A website is a great tool to have, however while I believe it is the most important tool of your online marketing, it should not stand alone. Social media, and specifically a blog should be used in conjunction with your website.
What does a blog do that a website doesn't? Well for one it's much easier to update. Not everyone has the time or money or content management system in place to easily update their website. Anyone can update a blog.
Also, Google and other search engines LOVE blogs. Especially if you include links to your website from your blog. It all becomes part of SEO.
It gets your users involved. The greatest part about a blog is the comment section below. Your users can add their comments, ask questions, interact with both you and other users. The possibilities are tremendous.
Here is a great little powerpoint presentation I ran across that gives some really nice tips on blogging. Really I think the best way to become a good blogger is just to do it, which I have to learn myself, being more of a website guy.
The point is, your business needs a blog. There are lots of options out there, and actually I've read some things recommending not using Google's Blogger.com which is what I currently use. Meh - it's free.