Running Head: Social Media and Its Effect on Business

Social Media and Its Effect on Business

Jennifer Hood

Student ID: 5076418

Thomas Nelson Community College

Business 100 – D01, Spring 2015

Professor Robertson

April 18, 2023

Running Head: Social Media and Its Effect on Business 2

Social Media and Its Effect on Business

Introduction

In a world where Facebook and Twitter are pre-loaded on new cell phones and even the

local mom-and-pop shop has a website, social media is everywhere you turn. According to Carr,

“most Americans spend at least eight and a half hours a day looking at a television, a computer

monitor, or the screen of their mobile phone.” (Carr, 2010) No one can deny the need Americans

have developed to update, text, tweet, “gram,” and surf. Businesses in the 21st century must keep

up with their customers in order to keep up with their competitors.

What is Social Media?

Before we can discuss its impact, we must first discuss what social media really is. Most

people use the term “social media” without understanding exactly what it means. Any website

that “interacts with you while giving you information” is a social media site. (Nations, 2015)

The local news channel that gives you an opportunity to comment on stories at the bottom of the

page is just as much of a social media site as YouTube and Facebook.

Social media comes in many different forms from many different places. The standard

categories associated with social media include social networking, picture-sharing, podcasts, and

weblogs. Other classes include internet forums, web magazines, microblogs, search engine

optimization and social bookmarking. Before exploring their impact on business, a clear

understanding of some of these groups is needed.

Social Networking

Perhaps the most common example of social media is social networking. A social network

is “a group of people who interact through online networks, blogs, comments, sharing, checking

in, reviews, and who use text, audio, photographs, and video for social, professional, and

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educational purposes.” (Safko, 2012, p. 28) The Big Three social networks are Facebook,

Twitter, and LinkedIn. Originally, many thought that Facebook would go out of popularity as

quickly as MySpace did, however The Washington Post reported in October of 2014 that

Facebook’s Q3 report showed “its monthly active users cleared 1.35 billion- roughly equal [to]

the population of China.” (Dewey, 2014) Twitter has an estimated 284 million users, and

LinkedIn has approximately 332 million users. (Smith, 2015)

Social Bookmarking

Social bookmarking sites are those that let “users store, categorize and tag, and search

bookmarks.” (Go, 2015) Delicious is a service that allows for the sharing of these bookmarks

and recommending them to others. Using algorithms based on search history and other pages

bookmarked by a user, Delicious makes recommendations for new sites that users may enjoy.

Pinterest is a similar site, used for “pinning” websites to virtual bulletin boards that can be shared

and searched.

Social Reviews

Perhaps the most well-known social review site is Yelp!, whose mission is “to connect

people with great local businesses.” (Yelp!, 2015) They also estimate 139 million unique

visitors each month of Q3 in 2014. Yelp! allows business owners to set up accounts to show

pictures and post messages to customers, but they are never allowed to alter the reviews posted

by their customers. This helps to ensure that users get a fair and unbiased view of the businesses

being reviewed. Other examples include the user reviews seen on Amazon and eBay.

How is Social Media Important to Businesses?

One of the best ways to express the impact of social media on business is the story of Dave

Carroll and his fight with United Airlines. In 2008, Mr. Carroll, the country-western singer and

Running Head: Social Media and Its Effect on Business 4

songwriter, observed three baggage handlers throwing his $3,500 guitar around on the tarmac.

Despite informing flight attendants and waging war against customer service representatives for

several months, United Airlines refused to compensate him for repairs in cash or even travel

vouchers. He decided to take his plight to the public, producing a four and a half minute music

video that he then released to YouTube. When the video reached 150,000 views, United

attempted to compensate Carroll in hopes of getting the video removed, at which point he not

only refused, he made a follow- up video. As of January, 2015, the initial video had been viewed

over 14.5 million times, the second had been viewed 1.8 million times, and the third had over

750,000 views, for a total of over 17 million views. (Maxwell, 2015) The BBC reported that

United’s stock fell ten percent within four weeks of the initial posting, a loss of approximately

$180 million dollars. (Wilson, 2011)

On the other hand, Taylor Guitars saw an opportunity- they not only replaced the damaged

guitar, they created a short video which they talked about their repair services and suggestions

for safe travel with guitars. Taylor Guitars came out the obvious “winner” here.

Free Advertising

In 2015, Facebook is a place where people live their lives, talking about what is happening,

including “shopping, spending, asking for advice, complaining, complimenting, and

recommending,” and there is not “any business in the world that would turn down the

opportunity to be exposed to and potentially talked about by” 1.35 billion people. (Safko, 2012,

p. 33) Businesses can share information with their customers as well as engage new customers.

They can also do customer service, marketing, promotions, and even sales! New updates to

Facebook allow businesses to create their own online shop. Especially for small businesses,

small promotions through social media can drive customers to the online store or even the brick-

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and-mortar store. With Twitter, it can be even easier to build a community; “when you have a

big announcement, sale, or product for sale, the community that you have built will respond to

you with purchases, retweeting, and coming into you establishment.” (Safko, 2012, p. 41)

Whether through Twitter or Facebook posts offering a percentage off, or interfacing with

customers to answer questions about products, social networking is an amazing opportunity for

businesses.

Free Networking

Networking is a key part of business; from experts to other businesses to suppliers, no one

business can stand alone. LinkedIn, which is a professional social network, has a very clear

mission: “connect the world's professionals to make them more productive and successful.”

(LinkedIn, 2015) “Professionals representing small businesses or start-ups, or entrepreneurs who

run businesses with extremely limited staff… [use] LinkedIn in search for influential business

partners who can help them get to the next level.” (Schaffer, 2011, p. xviii) It is interesting to

note that “LinkedIn’s … members include an executive from every Fortune 500 Company.”

(Schaffer, 2011, p. 9) Twitter also “allows for businesses to follow other leading experts to learn

from them and share their information,” while also allowing users “to have relationships with

people and businesses that they never could have before.” (Safko, 2012, pp. 40-41) This amazing

networking opportunity was unheard of before.

Free Information

Sometimes called “social listening,” certain applications for cell phones and internet

browsers allow users to see what is being said about competitors. It can also be as simple as

watching their Facebook pages and Twitter feeds. The most important thing is that it allows for

instant information about competition as well as how your own brand stands up by comparison.

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It can also show what works and what doesn’t, especially for a business that is just opening the

door to social media. For example, if a competitor is constantly using images to keep their

products fresh in customers mind, or they have a large number of “Likes” on their business’s

Facebook but almost none on Twitter, then a business owner can use that to gauge how best to

spend their time setting up their online brand.

Another important part of social listening is monitoring what is being said about your

own brand. Monitoring sites like Yelp!, as well as users Tweets to your company and comments

on a Facebook page can help to nip problems with customer service in the bud. For example, if a

customer complains on Yelp! about what they felt was an unnecessarily long wait to be seated, a

business may invest in “call ahead seating,” such as the program used at Texas Roadhouse

Restaurants. It also helps to give the business owner an incredible insight as to what the customer

thinks and feels when they enter the business.

Conclusion

Business must realize that “social media is not just a marketing tactic…it’s a social

phenomenon that is here to stay.” (Berkley & Walter, 2013, p. 1) Ultimately, “the concept of

doing business in a virtual world is still new” however, “there is a tremendous opportunity for

enterprises to participate in a huge trusted network of like-minded participants- in which many

may be prospects.” (Safko, 2012, p. 367)

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Works Cited

Berkley, H., & Walter, A. (2013). The Social Media Advantage. North Vancouver: International Self-Counsel Press Ltd.

Carr, N. (2010). The Shallows: What the Internet Is Doing to Our Brains. New York: W.W. Norton.

Dewey, C. (2014, October 29). Almost as many people use Facebook as live in the entire country of China. Retrieved from The Washington Post: http://www.washingtonpost.com/news/the-intersect/wp/2014/10/29/almost-as-many-people-use-facebook-as-live-in-the-entire-country-of-china/

Go, G. (2015). Social Media Overview. Retrieved from About-Money: http://onlinebusiness.about.com/od/onlinecommunities/a/social-media.htm

LinkedIn. (2015). About Us. Retrieved January 27, 2015, from LinkedIn: https://www.linkedin.com/about-us?trk=hb_ft_about

Maxwell, S. O. (2015). Sons Of Maxwell. Retrieved January 25, 2015, from YouTube: https://www.youtube.com/user/sonsofmaxwell

Nations, D. (2015). What is Social Media? Retrieved from About-Tech: http://webtrends.about.com/od/web20/a/social-media.htm

Safko, L. (2012). The Social Media Bible: Third Edition. Hoboken: John Wiley & Sons, Inc.

Schaffer, N. (2011). Maximizing LinkedIn for Sales and Social Media Marketing. Irvine: Windmill Networking.

Smith, C. (2015, January 23). How Many People Use 800+ of the Top Social Media, Apps, and Digital Services? Retrieved from Digital Marketing Ramblings: http://expandedramblings.com/index.php/resource-how-many-people-use-the-top-social-media/

Wilson, R. (2011). A Public Relations Disaster. Retrieved January 25, 2015, from Sentium Strategic Communications: http://sentium.com/a-public-relations-disaster-how-saving-1200-cost-united-airlines-10772839-negative-views-on-youtube/

Yelp! (2015). 10 Things You Should Know About Yelp. Retrieved from Yelp.com: http://www.yelp.com/about