Social Media and Business Impact

“Social Media” is the word nowadays on everyone’s lips, whether it is the young students or the adults or the major enterprises. However, I would like to describe some of the terms that are used in social media and why it is important for your business.

Social media is a technology channel built on web 2.0. It simply connects people on the web. It could be a video site such as youtube.com, metacafe.com or social sites - faccebook.com or orkut.com, myspace.com or online gaming sites. It could even be a blogging or micro-blogging sites such as twitter. 

Social networking has become the medium where individuals of similar mindset come together to form specific groups, for example, classmates, people with particular hobbies, technical members of a committee or a small rural community or neighbors from a town. The only difference between earlier social networking and the present scenario is the new technology – internet and www. This has enabled people from across the globe to connect and stay in touch, exchange information within seconds. The “distance” is slowly disappearing and world is becoming “small” (small world phenomenon). 

Social media marketing is the way to use “social media networking” to build customer relationships, drive repeat business and attract new customers through friends sharing with friends. Why is social network marketing powerful?  Mainly because of its characteristics - Network Effects, Strength of Weak Ties, Small World Phenomenon and Six Degrees Separation.

Here are some ways the social media can have a big impact on your business:

e-WOM – You can build your brand through word of mouth and also by spreading the word. Social media offers an excellent way to promote new products. The introductory offers or promotions are a good way to generate interest and to build the relationship (social group).

Promotions – Give customers offers which are so good that they cannot turn down and can make them go “viral”.

Participation - Listen and respond to what your customers are saying about you and to you.

Customer Retention - Build relationships with customers so that they trust you more.

Staying on Top of the competition - Social media is helpful in observing what other competing businesses are doing and what’s being said in the market by the consumers. From these observations, you will be able to infer market intelligence and “sentiments” of consumers.

To help marketers, I plotted my “Social” graph. It clearly shows different clusters (represented by different colours) –schoolmates, hobby network, colleagues/ex-colleagues and family/friends. This graph shows the “influential player” in my “social network.” (It does not mean that if you have more number of friends you are the influential player!)

 Which social “media” works for your business? It all depends on your “social media strategy.”