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The Advantages and Disadvantages of Social Media for Businesses

Social media platforms have rapidly grown into tools that are utilised by millions of businesses worldwide. In this article, we’ll dive into exactly why businesses use social media before providing you with some information to help you evaluate whether social media could be a worthwhile investment for your business.
The Advantages and Disadvantages of Social Media for Businesses

Updated on 20/07/2020

There’s no denying that businesses all over the world have realised, or are starting to realise, the power of social media as a tool that can help businesses connect with their audiences and drive sales. In fact, MarketingTech revealed that around 60% of all businesses in the UK already (and around 57% of small businesses) use social media for business purposes.

This raises a few obvious questions:

  • Why do businesses use social media?
  • What are the advantages of social media?
  • What are the disadvantages of social media?

In this article, we’ll provide answers to each of these questions. By doing so, we hope that we can empower you with some useful information that could help you make a decision about whether investing in social media marketing is right for your business.

Why do businesses use social media?

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There are a number of reasons why SMEs choose to use social media to support their core business functions. Typically, social media is used to support with marketing, sales or customer service strategies, and its specific uses may include:

Improving customer service

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Social media can be a powerful tool for delivering customer service. It allows you to respond to questions and queries directly from your customer base- cutting out the ‘middle-man’ of a dedicated web platform or ticket system. For small businesses in particular, this type of solution could really help to save some time that would have otherwise been spent replying to customer emails, and so it’s particularly useful for tackling quick questions.

What’s more, some social media sites (such as Facebook) have ‘Review’ functionality which allows customers to leave reviews which indicate how positive and satisfying their customer experience was. For businesses who are delivering these types of positive experiences, it’s worth encouraging reviews and reaping the benefits associated with being a well-rated business.

Top tip: If you’re dealing with a complaint in a comment, respond to the comment and then continue the conversation in private via direct messages. This will show other users that you’re responsive, but allows you get into enough detail to handle the complaint without it being publicly broadcasted.

Speaking of broadcasting, social media can be useful if you’re looking to better establish your brand within your market.

Increasing brand awareness

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Whether you run an independent high street shop or an e-commerce platform, social media is a great way to reach a new audience that you may not have otherwise attracted.

Interactions on social media reach further than just one person’s timeline. If a user interacts with one of your posts, their interaction will likely appear on one of their friends or followers’ timelines too. So, by engaging with your audience, you’re potentially reaching out to their friends and family who may have similar interests.

When you combine this brand building activity with sponsored and paid advertising, you start to build a fuller picture of the true power of social media. You could potentially find yourself reaching a broader audience with your product or service, and helping to build familiarity with your brand as well as generating leads. Let’s explore this in a little more depth.

Generating leads

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That’s right, social media can be an effective lead-gen tool. By utilising the advertising functionality on popular platforms such as Facebook, Twitter, Instagram and LinkedIn, you can target the exact audiences you want to reach with ads that you personally design.

There’s arguably no more effective way of reaching a high volume of customers in your target audience than by tapping into digital advertising, so it’s easy to imagine why global social media ad spend totally almost £30bn in 2019.

You could look to use social media ads to showcase the unique benefits of your products or services and demonstrate how they could fit into your customers lives. Exactly how to manage these leads and design your content to target them is up to you, but social media can be an effective way of helping these leads reach your website to make conversions- whether that means purchases or enquiries.

Taking on the competition

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It may be worth considering whether your competitors have a social media presence, and doing some research to investigate. Even conducting a basic search of their brand names into popular social media platforms could help you gain some valuable insights.

If you spot an opportunity to match your competitors’ social presence, or you’re the first to jump into social media in your market, you could consider the following tactics as a mean to get an edge over your competition:

  • Research your competitor’s social media accounts to identify how they connect with their audience and utilise those learnings in your own activity.
  • Compare your competitor’s content marketing strategies with your own; can you spot any gaps that you could exploit? Are they posting content that you know you can replicate, or even improve?
  • Read feedback that your competitor’s customers leave on their social media pages. Do they have any feedback that you could take on board? Could you gain any insights into what your target audience’s needs are? There’s only one way to find out!

Tapping into customer mindsets is incredibly important for businesses of all shapes and sizes- and feedback can be incredibly easy to find on social media sites.

Understanding what customers really think

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The search function on many social media platforms helps you understand what people are saying about your business - even if they’re not saying it to you.

By searching for terms connected to your brand, e.g. your company’s name, you can start to gauge customer sentiment toward your business. This may help you to address any problems that you might have not already been aware of.

What’s more, you can research specific hashtags or topics related to your market and industry to gain some valuable insight into the latest trends and customer needs that might be shaping the landscape.

Social media, however, isn’t just about gaining visibility over customer feedback and better understanding your customers. It’s also about replying to that feedback directly, and you use social media to manage your reputation by clearly responding to any negative press with positive, helpful messaging to really take your brand’s reputation into your own hands.

What is the impact of social media marketing on businesses?

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Now that we’ve covered some of the broader reasons businesses use social media, let’s take a look at the specific, measurable advantages that using social media could have for your business.

Advantages of social media for businesses

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We’ve compiled five specific advantages of social media marketing that you may experience if you implement a social media strategy within your business. Each of these five tactics could factor into your wider marketing or brand-building strategy, and each can be measured and tracked to help you gauge exactly how they’re impacting your performance.

1. Learn more about your audience

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Social media lets you learn more about your audience. It’s the perfect place to test new marketing messages or products. You can use the engagement statistics from a product post to measure its success, and test different messages with different audiences before deciding upon a larger scale strategy.

This type of testing can help you refine your offering and make better, more informed decisions.

2. Improve your brand building

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Social media can improve your brand-building. Most social media platforms are casual and informal, giving you the perfect opportunity to play around with how you interact with your customers and enabling you to work on your visual identity, too. The more familiar and comfortable people are with your brand, the more memorable you and your products or services will be.

3. Build your community

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One thing every social media platform excels at is empowering you with the tools needed to build a community with your customers through repeated engagements and interactions.

You may not necessarily have the time to stop and chat with each and every person following your branded pages, but you can engage customers and build a rapport on an open-ended basis. If you’re careful about how you build your community, and show that you care about them, you might find that they’re comfortable enough to leave you with honest feedback that you can put to good use.

4. Share your content

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Your content marketing strategy hopefully involves putting out a certain amount of content that benefits your audience on a semi-regular basis.

Social media platforms are great for sharing this content. With their built-in tools which allow you to design your post, you can take the time to carefully plan and execute posts as and when you have the time. There are plenty of free tools available that let you schedule posts ahead of time so you can focus on answering comments and queries in your spare time.

Our top tip would be to maintain some consistency in your posting schedule. If you have the capacity to do one post every other day, great- or even one post a fortnight is better than nothing. Stick to your schedule though, and through being consistent in the posting frequency and quality of your content, you’re likely to find that social media platforms show more of your posts to your audience.

5. Unlock the power of social posting

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Once you’ve built your audience and community, there’s a good chance that those people will be exposed to your organic social media posts. Be careful not to abuse this power by exclusively spamming advertisements through this channel, though, as you may want to instead use your organic posts to connect with your community, run giveaways, and build more advocacy for your brand.

Paid advertisements, however, are a completely different ballgame. Most platforms allow you to publish paid advertisements, and you can utilise a variety of different ad formats- such as sponsored posts (also known as ‘Dark posts’), banner ads or even video ad formats to connect with potential customers. Paid advertisements are much more effective than organic posts at driving sales, so it may be worth making an investment into social media ads if you’re looking to improve your bottom-line.

Disadvantages of social media for businesses

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Of course social media isn’t without its drawbacks.

It can be very demanding

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In order to make a success out of your social media activity, you need to put in the time and effort to create posts and engage with users. Depending on your budget and needs, this can involve posting multiple times a week across several platforms, although this differs based on your industry and product/service.

That posting time is intensive before you have even factored in the time needed to create the content; such as photos or videos, so it’s worth acknowledging that you’ll need to invest resource into social media if you want to reap the full rewards.

The fast pace of social media can be overwhelming

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On the one hand, knowing exactly what your audience will like and are talking about is difficult. Their needs may be constantly changing and evolving, so keeping an eye on exactly what content they’re likely to respond to could be a little stressful.

On the other hand, the sheer quantity of messages you could receive over social media may be difficult to deal with. Generally when disaster strikes, such as a faulty product launch, you may receive an influx of new messages which require your attention. That’s just one of the disadvantages of social media in general, unfortunately, but we don’t think it outweighs the potential positives.

You may attract unwanted attention

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Social media algorithms determine what content gets shown in users feeds. Unfortunately, social media platforms have a bit of a track record of drawing attention to people and accounts for all the wrong reasons.

Engagements often draw a lot of attention, so if you were to put out an offensive piece of content, there’s a good chance that you’ll have to act quickly to make amends. It may be worth having some sort of approval process for your content, in which you review it thoroughly before posting to ensure that you’re sending the right messaging out to your audience.

Results aren’t instantaneous

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A further disadvantage of social media is that it can often be a long-game. Unless you’re producing viral content on a regular basis, social media marketing is typically a long-term strategy in which you’ll steadily increase your following and reach.

Effective strategies focus on building a community and marketing to that audience on a regular basis, and you have to be willing to invest resources to make it work.

Negativity is rife on social media

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It’s so easy for users to write negative comments with minimal backlash on social platforms. Many accounts don’t even require you to verify your details or provide a picture of yourself, too.

Consequently, it’s possible that you’ll experience some negativity (particularly from platforms like Twitter), as many people turn to the platform as a go-to for sharing their negative experiences with businesses. Aside from trying your best to deliver a good service, some negative feedback is almost inevitable- so it’s important to put a good policy in place for dealing with negative feedback in a mature and helpful manner.

Is social media worth it for businesses?

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We hope that we’ve given a balanced view of social media throughout this article, but we’d like to point out that, in general, we think the pros outweigh the cons. If you carefully implement and effective social media marketing strategy, you could find yourself gaining more sales, connecting with more potential customers, and enjoying rewarding and fun relationships with your current audience.

How could Esme help?

Here at Esme loans, we have provided SMEs with millions of pounds worth of business loans for a number of reasons, including investing in their marketing strategy. Our online business loans are fast and can be applied for online using our 10 minute application form. Find out how to apply for an Esme loan or get an instant quote now.