks could greatly benefit SMEs, it would not be prudent for an SME to have presence in all the social media networks, thus the reason why Anoto AB chose three out of the many possible networks. Bradley and McDonald (2011) advocate that organisations evaluate their need to be on social media and the purpose. Among the goals that an SME could be seeking include customer relations, promotional services, sales and marketing and advertising among others. Of importance would be to ensure that these goals are measurable. However, the most critical step would be to decide which social media network to join. Perhaps appreciating the observation of popularity of social media networks by Honigman (2012), Schaffer (2013) recommends Facebook and Twitter for starters. This is the reason that makes Bluegala, a New York-based SME selling dresses and gowns, to operate only these two social media websites. Nonetheless, Anoto AB has had a successful social media strategy without the presence on Facebook. This could be a deliberate strategy following the recommendation by Cox (2012) that SMEs determine where most of their customers belong which should guide them on making appropriate decisions on the network to join. Even so, it would be crucial for the Anoto AB to have a Facebook account as this would enable it reach out to the millions of potential customers using the social network. Control and management form an even more crucial aspect of social media strategy than mere presence. Just like other IT tools, it is crucial to understand security threats regarding social media. This is particularly important considering the observation by Cross (2014) that more than 40% of SMEs have no policies to govern their social media strategies. As such, SMEs should put appropriate policies in place to ensure control of information that is shared with the public. Bulankulama, Khatibi and Herath (2014) advocate for professional management of social media networks as opposed to the informal approach to social media strategy. Indeed, this proposition could be of great benefit to SMEs as Kaplan and Haenlein (2010) observe that between 70% and 80% of social media breaches result from insiders. This would uphold the control of information sharing by such SMEs, hence beneficial in averting leakage of sensitive information or misrepresentation of the SME. Conclusion SMEs significantly contribute to economies across the world. In the same way, Anoto AB with its 103 employees plays a similar role through its transmission of handwritten text from hard copies to digital media, intelligent camera surveillance and scanning printed text across Sweden, UK, US and Japan. Its presence on Twitter, Flickr and YouTube is an indication of how SMEs have adopted social media strategies to gain competitive advantage. Effective customer service, advertising and marketing and communication are the major drivers for SMEs to adopt social media strategy. However, many others remain reluctant to make their presence on social media because of the security risk and the risk of spread of wrongful information. Employers find time wastage among employees on such sites as a major limitation with social media. For Anoto AB, it would be important to open a Facebook account so as to leverage on the popularity of the site to reach a wider market. Thus, SMEs should operate social media accounts where a majority of their customers hold accounts. Employing professionals to manage social media networks for SMEs would enhance controls for SMEs, including Anoto AB. 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