Power of Social Media in Business
Makeba A. Smith
Rasmussen College

Author Note This research is being submitted on December 02, 2012, for Pamela Wren’s B371/GEB3110 Section 05 Research and Report Writing course.

Power of Social Media in Business
The topic I chose to conduct my research paper on is the impact or the power social media has on business. The reason I selected this topic is because social media has become very popular among people today. In addition, many businesses have incorporated the use of social media sites to publicize, communicate, advertise, and promote their companies. The use of social media in businesses have been met with many opposing forces, but the purpose of my paper will be to focus on all the positive impacts social media has in the business world.
Should the power of social media in business be considered to have negative impact on companies? This is an important question to me because I use social media sites all the time. In my opinion the use of social media does not impact businesses negatively and as a result I intend on presenting a paper that will bring a positive light to those that oppose social media being used in business. In order to present my reasoning I will have to conduct research to obtain background information on businesses and the impact social media has on their productivity. I may also have to present information regarding the ways that businesses use social media to promote their companies. During the course of my research I expect to review social media as a whole and also the most popular social media sites that business use and the impact these sites have the companies. My research methodology is basically to pinpoint the various opposing views people may have regarding social media in businesses and to present the positive side to these views.
Social media has become a major tool of communication among many people. In addition, many businesses find that social media sites are powerful marketing tools that can be used promote their product. As an avid user of social media sites, I chose to research how powerful the use of social media site is in the world of business. My first method of research was to conduct an interview with a local business owner who has made the use of social media sites a part of her company. While social media sites have been met with many opposing views, they have proven to be a very effective marketing tool for many businesses with many positive outcomes. Over a period of three days, I sat with Ms. K’Maya Counts, owner and proprietor of Fashion Counts Clothing, to discuss her opinion about the use of social media in business. Like myself, Ms. Counts agrees that social media is beneficial to business owners once used correctly. Ms. Counts opened her clothing store about four years ago and was having difficulty getting the word out about her store and what it offered. She designed a website, distributed business cards, and received assistance from friends and family who spread the word around verbally, but for some reason her volume of customers were not what she expected. After about eight months, she said she decided to speak with a fellow business owner to find out what other options she has to increase the number of customers that visit her business. Ms. Counts stated that she was surprised by the answer she received. Social media was the last thing she could think of that would help her business. However, she took the advice of her fellow business owner and opened an account on Facebook and LinkedIn. Again she spread the word about her new marketing tool. As a result of this new idea, Ms. Counts said that the number of customers to her store more than tripled and her revenue has also increased greatly. She is now working on opening an online store for those individuals that prefer the ease and comfort of shopping online. After sitting with Ms. Counts, I can see that social media sites are extremely beneficial to businesses once the user knows what they are doing and markets their company correctly. Ms. Counts, though new to owning her own business, did her research and solicited the advice from another business owner and is successful in using social media in her business. Because of social media and her resourceful thinking Fashion Counts Clothing is more successful than she initially expected. Some critics may say that social media sites are harmful to businesses and only have negative effects, but K’Maya Counts’ clothing store is just one example of the positive effects that social media sites have on business. Before incorporating social media into her business her revenue from sales was about $18,000 annually. After social media, both her clientele and revenues increased exponentially with sales amounting to about $52,000 in 2011. Furthermore, it has prompted her to expand by opening an online store. This too, once done correctly will benefit her even more and allow her business to continue to prosper. For some people social media sites are just a means for college and high school kids to keep in contact with each and it does not have any real purpose. However, social media has become an integral part of business today. Exactly where social media lives within a company depends largely on what goals have been set for social media. In addition to a means of faster long distance communication, social media has also become a powerful marketing tool for businesses. My chosen method of quantitative research is to investigate the various ways social media is used by businesses in marketing and to reach and communicate with customers. I will be using resources made available by Rasmussen library. Social media are not just for socialization as it could also be used in hiring and introducing information about companies. According to Bhanot (2012), around 52% of businesses globally use social media sites like Twitter and Weibo to engage, connect, and inform existing customers. In addition to connecting with consumers, some companies use social media to collaborate with stakeholders and with employees across the globe, bridging geographic boundaries (Bhanot, 2012). Bhanot (2012) goes on to say that companies across variety of industries are exploring social media to tap opportunities in market research. They look at brand building, product promotion, development, customer service, and other aspects of running their businesses (Bhanot, 2012). The most successful digital marketers focus managing four core sources of value in their marketing strategies, rethinking their priorities and budgets, and substantially reshaping their processes and skills (Luigi, Oana, Mihai, Simona, 2011). Due to the expansion of social media, consumers perceive and absorb with marketing messages in different ways (Luigi et al, 2011). Based on my research it is apparent that the power of social media is far more extreme than I initially expected. There is evidence of many positive ways that social media benefits businesses and their productivity. Social media has been around for some time and by the looks of it, it will be around for many more years to come. With the advances in technology who knows where social media will go next. Businesses are finding more ways to reach out to their customers and finding more innovative ways to market their products. According to a survey done by Postling.com, 78 percent of small business owners surveyed use Twitter, and 75 percent use Facebook (Nesbit, 2011). According to Nesbit (2011), some small business owners are overwhelmed by social media, which keeps them from realizing its full potential. Another major problem is that there are often no clear-cut roles defined for who will maintain the social media sites. 64 percent of U.S. adults are active on social media and 79 percent of those users are likely to seek the opinions of others on social media before buying goods or services (Rodriguez, Petersen, & Krishnan, 2012). According to the article by Rodriguez et al (2012), of the 79 percent, 64 percent have changed their minds about a product or a business because of the opinions posted on social media. With a social media profile, businesses would have the option to post their own content, which will allow social media users to draw conclusions about the company directly from the source. Interaction through social media provides a way for companies to connect with new and loyal customers. Sixty percent of small businesses respond all the time to comments posted on social media, whether negative or positive, while 24 percent respond sometimes, and 16 percent do not respond at all (Trainor, 2012). Responding to posts from customers provides a way for businesses to have conversations with customers while getting feedback on performance and customer satisfaction. This also adds a sense of personalization between the company and their clients.
More than 82% of customers are likely or much more likely to trust a company whose CEO and team engage in social media. And an amazing 77% of customers are likely or much more willing to buy from a company whose mission and values are defined through their leaderships’ involvement in social media (The 'social media thing': Will it catch on in your business, 2012). Any company that is not engaged in social media today is like companies years ago that chose to send snail mail instead of picking up the phone and making a phone call.
The promise of social media marketing often goes unfulfilled. The objective is to create a dialogue with customers, generate traffic to specific websites and to generate interest in what a company has to offer (Small business trends: Small business news: Crazy for social media 2010). Social media marketers are often most successful when they are exceptional content creators. Being able to develop proprietary customized high-caliber content is commonly the most effective way to develop a solid position as an authority in a particular area (Bhanot, 2012). There’s certainly a cost to developing this level of proprietary content. If a company lacks the abilities or resources to develop their own astounding intellectual content, a reasonable alternative is organizing third-party content. By bringing together relatively new ideas and adding some transformative or explanatory and creative elements, a business can also be in a position to be a leading reputable authority (American Library Association – Congresses, 2011).
Beyond advertising on Facebook or Twitter, companies are using social networks to build teams that solve problems faster, share information better among their employees and partners, bring customer ideas for new product designs to market earlier, and redesign all kinds of corporate software in Facebook's easy-to-learn style (Trainor, 2012). According to Trainor (2012), social networking seems to be doing a different job in Corporate America than when the internet first came around. In the late 1990s, companies such as Wal-Mart used the Internet to streamline supply chains and better manage inventories to hold down prices. Banks used the new technology to cut the cost of processing mortgages by as much as two-thirds, by eliminating clerical workers and substituting e-mail for expensive overnight deliveries (Trainor, 2012).
Social media has the potential to be as important to the broader economy as more obviously business-related information technologies such as mobile phones and cloud computing. Companies are tinkering with the technology and their own business processes, trying to find ways to match them up to get the most impact and learn how to interpret all the unorganized data users disclose about themselves on the sites (Rodriguez, Peterson, & Krishnan, 2012).
More small businesses than ever are turning to social media to generate new business and connect with customers. With over 9 million small businesses on its platform, the most popular social network for building brand awareness is Facebook, which just unveiled its new Timeline format for businesses. There is no doubt that social media has become an essential marketing tool, but many small businesses are not taking full advantage of its potential (Nesbit, 2011)
Companies also use social media to recruit candidates for employment. Statistics show 14.4 million people have used social media to find a job. That’s nearly the same amount of job seekers who are currently displaced and seeking work. I’d be curious to know the amount of recruiters who use social media as their primary source of candidates. 56% of HR Professionals are using social media to source candidates. This figure happens to be a 54% increase from 2008. Social recruiting is a new phenomenon that has grown over the last 36 months by leaps and bounds. 24% of managers found candidate personality & fit from a social profile. Fit and personality are such subjective elements, but are critical to making the right cultural hire and decreasing employee turnover. The social profile can give the job seeker another outlet to showcase that he or she is a good cultural fit. 6 to 1 is the number of job seekers to every job available in America. No wonder job seekers are taking to social media and public campaigns to gain the attention of hiring managers and organizations. The market is flooded with candidates, some of which are not qualified and many of which simply have to wait too long in between opportunities (Luigi, Oana, Miahi, & Simona, 2011).
Research supports my original argument that the use of social media proves to be very beneficial to businesses. Social media serves as a useful marketing tool and also as a faster more efficient way for companies to communicate with customers. Small business owners like Ms. Counts, have seen firsthand what social media can do for a business and has continued to make use of it.

References
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