The economy, while showing signs of not deteriorating further, is also not as robust as we would like it to be. But smart businesses all over the world have managed to stay afloat by cutting down on their expenses considerably through some pretty innovative strategies. It is no surprise that such cost cutting innovations came to fore only during one of the worst patches of the economy. Nonetheless, even after the economy slowly started picking up, the strategies remain because they are not just a cost cutting measure; they result in substantial benefits for the business.

Marketers turned to social media in droves when the businesses had less money to spend. We went through, and haven’t yet completely come out of, a phase where even spending money for paper, printing and other routine expenses were brought under scrutiny. This has helped companies in a big way. Most of them were able to cut down unnecessary fluff in their expenses and metamorphosed into lean and tough warriors who had a real chance in surviving this battle.

Social media usage started in a big way during the economic downturn. It shows no signs of letting up, if any; the rate of usage is only increasing. When businesses learn how effective social media is, the more aggressively they use it.

The success of social media is based on its ability to converse with customers. When you use social media sites to promote your business, you are creating and magnifying the buzz about your brand. The customers speak directly to you, and that too within a matter of minutes after you initiate an attempt at engaging with them. This is an advantage that helps social media tower head and shoulders above all the rest of the advertising and marketing channels. Consider the amount of money that you have to spend on running a traditional print or a television ad. Even with the ad campaign running, it takes weeks or even months to get an inkling of what the customers think about your new product or service, updates or anything else that you are up to.

The caveat here is that you need to dedicate as much time to the social media conversations as your customers do. Prompt responses, staying away from hard sell, acknowledging blunders gracefully etc. are requisites for success.

Though social media first started to be used as a tool to cut costs, business people have since realized it’s potential and still continue to use it effectively to engage with customers. During the recession, many businesses that were forced into a corner to cut costs resorted to less than popular and sometimes downright unethical business practices. Social media gave a platform for those transgressing thus and for others to make the most of the situation.

Even those customers who had lost trust in the business could be wooed back by responding to their concerns genuinely and addressing them. Those businesses that did not bother to do so lost the customers because they went to some other company who did seem to care. Social media was, and still is, a great way to engage in a two way communication. Because of its subtlety and lack of hoopla that is usually associated with traditional marketing, social media is seen as more genuine, real and believable.

Whether the economic scenario is bleak or not, social media is and will remain one of the most powerful tools to build credibility for your brand and to attract a loyal following. It is not really a quick-fix for all the troubles of your business, so do not use it like a band-aid. Rather, use this powerful tool intelligently to build steady and deep relationships that are based on trust, respect and loyalty.