Maximizing the Social Media Potential for Small Businesses and Startups: A Conceptual Study

Abstract

Businesses are well known for devising novel techniques of business development, marketing strategies and enhancing brand awareness among their customers. In recent years, social media has emerged as an interesting opportunity for businesses to use it as an advertising platform for their business promotions, developing a brand awareness, educating masses about their products and their features. Social media networks like Facebook and Twitter have become strategic components of marketing and business promotion activities that could be called customer acquisition strategies. Such platforms have proved a boon especially for startups having restricted budgets. Despite easy accessibility of social media platforms, startups fail to maximize their potential in favor of their businesses. With the help of statistics, and their outreach, this study shall evidence the significance of social media in startups and unleash its tremendous potential and trustworthiness to promote businesses and even align it with business strategies.

Full text

International Journal of Economic Perspectives, 2017, Volume 11, Issue 2, 241-245
International Journal of Economic Perspectives ISSN 1307-1637 © International Economic Society
http://www.econ-society.org
241
Maximizing the Social Media Potential for Small Businesses and
Startups: A Conceptual Study
Wael S. Basri
Northern Border University, Arar, Saudi Arabia
wael.basri@nbu.edu.sa
Mohammed R. A. Siam*
School of Business Management, Universiti Utara Malaysia
r.a.siam@uum.edu.my
ABSTRACT
Businesses are well known for devising novel techniques of business development, marketing strategies and
enhancing brand awareness among their customers. In recent years, social media has emerged as an interesting
opportunity for businesses to use it as an advertising platform for their business promotions, developing a brand
awareness, educating masses about their products and their features. Social media networks like Facebook and
Twitter have become strategic components of marketing and business promotion activities that could be called
customer acquisition strategies. Such platforms have proved a boon especially for startups having restricted
budgets. Despite easy accessibility of social media platforms, startups fail to maximize their potential in favor of
their businesses. With the help of statistics, and their outreach, this study shall evidence the significance of social
media in startups and unleash its tremendous potential and trustworthiness to promote businesses and even align
it with business strategies.
JEL Classification: D2, D4, M21
Keywords: Start-up, Business Development, Brand Promotions, Customers
*Corresponding author.
1. INTRODUCTION
Startups and Small and Medium Enterprises (SMEs) have always faced the challenge how to maximize profits
without compromising quality. The entrepreneur understands that his business cannot succeed unless customers
know his products and services, for which he might have to make heavy marketing and advertising investments.
Many businesses fail on account of lack of budget and their capacity to spend on their brand promotion and
increasing sales. (Chan, 2016) An exception is seen in word-of-mouth marketing which is the best option for a
startup with a limited budget (Dugan, 2016).
In the recent times, the internet has made word-of-mouth marketing acquire a significant position. Social media
platforms have emerged as word-of-mouth sources enabling startups and SMEs to reach millions of customers
within seconds. Social media has revolutionized the business world by offering an optional marketing platform
which has gradually become a preferred strategy. Launching campaigns and other marketing activities on
Facebook and Twitter have now much been integrated into small startups parts that depend on these platforms
for all their marketing needs.
Globalization has necessitated every brand to reach its customers through a network that brings startups closer to
them and facilitating them to buy commodities of their need. This requires brands to be aware of different
demands of their customers. They face challenges like how to address multi-lingual audiences located in
different time zones and to prioritize and implement a business strategy that will get the maximum out of their
advertising campaign. Social media platforms are the fastest source to reach their potential customers; hence
startups strive for their social media presence especially to tap such markets where word of mouth strategy works
best for promoting products.
This study is a conceptual analysis of measures that could be adopted to maximize the potential of social media
for the development of startups and small businesses. It first discusses various social media platforms, followed
by various strategies that could facilitate the exploitation of social media platforms for specific needs of startups.
In the end there are a few suggestions and recommendations.

International Journal of Economic Perspectives, 2017, Volume 11, Issue 2, 241-245
International Journal of Economic Perspectives ISSN 1307-1637 © International Economic Society
http://www.econ-society.org
242
2. SOCIAL MEDIA PLATFORMS
The five big social media platforms widely utilized by startups and small businesses are: Facebook, Twitter,
LinkedIn, You Tube and Pinterest.
2.1 Facebook
Facebook with its 700 million active monthly users stands largest social media network. It is the fastest medium
to reach the masses; it begins with building an informal interactive environment conducive for entering into an
active social media interaction. The startups are required to design a Facebook page layout which contains info
graphics, videos and other visual components that could help customers to understand the business that the
startup is involved in.
2.2 Twitter
Twitter is another social media advertising tool that allows startups to disseminate their products and brands.
Research (Edwards, 2016; Forbes,2016; Wagner, 2014) evidence that almost two thirds of Twitter users take
decisions to purchase products of the brands they follow. Twitter is also a key social media strategy for one-on-
one interaction with customers. When a startup tweets its special discounts or any other updates, it gets quickly
followed by customers. Often customers want to share something about the product or the service, this tool
offers them a useful platform for interaction.
2.3 LinkedIn
LinkedIn is more suitable for B2B startups that aspire to expand their businesses through tie ups and joint
ventures. LinkedIn facilitates global networking and marketing in professional and business circles. (Wagner,
2014) Startups can enter into professional dialogues with their partners and customers in order to share the
content about their brand, products and services. Satisfied customers give their recommendations on LinkedIn
profiles of startups and help them acquire credibility and add trustworthiness to their products for new
customers.
2.4 YouTube
YouTube is the platform that startups use to share business and corporate videos with their customers and clients.
These videos allow customers to remain engaged and facilitate a conversation with them. It has also emerged as
a social media marketing tool since startups upload videos to disseminate specifications of their products and
instruct customers about using them. (Saeed, 2016)
2.5 Pinterest
Pinterest is comparatively a new social media marketing platform and has emerged as the most convenient social
media network for startups with tangible products. It is largely an image-centered platform ideal for retail
businesses. Pinterest is also suitable for small businesses that wish to advertise their brand and products to retail
customers.
2.6 Other Platforms
Besides these five major social media platforms there are a few other platforms that have been used to promote
products, ideas and launch business campaigns. The foremost among them is Google+ considered as Facebook
competitor. It promotes ideas and products in the same fun, and casual atmosphere. It is easy to upload and share
photos and videos, and links to the marketing campaigns. One of the advantages of Google+ is to build small
circles and segment customers, allowing the company to direct its information only to the selected customers.
Video conferences can also be hosted with Hangouts. Another media platform, is Reddit which is known to be
ideal for sharing business content. Having two billion page views a month, Reddit has emerged as a big potential
advertising tool. Since it is used by extremely tech-savvy, internet obsessed young community, only unique and
authentic marketing content can succeed since posting spam or overtly sales-focused content could even spoil the
image of the business. Instagram, Snapchat and WhatsApp are other social media channels that are mainly used
for advertising and marketing campaigns at small scales and for restricted audiences. (Saeed, 2016)
3. BUSINESS AND SOCIAL NETWORK
Businesses across the globe have maintained social networks for their B2C operations. (Dazeinfo, 2015) Not
only do the startups and SMEs utilize these social media platforms to economize their sales and marketing
budgets, these platforms are also popular among big companies. In the Forbes list of top 50 CEOs 84% (42) say
they depended upon social media sites like Facebook and Twitter to make buying decisions. Similarly, CMOs or
top-level marketing executives of 42 brands have an active social media presence on several platforms and 31
CMOs of these brands maintain active Twitter accounts with 10,000 or more followers. The reason behind such
an accumulation of companies can best be understood with these statistics for startups and business owners:

International Journal of Economic Perspectives, 2017, Volume 11, Issue 2, 241-245
International Journal of Economic Perspectives ISSN 1307-1637 © International Economic Society
http://www.econ-society.org
243
 74% of adult Internet users utilize social media for their purchases [Source: PewInternet] with 52% of them
use two or more social media sites.
 97% of Marketers are using some form of social media marketing [AdWeek] two thirds of sales
representatives say they finalized at least one sale every month directly from social media site. 64% of sales
teams who use social media reach their sales targets; roughly 81% of SMEs use social media and of those
94% do so for marketing purposes. The advertising revenue from social media reported reached $9.8 billion
in 2016.
 55% of all buyers use social networking to research a product. As a result, 61% of B2B marketers use social
media networks to build leads.
 Marketing budgets earmarked for social media marketing increased more than two-fold an increase from
10% to nearly 25% by 2020.
(Source: Dazeinfo, 2016)
4. SOCIAL MEDIA AND BUSINESS ACQUISITION STRATEGIES
As an entrepreneur of a SME, one must understand the value of strategizing and planning. It is important to
prepare a detailed strategy in order to keep focus on the business, its product or services. One of several
strategies that have emerged is to establishing the brand in the minds of the customers. It is recommended that
startups must align their social media approach with their company culture, portraying their product or service. It
is necessary to decide whether to take a classic approach or take an informal easygoing feel in the social
campaign. A social media strategy must also be built in alignment with the company’s primary goals and
objectives. For the purpose of this study and to analyze the success of social media platforms, a few goals have
been identified as follows:
4.1 Brand awareness
An important goal to achieve through social media platform is to develop the brand awareness. Startups find
social media an excellent platform to introduce a brand to potential customers and then later on post content in
order to engage and communicate with them and promote the brand. Social networks have a tendency to follow a
brand if the content spreads virally. A study by Relevanza (2016) suggest that social media was responsible for
attracting new customers in nearly three fourths of small businesses and startups.
Another Research (Schawbel, 2016) depicts that 75 percent American buyers depend upon social media to gather
product details prior to making a shopping decision. This trend also reflected their brand loyalty. The research
also discovered that social media was responsible for educating the US masses about a new product or for
launching new products in the market. Another research (Forbes, 2016) evidenced that nearly one third of
customers cite social networks when asked how they discovered a brand, a product, or a service.
It is well said that the company website can only suggest that a brand is available, but its social media presence
establishes that the brand is active. The reviews on Facebook and other social media platforms reassure buyers
about the authenticity of a brand and a product. An interesting fact shared by the same research (Forbes, 2016)
was that nearly two thirds of new customers who make an online search for a local business may like to contact
that startup whose information was available on social media. Often social media marketing can also
delegitimize a brand if the company fails to update the content or stops posting new comments about its brand,
product and services. The same new customer who does not find any update in a few months may assume that
the business is defunct or not active. Similarly, when customers request for help and if the same is ignored, it
may also reflect company’s poor customer care. In short, once a company opts for a social media platform for
marketing its brand, it becomes integral to company’s functional activities.
4.2 Increase of Sales
Another objective for which startups opt for social media platforms is to increase their sales and revenue.
Appropriate social media marketing and well established brand awareness through media platform legitimizes a
brand and automatically helps increase sales. However, there are a few deliberate efforts to steer consumers
toward buying the product or the service. For instance, business owners can write posts linked to product sales
with the help of promotional content and advertisements. Such audiences can be targeted who are new to the
media platform. Social media marketing possesses this ability to target particular audiences. Social networks also
comprise of customers with multiple interests and diverse demographics enabling marketers to select the right
customers to give the right message.
Retailers find it much easier to sell their products on social networks. The Retail companies have online stores
on Facebook or on Twitter. Many big retailers like Amazon allow Facebook and Twitter users to align their
company websites with the Amazon cart. Similarly there are methods to sell products on YouTube and other
social networks. What is more important that the sales team must be attentive to the queries and objections that
customers might post about their product and the same must be addressed instantly.

International Journal of Economic Perspectives, 2017, Volume 11, Issue 2, 241-245
International Journal of Economic Perspectives ISSN 1307-1637 © International Economic Society
http://www.econ-society.org
244
4.3 Customer Service
Social media platforms have grown up as an effective digital marketing strategy for customer acquisition and
customer retention. (Forbes, 2016) It starts with lead generation that drives traffic to the company’s website or
blog. Gradually, due to the company profile and brand awareness and also the content, leads are converted into
customers. Essentially, social media platform must also be used as a point of contact for customer service. The
startup may have its own dedicated customer service department equipped with contact numbers and emails, but
it must attend to customers’ complaints through the mode of communication that the customer prefers. Mostly
customers use social media platforms to enquire customer service related questions and responding to such
queries prove the ability of the startup to help customers. Startups through their social media platforms assure of
immediate help and support to the customers if they have a problem, they can easily find help online through
their favorite social media platform. By being receptive to customer needs, startups can establish a brand and
also increase customer loyalty to the brand.
4.4 Content distribution
A useful strategy that most startups link with their social media presence is their content distribution and
dissemination of information about their brand. All social media networks are crowded with referral traffic
where people are in search of specific content in order to share it online within their circle. A study
(Forbes,(2016) revealed that more than 50 percent of the time, customers spend their time online with content
and an additional 30 percent of their time on social channels where content can be shared. Startups have
understood this trend and prefer content marketing on the social media to increase their customers and enhance
their brand. It is important that the content is engaging and unique enough, in order that others could share the
content and thus advertise the brand inadvertently.
5. IMPACT OF SOCIAL MEDIA
Social media has a proven capacity to produce an impact in a number of ways like brand popularity, content
distribution, community interaction, lead generation or customer acquisition. Startups that have lower budgets,
lesser influence in comparison with the established companies can really make the most out of the social media
platforms and utilize its immense benefits. However, despite such benefits, only a small number of startups are
able to exploit social media to its fullest capacity.
Several attempts have been made to measure ROI on social media platforms. 46% of B2B marketers however
have failed to assert that any social media platform has generated revenue for their businesses. Only 13%
consider the impact of social media quantitatively who are among those startups that link social media marketing
activities with their sales targets. The most commonly tools used to measure social media marketing impact are
the analytics provided by the social networks themselves such as Hoot Suite recommended for managing
Facebook and Twitter accounts; web analytics like Google Analytics and various other dedicated social media
measurement platforms. (Dugan, 2016).
6. SUGGESTIONS AND RECOMMENDATIONS
It is important for startups to choose a strategy specific to their business though the nature of their business will
determine how to maximize the potential of social media platforms, here are a few general tips for any startup
that wishes to use social media:
First and foremost, it is important to ensure a long-term growth by building up an online community of brand
ambassadors as well as target audience who will provide the startup and its business additional exposure and will
promote brand awareness. The startups can prepare data bases of such demographics like their Age, Gender,
Location, Income and Education. The more is the awareness about audience the better are the possibilities to
target them. It is also important to know what sites and services they use online; how frequently they do
shopping and what products; what their interests are and so on. These questions will help a startup to serve its
customers better and eventually build a relationship.
Secondly, the startup company must produce its content keeping in mind the potential customers. The content
must not only engage them but it must also be informative and enjoyable. It must be regularly updated by
maintaining a consistent content publishing cycle. If the startup deals in products, the content must highlight its
features and configurations most accurately and genuinely instead of show casing it superficially.
Third, the success of online marketing is in listening instead of talking. Social media sites are mainly for
listening to followers and collecting valuable feedback. Often in situations requiring data collection and
brainstorming exercises, social media platforms like Facebook and Twitter become online focus groups for
setting up a startup.
Next, word of mouth is the best marketing strategy and social media platforms are the best form of such
advertising. Referrals from people in the same social circle are trusted more significantly than a customer might
receive from any other sources. Most startups offer incentives for such referrals, such as a percentage discount, a

International Journal of Economic Perspectives, 2017, Volume 11, Issue 2, 241-245
International Journal of Economic Perspectives ISSN 1307-1637 © International Economic Society
http://www.econ-society.org
245
gift card or reward points. Word of mouth strategy builds a highly engaged community capable of showing
consistency and repeat buying habits. It becomes a kind of influencer marketing which is a cost-effective tactic
for startups.
Last, but not the least, startups must regularly analyze their online activities and interactions on social media
platforms. Tools like Hoot suite and Buffer provide good analytics that can help them to assess and evaluate the
impact of their activities. Based on the analytics report, the companies can edit their content, modify their
campaigns by devising new info graphics or videos.
7. CONCLUSION
To sum up, social media networks can provide a long-term growth to startups and SMEs. This study has
attempted to explore hw startups can maximize their potential with social media. Entrepreneurs running small
businesses and startups have limited resources and budgets; therefore, social media networks are used to promote
their brand at very little financial cost. Moreover, social media has also proved to be a strong word-of-mouth
advertising tool to market products and brand awareness.
REFERENCES
Chan, Nathan (2016) 15 Tips to Grow a Social-Media Audience for Your Startup Social Media : Founder Magazine
retrieved on 21/2/2017.
Dugan, Lauren (2016) 4 Social Media Marketing Strategies for Startups Simply Measured Blog. (retrieved on
12/2/2017).
Edwards, Samuel (2016) A Social Media Guide for Startups and Entrepreneurs | Inc.com (retrieved on 17/2/2017).
Forbes, (2016) How Social Media Is A Blessing For Startup Businesses, Digital Marketing for Career & Business
Growth..
Gujarat Technological University (2015) Effective use of Social Media for Small Business Innovation Council
Student Startup Support System Co-Creation Center.
Saeed, Sheraz (2016) How brands can leverage latest trends to drive social media conversation www.yourstory.com
(retrieved on 12/2/2017).
Schawbel, Dan,Larry (2014) Weber: Why Social Media Is Important For Startups. Entrepreneurs MAY 21, 2014.
Wagner, Kurt (2014) LinkedIn: 81% of Small and MediumSized Businesses Use Social Media (retrieved on
12/2/2017).