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?