Social media can save your business by bringing the conversation about it into a place where you can monitor and manage the discussion. Imagine the following scenario. You're a local restaurant in a medium-size community. A guest comes in and, for whatever reason, has a bad experience. The next day, she's out shopping with a friend and discussing lunch options. "Have you ever been to (your restaurant)?" the friend asks. Your disappointed guest then gives an account of her bad experience. The next time the friend's husband asks where they should go out to dinner and suggests your restaurant, his wife says quickly, "Oh no, I heard that place was terrible."
Now imagine if that conversation happened online instead. The guest has a bad experience and rants about it on Yelp. You and your staff notice the review and quickly post a response to apologize and explain. The friend, looking for a place to eat, reads the review, but then reads the other four- and five-star reviews your restaurant has received, as well as your response. She and her husband decide to go there for dinner and see what all the fuss is about and to judge for themselves.
Instead of negative reviews, mostly based on hearsay, saturating the community before you can do anything about it, social media helps everyone weigh in through a more public forum. People are forced to go "on the record" with their complaints, and are held accountable by their peers. If word-of-mouth is one of the most effective marketing methods, social media takes word-of-mouth to the next level by allowing you as the business owner to be involved in the conversation.