The Effects of Emerging online Social Media on Business-Consumer Relations: How online Social Media Connects Businesses and the Public

The effects of emerging online social media on business-consumer relations: how online social media connects businesses and the public

Erik Qualman, author of Socialnomics, once said “The power of social media is that it forces necessary change”. Also called ‘user-generated communication’, Mangold and Faulds (2009) stated that social media is changing the systems organizations use to convey information to clients. In 2015, sixty-four percent of Hong Kong’s population was found to have active social media accounts. (Michaelidou, Siamagka, & Christodoulides, 2011) Also, Kaplan and Haenlein (2010) have studied that social networking site is one of the popular online activity in terms of average time spent. By taking advantage of social media popularity, emerging online social media could become the mainstream practice of modern society to build a positive relationship between business and consumers through increasing brand exposure as well as strengthening communication with consumers.

Online social media is a cost-effective medium to increase brand exposure. By utilizing advertisement creation tools in online social media, businesses are able to target and control the exposed demographic (“Choose your advert audience,” n.d.), concentrating its promotions towards potential consumers. A boutique which sells teenage clothing, for example, can adjust advertisement to be shown only to adolescent users, based on the data collected from their social media site. Moreover, the “Like and Share” function on social media provides free “word of mouth” advertising. It allows users to ‘like’ or ‘share’ interesting posts on their profile. This becomes visible to other connected users, which may then do the same – allowing the advert to appear on multiple networks of users, with minimal expense. Take the soft drink giant Coca-Cola as an example; videos which features caused by dropping mints into Coke was posted online in 2006. The video spread rapidly, due to the large scale of people who “liked” and “shared”, and resulted in great success as it caused an intense echo, along with a boost in attention on the brand (Kaplan & Haenlein, 2010).

Apart from brand exposure, online social media provides a channel of communication that shortens the distance between business and consumers. For instance, businesses can directly understand consumers’ preferences using the measurement tools provided by online social media, which collects data to determine the interests of users (“Facebook Measurement Basics,” n.d.). To take this further, businesses can develop and post content which suits those expectations and respond to consumers’ feedback rapidly and round the clock by using active conversations, such as instant messaging featured in social media (Kaplan & Haenlein, 2010). Consequently, consumers can ask questions and give feedback instantaneously at the touch of a button. Renowned coffee shop Starbucks, for instance, initiated a “My Starbucks Idea” platform according to public’s interest. The campaign was widely successful as it bridged the communication gap between businesses and customers (Kaplan & Haenlein, 2010). Conversely, consumers can be updated to companies’ current situation and recent developments. Users of online social media can exchange information across the world within a short time (Lea, Yu, Maguluru & Nichols, 2006). When new goods are launched, companies can upload promotional posts, notifying the huge network of consumers who have liked the company’s page. This newfound convenience encourages consumers to interact with business anytime and anywhere, bringing the business-customer relationship far closer than traditional means.