Unless you have been living in a cave, you have heard of social networking sites like Facebook, Twitter, and LinkedIn. But have you realized how strong the impact these sites and others are having on the marketing, advertising, PR and communications functions of your small business?

Marketing has been turned upside down from one based on traditional methods to a reputation and consumer-driven perspective. Consumers are relying more and more on what others say about your brand rather than what you tell them. Purchase decisions are made based on perceptions from others who have a strong influence on the decision-maker. One unhappy customer’s story can spread like wild fire over the many available Internet communication channels. Because of this trend towards empowered consumers, companies are compelled to give special attention to their reputation and customer service.

Traditional marketing focused on getting your message out to the masses as often as possible relying on repetition as a key in influencing consumer decision making. While this is still important, it is superseded by a brand’s quality of engagement, perceived value and level of trust.

Perceived value is an extremely important part of this new age of social media influence. In social media marketing, freebies have become the norm. The onus of creating this perceived value is on the small business owner to give things or information away for free in an effort to build relationships, provide value, and prove that he or she is an expert in their specific field.

In addition, response time has taken on a whole new level of importance. Gone are the days of getting back to an unhappy customer when you have the chance. While you are tending to other pressing business matters, a disgruntled customer may be sharing a perceived negative experience with your company by sending out a tweet, posting a blog article or writing on a forum site. As a small business owner, you no longer have the luxury of waiting to respond to a complaint – you need to act quickly to manage your reputation and tend to any negative publicity you might be faced with in the world of social networking.

Even in light of the changes in the business world today, this is not to say that traditional marketing methods are no longer effective. What it does mean is that the power of social media, both the positive and the negative, is a force to be reckoned with and should not be ignored by any business owner. Knowing the influence your reputation, customer service and perceived value has will put you in the driver’s seat when it comes to marketing your small business.

Capitalize on the positives and manage the negative effects of social media marketing to position your brand in the most favorable light.