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Not Actively on Social Media? It May Be Costing Your Business More Than You Think.

Posted by BSG Team on Mar 16, 2015 12:59:59 PM

Billions of people around the world use social media and the conversations they have in their networks matter enormously. That is because people trust the opinions of other people over traditional sales and advertising messages.

As a result, businesses that aren’t engaged in social media may be putting themselves at a competitive disadvantage, not only because they lack a direct connection with customers but also the sources that influence their customers – friends in social media networks.

The cost of being absent from social media, or as Trevor Young says a disconnected business, is already apparent but likely to grow in the coming years for a number of reasons:

  1. Older consumers are becoming increasingly Internet savvy and influenced by social media content.
  2. The billions of new consumers emerging onto the market have never lived without social media and expect to engage with companies across multiple social media networks as well as other digital and real life touch points.
  3. Content generated by the users of a product or brand (rather than experts or company-generated material) is becoming an even more powerful form of influence as people seek the most relevant opinions. That means connected strangers could become the power influencers of the future.

Let’s look at why these trends make the development of a social media strategy critical.

1. The internet-savvy older consumers

It’s a myth that social media is a young person’s game. Globally, older users are becoming more and more Internet savvy and are currently driving growth on social media platforms. For example, a study by Global Web Index last year found a 46% increase in users age 45 to 54 years on Facebook, 56% on Google+, and Twitter users aged 55 to 64 grew nearly 80%.

Insider Retail says some 58% of Internet users aged 50 to 64 now use social media and almost one third of those online aged 65 and over use social media.

Given that we have a large, cashed-up older population and that the population overall is aging, this is an important trend. Even those brands that claim their business is with older people can no longer use this as an excuse to stay away from social media networks.

Although there is a difference in the level of social trust between generations, across all age groups, personal recommendations are highly valued. What’s shifted is that it no longer matters whether those recommendations are face to face or as a result of virtual connection.

Older people are increasingly influenced by the content they find in social media; this is whether it’s information on a retail product or professional and investment information. For example, Cogent Research found up to 70% of wealthy investors made personal investment decisions that were influenced by content they found in social media networks.

Businesses that want to reach this audience need to take into account that they are spending time on networks and respond to the material they find there.

2. Emerging consumers are digital natives

Many businesses still think social media is a fad but LinkedIn is almost 12 years old; Facebook has been around for a decade and adds about half a petabyte (or one thousand million million bytes) of data to its network every 24 hours and even relative newcomer Twitter is eight years old and manages 500 million tweets a day.

Social media has been around so long that the generation of consumers now entering the market can claim to never have lived without it. These consumers are a social-first generation and expect to find businesses online, engaged, and across multiple touch points as a matter of course.

The Engaging Millennials: Trust and Attention Survey from McCarthy Group is one of many in recent years that shows how little influence traditional marketing has on younger people, claiming up to 84% of millennials don’t trust advertising and sales messages. They do, however, trust their friends and here again we return to the conversations that these friends are having in social media networks.

Companies that want to reach them need to appeal directly to young people and the sources they trust – their friends – where they are and not where a company wants them to be.

To start, that means being present on social media, understanding what people are saying, and being willing to respond to their questions or concerns in real time.

3. Strangers – the emerging power influencer

Interestingly, new research shows that online, young people increasingly trust the views of complete strangers as much as friends if those strangers are commenting on a product or brand that they have actually used. What they really value is relevant experience.

Writing in Forbes, CMO of Bazaarvoice Erin Nelson cites research that shows for a majority of millennials the comments of strangers who have used a product are more likely to influence purchasing decisions than anything else.

“As they research and buy, most Millennials (84%) are comforted that they have access to the opinions and experiences of strangers, and a majority (64%) of Millennials believe that companies should continue to offer more ways for consumers to share their opinions online in the future.”

A business that provides channels for sharing and engaging is able to build an online footprint that gives it access to those people who are talking about its products and so be more likely to influence the conversations.

Given that the annual spending power of millennials exceeds $200 billion in the US alone and will soon eclipse that of the Boomers, taking buying behavioural preferences into account is critical for business strategy.

A dilemma faced by businesses is that they have to be online and aware of what is happening, but their influence is now secondary to those who use their products.

Nevertheless they have an opportunity to create relationships and an emotional connection with their customers by being online and engaging directly with them, rather than at hands length.

Having a strong online presence means companies can at the very least deal with misconceptions or complaints before they spiral out of control. They can also track consumer preferences and adjust their communications strategy in real time. For example, digital strategist Yeves Perez shows how holding a live Twitter Chat can not only lead to millions of brand impressions but also generate new prospects and warm leads. It can also be used for customer service.

Many things are possible but to influence conversations businesses must first be a part them. That means understanding why social media is important, how it fits into the $8 trillion dollar e-economy to determine how to properly invest in a strategy.

This article originally appeared in the Firebrand blog. Dionne Kasian-Lew is the author of The Social Executive – how to master social media and why it’s good for business (Wiley). Connect with her on LinkedIn, Twitter @dionnelew, email dionne@dionnekasianlew.com.

Topics: Social Media ROI, Content Marketing, Social Media Best Practices

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