Business Applications Of Social Media Inside Organizations: An Overview

Is social media good for business? How do organizations use social media to improve their marketing effectiveness and boost their sales?

Photo credit: Stephen VanHorn

Social media is making strong inroads in the business world, but understanding how to leverage social media properly remains one of the greatest marketing challenges to overcome.

While there is no secret formula with which your business can benefit from social media, there are a number of facts that do point clearly at the increasing relevance of using social media to improve their business opportunities:

• The use of social media is growing rapidly. eMarketer predicts that in just four years more than 50% of Internet users are going to be regular social media visitors.
• Traditional marketing channels have become tricky venues to promote your product. Consumers are suspicious of marketing and relationships created ad hoc to sell a product do not work anymore.
• Social media is focused on engagement, community and authority. Your marketing approach in the attention economy, should be to create a community of loyal visitors and "evangelists" for your brand, willingly spreading the word about what you do.
• Social media is emerging as a reliable indicator of online advertising performances.

"OK" - you may say now - "I am starting to understand the value of social media for my business, but what type of social media should my company use?"

Linkedin and Facebook seem now the preferred venues for businessmen, while blogs are the most popular form of social media that organizations are starting to use.

How do I know all this?

Josh Gordon, marketing consultant and president of Selling 2.0, has prepared an extremely useful social media report providing interesting insight about the use and adoption of social media inside the business and corporate world.

Part one of this report (Part 2, Part 3) provides an overview on how much organizations are familiar with social media and why their usage is predicted to grow exponentially in the next few years.

The Coming Change In Social Media Business Applications:
Separating The Biz From The Buzz

by Josh Gordon

Introduction

A shift is coming in how organizations use social media

Companies have been using social media primarily as a general communications tool - mostly for public relations and marketing. That is about to change, as businesses discover its value as an essential tool for customer engagement - providing lead generation, immediate customer contact, and customer interaction.

Four factors are driving this trend.

1. First, due to the rapid rise in the popularity of social media, the number of potential customers engaged on social media sites was previously underestimated by many organizations.
2. Second, in the current economic downturn, where there are fewer customers in general, finding them and engaging them are much higher priorities.
3. Third, there is now a "Main Street" acceptance of social media as a powerful persuasive tool. Regardless of political affiliation, managers everywhere recently noticed that the largest and most successful social media campaign in history helped elect Barack Obama President of the United States.
4. Finally, there has been a breakdown in traditional lead-generation programs. With more customer contact moving online, it is easier than ever for a client to ignore messages from potential suppliers. Social media can help break the ice.

Why This Study?

Social media is getting a lot of media coverage, but all the attention does not necessarily make it easier to understand which functions are actually useful in business. This study was designed to provide managers with guidance in that area by measuring which social media tools are being used right now, and by whom.

A look at what other businesses are doing can offer perspective, as well as a benchmark for managers to compare their own organizations' progress and opportunities.

In order for a benchmark to be useful, it must be specific and detailed. To that end, I have divided this survey into three parts.

• Part I is an overview of both current and future intended business use of social media.
• Part II focuses on the business use of Twitter.
• Part III examines the business use of social networks like Facebook and LinkedIn, with a separate focus on the four general business functions that social media serves: sales, marketing, public relations, and internal communications.

Overview

Leading Business Uses of Social Media

Most popular business uses of social media

Marketing and PR are currently the leading business uses of social media; sales and collaborative work lag behind.

Social media is being used in business most often as a marketing and public relations tool, while uses in sales support and collaborative work lag behind.

Almost three quarters of respondents said their organizations use social media for branding, and two thirds use it for public relations. Only 38% are using it to support collaborative work, and only about one in four use it to support sales efforts.

 

Lead Generation

Most frequently desired business functions in social media

Looking to the future, "lead generation" is the top business function for which organizations most want to use social media.

Organizations have shifted priority.

With the economic downturn, "lead generation" has moved to the top spot as the business function organizations are "most considering" for the future.

The two currently most frequently used functions, branding and public relations, follow behind. This is a highly significant shift, and is reinforced by other findings in this survey.

 

Customer Competition

Business social media use for external communications

When competing for customers, smaller organizations use social media more frequently.

The smaller the company, the more frequently social media is used to improve external communications.

As we compare social media usage at smaller companies with one to 10 employees to organizations with over 1,000, there is a steady decrease in the percentage of usage.

Companies with 10 or fewer employees are about 30% more likely to use social media for public relations, branding, and understanding customers than companies with over 1,000 employees, and twice as likely to use it for lead generation.

 

Internal Communications

Business social media use for internal communications

Larger organizations use social media more frequently for internal communications.

Organizations with over 1,000 employees are twice as likely to use social media for internal communications as companies with one to 10 employees, and roughly 18% more likely to use social media for collaborative work.

Larger organizations have more complex and geographically dispersed communications challenges. In addition, they often have more sophisticated IT support. They need the communications services more, and they have the technical support to take advantage of them.

Where larger organizations have more resources to touch their customers, such as corporate advertising, social media may not be as big a priority.

However, with less money for outreach programs, smaller companies can make big inroads by focusing more on social media.

 

Encouraging Social Media

Business social media policies most used inside organizations

More organizations encourage the use of social media than discourage It.

It was not long ago that many organizations discouraged employees from visiting social media sites, with many of them blocking access to sites outright.

But today, 41.2% of businesses have employees whose job function includes spending time on social media sites, while only 9% report blocking internal access for employees.

Whereas 41.9% of organizations report that they have no corporate policy of any kind regarding social media, 21.8% report having a formal policy for employees who want to blog.

Finally, about one in four organizations sponsors a group on a social network for personal announcements and social events.

 

Leading Social Media For Business

Most used social media technologies and tools for business organizations

LinkedIn, Facebook, Twitter, and blogging lead social media services and activities for business

Four services dominate the use of social media networks and tools:

• LinkedIn (79.3% of respondents now using),
• Facebook (77.2% now using),
• Twitter (75.3% now using).
• Use of blogs follows closely behind, with 68% of businesses currently using them.
• Only 17.2% of organizations use MySpace for business.

 

Blogs As Preferred Social Media

Social media tools organizations are turning to most

As organizations look to the future, the social media form they are "most considering" using is blogs.

While Twitter and Facebook get the headlines, the social media form organizations are turning to most as they look to the future is blogging.

Some consider blogging "old" social media, but it has proven itself an effective communication tool.

The ability to reach a mass audience with a personal point of view and invite comments is very powerful.

End of Part 1

Part 2: Business Applications Of Social Media Inside Organizations: Twitter

Part 3: Business Applications Of Social Media Inside Organizations: Social Networks

Originally written by Josh Gordon for Social Media Biz Buzz, and first published on July 20th, 2009 as The Coming Change in Social Media Business Applications

About Josh Gordon

Josh Gordon is president of Selling 2.0, where he works to improve the performance of organizations and sales teams with research-based training and consulting services. Josh has written four books on the subject. For more information, visit www.Selling2.com.

Photo credits:
The Coming Change In Social Media Business Applications: Separating The Biz From The Buzz - Björn Meyer