Social media can be defined as, ‘the use of mobile and internet technology in order to communicate or share content with each other’ (Financial Times Lexicon, 2011). Several companies have started to incorporate the use of social media into their businesses as it is being observed that it can significantly improve the potential profitability of a particular business. Many companies have reportedly gained benefits through the use of social media. According to a survey by McKinsey & Company, (McKinsey, 2009) it is observed that approximately 69% companies who made the use of social media gained business related benefits like; increase in business revenues and decrease in business costs.
According to a study report available at Inc. Magazine, (Rubin, 2010), the study shows that 7 out of 10 consumers most likely prefer a product or service that has its information available through different social media sources. Another statistical data conducted in the United States show that approximately 38,000,000 individuals, aged between 13-80 agree that their purchasing is largely influenced by social media (Graham, P., 2011).The use of social media by several types of businesses has increased over the years and this increase has definitely impacted consumer’s choice with regards to different products and services. Those businesses that make the use of social media more often are most likely to gain more benefits. The benefit of incorporating social media into your business is that it helps one to reach not only national but also international consumers.
A study conducted by Dugan shows that more than 1 million people view tweets related to customer service almost every week (Dugan, l., 2011). People all around the globe have increased the use of social media in their everyday life and several businesses take advantage of it and market their products and services via different social media websites. According to a statistical data available on e-Marketer website, (Reese, S., 2011) it is observed that 132.5 million people in United States used Face book in 2011 and at the end of 2013 the number of users would increase to approximately 152.1 million. These numbers would continue on increasing with every passing year. Any business can make the use of social media to increase its profit margin but it all depends on how efficiently a particular business uses it. For instance, nowadays, approximately 90% of consumers spend more time on the internet and almost every consumer researches on the internet before making his final purchase decision. A business that is able to generate positive product reviews and who is able to promote its products and services efficiently via social media would definitely gain benefit (Allegiance, 2010).
According to Stephanie Gehman; “Social media is not as planned or controlled as a focus group when it comes to research and development. However, with concentrated time and effort you can use these channels to your company’s advantages.” (Gehman, S., 2011) This shows that any company can make the use of social media and its different channels to earn profit for its business but it all depends on how efficiently and purposefully one makes the use of this medium. Furthermore, Stephanie Gehman has introduced a three stepped process of incorporating social media to increase business profitability. The process comprises of following 3 steps; 1. Establish your roadmap, 2. Pose relevant questions and collect data accordingly, 3. Put the data collected to work (Gehman, S., 2011).
Any company or business that uses of social media in order to develop and market their products are most likely to gain more benefits as compared to a company that does not imply the use of social media into its business (McKinsey, 2009). According to an online survey by Gordon, it is reported that approximately 70% of companies make the use of social media into their businesses (Gordon, n.d.). Even world’s biggest companies like; Google, IBM and Cisco have made the use of social media technologies to increase their business profitability. Moreover, younger generation of employees expect their employers to make the use of social media technologies into their businesses (Gaudin, 2007).
Lastly, it can be said that social media does help a business to increase its potential profitability. Social media has definitely changed the business practices for many companies and it has becomes easier for businesses to reach their potential customers. In fact, now businesses are able to reach large number of their potential customers through advertising and promotion via social media channels. Those companies who do not embrace social media technologies are at a very big disadvantage and they incur unimaginable losses due to their neglecting behaviour.
References
Financial Times, 2011. Social media. [online] Available at:
McKinsey & Company, 2009. How companies are benefitting from web 2.0: Mckinsey global survey results. [online] Mckinsey & Company. Available at:
Rubin, Courtney, 2010. Is the online information about your business correct? [online] Inc. Magazine. Available at:
Graham, P., 2011. Social media now influences brand perceptions, purchase decisions of 38 million U.S. [online] Knowledge Networks. Available at:
Dugan, L., 2011. More than 1 million people per week view customer service tweets. [online] Study. Available at:
Reese, S., 2011. Quick stat: facebook to reach 132.5 million users in US this year. [online] eMarketer. Available at:
Gehman, S., 2011. 3 ways to use social media for product research and development. [online] Available at:
Allegiance, 2010. The case for social media feedback management [online] Available at:
Gaudin, Sharon, 2009. Study. [online] Available at:
Gordon, Josh. n.d. The coming change in social media business application: separating the biz from the buzz. [online] Social Media Today. Available at:
