Recent developments in Web 2.0 and 3G/4G technologies (and now 5G) have created a major paradigm shift in business-to-customer relationships. Customers are no longer passive ‘receivers’ of company and brand-related marketing messages. Instead, they are engaged in initiating conversations with and providing feedback to businesses. Social network sites allow users to create and share personal profiles, establish and develop new connections, and acquire information in an interactive manner.
Small businesses are more likely to use social media than large companies. A recent survey found that 76% of small businesses do not use social networking sites for business purposes. The majority of businesses that do use social networks for business reasons do so because they believe it is a good way to increase sales. The number of businesses using social media is on the rise, according to a recent survey of 1,000 small business owners. The survey also found that more than half of businesses use Twitter to communicate with their customers. The study found that 70% of businesses who use Twitter for business-related purposes do so more often than those who use it for personal use.
Metrics such as the number of viewers, visitors, friends, or followers do not automatically translate to higher conversions, order value, or sales. Another issue is the length of time required for each new SNM tactic to work and the resulting problem of measurement timing. Forrester Research predicts that social media will see the steepest growth of any channel, a 34% CAGR over the next five years, exceeding $3 billion by 2014.
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