Social media means business
Companies who are not participating in social media and using social technologies are at a disadvantage; social media means business.
In a 2013 article in MIT Sloan Management Review, Gerald C. Kane, Associate Professor at the Carroll School of Management at Boston College, wrote: “When asked to define social media, most people probably rely on something similar to Supreme Court Justice Potter Stewart’s definition of obscenity: ‘I know it when I see it.’” Unfortunately this approach to defining social media tends to perpetuate stereotypes and does not accurately reflect what social media is and how it can be utilized by business. What, then, is social media? Social media is defined by the Oxford English Dictionary as: “websites and applications that enable users to create and share content or to participate in social networking.” These websites and applications are inclusive of Twitter, Facebook, LinkedIn, and Google+. Social media is part of a larger framework called social technologies. The McKinsey Global Institute defines social technologies as: “IT products and services that enable the formation and operation of online communities, where participants have distributed access to content and distributed rights to create, add, and/or modify content. Social technologies are inclusive of Yammer, Jive, Moxie, and Supply Chain Operating Networks such as Descartes, GT Nexus, Elemica, E2open, LeanLogistics, and One Network. Also included in social technologies are network-based business intelligence and analytics.
Social media is business
Clara Shih, CEO and Founder of Hearsay Social, and Lisa Shalett, Managing Director and Head of Brand Marketing and Digital Strategy at Goldman Sachs, call attention to the fact that when you get right down to it, social media encompasses “a set of new and innovative ways for businesses and customers to do what they have always done: build relationships, exchange information, read and write reviews, and leverage trusted networks of friends and experts.” Furthermore, engaging in social media and utilizing social technologies provides business with the tools to manage status, social networks, and established relationships—all drivers of firm performance. Social media and social networking also enable companies to be able to better manage risk, create demand, define their reputation, innovate, and enhance business intelligence.
Companies who don’t use social media are at a disadvantage
Companies who are not participating in social media and using social technologies are at a disadvantage. One of the primary reasons is that customers (current and future), employees, and competitors are participating. Kane points out that “competitors are innovating and experimenting with social media to conduct their own business faster, at a greater scope, and with broader reach than is possible without these tools. If competitors can figure out how to use social media for their advantage (and they will), then the manager and his or her business will lose out—unless he or she can keep up. After all, there is no such thing as social business—there is only business.” Similarly, Shih and Shalett note that “[s]ocial media offers a variety of opportunities for brands to understand and participate in those conversations. While participating in social media is not without risk, not participating might prove to be the greater risk—especially to reputations.” By the same token, Freek Vermeulen an Associate Professor of Strategy and Entrepreneurship at the London Business School puts forth: “Status, social networks, and prior relationships are the forgotten drivers of firm performance. Underestimate them at your peril. How you manage them should be as much part of your strategizing as analyses of differentiation, value propositions, and customer segments.”
Kane also points out that social media enables customers to share information about their experiences globally, and allows employees to collaborate so as to improve customer service.
The benefits outweigh the risks
In 2012 The McKinsey Global Institute reported that 72% of companies surveyed use social technologies in their business and that 90% of those companies reported seeing benefits. “The benefits of social technologies will likely outweigh the risks for most companies. Organizations that fail to invest in understanding social technologies will be at greater risk of having their business models disrupted by social technologies.”
A 2014 survey found that companies within the logistics and supply chain industries are using social media and realizing benefits. The survey found that the three most popular social networks for companies in the logistics and supply chain are Twitter, (95%), LinkedIn (86%), and Facebook (77%). Specific benefits realized from social media include: increased engagement with customers (86%), increased market intelligence (80%), and increased business intelligence (73%). Other benefits include:
- Increased customer retention;
- Increased demand for products and services;
- Increased leads;
- Shortened sales cycles.
Social media means business.