Social Media in Evolving Business

Social media in recent times has become a headline grabbing phenomenon that is rapidly growing. Instead of using social networking as a tool to simply connect with people, entrepreneurs across the world are frequently trying to find ways to utilize the trend of social networking as a business opportunity.
Studies suggest that social networking sites should be viewed as a complementary device to the presence of businesses in order to promote success. Businesses should consider the sites as an asset that is valuable and useful in gaining their companies positive attention. In essence social networking sites, when used properly, should not be employed as a replacement to the business traditional online presence.
But the question arises, what is social media?

Social media is a conversation on the Internet. It is a conversation of the organization with its customers, employees, suppliers, investors, critics and fans. In a nutshell, it is a conversation with anyone having access to Internet. However, the conversation is not controlled and organized. But it is organic and complex, in the form of a human voice. Thus, it is not a strategy, but simply a mode of reaching out to all the stakeholders of the business.

What are the characteristics of Social Media?

Social media is best understood as a group of new kinds of online media, which share most or all of the following characteristics:

1.    Participation: social media encourages contributions and feedback from everyone who is interested. It blurs the line between media and audience.

2.    Openness: most social media services are open to feedback and participation. They encourage voting, comments and the sharing of information.

3.    Conversation: unlike traditional media, which is more of a “broadcast” (content transmitted or distributed to an audience), social media is better seen as a two-way conversation.

4.    Community: social media allows communities to form quickly and communicate effectively. Communities share common interests, such as a love of photography, a political issue or a favourite TV show.

5.    Connectedness: most kinds of social media thrive on their connectedness, making use of links to other sites, resources and people.

Why should companies adopt social media?

- It covers a large audience in a faster, economical and easier manner

- Helps even small businesses to reach to a wider customer base

- These channels allow a connect with the stakeholders which enhances the credibility of the firm

- The best place of connecting with the stakeholders is where they are already talking about things important to them. Thus by joining in the conversation would increase the noticeability of the firm.

- It allows the company’s website to integrate multimedia such as audio and video which increases the attractiveness of the company

- It allows users to generate their own content thereby allowing them to interact with each other

How can companies utilize social media?

There are many mediums available for an organization to effectively harness the complete potential of social media. The various types of mediums available are as follows:

Social networks: These sites allow people to build personal web pages and then connect with friends to share content and communication.

Blogs: Perhaps the best known form of social media, blogs is online journals, with entries appearing with the most recent first.

Wikis: These websites allow people to add content to or edit the information on them, acting as a communal document or database.

Forums: Areas where online discussion on specific topics and interests are held. Forums came about before the term “social media” and are a powerful and popular element of online communities.

Audio, Video and Photo sharing Sites: Sites where the above mentioned are shared between a large numbers of people.

Microblogging: Social networking combined with bite-sized blogging, where small amounts of content (‘updates’) are distributed online and through the mobile phone network.

Companies are now using a wide array of social networking services ranging from Twitter, Facebook and LinkedIn to emails, blogs and websites to build up interest in their new product or service launch. There are countless social media sites available in each of the above categories.
The diagram below maps some of them into the social media space.

Is Social Media perfect? Doesn’t it have any downsides to it?

Like everything else, social media does have its share of limitations. However, most of these limitations vary depending upon the user’s perceptions. The various disadvantages of this new age media are as follows:

Time Consuming: To leverage on social media, one needs to be connected to its audience all the time. He needs have updated helpful information on the network and should respond to any queries to satisfy the curiosity of the audience otherwise the audience might loose faith in business.

Limited Reach: Accessibility to the Internet in India is only around 3-5% of the total population. Thus, only a limited segment can be targeted through this medium.

Information Overload: With so much information available, there can be a problem of information overload and social networking overload which may cause problems of authenticity and validity of the information may become an issue.

Lack of Knowledge: Since social media is still in its infancy stage, not much awareness and information is available. Thus, organizations may have to incur high initial costs for setting up its operations.

Intrusion on Privacy: Since social media is an open platform, there may be issues with privacy as a lot of information is available about the user.

Apart from these problems, there is also an issue with customer loyalty. According to Deloitte in 2008, around 40% of user generated content websites have more than 500 members but very few engage with it in terms of their contribution, retrieval and exploration on the site.

Tags: social media optimization for businesses