Why Social Media Marketing Is Important For Any Business

Why Social Media Marketing Is Important For Any Business

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Introduction: In the early 1990s, internet was the buzzword. Its promise was heralded as ground breaking. Some entrepreneurs exploited the new opportunities it presented to create new businesses, transformed old industries, and also to destroy old businesses (laudon & Traver, 2010). There is no doubt that no company out there today would like to be the next Circuit City, or Borders. These are some of the companies that failed to adapt to the internet and web technology and were swept away by competition. Similarly, no company would like to be the next dot.com business. These are businesses that sprung up in the wake of internet euphoria without sound business fundamental and only hype to go by. They were short lived. Instead most traditional businesses would like to be like Walmart, Dell computer and more. These are companies that recognized the changing trends in their industry and transformed their business to compete. And new businesses would like to be the next Amazon, Google, Facebook or Twitter. These are some new businesses that emerged in the new internet environment.
One thing businesses are known for is planning for the future by developing strategies that carefully align their activities with their goals. Most organizations’ goal is to make profit. Making profit in the internet age of intense competition and democratized information can be difficult. Product differentiation becomes hard to do, and information asymmetry has been nullified. This leaves organizations seeking new ways to create competitive advantage in order to further their profit motives. Traditionally, businesses turn to technologies to improve business processes to create efficiencies, cut cost and derive profit. As much as the internet has caused disruptions in many industries, those that recognized its potential and successfully exploited it were able to strengthen their position in the marketplace. And we know the plight of those organizations such as Blockbuster that were unable to identify the potential- Netflix emerged in its place.
It seems like yesterday that internet was the buzzword. With the benefit of hindsight, internet has lived up to some of the hypes and not so much in some aspects. The internet and web technologies at the hearth of internet phenomenon are widely observed by experts to be continuously evolving at an accelerated rate. One of these internet evolutions is the emergence of social media and the buzzword of the day has shifted to social media. Most business experts expect the pace of change in social media popularity to accelerate in the next decade.

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In the light of developments in social media and its capabilities, business visionaries are asking what does the future holds for businesses in this new environment.
Study shows that businesses must develop social media strategy in order to survive long term because social media touches every part of an organization from marketing, customer service, sales and product development.
Just like the outset of the internet revolution, many predictions have been proffered. The purpose of this research is to investigate why having a social media strategy is imperative for the long term survival of organizations. More specifically, this paper aim to determine social media solution for businesses in marketing, sales, customer service, and new product development. To accomplish this, this investigation reviewed latest social media literature including websites, books, magazines and articles.
The question of why social media is imperative for business survival was best addressed by the following findings: We are in the social customer era (Greenberg, 2010) that spells the “end of business as usual and businesses must rewire the way they work in order to succeed” (Solis, 2012). No company can avoid social media and those that do will fail (Holloman, 2012).
When you take these findings from Greenberg, Salis and Holloman together, they seem to be speaking to the fact that social media has become the dominant method of using the Internet, and it is profoundly changing the way millions of people interact, and communicate. Social networking in particular has become extremely popular, with over one billion users on Facebook alone and billions more accounts across thousands of social networking sites (Golbeck, 2013). This growth of social media popularity is observed to be taking place across all demographics- leading some to concluded that social media is now mainstream. Greenberg’s claim that we are in a social customer era can be understood when we recognized how much power the customer now has due to internet communication and social networking. The customer is now connected to network of friends and families with the capability to create content, share and interact with one another. This customer’s connections to networks of their friend (an audience of audience) coupled with their ability and readiness to mobilize or be mobilized for action at the speed of internet are what Solis attributed for his bold claim that business as usual has ended. Also, the following statement from Mark Zurkerberg (founder of Facebook) “There's going to be an opportunity over the next five years or so to pick any industry and rethink it in a social way … we think that every industry is going to be fundamentally re-thought and designed around people” was credited to (Shiels, 2010) by Holloman. He further explained that demand for businesses to rethink their ways of doing business is people driven. They want change because inherently people are social creature. And their new love affair with social media is feeding (customers, employees, and partners) increasing demand for social interaction from the companies. Amongst the changes in the customer’s behavior on social media they noted are: the demand for engagement and interaction with organization on a human level, on their terms, and on their turf. They want honesty not crafted corporate messaging. In today’s environment, the customers’ turf is increasingly on third parties’ network outside of organization’s control. Others have also noted that the customer’s decision making space has become crowded. It is no longer the traditional view of the customer marching down the linear decision making funnel as Divol, Edelman and Sarrazin (2012) observed . Instead the social customer decision making journey has been observed to be filled with loops throughout the purchasing journey.
It appears that most businesses have come to the realization that social media has caused fundamental changes in customer behavior to the extent that the traditional ways of reaching and transacting with them will no longer suffice. This was articulated by Holloman with the statement that “The tone is now being set for businesses by their customers, staff and business partners – and companies must adapt. More critically, they must participate”. The challenge for most businesses as studies indicated is how to best harness the potent power of social media to drive their business process for competitive advantage. It is not enough to jump into the social media bandwagon. Companies that did that without clearly defined strategies have failed. The complexity of measuring returns on social media investment is shown to be hampering executive supports for such initiatives. On this note executives are being encouraged to rethink the measurement of return on their social media initiatives and be bold in making the transition to a social business with social media strategies. Carter (2012) noted that transitioning into a social business represents change which could be very disruptive. However, pointing to the potential to exploit this new media for business gains, she urged businesses to get bold in confronting this transition.
It is easy to surmise from all this experts that they all seem to be saying that the future of business is through social media. That being the case, businesses has no choice but to participate for the sake of their future. Like all good businesses, planning for the future is advised to best be approached with sound strategy. Laudon and Traver (2010) defined business strategy as “the set of plans for achieving superior long-term returns on capital invested in a business firm”.
With the case being that social media can be harnessed to drive results in all business processes, and the importance of approaching this with sound business strategy, it implies that an organization that wishes to deploy social media for marketing, sales, customer service, and new product development/innovation must articulate their strategies around each of these processes.
Marketing solution: Marketers need to be where their customers and potential customers are. And increasingly this is online (Shih, 2009). Getting closer to customer is a top priority of CEOs, according to IBM 2010 study (Baird & Parasnis, 2011 p. 30). Traditionally, businesses review their environment, identify trends, extend them, and consider their impacts. Rappaport compared business response to these activities as backward looking. He also added that very often the strategy team could only make assumptions, because they were often constrained by past experience, legacy thinking, and corporate mind-sets. As a solution, Rappaport advocated taking a forward looking approach. Recognizing the trend of customer online activities, he sees turning to social media for insightful timely customer research into their mind-set that influences their behavior is a winning strategy. Shih added that the reality today is that the volume of information online is making it difficult for companies to differentiate their marketing message in a way that that customers can easily find what they are looking for. This is driving the need for hyper-targeting to reach and engage the right people at the right time. The knowledge that people reach out to their friends, families, colleagues and acquaintances on social networks to find content that is of interest and relevant to them should be valuable for marketer. With this in mind, Shih argued that marketing must now become social, precise and personal. Similarly, Divol, Edelman and Sarrazin (2012) stressed the importance of this knowledge of the customer that can be exploited to monitor, respond, amplify and lead the customer behavior. The authors claimed that most executives certainly know what social media is and what made it potent- the viral nature of information on these channels. However, the challenge for them is how to harness its power. They observed that social customers behave differently from traditional customers when making buying decision. And marketer can tailor their use of social media to each stage of the customer decision journey- considering, evaluating, buying, experiencing, advocacy and bonding (Divol,Edelman & Sarrazin, 2012).
By looking at ways that social media can be exploited to drive an organization’s marketing process, these experts are pointing to the fact that it can be used to conduct a more revealing customer research that would enable what Shih described as hyper-targeting, development of products and services uniquely suited for each customer thereby promoting product differentiation that creates competitive advantage, and it can be used to gain access to customers’ networks of friends, families and colleagues for broader distribution of products/services, branding and advocacy..
As attractive as these opportunities are, experts warned that there is a catch. Understanding how social media affects the consumer is important. Otherwise, you could be aiming it at the wrong targets and as a result, unable to realize its potential. Divol, Edelman & Sarrazin, (2012) supported this claim by adding that in addition to knowing how social media affects the consumer, they must also understand the core business function of social media which are: to monitor, respond, amplify, and lead the customer behavior.
It is from these perspectives that a case for having social media strategy is made to understand the customer, develop clear social media strategies that can best identify and effectively exploit opportunities (to monitor, respond, amplify and lead the consumer) along the social customer’s purchasing decision journey.
Sales solution: Businesses are realizing that they can harness social media for the accumulation of social capital. And those with greater social capital close more deals, are better respected (Shih, 2009, p. 43). This is because “all things being equal, people want to do business with their friends. All things being not so equal, people STILL want to do business with their friends” (Carter, 2012). This statement was attributed to Jeffrey Gitomer (author of Social Boom and The Little Red Book of Selling).
With social media you can now have access to friends of your friends. Experts have argued that the process of building long term relationship with customer via social media is quite different from the traditional customer relationship approach. Spiro, Stanton and Rich (2009) listed the following as activities in a typical selling process: Prospecting; Pre-approach/ planning the sales; Approach; Need assessment; Presentation; Meeting objections; Gaining commitment; and follow up. The claim that “everything that can be social will be” implies that each of these selling processes can be socialized. Dell computer did it with their dellidea.com and Starbuck did with mystarbuck.com. Both companies reported impressive results that are not possible in the analog world.
Another important sales solution espoused by Shih is that social media shortens the sales cycle. Given today’s hyper-competitive marketplace, timely insight to customers need facilitated by social networking has become critical for sales success. Armed with relevant customer information and engagement in casual communication with customer made possible on social media, sales calls can be made personal to the customer’s liking. Sales people doing their homework before making sales call has been made more efficient by the share amount of customer’s data available on social media sites. Social media help foster mutual trust because it enables customer as well as companies to check each other out using online profile, reviews and more (Shih, 2009). Shih gave an example of Aster Data Systems, a start-up company that has found sales success by tapping into the company’s social network on Facebook, Myspace and Linkedin to source leads.
By facilitating more efficient preparation before sales call, enabling one-on one relationship building, sales team collaboration through timely communication and coordination, the personal connections on social networking sites could help shorten the sales cycle. And socialize all aspects of the selling process.
Customer service solution: The viral nature of online information especially on social media is one the reason some experts argued that no company can afford not to have presence on social media. “Great customer service generates powerful commentary that circulates quickly through social media. So does poor customer service!”(Roman, 2011). The fact that social conversations about your brand can be taking place in third party platforms with or without your organization has also been used to urge businesses to get involve in social media. There are several companies whose reputation has been damaged as a result of a single Tweet. And others have been harmed by delay or lack of prompt/adequate response to customer’s complaint on social media. Gordon (2012) argued that there is a new approach to customer relationship of engagement and interaction. Rappaport (2011) added that this new approach requires that organizations learn to “listen first”. By so doing, he believes organization can turn social media conversations into business advantage for both short and long run. Business advantages that effective social media implementation could offer as mentioned by other experts include the following: facilitate and accelerate a level of excellent customer experience that the new customer engagement demands (Roman, 2013), the ability to personalize customer experience and to customize products and services, offers some unique ways to differentiate product and service to the particular demands of each customer. These are perhaps the most significant ways that social media can be used to create competitive advantage (Laudon & Traver 2010 p.107).
The best way for a company to know the effectiveness of their customer solution is by hearing from the customer. Greenberg attributed this to the fact that the customer “owns the experience”. Social media enables bidirectional communication between the customer and the organization for feedback that could be used to enhance products or services and build lasting relationship. Authors have provided case studies showing that organizations have used social media to streamline their customer service by creating community where customers answers customers questions, maintain frequently ask questions and in the process reduced the volume of customer calls to their call center.
When studies show that organizations must develop social media strategy in order to survive long term, specifically when it comes to customer solution that social media can offer, they are recognizing that the power of the voice of customer (VOC) which has been heightened by social media, can be harnessed for understanding the expectations of social customers and prospects for more effective relationships and deeper levels of value. Provided a whole new vision of marketing based on social media strategy is adopted (Roman, 2011).
New product development: At best companies want to deliver products that customers adore. That requires getting great products ideas to the market better and faster than competition (Radeka, 2013). However, research have shown that over half of new products that are brought to market fail or underperform because these products are developed or marketed without full understanding of the customer. The more people you can get engaged, the more powerful it will be (Radeka, 2013). The revolution in the use of social media has started a revolution in customer engagement (Greenberg, 2010). Such engagement is being used to generate ideas, test products, and more. According to Rappaport (2011), companies that have turned to social media listening for innovation and new product work find that it has. It allows them to gauge market interest; hear suggestions for potential product features; and fine-tune concepts, products, marketing, and advertising. Social networking has the potential to unlock the intellectual capital within organizations, to connect experts and expertise, and to pave the way for unprecedented innovation (Carter, 2012). Armed with information about customer and what they want companies can feel more empowered to go after new markets. Because their ideas are heard, customers feel more accountable for providing input and are grateful when their input is incorporated in the design of new products. It is a win-win situation for companies and their customers (Shih, 2009).
The case that is being made for why developing social media strategy is imperative for businesses, specifically for new product development and innovation, stems from the fact that it enables organization to engage vast number of customers and prospects and to transform them into partners. If done correctly, it promotes a new level of bidirectional conversation which experts agreed could extend across product development (co-creation), sales, marketing and customer support. This viewpoint was espoused by Shih (2009) with the claim that with social media, not only are customers encouraged to engage with your company, but they will be motivated to engage with their friends and colleagues around your company, contributing to your sales, marketing and product innovation efforts. Rappaport cited the example of how one organization- Starbuck is using MyStarbucksIdea.com on social media to generate ideas for new product that their customers want and co-create and they are seeing great results.
Conclusion: Study shows that businesses must develop social media strategy in order to survive long term because social media touches every part of an organization from marketing, customer service, sales and product development. Given how much the social customer has changed, and the paradigm shift of power from organizations to consumers, it is apparent that people have spoken. Organization must not only adapt to these changes, they have to participate in social media for the sake of their future. It has been shown that participating in these new channels with sound business strategies they can drive better results from Marketing, sales, customer service and new product development. Furthermore evidence shows that there is no company that cannot stand to benefit from social media initiative provided its done correctly. Traditional methodologies of reaching and transacting with them no longer suffice. It is therefore imperative that forward-looking businesses develop social media in order to survive long term.



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