Social media is integral to business success but competing priorities and a lack of understanding about how it fits into strategy mean it’s often not on the agenda.
Because of the way that social media plays out when things go wrong, in particular through traditional media, business owners are disproportionately aware of its risks.
On the other hand they are missing out on growth opportunities and that social media enables them to create a direct relationship with customers, increase sales and improve loyalty and retention through online customer service.
Here are 11 reasons to put social media on your 2015 agenda:
1. Every business is a digital business
There are over two billion people online and five billion have mobile phones. When they want something (information, recommendations, products or services) they search online.
They’ll find you, not vice versa. But that means you have to be there to be found, including in social media channels where conversations are highly trusted and influential. Social media is an integral part of digital life.
It doesn’t matter whether you sell data or pizza, you’re a digital business.
2. Social media is good for business
Many studies quote multi-trillion dollar figures on the value of the internet economy. What’s important is to leverage the benefit for your particular slice of the pie.
According to research by Boston Consulting, SMEs that are online and engaged have grown revenue up to 22% higher and sales up to six times faster than those with little or no online presence.
Exact Target shows 66% of marketers believe social media positively impacts business performance and plan to increase use this year.
3. Social media will become more, not less, important
Social networks are used by 73% of adults online and 52% of them use multiple sites. This gives businesses a powerful mechanism to engage directly with their customers.
The impact is also likely to grow as more people come online and older consumers become digitally literate.
There is already evidence this is happening; users aged 55+ accounted for the highest adoption rates on Twitter, Facebook and Google+ in 2014. According to Pew Research, 31% of all seniors use social media and 56% of those 65 and older use Facebook.
In a connected economy, a disconnected company creates a ticking time bomb, according to Trevor Young and void for competitors to step in.
4. Social media creates a new mindset
It’s old-school thinking that you can insert a message when and how you want because you’ve paid for it.
Although there’s plenty of scope for paid advertising, including using social media, it is at minimum a two-way conversation. Often it’s broader, impacting groups and even whole communities; for example, posting voting intentions has an impact on the ballot box decisions of friends.
Social media creates a discipline of engagement that will stand you in good stead as channels evolve.
For example, according to Business Insider, the market for messaging apps like WeChat, WhatsApp and Line grew 148% last year. Some predict it’s the new social media. While different from Twitter or Facebook what these channels have in common is that they put the user in control of what is said and shared. That reinforces the importance of building communities that will talk positively about your business.
5. You don’t control your most powerful influencers but you can influence them through social media
The content that users generate spontaneously (user-generated content or UGC as it’s known) is one of the most powerful influences on behaviour.
Crowdtap and Ipsos showed that for millennials UGC is 20% more influential on a purchasing decision than a professional review and 35% more memorable than other forms of media. Bazaarvoice’s Erin Nelson says the comments of strangers who have used a product are more likely to influence purchasing decisions than anything else. What they value is relevant experience.
Having a direct relationship with these influencers including the ability to correct misinformation is critical.
6. Social media enables a direct relationship with customers
Amongst other things, social media influences how people invest and is useful for any business that can benefit from talking directly to customers.
According to Cogent Research, 90% of high net worth investor groups use social media to inform personal investment decisions, and up to 70% have changed relationships or reallocated investments as a result.
Integrating social media into business strategy gives a company direct access to the community to tell its own stories
Businesses that rely on others (like brokers and financial advisors) to share their stories have no control over how it changes through various layers. This increases the risk that key information drops out or is distorted. A direct relationship with the community overcomes that barrier.
7. Customers reward businesses that serve them on social media
According to Conversocial, 66% of consumers stopped doing business with a provider and switched to another in the past year due to poor customer service experiences.
Bain & Co found that customers who engage with companies over social media spend 20-40% more money with those companies than other customers.
When they provide customer service over social media, those customers end up spending 20-40% more with the company.
8. Social media is just as important for sales in B2B as B2C
Author Bryan Kramer says global interconnection means the end of the distinction between B2C and B2B for H2H, or human-to-human, connection.
Notwithstanding that, Tom Pick’s article shows its importance for B2B, given that 81% of B2B purchase cycles start with web search.
While 85% of B2B buyers believe companies should present information via social networks only 20% of CMOs currently leverage it, meaning a potential advantage for those who integrate it into strategy quickly.
9. Your people use social media
Your people already use social media at work and to talk about work as well as other things.
In Social Media and the Law (Lexis Nexis), James Mattson says “social media challenges the divide between private and public life, conduct at work and conduct out of work hours.”
That means you must have enforceable policies to manage its proper use.
Even during pre-employment research, employers must be sure they don’t breach discrimination or privacy laws when collecting data from social media accounts.
Given a social media platform is an asset, and in some cases platforms like LinkedIn can act as de facto CRMs, the ownership of social media accounts needs to be considered through the lifecycle of employment, including the employment contract.
10. Social media can increase productivity
Social media can also be used to drive productivity.
It’s well recognised that young professionals value internet-connected mobility over pay. A recent Cisco study found companies that embrace social media are more attractive to job applicants in the highly competitive talent pool.
Employees currently spend up to 20% of their time at work looking for information and McKinsey & Co believes productivity could be increased by as much as 25% by social technologies that increase collaboration.
This is one of many studies that support the use of enterprise-wide social technologies for productivity.
11. The law says you must take social media into account
Apart from the impact that a social media crisis can have on reputation, there have been numerous cases in which the misuse of social media has directly impacted the share price.
In April 2013 the US Security and Exchange Commission announced that social media could be used to make market statements; the focus is still on reaching the broad market. (The decision can be read in full here.)
It’s important to note that disclosure laws vary in Australia, which has an ASX-first approach. In 2013 the ASX updated its guidance on disclosure, advising companies to monitor online for sensitive information. (Guidance Note 8 can be read here.)
Here are some tips for turning these insights into actions:
- Brief the leadership team on the importance of social media.
- Source industry-specific intelligence including case studies and information on regulatory constraints.
- Research the social media preferences of your customers, for example, Google+ has 67% male users while Pinterest is 70% female.
- Put a social media policy in place and train against it.
- Develop a social media strategy linked to concrete business objectives.
- Obtain relevant baseline data that enables you to track performance and measure ROI.
- Prioritise and pilot a social media program, for example, in customer service or engagement, whatever best suits your business.
Dionne Lew is the CEO of the Social Executive®, an advisor to boards and senior executives on digital and social media rated in the top 1% for global community influence by Kred. Her latest book The Social Executive – Why Leaders Need Social Media and How It’s Good For Business (Wiley) is now available.