Competitive advantage is a long term advantage a business/organization can have over another within its competition. It enables a business to survive and flourish in the long run.
Business environment keeps on changing and organizations that sniff the change early and adapt to it do well than their competition. Those who fail to anticipate or see change perish or suffer huge losses in business. I am sure we don’t need to give any examples here.
We could enumerate various sources of competitive advantage and classify them under various heads and do some theoretical analysis also. But to keep things simple, let’s just focus on the source of competitive advantage.
Social Media – The Source of Competitive Advantage
The source of competitive advantage, if we observe carefully, lies in anticipating change and adapting in time. In business, throughout the human history, there have been different drivers of competitive advantage. Presently, social media is looked upon as a very good source of gaining competitive advantage by many, though there are contrary viewpoints as well.
Let’s talk about how organizations can drive home competitive advantage using social media.
Social media, as we have seen, has been used by businesses in engaging their customers online, to build positive relationships, network with people who matter to your business and most importantly, navigate the unorganized sea of information with grace.
Social media is not only used to gain customer attention or to engage them but it can prove to be equally useful for attracting skilled employees, organizing profound conversations, tracking competition, etc.
Social networks like Twitter have also played an important role in the political world to organize protests (2011 Egyptian Revolution, 2010-2011 Tunisian Protests and 2009-2010 Iranian Election protests and 2009 Moldova Civil Unrest). Although we are talking about how valuable social networks can be but here, we will keep aside everything and talk only about the business world.
Organizations that used social media as an interface with their customers found them responding well. When the intent is to provide more communication opportunities to disgruntled or even happy customers, for that matter, the results are bound to be positive. Communication from the companies is always welcome; however, how it proceeds and how much interest readers show, depends upon your strategy and way you handle the entire process.
Besides this, what value it is bringing into your readers’ lives is also a matter of concern. It is not hidden from anyone that a business’s ultimate aim is to generate leads, but there are sophisticated ways to communicate this. There is no need to seem like a hard core sales company. Starting a conversation and taking it further carefully can help you take your customers to that point where they will be compelled to buy from you.
Attracting Skilled Employees
Now how the hell can one find skilled employees on social media? If you remember, LinkedIn was created for the purpose of business networking only. And companies have taken an advantage of this to poach talented resources for them. Many organizations across the world have resorted to using social media platforms for attracting the best talent in the industry. No wonder we see jobs from around the world being posted on sites like LinkedIn.
Internet is vast beyond anybody’s imagination. It was not possible for organizations to track the kind of conversations that are building up around them. With social media they can organize and monitor these conversations to their benefit. All they have to do is come up with a unique story and build around it.
Tracking the Competition
Social media often compels organizations to spill the beans regarding their future plans sometimes. This is helpful for the competition, if they keep track of them. In addition, they can offer insights into their marketing strategies and understand what works and what doesn’t and better their competition.
Companies can, in addition, seek ideas and thoughts from their customers and understand them better in the process; not only in terms of how they can customize their products and offerings but also how they can market it well. Possibilities are endless and waiting to be explored!
Companies Set to gain Competitive Advantages through Social Media
With this, let us now take a look how companies from different industry verticals are planning to gain competitive advantage through social media.
What customers exactly look for? Great experiences! In 2012, The Chief Marketing Officer Council found that over 47 percent of the customers expect service within 24 hours and according to Jupiter Research, 80 percent of them claim to take their businesses somewhere else if their expectations are not met.
Not to mention, other organizations are all the time looking to tap these customers. It’s all about learning how to build up and manage relationships with customers and keeping in touch with them even when their expectations are not met. The moment you break the chain of communication, they switch to your competitors.
How Cosmetic Retailers Are Engaging Customers through Social Media?
Sephora, owned by Louis Vuitton Moet Hennessy created a Beauty Talk community where customers can come and share their interests and tips on makeup and beauty. The surprising fact is that the members of this community spend two and a half times more on beauty products and cosmetics than an average customer and the super fans spend up to ten times more.
The brand not only offers product information to their customers through their active users on Beauty Talk but also sources customers who are really interested in buying beauty products.
Law Firms Embracing Social Media
Majority of law firms across the world are in denial, thinking social media to be temporary fad. They are still not convinced with the fact that social media can do wonders to their business. This is why they are not placing their faith and effort in social media conversations.
However, there are some firms who are present on social media in US, have gained a competitive advantage over those that are skeptics and aren’t using the medium. Knowledge is the basis of their competitive advantage over other firms.
Merchandisers, cosmetic manufacturers and sellers, food joints and online marketing service providers are already on social media and deploying the platforms to maximum possible extent. However, there are numerous businesses such as, law firms, hospitals, etc. are still in denial. They can also unlock numerous opportunities and gain lasting competitive advantage if they start using such platforms for generating business.