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Portions of this post are based on McKinsey survey report. (link at the end)
Online shopping gained immense popularity during COVID19 pandemic and continue to rise unabated.
- 21% of global retail sales are online as of 2022. It will increase to 22.3% in 2023.
- It is estimated that global e-commerce sales reached 5.7 trillion US$ in 2022.
- At least 2.14 billion people shopped online in 2020 and this number is rising.
- At least 75% of consumers shop online at least once a month.
- 63% of all shopping journeys begin online, though all of these may not end up in actual purchase.
McKinsey pinpoints four primary functions of social media for businesses – monitor, respond, amplify, and lead. All these are related to consumer behavior which is gauged through purchasing decisions made by the consumers while browsing the internet.
- Monitor – if you and your friends are planning to eat out, it is customary to search for new places, and it is equally customary to read reviews given by earlier visitors. Same goes for every type of purchase which is done through internet. Businesses can do well by continuously monitoring what is being said about their products or services. It is estimated that half of the consumers who had had a negative experience would publicly complain online. It should also be understood by businesses that if five positive reviews shall motivate a consumer to buy, one negative review is enough to stop him. Continuous monitoring of what is being said about your business is therefore essential for maintaining and expanding business.
- Respond – a study found that 79% of consumers expected a response within 24 hours of a complaint, and 40% expect brands to respond within one hour. 81% say that they will complain online if they did not receive response in desired time, they will complain online and shall not recommend the product/company to their friends and followers. It means that monitoring must be followed by adequate and proper response. These are tough demands and only about 50% businesses meet these expectations. Within the organization, negative feedback must reach relevant teams, so that they can take required actions.
- Amplify – means doing a marketing activity which that would lead to more sharing and greater engagement. Starbucks launched a campaign in 2009 that awarded $20 gift cards for being the first to tweet a picture of new advertising posters in major US cities. In this way, the company turned core customers into brand ambassadors at a nominal cost which would otherwise take millions of dollars. Amplification outside the business is very common where an information or event is shared with millions in minutes. Businesses can design campaigns along these lines to amplify their marketing messages.
- Lead – is for leading consumer behavior. Businesses can use social media platforms to encourage long-term behavioral changes among consumers through activities related to brand content awareness, product launches, targeted deals and offers, and customer input.
It is now imperative for businesses to understand social media functions, and how to make effective use of these channels. By adopting the above four techniques, businesses can take good advantage of the immense potential offered by social media.
Benefits of Using Social Media for Business
Handled properly, social media offers numerous benefits for businesses.
Enhanced Brand Awareness – Social media platforms provide a wide-reaching and cost-effective means to increase brand visibility. By creating engaging content, businesses can reach a broader audience and build brand recognition.
Increased Customer Engagement – Social media facilitates direct communication and interaction with customers. Businesses can engage in conversations, respond to inquiries, and receive feedback in real-time, fostering stronger relationships and customer loyalty.
Targeted Marketing and Advertising – Social media platforms offer powerful targeting capabilities, allowing businesses to reach specific demographics, interests, or locations with their marketing messages. This enhances the efficiency and effectiveness of marketing campaigns.
Market Research and Insights – Social media platforms provide a wealth of data and insights about consumer behavior, preferences, and trends. Businesses can gather valuable market research, monitor industry conversations, and gain insights into their target audience.
Influencer Partnerships – Social media influencers have a significant impact on consumer decision-making. Collaborating with influencers relevant to their industry or niche allows businesses to leverage their reach and credibility to promote their products or services.
Risks for Businesses Using Social Media
Customer Expectation Variation – Since the age groups using various platforms varies, therefore businesses need to identify the finer differences and design promotions accordingly.
High Expectation for Response – As mentioned earlier, customers expect to get response within hours, which is a tall order and may not be able to be met by many businesses.
Unpredictable Demand Spikes – It is well-nigh impossible to predict how the campaign will be received. This is more so when an influencer is involved. Any post may become viral leading to unexpected demand which the business shall not be able to meet in due time.
Difficult investment Decisions – Social media is evolving and the demand is dynamic. It is neither straightforward nor easy to make investment decisions for adding new technology or upgrading existing one.
Proposals for making adequate use of social media for Businesses:
Define Clear Goals and Objectives – Establish specific goals for social media marketing, such as increasing brand awareness, driving website traffic, or generating leads. Clearly defined objectives help guide content creation and measure success.
Understand the Target Audience – Businesses should research and understand their target audience’s demographics, interests, and preferences. This knowledge allows for tailoring content that resonates with the intended audience and drives engagement.
Develop a Content Strategy – Create a content plan that aligns with the brand identity and target audience. Consistently produce high-quality and relevant content, including posts, images, videos, and articles, to engage and attract followers.
Engage and Respond – Actively engage with the audience by responding to comments, messages, and inquiries promptly. This demonstrates a commitment to customer service and fosters a positive brand image.
Analyze and Adapt – Monitor social media metrics and analyze the performance of different content types and campaigns. Adjust strategies based on insights gained from data analysis to optimize future efforts.
Collaborate with Influencers – Identify influential individuals within the industry or niche and build partnerships to amplify the brand’s reach and credibility. Influencers can promote products, share content, and engage with their followers on behalf of the business.
Stay Updated and Experiment – Social media platforms continually evolve, introducing new features and trends. Businesses should stay informed about platform updates and industry best practices, while also being willing to experiment with new approaches to find what works best for their audience.
By understanding various types of social media, recognizing the benefits for businesses, and implementing effective strategies, organizations can harness the power of social media to expand their reach, engage with customers, and achieve their business objectives.
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