The Impact of Social Media on Business

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by on July 26, 2011

How can social media make your business more profitable? Is it a more effective way to communicate with your audience, or merely another marketing channel?

No single answer fits all businesses. What suits your business depends on your audience, market peculiarities and competitive environment. Some large companies study their customers, and then use social media to help their customers make better decisions. You can adapt some of these successful techniques to your marketing.

What exactly is social media? To some people it consist of interactions with customers using Twitter, Facebook and LinkedIn. But, its really much more:

According to Designing for Civil Society:

Social media is a term for the tools and platforms people use to publish, converse and share content online. The tools include blogs, wikis, podcasts, and sites to share photos and bookmarks.

Social media may include content such as digital books, articles, comments, photographs, video, audio and bookmarks created by an individual or in collaboration with others. It can be implemented for consumption on mobile phones, social networks and/or web pages.

Social media trend means sharing

One way customers can make better decisions is by sharing information between each other. Amazon is a leader in studying customers and encourages sharing. The company collects about 500 pieces of information about each person, and shares customer information between customers. For example, a person contemplating a book on Amazon is shown book reviews written by other customers. Amazon makes $50 from the first book review posted because one review triggers more sales, even if the review is negative.

When a customer orders a book, Amazon displays additional items that other people bought when purchasing the same book. It helps the customer make a better decision about which and how many items to buy.

Booking.com shares information between customers making travel reservations. A man planning a vacation with his family to Montreal can learn which hotels other families booked while in Montreal. If a couple is traveling to Paris for a month, they can learn which extended stay accommodations other couples reserved when staying in Paris. These customers can make reservations with more confidence or find a closer fit.

Considering the positive impact of social media on business, how can your company help customers share with other ideal customers, like Amazon does?

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