The rise of social media has compelled most business operators to change their information systems. According to Aral, Dellarocas and Godes (2013), social media has both positive and adverse effects on all forms and sizes of businesses. Technological growth has enabled a majority of the people to own computers and mobile phones that are Internet-enabled. Today, millions, if not billions of people interact and do business on different social media platforms.
Consequently, entrepreneurs have been forced to reposition their brands to target particular groups of clients. Also, most businesspeople have changed their marketing and communications strategies. According to Aral et al. (2013), social media enables business operators to share information with different customers, therefore reaching multiple clients at once. Besides, social media like Twitter accords business operators an opportunity to share ideas, photos, and videos of their products and services with clients.
The Twitter does not only enable entrepreneurs to reach the target clients, but also enlighten them on how to use products. This paper will discuss the positive and negative impacts of Twitter on information system of a business. In spite of most entrepreneurs using Twitter to market their products, they are yet to exploit its full potential. On the other hand, a majority of business operators do not realize that social media may be detrimental to the information system if not well utilized. The rationale for choosing this topic is to enlighten business operators on the benefits of using Twitter and the dangers of its misuse.
One of the positive effects of Twitter on the information system is that it helps to improve customer relationship management. Some business operators use Twitter to identify and address customer service challenges (Castronovo & Huang, 2012). Some entrepreneurs use Twitter to harvest customer data. The data is then analyzed and used to enhance customer services. Before the invention of social media platforms, entrepreneurs depended on brochures, billboards, word of mouth, and television advertisements to market their products. In addition, they would get customer feedback through interviews.
Today, mot organizations have Twitter accounts that help them to get customer feedback. Thus, organizations are capable of bolstering customer relations by responding to customer complaints. Apart from harvesting customer data and feedback, Twitter enables entrepreneurs to communicate with customers and inform them about novel products and services. According to Castronovo and Huang (2012), Twitter enables entrepreneurs to keep in touch with clients and learn about changes in consumer demands.
Castronovo and Huang (2012) allege that social media platforms have a significant effect on how entrepreneurs communicate with clients. Prior to the invention of Twitter, customers could call, send an email or write a letter to an entrepreneur. Today, customers prefer to contact entrepreneurs through their Twitter accounts. Twitter enables clients to send private messages to business operators or post public messages on a business’ account. Luo, Zhang and Duan (2012) argue that customers use Twitter to express their satisfaction or dissatisfaction with a business’ products or services. According to Luo et al. (2012), the information shared on social media influences the buying behavior of customers.
Most customers rely on the recommendations from their colleagues. Therefore, they refrain from purchasing products that with negative appraisals. Entrepreneurs ought to be keen with what customers post on Twitter. They should review their Twitter accounts and address customers’ complaints as a way to safeguard the reputation of the businesses. Luo et al. (2012) allege that responding quickly to customers’ complaints on Twitter or Facebook helps to protect the image of an enterprise and enhance customer loyalty. Most companies use Twitter to liaise with clients and persuade them to purchase their products.
Qualman (2011) alleges that one of the primary benefits of Twitter is that it enables business operators to connect with clients. According to Qualman (2011), “a strong social media presence gives personality to your brand and helps you to engage with your customers in a way that is not only relevant, but also inspires the customers to impact change” (p. 47). Twitter facilitates engagement between clients and business operators. Moreover, it enables entrepreneurs to share information that is of help to customers. Through Twitter, entrepreneurs can initiate online conversations that are useful to both the clients and businesses. Qualman (2011) argues that speedy and courteous response to customer complaints helps to preserve the image of a company.
Branding and Skills Development
Social media influences how consumers interpret a business’ brand. Before the invention of Twitter and other social media platforms, the majority of consumers regarded enterprises as aloof entities. Qualman (2011) maintains, “Social media opened up a new level of dialog between a business and its consumers” (p. 51). Today, customers that relate to a company through Twitter help in brand positioning. They assist in marketing a business’ brand to potential clients. The Nike Company uses Twitter to target customers aged between 20 and 35 years. As a result, most consumers consider the Nike as a brand for the youths (Luo et al., 2012).
Luo et al. (2012) argue that entrepreneurs are lured to use Twitter to promote their businesses and trounce competition. Moreover, Twitter helps business operators to promote innovation. Entrepreneurs use Twitter to create groups of experts who share ideas on development of varied products. Currently, a majority of businesses share information through user-generated content, thanks to Twitter. Also, Twitter helps most entrepreneurs in knowledge management, creation and exchange. Businesses can liaise easily with suppliers and manufacturers, therefore ensuring that they offer quality products.
Spread of Negative Publicity
The primary objective of using Twitter to market a business is to share information with as many customers as possible. Entrepreneurs use twitter to relay positive information about their businesses. Similarly, Twitter can be used to spread negative publicity. A company does not have exclusive control of the information it shares on Twitter. Customers have the liberty to comment on a message posted on a company’s Twitter account.
Thus, it is easy for adverse information about a business to go viral and reach many customers (Rapp, Beitelspacher, Grewal & Hughes, 2013). Such information may damage the reputation of an enterprise and affect its profit. Rapp et al. (2013) claim that most conversations on Twitter appear informal. Therefore, they are susceptible to misinterpretation. Once the consumers misinterpret a conversation, it is hard for a business to reverse the situation. The fact that it is possible for many people to relate to a single comment makes it hard for companies to control their Twitter contents. Therefore, some users may take this advantage to change the meaning of the information and ruin the image of an enterprise.
Changes in Marketing Strategies
According to Vries, Gensler and Leeflang (2012), social media has resulted in changes in marketing strategies. Today, business operators are supposed to have a direct contact with customers. Failure to interact with clients affects the success of a marketing campaign. Vries et al. (2012) argue that Twitter is not compatible with traditional forms of marketing. Therefore, business operators are required to revamp their marketing strategies if they wish to benefit from market their products using Twitter. In most cases, revamping a marketing strategy means abandoning the old one and coming up with a novel plan.
Hence, Twitter may force a business to change its entire information system, which is a costly and time-consuming process. Apart from changing the information system, Twitter makes a marketing department to focus on online marketing and abandon offline campaigns that are significant to a business. Thus, a business cannot get information from customers that do not have skills in using Twitter.
Social media alters the manner in which entrepreneurs run their information systems. It enables business operators to have a direct contact with consumers. In addition, Twitter enables business operators to use social pressure to influence the buying behavior of target customers. Also, entrepreneurs use Twitter to gather information about their target customers. The information helps to design marketing campaigns, therefore boosting the sales volume of an enterprise. Business operators use Twitter to liaise with customers and market products and services. A well utilized social media platform may not only help in marketing, but also the development of entrepreneurial skills.
Organizations use Twitter to share innovative ideas and to amass skills in diverse fields. Social media platforms like Twitter may have adverse effects on businesses if not utilized well. Twitter may lead to the spread of negative publicity that can ruin the reputation of an enterprise. Entrepreneurs ought to monitor their Twitter contents and respond to misunderstandings in order to mitigate the damage. Apart from ruining the reputation of a company, Twitter may require a complete overhaul of an information system. Such a transformation may be costly and time-consuming to a majority of the companies.
Aral, S., Dellarocas, C., & Godes, D. (2013). Introduction to the special issue- Social media and business transformation: A framework for research. Information Systems Research, 24(1), 3-13.
Castronovo, C., & Huang, L. (2012). Social media in an alternative marketing communication model. Journal of Marketing Development and Competitiveness, 6(1), 117-134.
Luo, X., Zhang, J., & Duan, W. (2012). Social media and firm equity value. Information Systems Research, 24(1), 146-163.
Qualman, E. (2011). Socialnomics: How social media transforms the way we live and do business. New Jersey: John Wiley & Sons, Inc.
Rapp, A., Beitelspacher, L., Grewal, D., Hughes, D. (2013). Understanding social media effects across seller, retailer, and consumer interactions. Journal of the Academy of Marketing Science, 41(1), 547-566.
Vries, L., Gensler, S., & Leeflang, P. (2012). Popularity of brand posts on brand fan pages: An investigation of the effects of social media marketing. Journal of Interactive Marketing, 26(2), 83-91.