Is Social Media Helping A Company's Bottom Line?

The emergence of Social media has played a huge role on improving communication and public relations (Al-Deen & Hendricks, 2011). It has changed the way information is exchanged across societies in the whole world (Mayfield, 2008). Nowadays, many businesses have realized the importance of using social media to build strong relationships with their customers and promote their products. However, Cespedes (2015) argued in his article that social media has no influence on a company's sales; it just helps to create brand awareness among customers.

A survey conducted by Gallup ( cited in Cespedes, 2015) in US shows that more than 50% of adults who use social media feel that an organization accounts and websites doesn't influence people purchasing decisions. In addition, many organizations tend to buy fake accounts, followers, likes and reviews to capture the eyes of real users (Cespedes, 2015). Another study conducted by Forrester indicates that only 2% of well-known brand companies' followers see a company's posts and less than 0.5% interact with the posts considering the fact that not all the followers are customers to that particular brand (Cespedes, 2015). Although many researchers argued that social media is not a selling tool, others believe in the power of social media on boosting companies sales and many evidences prove their claim.

Many well-known companies succeed on increasing their profits by taking advantage of using social media. For instance, Sony succeed on raising its income by 1.5 million dollars by offering competitive offers to its customers through twitter (Fisher, 2010). In addition, Instagram has become one of the most effective applications to generate profits for businesses. Jeremy (2015) stated in his blog that Instagram helped him to increase sales of his t-shirts business successfully. Moreover, companies can implement mass selling promotion by using social media that will increase its sales indirectly since social media contributes on achieving word-of-mouth marketing and as a result helping companies' bottom line (Mangold & Faulds, 2009).

References

Al-Deen, H. S. N., & Hendricks, J. A. (2011). Social media: usage and impact. Lanham, Maryland, Lexington Books

Cespedes, F.V. (2015). Harvard Business Review. Retrieved from https://hbr.org/2015/03/is-social-media-actually-helping-your-companys-bottom-line

Fisher, L. (2010). Evidence that Social Media Really Does Drive Sales. Retrieved from http://thenextweb.com/socialmedia/2010/09/21/evidence-that-social-media-really-does-drive-sales/

Jeremy. (2013, March 2). I used Instagram for Business and Doubled my Sales in One Month [ web log post]. Retrieved from http://www.firepolemarketing.com/instagram/

Mangold, W. G., & Faulds, D. J. (2009). Social media: The new hybrid element of the promotion mix. Business horizons, 52(4), 357-365.

Mayfield, T.D., 2011. A commander’s strategy for social media. JFQ, 60, pp.79-128.