Innovate or Die: How Social Media Has Transformed Business

Yesterday, I bought a product online because I saw a positive review on another website. Did I know the reviewer personally? No. I only even knew about the product because of a link sent to me by a friend, over WhatsApp. Without ever seeing, touching, or experiencing the product in any way, I made a purchasing decision entirely based on social media.

In the past, businesses could rely on their brand assets and word-of-mouth to get customers. But those days are gone with heated competition on the market. Brands must now work to build trust with their audience and provide real value to succeed – much of this can be achieved with social media.

Marketing on social channels, such as LinkedIn, Facebook, Instagram and YouTube has become a norm for communication. Many of us reminisce back to the times when ‘going viral’ was receiving an email with “FW:” twelve times in the subject line. We remember paying astronomical phone bills when living away from loved ones. Who remembers writing and posting LETTERS? I can still taste that terrible envelope glue. Social media has connected us. It’s no longer a want, but it’s a need.

Rather than spending thousands of dollars on advertising through traditional means, such as radio or T.V., businesses can create content on social media for a little budget or for FREE – it just takes time. A study by Statisca, shows that 30% of marketers worldwide believe that content generates the highest Return on Investment, and 20% believe organic (rather than paid advertising) social media produces the most effective results. More than 90% of Millennials will make a purchasing decision based on a single piece of input from social media.

I had the privilege of working with Daniel Wellington this year. They’re a Swedish company that sells simple, unisex quartz watches with a classic design and are, perhaps, pioneers in what we now call ‘Influencer marketing’ on social media. They spotted Generation X and Y who were creating content on Instagram and sent them a free watch to wear and post about.

This created a huge buzz around their brand – their hashtag #danielwellington has been used over 1.9 million times! The owner, Filip Tysander, had invested just $1500 for kick starting the company in 2009. By 2015, he had sold one million watches for a tidy $220M profit. The distribution of the watches to the Influencers proved remarkably effective and was produced at a fraction of the price of a classical advertisement campaign.

Other businesses choose to ignore the digital trends, like TOYS R US who recently declared bankruptcy. They had relied on the strength of their brand name and more traditional means of advertising. They didn’t innovate. But 7-year-old YouTube star, “Ryan ToysReview” made over $11million last year alone by reviewing toys – he has millions of views and subscribers. Do you think if TOYS R US had used a kid like him and embraced social media into their marketing strategy, then they would have had a more fortunate outcome?

Having strong brand name just isn’t enough now. Social media has changed the way we do business. And businesses have two choices, they can embrace it, reach and build a relationship with their target audiences… Or suffer the consequences.

Has your business embraced social media? What are your thoughts and experiences?