Impacts of Social Media on a Business

Impacts of Social Media on a Business

Introduction

In the business arena, Citing Lilienfeld (2011), communication holds a key role as far as reaching out to new potential clients and maintaining existing customers is concerned. However, mass media holds a pivotal but often misunderstood role in case of a disaster. Reflections show that media coverage of disasters tends to be rife with misinformation and strengthens myths about social class, criminal activity, and violence (Lilienfeld, 2011). On the other hand, research shows that an organization that employs an excellent social media disaster mitigation plan can have the upper hand and succeed in curbing the effects of social media challenges.

In the old days, before social media, a negative company experience could stay within a small circle of people. In comparison, if today’s customer receives a service that does not meet their expectations or purchases disappointing products, information can be accessed through social media networks (Kietzmann, 2011). This becomes hard to combat this publicity. The harmful publicity aids in toxic situations, eventually leading to issues such as boycotts and even lawsuits. This doesn’t only result from unsatisfied customers but also the leaking of confidential information about a business. An individual with knowledge about a company might spread it out, damaging the company’s competitive power. Below is an example of a negative social media impact on a business.

Maxtrek Hotel operates under a reduced social media disaster management plan. One evening, a client secures a booking in the hotel just like any other walk-in customer. Moments later, she is dragged out of her room by management.  The management argues that there was a miscommunication about the room booking since somebody else had already booked the hotel a day before.  Since the lady has just landed and she is a first timer in the city, she has nowhere to go, and all hotels in the neighborhood are fully booked. The management does not provide her with any other option other than leaving the hotel room. The other clients gather to witness this “harassment,” and the whole scene goes viral. By word of mouth between clients in the hotel and later to the social media, soon the hotel reputation is tainted as everyone on social media is talking about the issue. Soon, the hashtag “Maxtrek cool” emerges. This hashtag acts to de-market the hotel, and early or after, the hotel receives a few or no clients. The “harassed” client later sues the hotel since she was dragged out of the hotel and forced to sleep in one of the hotel benches. The hotel is later lawfully fined, and the license of operation revoked.

The above is a case study where social media is depicted as a powerful tool or channel of spreading information. In this case, the organization doesn’t have any chance to rectify their mistake without suffering the consequences first. Through social media, the issue put the hotel on the spot, and the error, which the management thought was redeemable, became the defining moment of the business. This case may be brought up many other issues where clients had received poor services while in the hotel, ultimately tainting the image of the company. The social media here has aided the closure of the company, making it a potent tool.

The Power of Social Media

As witnessed in the case above, social media remains powerful. It can rocket business to the best marketing levels ever, but a slight mistake can destroy everything in a span of a blink. This is because;

Never forgets

Once a discussion is on course, it can keep resurfacing every time. This means that a business should be prepared to battle the topic forever.

Increased customer power

This gives clients more ability to express negativity publicly. This has always been very hard to contain. It gears up the fast spread of negative publicity. Customers are always fast to post negative experiences and their dissatisfaction with a particular brand without possibly considering what it would result in the business. It, therefore, becomes difficult to contain once the information has already reached out to a large number of people.

Reduces productivity

Social media is an interactive platform where people actively engage with each other. Employees who spend much time on social media are hardly productive because they waste a lot of time that could otherwise be dedicated to working. This type of employee, for instance, maybe caught in a situation where they have to engage a customer on behalf of the company. Information provided might be untrue or inaccurate and may, in the long run, affect how customers relate to the organization.

Leads to strategic shifts

Companies accustomed to traditional marketing strategies might find it hard and challenging to survive in the modern business world. Today’s’ customer tastes and needs are ever-changing. This means that business planning should be progressive and up to date to align with their client’s needs. Consequently, this translates to spending significant resources and time to achieve these required changes. This might also end up affecting the normal operations of the business. Staying aware of the trends in customer needs keeps a company aware of the expectations their clients have, and thus it makes the businesses on top as far as the competitive market share is concerned.

–Difficult to track negative information- In the present era, this remains a significant challenge. Since the social media platforms are open for everyone globally, it means that everyone is free to initiate a negative conversation about business and comment negatively about a company. It’s always hard to track this misleading information over social media to address them accordingly. Even though a company might be able to follow some of the misleading information, it will always be too late, and the damage will be already visible. This means that the response will ideally have no meaningful significance.

Reduces confidentiality

A business organization that allows employees to use networking websites increases the exposure of the company to possible breaches regarding secrecy. This is because some employees may carelessly post sensitive information on these sites. This can result in damaging the business reputation, therefore, leaving people with few or no choices but to question its reliability and credibility. Some workers may go to the extent of posting sensitive company information on their private networking platforms. This information might have been too young to release, and the company was not prepared to release it, thus interfering with the company’s plans on information management and dissemination. According to Shirky (2011), social media is available to billions of people; therefore, once information has been leaked, it might be too late to do anything about it. Some companies may make a mistake to their advantage through spreading the data as a marketing tool to outdo their “careless’ competitor. The careless competitor may soon or after getting kicked out of the market. However, the use of these networking platforms is increasingly becoming popular and among many employees. This makes it difficult for any company to ban its employees from accessing these platforms since it’s not an ideal way of curbing the negative impacts resulting from the use of social media. In summation, the perfect way to control this would be formulating an excellent social media policy that would provide employees with guidelines on the responsible use of these media platforms.

Revisiting the Maxtrek hotel scenario, the company did little to combat the effect caused by the case witnessed. The company should have employed an extensive ethical, social media campaign to mitigate the challenge. Firstly, it should have weighed the matter and provided the customer with another room if any was available in the hotel. After listening to the client, if it was a must to get the client out of the room, it was supposed to be done more ethically. After assessing the situation, the extra mile to find the customer a room in a different hotel for free could have been a convenient idea.

Conclusion

Through social media outlets, consumers nowadays enjoy the ease of conveying their opinions about a brand, whether it criticism or praise (Hughes et al. 2013). Through social media, buyers have been able to build their strengths in numbers to get their opinions put across to the intended organizations and brands. More and more consumers are today interacting with each other about a specific brand over websites such as Facebook and Twitter.  Citing Prahalad (2002),  this has also made it possible for consumers to promote their favorite products on these platforms. This allows a business to clearly understand their clients’ needs and be able to point out what can dissatisfy them.  The social media consumer has increasingly become more demanding, leading to the change of consumer relationships from one-dimensional to a bi-dimensional bond. As a result of consumer empowerment, traditional marketing strategies should be developed. This is in a bid to reposition declining businesses and reposition the rejuvenating firms as well. Today’s consumer trusts social media much as far as making purchase decisions is concerned.

References

Kietzmann, J. H., Hermkens, K., McCarthy, I. P., & Silvestre, B. S. (2011). Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons, 54(3), 241-251.

Prahalad, C. K., & Ramaswamy, V. (2000). Co-opting customer competence. Harvard business review, 78(1), 79-90.

Rapp, A., Beitelspacher, L. S., Grewal, D., & Hughes, D. E. (2013). Understanding social media effects across seller, retailer, and consumer interactions. Journal of the Academy of Marketing Science, 41(5), 547-566.

Shirky, C. (2011). The political power of Lilienfeld, S. O., Lynn, S. J., Ruscio, J., & Beyerstein, B. L. (2011). Fifty great myths of popular psychology: Shattering widespread misconceptions about human behavior.