Entrepreneurs Question Value of Social Media

This article from the Wall Street Journal opens with an anecdote about a woman who purchased a kayak after the co-owner of Folbot, Inc. posted a message on her twitter. She had mentioned in a post that she was interested in a folding kayak and was contacted by David AvRutick. In the past few years, social media has become a popular marketing instrument for small firms such as Folbot, Inc. due to it's user-friendliness and relative low-cost as compared to traditional marketing methods. I think the ability to connect on a personal level with potential clientele is of enormous importance. This story speaks to the unmatched value of using social media as an important public relations tool.


However, there are naysayers who believe this type of interaction is the exception and not the norm. Research from the University of Maryland's Smith School of Business and Network Solutions LLC, a Web-services provider in Herndon, Va., found that of 500 U.S. small-business owners, just 22% made a profit last year from promoting their firms on social media, while 53% said they broke even. What's more, 19% said they actually lost money due to their social-media initiatives. 


I think these numbers possibly point to the ineptitude of the companies attempting to use this new technology more than anything else. Perhaps they have a social media site but aren't interacting on a one-on-one level with their consumers or they are being reactive as opposed to proactive. This survey doesn't give enough background on why these small-business owners aren't able to make social media work for them when stories like the one in this article so clearly prove that it can.


Larry Chiagouris, professor of marketing at Pace University's Lubin School of Business, said that social media could harm businesses if a representative were to say something offensive or even simply grammatically incorrect. I agree that that is a possibility but I don't see why that should stop companies from taking advantage of all the great things social media has to offer both their business and their consumers.


In order to get positive results from the use of social media, companies need to regularly interact with consumers and be mindful of what they post. This may require considerable effort but I think the more quality time and energy put into making social media work for your business, the more you will get out of it in the end. I believe the pros outweigh the cons in the argument against corporate social media usage.