Social media impact on business

Social media support customer relationship management, marketing, sales, financial and human resource objectives.


A study conducted by the Altimeter Group indicated that companies use social media to accomplish various business objectives, such as increasing annual sales growth. Small businesses recognize the benefit of social media as a communication platform that facilitates two-way communication between a company and its stakeholders. This supports company processes and objectives including customer relationship management, market research, customer base expansion and customer retention, product marketing, cost control initiatives, public relations, sales and recruiting.

Customer Relationship Management

Tom Funk writes in “Social Media Playbook for Business: Reaching Your Online Community with Twitter, Facebook, LinkedIn, and More" that the principle advantage of a social media program is the opportunity to strengthen the relationship between a company and its customers. Through real-time online connections with existing and potential customers, a company conveys information regarding its brand. In turn, the company might benefit from positive word-of-mouth that is exponentially broadcast across a social network. Funk states that the greater the frequency and degree of engagement, the stronger the relationships become and the greater the impact of the relationships on sales, customer satisfaction and product reputation.

Customer Retention

Funk writes that 67 percent of Twitter users who become followers of a brand are more likely to buy the brand's products. This sales result is due in part to a company's use of social media to convey brand values, create positive word of mouth and enforce the connection between the company and its customers. These enhance a company's efforts to build customer loyalty.

Related Reading: Free Social Media Management Tools for Business

Expansion of Customer Base

According to Funk, companies reach new customers through the conveyance of the corporate message on a social media channel, the broadcast of positive customer feedback regarding the corporate message and its products to some of the 100 million Twitter users and 500 million Facebook users, and the conversion of the feedback to product purchases. The broadcast of such third-party endorsements complement such traditional marketing efforts such as print and broadcast advertisements.

Market Research

Social media support customer relationship management, marketing, sales, financial and human resource objectives.

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Popular Q&A

How does social media impact the business?

Social Media is important to business because of the major benefits of conversing with your customer through Social Media is to gain Customer Loyalty. Using sites such as Facebook, Twitter, Youtube can help businesses gain insights, engage customers and interact with them unlike any other media.

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