Using social media to attract consumers

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Abstract

Social media allows information to be shared electronically among wide range of customers. It helps organizations to analyze their market and strategize accordingly. This study examines how social media can be used to attract customers. A survey was conducted with a non-random convenience sample of 10 students at New Jersey City University. The data shows that social media advertisements and word of mouth helps in retaining customers for a long period of time, enhancing performance in market place. Most participants stated that social media marketing strategies have many benefits for companies. Results are consistent with previous research, which stated that organizations seek to utilize social media in order to attract consumers. Future studies should focus on the social media usage as it is an important marketing strategy.

Chapter I

Introduction

Social media impacts all businesses today, from small local companies to large national organizations. Social media marketing deals with the use of social platforms by an organization to promote the company’s goods and services. Most of the social media platforms have created their own data access tools that provide firms with wide opportunities to engage with their customers (Labrecque, 2014). These tools help in sharing and creating content that is viewed by customers. The tools also help the companies in accessing the ways through which corporate marketing and branding goals can be achieved.

Organizations use social media to connect with various stakeholders, through which their products and services can be promoted on a wider scale than with traditional media. To best utilize social media, a firm must analyze the most effective ways social media marketing can be planned and achieved (Tsimonis & Dimitriadis, 2014). They must formulate strategies that can lead to the generation of brand development for the firm and help them in acquiring competitive advantage. The use of social media enhances opportunities for organizations to communicate with customers. “Social media, especially social networking sites, provide a virtual space for people to communicate through the Internet, which also might be an important agent of consumer socialization” (Vinerean, Cetina, Dumitrescu, & Tichindelean, 2013, p.66).

Purpose of the Study

The purpose of this study is to explore how social media is used to attract customers.

Research Question

In what ways does social media help companies attract customers?

Importance/Significance of the Study

The topic of how social media is used to attract customers is important to study for several reasons. Customers are particular about where they are buy products or services. In order to select the product they want, they are willing to search online before making any purchase decisions. Since the internet is now more conveniently searchable through smart phones, customers can search for products and services using their phones in just minutes. Marketers must study how people search for products and services in order to develop strategies for reaching them in order to satisfy their needs and wants. Knowing more about customer needs will help companies to reach more customers and acquire better return on investments.

Another reason why the topic of how social media attracts customers is that today a lot of platforms and applications let customers express their opinion easily about any product or service. One of the main reasons why businesses must use social media is because their competition uses these platforms daily as a marketing strategy. Social media provides many opportunities for organizations to build better relationships with clients and attract more customers (Vinerean, Cetina, Dumitrescu, & Tichindelean, 2013).

Social media marketing strategies have many benefits for companies. It improves engagement with customers by building strong relationships with them (Vinerean et al., 2013). Engaging with customers through social media, providing them with necessary information regarding the products and services and giving them necessary feedback, helps companies develop ways through to strengthen their engagement with their customers (Vinerean et al., 2013). Enhanced customer engagement helps firms analyze customer acquisition, allowing them to better determine how the loyalty of new customers can be achieved and how current customers can be retained. High visibility on social media platforms further helps to build strong corporate relationships with customers, which is necessary for retaining old as well as new customers (Trainor, Andzulis, Rapp, & Agnihotri, 2014). In order to build engagement, researchers and marketers must examine the best ways to reach all customers and satisfy their needs.

Limitations of Study

A limitation of the study is the fact that the method used in the study included a small sample, a non-random sample, and a sample whose participants are from one geographic area. All of these make the sample non-representative of the population, thereby limiting the validity and reliability of the results.

Definition of Terms

Social media requires an understanding two key terms i.e. communication and sociology. Communication is a medium through which data or information is transmitted or stored. Sociology is a structure in which various social actors are tired up to each other (Peters, Chen, Kaplan, Ognibeni, & Pauwels, 2013). Social media is a type of electronic communication medium through which customers and businesses share information and ideas.

Platforms refer to the multiple web mediums or networks such as Facebook, Twitter, Google +, Instagram, etc. that influence social activities of the consumers. They are the channels through which social relationships are carried between consumers and businesses (Tiago & Veríssimo, 2014). Platforms are also referred to as a group of applications that allow interaction and exchange between users.

Outline of Study

This study is broken down into five chapters. Chapter one is the introduction to the study which includes background information about the topic and why the study was conducted. Chapter two focuses on the review of literature. The review of literature is where previous research is reviewed to reveal current knowledge and uncover substantial findings. Chapter three looks at the methodology and the techniques that were used to collect and analyze data. This study utilizes primary research in the form of a survey. Chapter four examines the results from the methodology and identifies what the data has uncovered. Chapter five is the discussion where the differences and similarities between the results in chapter four are compared and contrasted with findings of previous researchers in the review of literature. The discussion aims to reveal what remains unanswered and what future studies should focus on.

Chapter II

Review of Literature

All companies work to create strategic marketing plans that place their brands uniquely in the market. Today, social media plays a crucial role in promoting multinational corporations around the globe, which also requires strategic planning. Traditionally, strategic marketing plans have included promotional tactics such as newspaper advertisements, television commercials, magazine advertisements and brochures for promoting brands (Trainor, Andzulis, Rapp, & Agnihotri, 2014). Organizations have focused on these traditional marketing techniques for retaining the customers in the long run. However, in the recent years, customers have embraced technology and the latest mobile applications for gathering news and information. In a technology-centric era, the number of internet users is increasing exponentially across the globe (Vinerean et al., 2013). Social media influences small and medium sized firms as well as multinational corporations by changing the strategy of marketing and allowing them to adopt new tactics of social media marketing for successful customer retention (Peters, Chen, Kaplan, Ognibeni, & Pauwels, 2013).

The main platforms of social media marketing are Facebook, Twitter, Blogs, YouTube, and Google+, through which organizations convey their message to the audiences. On Facebook for instance, brands try to upload different posts in order to attract more clients across the globe (Malthouse, Haenlein, Skiera, Wege, & Zhang, 2013). Moreover, uploading videos through YouTube as well as developing effective content in Twitter and Blogs are also effective strategies for corporations promoting their products and services. Developing effective search engine optimization is also another important strategy for attracting more global clients (Trainor et al., 2014).

In addition, several other social techniques incorporated by organizations include online advertisements, electronic word of mouth, online chat groups, blogs and micro blogs. By online advertisements, organizations have the incentive to advertise their products on chosen websites (Malthouse et al., 2013). Social marketing techniques provide an opportunity for organizations to promote goods and services to the customers through the applications of advertisements and promotional strategies. Organizations can use any of the mentioned social techniques to attract more customers (Aral, Dellarocas, & Godes, 2013). Feedback from customers and customer’s queries help in developing products as per the needs of the consumers. Modifications suggested via social media can be made in accordance with the tastes and preferences of consumers, hence, providing a better opportunity to raise demand for the products (Laroche, Habibi, & Richard, 2013). When organizations change promotional activities from traditional to modern methods, they must assess the possibilities of acquiring more consumers for the products, as modern methods of promotion are more effective. Moreover, by acknowledging the change in the manner of promotion and utilizing social media methods, organizations can attract more consumers (Rauniar, Rawski, Yang, & Johnson, 2014).

This review of literature explores how social media is used to attract customers. Specially, it examines the pros and cons of using social media to connect to and win over customers, comparing social media strategies to traditional methods of marketing.

The benefits of using social media include the fact that social media marketing strategies provide ways for multinational corporations as well as small and medium sized entrepreneurs to promote their products and services in the international market. Social media leads to the enhancement of global marketing strategies in many ways. First, social media is useful for creating brand awareness and brand visibility among widely dispersed consumers. Through marketing strategies, organizations try to provide all the relevant information regarding the brand values, product specifications and price of the products. By providing all the relevant information about their products via social media, organizations can promote the goods in the international market (Ashley & Tuten, 2015). A social media strategy is therefore beneficial for firms hoping to improve brand visibility in the international market, as it is where customers can access information and news regarding particular brands. Providing knowledge to consumers regarding brands helps them to attain information regarding the product, thereby maintaining brand awareness in the market.

Second, social media is useful for building customer engagement. Social media marketing strategies improve engagement with customers by building strong relationships with them. One of the most essential goals for firms is to attain customer loyalty (Trainor et al., 2014). Engaging with customers through social media, providing them with necessary information regarding products and services, and giving them necessary feedback, helps companies develop ways to engage with their customers. Enhanced customer engagement helps firms analyze customer acquisition to better determine how customer loyalty of new customers can be achieved and how current customers can be retained. In short, high visibility on social media platforms helps to build strong corporate relationships with customers, which is necessary for retaining old as well as new customers (Trainor et al., 2014). Additionally, as social media is two-way communication, sales representatives can directly interact with customers using social platforms. This is beneficial for understanding the actual needs and preferences of customers and provides a possibility for firms to transport the right products to the right customers (Ashley & Tuten, 2015).

Third, social media is a cost-effective marketing communication technique. Social media marketing is considered as one of the most cost-efficient marketing strategies (Tiago & Veríssimo, 2014). Setting up websites and profiles in networking sites incurs a certain amount of costs that are considered as negligible as compared with the costs incurred through other, more traditional forms of marketing strategies. Through a single social promotional activity, vast amount of customers can be reached in a global platform. Different customer segments can be accessed, thereby getting the opportunity to promote products on a larger scale. Application of such cost-effective methods of carrying on promotional activities helps companies acquire better return on investments. As Vinerean et al (2013) noted, this thereby raises the profit margin of the organization, allowing investments in other aspects related to operating the business.

Social networking is considered as a valuable promotional channel for companies, which gives them the advantage of exchanging ideas with like-minded people and gaining knowledge regarding the likes and dislikes of customers. Social media is a platform where people from different backgrounds, cultures and habits engage with each other. It is one of the best channels for organizations to use to communicate with customers and attain knowledge regarding their preferences and needs (Rapp, Beitelspacher, Grewal, & Hughes, 2013). Using online networking sites, organizations have opportunities to enhance their goods according to the needs of the customers. These sites provide companies to learn information that helps them modify their products and services, and socially market their products through the process of electronic word of mouth (E-WOM). E-WOM provides companies an opportunity to promote their products and services through other customers (Hennig-Thurau, Hofacker, & Bloching, 2013). These customers gain knowledge from the firms and spread the news of certain differential specifications of products, thereby raising demand for the products and acquiring more customers.

The ranking of the website of a particular organization in multiple search engines helps in analyzing the impact of specific social networks. As more people acknowledge the brand and gain information regarding the products and services of the firm, the visibility of the firm in search engines increases. This is a form of marketing known as search engine discoverability (Habibi, Laroche & Richard, 2014). The practice of using search engine discoverability makes it easier for customers to find the products that they are actively looking for. Search engine optimization is one of the simple techniques used for marketing products and services through search engine discoverability. Organizations use attractive and innovative properties of their website and thereby improve the optimization of their search engines. This helps them in securing higher search ranks and hence, when the customers search related keywords, the websites of the particular organization with high ranks are usually shown, thereby raising their ability to attract customers in a better manner (Habibi et al., 2014).

Social media provides the opportunity for organizations to enhance their ability to connect with customers on a personal level. A personal connection helps organizations develop their brands by the brands’ association with various customers on a bigger platform. Firms can use social media for improving their brand image to consumers. Implementation of extensive strategies for brand development helps firms upgrade their standards to acquire more customers for their products. Through customers feedback and query-solving services, organizations enhance the ability of improving and modifying their products (Schivinski & Dabrowski, 2016). Hence, the firm is capable of doing publicity of its products at a much lower cost where customer loyalty and customer acquisition become two of the most important aspects of the outreach. Social media helps in selecting the appropriate support and network for the firm and its products, thereby enhancing brand image and providing the firm with comparative advantage.

Although social media is beneficial for customer retention, it has some disadvantages, including risk to brand reputation and customer loyalty. Negative impacts of social media marketing also include the risk of hacking. In the recent years, the number of hackers in the industry is rising rapidly, which adversely affects firms (Malthouse et al., 2013). Hackers are paid well for searching internal information of businesses (Malthouse et al., 2013). Hackers try to provide authentic internal information so companies can develop new innovative ideas for gaining high competitive advantage from the rival firms. Hacking also leads to the leakage of customers’ personal information. This leads to a loss in customers’ trust towards the brand, leading to a considerable fall in the demand trend faced by the firm (Malthouse et al., 2013).

Second, the risk of negative comments on social media must be considered by companies using new technology. In fact, handling negative feedback of customers is another issue for which the firms face difficulties in managing social media strategic planning. Customers sometime provide negative feedback regarding brands, which demotivates other consumers from purchasing the product from a particular company (Trainor et al., 2014). Slow customer response is another negative factor of social media, a situation that can occur when sales representatives fail to provide 24/7 services to customers, causing further dissatisfaction of the customers (Trainor et al., 2014).

Third, social media is considered as a time-consuming process used by firms to promote their products and services. Organizations need to incorporate several strategies to attract customers towards their profiles or online advertisements (Malthouse, et al., 2013). Moreover, monitoring the comments and responding to the queries of customers requires company representative to stay online 24/7. The time commitment companies must dedicate towards social media marketing is crucial for organizations (Malthouse, et al., 2013). With the insufficiency of organizations in providing enough time to the marketing strategies online, there are high chances of losing the customers who had been previously associated to the firm.

Social media offers many benefits for firms engaging with customers and maintaining large platforms for promoting their products. It helps in changing the nature of the organization’s communication techniques. Firms that practice only promotion through traditional methods of marketing may want to undergo a transitional shift in promotion of their products. It is not necessary that the organization is successful in analyzing the ways, through which a transition from traditional marketing to social media marketing is achieved by firm. At certain level, firms must employ better strategies and efficient management that would help them in analysing such facilities of social media (Laroche et al., 2013). Any form of inefficiency in such strategies of marketing shift would lead the firm to limit its gains.

The defining attributes of social media is the opportunity for interaction of multiple users and single piece of content. These interactions provide an opportunity for firms to attain likes and comments. These contents are further broadcasted to followers and the actual contacts of the firm, hence, they can provide greater reach for the organization’s promotions. As organizations do not have any form of control on its contents, misleading comments and illegal sharing of the contents might lead to negative marketing for the firm. This dampens the effect of social media marketing, which would have generated customer acknowledgement and market share for the firm (Peters et al., 2013). Moreover, it can lead to a negative image along with a reduction in the revenues earned by the organization.

Social media marketing is a common way to promote products and services. Most companies have acquired ways to successfully market their products through social media and analyse the outreach. This thereby provides opportunities for customers to avail better varieties of products. A single firm must deal with a wide variety of competition in marketing. Achievement of customer loyalty is considered as quite difficult for an organization as the customers are able to explore wide variety of firms promoting their services (Rapp et al., 2013). As customers are provided with better and new varieties, they do not maintain loyalty with a particular firm. Hence, social media makes firms to face the risk of high competition level.

In conclusion, the strategy of social media marketing is advantageous for retaining long-term customers and enhancing business performance in the global market. Promotional operations of the firm through social media help in availing better opportunities by providing a bigger platform to market products and services. Activities on social media are helpful for businesses to improve engagement with their customers through which it is possible to strengthen the customer base (Trainor et al., 2014). On the other hand, there are some negative impacts of social media marketing such as high number of hackers (Malthouse et al., 2013), managing negative feedback (Trainor et al., 2014), and time-consuming technique (Malthouse et al., 2013). It is necessary for all firms to resolve the existing issues and utilize social media marketing strategies in order to maximize its benefits and secure future sustainable development of business successes.

Chapter III

Methodology

The topic of using social media to attract consumers has been studied by the use of similar methodologies. Most researchers used an online survey as a research method for their study. Data collection was achieved by using an online consumer survey. In the data analysis phase of the research, the data was collected via the Internet, and for the information’s preparation and processing the researchers used the statistical analysis program SPSS (IBM SPSS, 2011). Nowadays, the analysis of consumer behavior is central for marketing success, especially since most potential consumers are using the internet and different online socializing tools. Social media platforms offer immense possibilities for attracting more consumers and fostering relationships with them (Vinerean, Cetina, Dumitrescu, & Tichindelean, 2013). These platforms can also provide measurements/data with which researchers can develop findings.

Other researchers used content analysis as a research method to gain information on the content of social media branding efforts. This method has proven useful in the past for understanding the content of print ads, television commercials, product placement, outdoor advertising, and Web sites (e.g., Calcott & Lee, 1994; Dahl, Eagle, & Baez, 2009; McQuarrie & Phillips, 2008; Turley & Kelley, 1997). Although content analysis does not capture the effectiveness of creative strategies across different media, it is useful to identify the social media channels and strategies used by top brands (Ashley & Tuten, 2015).

In the current study, the methodology used an online survey. The survey was conducted by emailing a questionnaire to a total of 10 students at New Jersey City University. The purpose of the questions was to identify how important social media marketing is used in order to attract consumers. Questions also sought to determine which social media platforms are most successful and unsuccessful. 10 responses were collected. The results of the survey follow.

Chapter IV

Results

Data collected from the survey has shown that social media usage is common and very frequent for most respondents. The majority of participants showed a favorable attitude about engagement. This finding shows that most organizations are aware that using social media marketing is an effective strategy for attracting consumers.

The first question in the survey asked how long the participants organization has been using social media. This question was multiple choice and answers ranged from twelve months, to more than twelve months. “More than twelve months” was the most popular answer with 7 out 10 responses. Two participants chose “12 months” and one participant chose “6-12 months.” This suggests that most organizations are using social media to market their products/services.

To gather more data about social media usage, participants were asked to select the social media platforms that they use to promote their products/services. Possible answers included Snapchat, Instagram, Twitter, Facebook, YouTube, and “other” which allowed participants to write other platforms they are using. The most common responses were Facebook and YouTube. Both applications were very popular amongst respondents with 6 out of 10 responses each. Snapchat and Instagram were the second most popular answer with 3 out of 10 responses. One participant choose “other” and wrote a variety of responses. This data shows that Facebook and YouTube were the two most popular applications among participants, so developing engagement strategies specifically for these outlets could yield positive results.

Question three asked participants how important social media account’s such as Facebook, Twitter, and Instagram are in order to attract consumers. Possible answers included “not important,” “important,” “very important,” “critical.” The most popular response was “critical,” with 9 out of 10 responses, which means most organizations use those accounts daily as it is an important marketing tool. One participant choose “very important,” which means organizations always use those accounts to promote their product and services.

The next question asked participants if social media platforms have created brand awareness of products/services. “Yes” was the response from 100% of participants. This suggests that social media platforms have a significant and effective role in creating brand awareness. The fifth question asked how many followers/fans have the organization gained for their brand since they started using social media platforms. The most response was “500-1000,” with 7 out of 10 responses. The second most response was “more than expected,” with 2 out of 10 responses. Overall, participants showed a positive attitude about customers interacting with brands on social media platforms.

The sixth question asked participants about the value of brands after the efforts of social media. Most participants responded “yes,” with 8 out of 10 responses. They stated that the value of brands has significantly raised after the efforts of social media. Two responded was “unknown.” This can be interpreted as organizations are unaware if their social media efforts are effective because either they do not know how to measure the results or they do not know how to effectively use social media marketing therefore their responses were unknown.

The next questions asked participants if they are engaging with followers/fans on social media by liking, commenting, etc. Most participants said “yes,” with 9 out of 10 responses and only one participant responded “no.” Overall, this suggests that social media engagement achieves great success for organizations in attracting consumers. The majority of participants stated that interacting with consumers on social media significantly improves the relationship with them and also enhances the brand.

The last question in the survey asked participants if they are gaining more customers or increase in sales after using social media. “Yes” was the response from 100% of participants. Overall, with the data collected it can be determined that most organizations are neutral in satisfaction with their social media marketing initiatives. Organizations prefer to use and improve social media and website marketing activities to promote their products and services in order to attract consumers.

Chapter V

Summary of the Result

Analysis of the gathered data has helped to meet the research objectives. The findings indicate that the social media has the ability to attract customers for a particular brand. It can be clearly seen from the result of the survey that most of the respondents answered in favour of the social media strategy, which acts as the marketing tool for their product. The use of social media platforms such as Facebook and YouTube have become popular among organisations as it helps them to increase their brand value, brand recognition and also initiating consumer-business relationships.

Implications of research

The research findings suggest that organisations are still relying on the traditional marketing method and should adopt social media advertising as its promotional campaign for effective advertisement of their brand. Moreover, it also implies that competition has increased among firms using social media tools and thus they should try make their social media page look more attractive than their rivals. The design of the page helps the company to improve their social media campaigns and attract more customers. Social media advertisement are much cost effective and easily approachable to the customers. Thus, this has put a great threat on the traditional marketing tools to revise their pricing strategy.

Relation between findings and prior research

The analysis of the survey results has proved that social media is an effective tool for direct customer interaction and increasing brand awareness. It allows the company to modify their products in accordance to the needs of the customer. This finding relates to the views stated by Rapp et al. (2013) that social media offers a platform to the companies to know their customers and their preferences towards a specific product. Social media initiative has helped companies to retain their existing customers as well as make new follower. This is identical to the thoughts of Trainor et al. (2014) that social media influence strong customer relationship by developing new customers for the brand. It is the best way a company can influence brand appreciation through effective communication. Schivinski & Dabrowski (2016) has placed a similar thinking that value of the brand increases by engaging with the customers’ frequently. This modern marketing tool has helped in increasing effective brand awareness among consumers for their products. This finding is similar to that of Ashley & Tuten (2015) who also identified that social media helps in generating brand visibility among the wide range of customers.

Areas for future research

The research conducted on the effectiveness of social media in improving brand awareness lacks in certain areas. The survey failed to cover certain questions which could reflect the danger of using social media (Malthouse et al., 2013). Evidences from previous literature have shown that social media as an advertising tool has some threats as well. Thus further survey should be done to find the extent of threat social media puts on the company while promoting their brands. This will show the risk the modern technology has along with the benefits that they place on the brand.

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