Small businesses still grappling with social media benefits

Optimism about the economy and the use of social media pervade a new report called the Small Business Success Index, a survey sponsored by Network Solutions® and the University of Maryland’s Robert H. Smith School of Business.  A few highlights from this wide-ranging report:

Technology investments on the rise. One way that small businesses responded to improving sales last year was to return to investing in technology. The perceived importance of internet business solutions (IBS) such as websites grew in the past six months; 42 percent consider IBS as highly important to their success, compared to only 33 percent back in June of 2010, which was actually the lowest percentage in five years.

Over half of small businesses (56 percent) now have websites, up from 46 percent a year ago (still an opportunity!). Social media is now used by almost a third of small businesses (31 percent), up from 24 percent a year ago and 12 percent two years ago.

Searching for Search. 27 percent of small businesses have a Search Engine Optimization (SEO) plan, up from 19 percent a year ago. The only internet business solution in the survey that dropped is the purchase of online advertising in directories, a category that may be affected by the ability to use SEO and social media to find customers without spending. However, many small businesses plan to add online directory ads in the future.

Small business continues to embrace social media. There is almost universal awareness among small business owners of Facebook and Twitter, while half are aware of LinkedIn. The most commonly used social media sites are Facebook (used by 27 percent of all small businesses) and LinkedIn (18 percent). The growth in social media is not cutting into investments in company websites, and is actually contributing to their expansion; 62 percent of social media users feel their use of this medium has no effect on their web investments, while 27 percent believe it will result in greater spending (only 9 percent would spend less or forgo their website).

…But are still confused about it. Small businesses are still grappling with how to get the most out of social media, not surprising because so many users are “newbies.” Owners more often feel that their use of social media has fallen short of expectations (36 percent) than exceeded their expectations (9 percent), and this gap has increased over past survey waves. The main accomplishments from using social media include:

  • staying engaged with customers
  • developing higher awareness of the company
  • identifying and attracting new customers.

Mixed financial results. When asked about their experiences to date with this medium, 63 percent of owners feel it has helped make their customers more loyal, but 56 percent feel it has taken up more time than they expected. Summing up the bottom-line, 25 percent of small business owners estimate that their investment in social media has made a profit while 15 percent estimate they have lost money; the remainder (46 percent) feel they broke even.

Mobile is on the way, maybe. Owners are learning to deploy social media in a mobile context. Of those who use social media already, 47 percent use social media to send text messages to customers, while the same share (47 percent) use their mobile devices to respond to other people’s comments on social media sites.

Despite their use of mobile devices for routine interactions with social media, small businesses are skeptical that a broader use of mobile marketing can provide tangible value to their businesses right now. Most owners consider mobile marketing to be “ahead of its time” (24 percent) for small business or “cutting edge” (36 percent). Only 15 percent of small business owners believe that mobile marketing would be “extremely” or “very valuable” to their enterprise, and another 20 percent feel it would be “somewhat” valuable. This attitude is largely unchanged after owners hear more about detailed uses of mobile marketing.

And you?  What are you seeing from small businesses out there?  Does this research reflect your own experiences?

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  • Mark, this is fantastic news and I’m not just talking about for those of us like you and me who help companies {grow} with the tools necessary to do so. I know you also subscribe to the “not social media first” mentality which means we don’t jump on a Facebook group or build a YouTube channel as the first tactic – that is flawed strategy. The first step is to unearth the pain and discover the options. It’s not a matter of should a company use the social web it’s how and why and whether they will keep at it. There are no instant wins just like any other outbound marketing initiative. Direct mail, television, radio, print or outdoor doesn’t work in an instant either.

    It is encouraging to see companies of all shapes and sizes, B2C and B2B, embracing what digital channels will work best for their needs. But in our quest to stand out, we can generalize and homogenize. Simply having a website or being on Twitter is not a enough. The challenge is where change occurs within the organization to understand this (like everything) takes time. The patience required to embrace new channels and disciplines can often be met with the impatience of the immediate bottom line.

    The responsibility of those who are helping companies is to manage realistic expectations. The social web like every other discipline is filled with people who promise instant results which creates even more cynicism amongst nervous business owners who want to step out onto the ledge.

  • I see this even in my company. Information comes at you so fast that trying to learn social media is like “drinking water from a fire hose” I suggested that we really work on our blog and social presence first. Let’s see if the advice is heeded.

    The mistake that many make is starting blogs or Facebook pages and abandoning them. I have even seen websites that have poor spelling and grammar. How is this going to get you business? I have a friend who is a general contractor, and when I looked at his website I noticed the ADDRESS was wrong! I just shake my head. I told him he needed his site redone, and he balked. This may be why he does not have that many customers, but what do I know?

    I know that some are really embracing social media and doing it really well. If I were to make only one suggestion it would be to pick one thing – one platform and do it really well, and then build out.

    Does this conversation sound familiar? It does to me.

  • I see lots of companies using facebook as the only way to reach their audience..most of them totally miss the search engine..which is the local search..

    “Black Seo Guy “Signing Off”

  • I have been to the local Social media Club events here. Most attendees are small businesses or professional services like realtors. Based on work I do for a start up business in the Food Industry the biggest challenges are cash. I myself am taking a fraction of pay to bring a start up to market in return for a big payoff if I do. But I don’t have a mortgage kids or a wife or ex wives and can bite the bullet. But the businesses of similar level I have tried winning business at a reasonable rate look at my lower than industry average rate as too high. I have to assume this is across the board for all digital and marketing services.

    So Social is attractive because small business owners can do it themselves but then find how much time it takes and I bet half the businesses gauging profitability did not count their own personal time. Everything you listed in this great post Mark is valuable to small business. Especially SEO for two reasons. 1] organic search is free. Meaning you pay someone to optimize where you show up, but you aren’t bidding on Google Ad Words per click. 2] Google Ad Words are great if you can afford it. But anyone like me who uses Firefox with Ad Blocker Plus Add On doesn’t see any Google Ad Words results!

    Mobile – the most likely choices – FourSquare, Gowalla, Yelp can help but they don’t move needles. Usage is too small. Your street sign and placing an Ad in the local print pubs will most likely work better. For example Yelp Mobile which btw I just created a Special Deal for a client. It’s free. And easy. BUT the average use of Yelp Mobile per day is 864 sets of directions and 864 phone calls to local businesses via the Mobile App….PER STATE! Which is about Zero. We aren’t there yet.

  • I think it all depends on the small business and whether they need to be digital or not.

    Does the small business in the small village in the U.K., with 1,000 residents, need a website and Twitter, etc, to know that they’ll be the one the villagers come to for their groceries? Or does the village inn need to have a website when they can advertise on the Tourism website for visitors to the region?

    So, great to see the increase, though perhaps not surprising to see a continued lack of uptake and confusion, particularly with all the conflicting information around to try and understand.

  • I’m sharing this with my clients! Thanks! 🙂
    Laura

  • You’re right Danny, it isn’t necessary for some, but think of it this way: of those 1,000 residents, how many have high speed internet and an Amazon account. The digital marketing would still apply for even the smallest towns as businesses need to set them apart from each other. And keep brand recognition with the locals. The search and social marketing strategy isn’t vital to their success but the low cost of implementation makes it a worthy endeavor to increase their bottom line.

    Also applies for those affected by visitors. Take the Inn for instance, it isn’t normally competing for visitors who are already determined to go to that village. But they are competing with every village inn throughout the country when someone from London googles or tweets “what’s the best small village inn for a weekend getaway?”

    My two cents 🙂

    p.s. remarkable data Mark!

  • Lexy at @ClearpointPR

    Good morning Mark,

    Thanks for sharing the report & these highlights, very interesting. Good comments everybody else too. These are pretty in line with what we’re seeing with our small business clients. There is definitely an awareness with, a desire for digital marketing in some clients, but for the most part confusion along the line. I’m pretty sure without our guidance, strategy, and general support, even those clients who know they need digital marketing would not have embraced them.

    Sharing this with our clients & followers.

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  • I’ll be forwarding this to a few small businesses I know in the Denver area. Right now, they do not fully understand the “opportunities lost” by not having a better online presence.

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  • Companies of all sizes appreciate the efficiency of social media marketing. It combines concepts of advertising, direct marketing, personal selling and public relations into one comprehensive package. Conventional marketing techniques are hard pressed to match this level of integration. Advertising agencies charge exorbitantly to provide all these services. Producers of goods and services now not only are able to cover all marketing activities while adopting social media marketing but also can reach their target audience instantly.

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  • Mark W Schaefer

    This is a wonderful comment Howie that touches on a lot of important subjects. The one near and dear to my heart is monetizing the work in social media. It is touch to do and somall busiensses — who barely understand it, don;t want to pay. I focus on strategy — I’m not interested int he day-to-day stuff and not sure how to really make money on it unelss you are willing to work for something just north of minimum wage! Good luck with that!

  • Mark W Schaefer

    I love this comment. Reminds me of that post/case study I wrote last summer about the bakery in the village in North Carolina. Why do they need to be digital. I showed 4-5 things I would do for the business to grow before I would ever do social. Tons of people disagreed, but here’s my little secret: You and I are right on that one Danny! : )

  • Mark W Schaefer

    OK, I went ahead and dug out the blog post I referred to above Brad. It’s one of my favorites, actually. Here it is: http://www.businessesgrow.com/2010/07/11/why-your-company-may-not-need-social-media/

    The point is, yes … everybody can probably realize SOME benefit from social. But it may not always be a priority, based on the competitive structure of the business. Thanks for your comment!

  • Mark W Schaefer

    Glad to help!

  • Mark W Schaefer

    Cool. Glad to have a positive impact on your business Lexy.

  • Mark W Schaefer

    Ship them a copy of Tao of Twitter while you’re at it. It will help them understand Twitter in the first 25 pages and it will help support your friendly neighborhood blogger! : ) Thanks Brian!

  • Mark W Schaefer

    Thanks. Hard to disagree with that. But I do wish you would read this: http://www.businessesgrow.com/2011/01/17/your-companys-single-biggest-mistake-on-twitter/

    It woudl help us connect i think! Thanks.

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  • Biggest Myth In Social Media: YOU personally have to do it all

    You won’t find Michael Dell of Dell computers taking care of Dell Support questions or Dell care’s Twitter account. Why should you do that stuff for your company? Hire the small stuff out.

    Don’t let the guru’s make you think you have to do everything.

    The answer to all of this is a kick ass social media manager: Here’s what look for…

    Do they have a website or a blog?

    Facebook fan page or Twitter profile don’t cut it. They should be doing the basics of what they’re gonna have you doing, and a website is the most basic of basic. And blogging is the heart of social media. Everything should flow in and out of it. Twitter and Facebook are just an extension of this site.

    Do they have branded social media sites?

    Are their profiles –Twitter, Facebook, LinkedIn – professional looking across the board? Is the theme consistent? Are the logos consistent? The colors? If their sites look like crap, what makes you think yours will be different?

    You want the same look and feel across all your media. You want it to seem like they never left your main site.

    Are they active on the scene?

    They might not be the best social media manager if their last blog post was 4 months ago. You’re looking for consistency across the board. If someone hasn’t logged into LinkedIn in 2 months, you know they aren’t paying any attention to it.

    Is their action conversational rather than robotronic?

    You want to see that they’re conversing – not just posting links. If you aren’t seeing @replies on twitter, they’re not conversing.

    Questions you want to pose…

    After you’ve seen all their sites and like what you’ve peeped, get them on the phone and see if any of these questions stump them…

    What are the first 3 things would you do to build my social media presence?

    The wrong answer is, “We’re gonna tweet for you.”

    The first thing you want someone to do is diagnose what you do, what you should be doing, what are you doing that works, what are doing that sucks. They’re going to see what they’re dealing with.

    The second thing you’d want someone to do is connect your twitter to your facebook to your linked in to your blog. Then they might install apps that make the process of simplifying things for you like autoposting out to Twitter and facebook when you have a new blog post.

    The third smart thing to do would be to do a clean up. If you haven’t touched a twitter account for 6 months there’s gonna be all kinds of DM spam that needs to hacked out. Same with Facebook. This step is douching everything out so you’re starting fresh.

    Then from this place you’d want to have a strategy laid out and then start executing on it.

    If small business owner finds a great social media manager, they can spend more time focused on their marketing which is what REALLY pays the bills.

  • To answer your three questions Mark— “Still grappling” is the sentiment around here! My own experience is and has been one-step forward and two-steps back. Playing “catch-up” for and with social media benefits appears to be a lifelong learning new reality.

  • Anonymous

    It’s good to know Small Business’s are embracing social media, but could it be the lack of solid understanding of the quickly moving social media and the unknown cost to them that has Small Businesses hesitant?
    I believe if they would reach out to companies who say they have had success using Twitter, Facebook and LinkIn and pick their brains they may got some idea of how to fit social media into their business model. My thought is that if Small Businesses don’t embrace social media they will be deemed irrelevant to their customers who do embrace it.
    The problem I see is if this does happen to Small Businesses it will be to late for them to recover as their customers will have formed new relationships with companies who are moving with the Social Media flow. It is already happening and will only continue as we are now moving to mobile Social Media at a break neck pace.

  • Mark, thank you for sharing this link, going to read it

  • Strange. I had replied to your comment but now it is not showing up. Something is eating my comments.

    Any way, I think for professionals like you and me this is good news, not just the trend but the opportunity. Thanks for the comment Kneale!

  • That is brilliant advice and you know I’m with you on that! Focus is key, especially if you have limited resources. Thanks for the great comment Nancy!

  • So true. That’s why there really aren;t any social media experts. We’re all students!

  • This is a superb point. I do think there is a first-mover advantage in many cases. You need to be out there connecting and building relationships and be at the top of mind when consumer need you. At least that’s the way I see it for small businesses trying to take advatage of this channel. Fantastic insight. Thanks!

  • Grappling is right, Mark. A lot of small business owners do not fully grasp yet how social media can be used to their fullest advantage. Now, this does not mean that I am any good myself. I would just like to see myself as going slow and steady with my social media marketing efforts as I don’t want to take on too much all at once. Maybe when I am sure of my footing, I shall surge on? 😉

    – Wes –

  • Jay

    your most valuable asset as a small business owner/operator is yourself, you are the brand. One thing social media lends is a global platform for developing, defining and promoting your brand. social media brings balance to corporate advertising that has never existed before now. In the past the big corps had an obvious advantage in the area of brand exposure, they simply have more resources $$ availble to them. As a small business owner to not spend time learning how to put this to work for you would be negligable. I am not talking about just your company brand but yourself as a brand . As you build a reputation as an expert in your area of business you now use this platform to point to your company asa premiere provider of whatever your company is doing.

  • Superb point, Jay. Quite overlooked, too. I spoke to a class of 100 students today and asked how many had a personal brand … about three hands went up. They are missing the concept!

  • Yup, was just discussing this with some business owners. Conquer one thing at a time when resources are limited. Focus and excel. A sound strategy!

  • Mark

    Great stats and while they are showing an increase, there is still a very big gap. Small businesses hear of this social media and want to jump on in and get new customers. How many customers will a facebook page bring? How many offers can I put out there on twitter to make them come in. This is alarming as they are focused on the sales only and not building long standing customers. When you start to ask the questions of repeat customers, their propensity to buy, will they buy without a coupon, etc the blank stares come in. Sure this not every small business but mostly the ones that are trying to use social media as the savior for their business.

    Social media is a form of advertising and a website is the receiver of all the forms of advertising. Getting some business owners to understand that the phone is not the exclusive receiver or where you drive them to is a hard sell sometimes. Trad adv and SocMe adv comes together at the website. The advertising is the extension of the efforts but giving people a strong solid place to go for more information before having to find the time to call is what starts to separate the surfers from the buyers. Let them surf the site and not the keypad on the telephone that probably never would get the call button pushed.

    Great article, thanks for taking the time to grab the data.

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  • Sam

    You laugh because you think I’m
    different I laugh because you guys are all the same. Social media helps people see the real you. Great article

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