In a global economy driven by increasingly empowered consumers, small and medium-sized enterprises (SMEs) are challenged to find new ways to stand out from the competition, create tighter bonds with their customers, and enhance the growth of their business. Technological innovation has been a key source in maintaining a competitive advantage for SMEs. Although expectations and emphasis for particular technologies varies depending on industry and geography, the overall trend is clear: social media is helping SMEs collaborate more, get closer to their customers, and in turn, grow their businesses. In a recent SAP Global SME study with Oxford Economics, 2,300 SME senior executives across 23 countries were asked about strategic initiatives that were most important to them in driving business growth. Of the respondents, 39 percent cited strengthening customer relationships, a combined 63 percent cited domestic and global expansion, and 49 percent noted expanding product and service offerings. Not only must SMEs work on getting closer to existing customers and meeting their ever-changing demands, but they must also look for ways to increase their market share and attract new customers within both domestic and new geographical markets.
Social media can give companies a competitive advantage
As a result, many SMEs have realized the importance of social media in gaining a competitive advantage – 40 percent of respondents are widely using social media technologies today. Out of the SME senior executives surveyed, 31 percent stated that social media has helped drive better customer service. Additionally, 25 percent cited improved product and service development with social media.
1. Creating a community
2. Expanding reach
3. Maximizing ROI on marketing and advertising
4. Gauging customer sentiment
5. Managing brand reputation and identifying opportunity
6. Boosting website traffic
7. Improving Productivity
Here is why. Personal involvement, engagement, and connection are among some of the most important reasons consumers choose smaller businesses over larger brands. For SMEs, knowing how to capitalize on this for their growth initiatives is crucial. Social analytics and collaboration tools can help SMEs use social media to participate and reap rewards from engaging with employees and customers more dynamically; learning how to craft a better brand, quickly responding to changes in customer preference and making sure their social media has a positive impact on business. Outlined below are seven ways social media is helping SMEs do exactly that.
1. Creating a community. Social media allows businesses to connect with customers interested in the products and services they offer. Using the right social media platforms and having access to the most relevant audience allows SMEs to engage with their core customers and build communities. Social tools help foster internal communities as well. SMEs can use social media tools to supplement instructor-led training, for example, with a variety of content and collaborative communities to improve employee development and learning.
Going global with Facebook, Google+, Twitter, and YouTube
2. Expanding reach. Leading social media platforms like Facebook, Google+, Twitter, and YouTube cater to worldwide audiences. By using these main platforms, SMEs have already taken their business global and extended their message. This is especially important for the large number of SMEs seeking to expand beyond their immediate locations.
3. Maximizing ROI on marketing and advertising. After engaging with their target audience, SMEs can use social media to promote their products and services in a more personal way. A picture is worth a thousand words, and having the ability to upload images, from an event or videos of product demos, for example, can bring SME offerings to life in a way that words alone cannot.
4. Gauging customer sentiment. Social media analytics are more than numbers. Monitoring tools use analytics to measure consumer sentiment from data gathered on social sites. They provide the proof points needed to improve customer engagement, make marketing decisions, and link social media efforts with the bottom line. Through the use of analytics, SMEs can track customer input on products, services and offerings. Empowered with insight into customer sentiment, SMEs can improve customer segmentation, provide targeted offers, and increase upsell and cross sell opportunities.
5. Managing brand reputation and identifying opportunity. Statistics show that consumers largely base their purchasing decisions on the reviews, commentary and recommendations of people inside (and even outside) of their circles. By using online reputation management tools, SMEs can monitor for mentions of their brands, products and services, and promptly engage in those active conversations. Engaging with consumers in this way can help negate negative commentary, uncover unmet customer needs, and potentially help convert prospects into customers.
Google includes social signals in SEO rankings
6. Boosting website traffic. The popularity of social media has essentially forced search engines such as Google to include social signals into their Search Engine Rankings (SEO) algorithm. SMEs that engage in social media and link to their Web sites on their social media profiles, can expect to receive an increase in quality traffic – thanks to the combination of social and algorithm-ranked content.
7. Improving Productivity. According to a report by McKinsey & Company, the average worker spends an estimated 28 percent of the workweek managing e-mail, and nearly 20 percent looking for internal information or tracking down colleagues who can help with specific tasks. By connecting employees to experts within the company, social media tools encourage collaboration, enabling employees to get source answers, share ideas, and move projects, products, and services forward faster.
Like most SMEs, Synergium, a Lithuanian translation services company, was faced with the challenge of achieving effective employee communication and efficient project coordination. As a result, Synergium turned to social tools to help them effectively communicate across their multiple locations, in three different countries. Using the social enterprise collaboration tool, SAP Jam, Synergium has been able to engage their employees through an interactive online social community that helps them connect and accelerate their time to productivity. More specifically, Synergium has enhanced their employee collaboration on translation projects across different company locations, and can now effectively share information across the entire organization —all while reducing the time spent in traditional email.
SAP Jam: effective communication across the organization
To encourage social collaboration, social technology needs to be easy and simple to use. “You cannot force employees to become social. SAP Jam brings value, fun, and makes people want to use it. The simple, intuitive SAP Jam interface has even encouraged participation from the most resistant social user,” said Mindaugas Kazlauskas, Chief Executive Officer, Synergium. “With SAP Jam, we have seen more effective employee communication and an increase in employee retention.”
Synergium is not the only company jumping on board with investments in social collaboration. The Oxford Economics study revealed that SMEs are recognizing that they cannot afford to ignore the current digital revolution. Over 36 percent of senior executives surveyed ranked social media as their most important technological investment over the next three years. Although the rankings varied from market to market, social media remained a priority in every country. This is because social media has an undeniable impact on SMEs’ performance. More than half of the survey participants predicted that over the next three years, their investments in social media would create a competitive advantage for their firm. Additionally, upwards of 41 percent of survey respondents indicated that social media is already creating a significant competitive advantage for their company.
On paper, developing a squeaky-clean social media strategy can seem simple. But the execution of the day-to-day tasks involved in that strategy can be a different story — at least without having the right implementing processes to manage it. In fact, when asked about the key challenges their firms faced in adopting social media, senior executives cited uncertainty in how to apply it to their business, not knowing how to measure the ROI, and difficulty getting employees to embrace it. Additionally, almost 40 percent of respondents said they were challenged with the amount of effort needed to commit to maintaining a viable social media strategy.
Innovation, better customer relationships, and international business
The value social media brings to SMEs is irrefutable. With the right social analytics and collaboration tools, SMEs can overcome these challenges and maximize social media strategy implementation. By enabling SMEs to use social media as a way to measurably strengthen customer relationships, expand geographically, and increase offerings, these tools make social media an essential ingredient for sparking innovation and increasing competitive advantage.