Tuesday, February 18, 2014

The Power of Social Media in a Business

We are a society that likes to be social, we like to talk to others, make new friends, and build new relationships. Being social is part of us. We are social creatures. We crave social interactions. We love to belong to social groups, listen to stories, share experiences and contribute something of value to the groups to which we belong.[1]  Therefore when social media channels like MySpace, Facebook, Twitter, YouTube, LinkedIn, Pinterest, Blogs and others became available, people loved it, they were happy because these mediums gave them the ability to communicate with others, share photos, make new friends. It was a way for people to connect, to keep building relationships and even express themselves. However this is not a new concept. Social Media has been around for a long time. It started with the BBS. Short for Bulletin Board System, these online meeting places were effectively independently-produced hunks of code that allowed users to communicate with a central system where they could download files or games and post messages to other users.[2] Since then, it has evolved greatly and it is more accessible than before.  It has become part of our lives so much that many organizations know that and want to take advantage of it. 

Many big companies think that social media is a new way of doing businesses better. In fact, the goal of many companies today is to turn from a product-focused organization into a customer-centric organization.  Firms of all sizes need to learn to emulate what small, service-oriented businesses have always done well, that is, create better one-to-one relationships with their customers.[3] Why would they want to do this and how can companies build a relationship with their customers?  The answer is simple, companies want and need to build good relationships with people to ultimately increase revenue and improve profit. In order for companies to really build a good relationship with their customers they need to understand its customer, know who they are and what their interest are.  They need to get to know their customers more personally.  Through social media analytics, big and small companies can do this and more.  Through social media, companies can increase brand awareness, generate more leads, increase customer retention[4] and it can also be a way of a voice of customer platform allowing companies to understand and getting to know what their customers really want or need.
Increase Brand Awareness is all about getting people to see your brand. It is about people getting to know you and what you believe in so that they can relate to you and want to build a relationship with your company.

Generate more Leads is trying to get people to be interested on your products or services and ultimately give you contact information. This would be a great way to start getting to know your customers more personally.  With contact information, many times you learn where they are geographically, giving you an idea where your customers come from.
Increase Customer Retention is trying to keep your current customers happy so they
keep coming back to do business with you. One time, I read a report from Minder Chen that mentioned that people usually have the mentality that “if I am conversing with you, I’ll speak your language. If I am buying from you, you speak my language.”  We could interpret this in many ways, literally by speaking in your different customers languages or by being sensible to the customers needs and wants and giving it to them. Social media can help marketers start to understand what their customers’ needs, wants, and desires are, instead of trying to get inside their heads and guess.

Voice of Customer; first of all, Voice of Customer (VOC) Analytics is an end-to-end solution that enables enterprises to process customer sentiments and opinions in unstructured text. These opinions and sentiments come from different channels at multiple interaction points such as blogs, market research reports, emails, Twitter, and social media.[5]  Social media as its name states is social. Organizations need to be available to engage with their customers, encourage their customers and prospects to chat with them, respond to queries and ask questions.[6]  By doing this, companies get immediate response, such as learning to analyze their customers behaviors, and learning to give customers what they want, when they want it and how they want it.  This increases revenue, improves profit and builds a closer relationship with their customers. 

If social media is so beneficial to organizations in general, why is it that not everybody uses it? The answer is that social media analytics is hard to quantify, not very many know how to integrate social media with their other marketing campaigns, they don’t have the people or skills to do this, or simply they don’t see a fast return on their investment.[7] However, there are more and more companies that are coming up with social media analytic platforms that can solve this problem.  Some of these companies are IBM, Adobe, Wildfire by Google, Infosys, HIMI and many more. 

I believe that different social media channels will soon no longer be an option for companies to implement as part of doing businesses. It will end up being a necessity.  Many years ago, the following report was given; “Today, economists confirm that we are in an era of global business - a one world market. In today’s global economy, the new world market will not only be international, but also intensely intercultural. The country or company whose citizens have the greatest competency, all else being equal, will gain this competitive advantage.”[8] If this report was given years ago, how much more important is it today to capture a global market? Organizations could reach a more global audience in a faster way and in such a scale through the use of different social media channels than any other marketing channel out there. Or, what do you think?

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