Social Media Impact on Business Revenue

Social media greatly influences your company’s revenue in 3 simple ways. These 3 factors are [B]randing, [I]ncidents and [T]ime.

1) Social Media [B]randing

Companies, irregardless of size or experience, can take advantage of social media, to build their brands. Especially in today’s age where consumers are being bombarded by countless amounts of advertising messages; it is pretty hard to keep consumers focused on your brand with traditional media reach and old schools marketing methods such as promotions and discounts.


On the other hand, reaching out to the new age consumers via social media can help companies to minimize marketing costs and maximise their revenue. You don’t need to have a huge advertising budget to reach say 50,000 targeted consumers in a day on Facebook.

2) Social Media [I]ncident


Consumers are able to communicate with the brand as well as helping brands grow through good word-of-mouth marketing on social media.

Likewise for the opposite, if the consumers do not have good experiences with your brand, they can also ‘destroy’ your brand reputation via social media in a matter of days.

Case Study

“United Breaks Guitars” is a song written by Dave Carroll about how he was refused compensation by United Airlines when his guitar was broken on a connecting flight via the airline, and also about how indifferent 3 airline employees were towards him.

When the song was uploaded on Youtube, it received 150,000 views within a day and about 5 million views in a month plus. Within 4 days of the video, United Airlines’ shares plummeted by 10% approximately. This is about US$180 million loss in just 4 days.

Other than United Airlines, there are also brands today which also suffered similar reputation loss from social media incidents.

Lesson learnt

The lesson that we can learn from social media incidents is that we cannot take the voices on the internet and social media for granted. With social media, consumers today have more power than the companies. Hence, companies should constantly focus on building customer service excellence.

3) Social Media [T]ime

A survey by Network Box reported that,

“Employees visit Facebook 7 out of 100 times at work.”

While BBC news puts up another report saying,

“Staff who use Twitter and other social networking sites while at work are costing UK businesses £1.38 billion every year.”

Image credits:
Image credits:

Well, this is a chicken or egg question: does spending working time on social media really affect a company’s productivity? Or is it the other way around? Well, this particular factor is often debatable. And whether it is true or not, it will be up to you (the reader) to be the judge.

In Summary

Social media do have an impact on company’s revenue; it is of course good to take advantage of this new media in driving revenue to your brand; while at the same time, be cautious of going overboard.

However, instead of pulling the handbrake to stop social media completely, learning to manage social media will be a wiser corporate decision instead.