No online concept progresses at a faster pace than social media, as it continues to make its mark in the fields of business, non-profits and social collaborations. With the recent revelation that up to 20% of U.S. consumers now also use social media giant Facebook to research products prior to purchasing them, social media is emerging as a significant player in the e-commerce market sector. Given this and the fact that social media has already delivered many money-saving techniques for brands, just how effective can it be in helping consumers save their hard-earned cash?
TUTORIAL: Budgeting Basics
More than 1.5 million local businesses, around the globe, now boast Facebook pages - with 3 million pages in total representing brands and businesses of all shapes and sizes. With an average of 20 million individual consumers becoming fans of these pages every day, there is a clear sense of group wisdom developing between customers. This is where social media plays a key role in producing customer referrals and information, which can either secure discounts through promotions, or help individual shoppers save money, thanks to the advice of a friend.
This concept has already been applied to niche social media resources like Honk.com and CarGurus.com, which rely on a network of like-minded car enthusiasts to share information. CarGurus has a network of 600,000 users who post reviews, opinions and discount information concerning a range of cars and models. These snippets of social information are shared through conversations that allow consumers to find the best car and deal to suit their requirements. (For related reading, see How Small Businesses Can Best Use Social Media.)
Building Credit Scores
The global recession, and a stalled economic recovery, has left a long line of consumers adversely affected, financially. This can often be attributed to reduced disposable income, or, more significantly, a bad credit rating. By the close of 2010, the level of consumer debt in the U.S. stood at just under $2,400 billion, which averages out to approximately $7,800 per individual, in the country. So, certain organizations have used social media to target those afflicted, in order to teach them the processes of building and rebuilding a positive credit score. (For more information on credit scores, check out The Importance of Your Credit Rating.)
CreditKarma.com is one such website that can help consumers improve their credit scores. Using Twitter and similar social media outlets, the website offers information and tools which teach consumers how they can save money while financing expensive activities, such as purchasing a car or home. The site uses real details and information to achieve this, allowing consumers to lower their loan rates and reduce the amount of money that they pay in monthly installments.
Tapping into a Global Community
The purpose behind any social media site is to draw individuals, businesses and consumers into a close-knit and easily-accessible global community. This is also where the idea of crowd sourcing emerged from, as businesses could suddenly tap into local knowledge, and talent, to help drive their brands forward. Evolving this concept, a stage further, are niche social media outlets. BookMooch.com and Freecycle.com, which are community based resources, focus on the principles of sharing and receiving from like-minded individuals.
BookMooch is of particular interest to some consumers, as it connects an entire community of book lovers and avid readers, who can share and receive online books that they own or are interested in reading. So, rather than having to download a book, or purchase it new, from a traditional book store, consumers can access their book of choice for free for an agreed upon period of time. The same principle is applied on a more diverse scale by Freecycle, which has a network of thousands of people who are looking to share and exchange consumer items within their local areas. (For related reading on utilizing the second-hand market, see Go Green, Save Money.)
The Bottom Line
Social media is a broad concept, and one which is driven by the needs of its users and followers. In an age of depressed economies, where value for money is the key consumer priority, social media has become a medium for cost saving group referrals, financial information tools and a community-led effort of sharing knowledge and physical products. As long as the economic state remains perilous, businesses will continue to utilize social media to aid the long-term financial well-being of their consumers.