Small Businesses Engaging with Social Media

August 14, 2012

Social media is huge. Facebook alone has over 900 million active users, while microblogging service Twitter has more than 500 million registrants. If you’re a small business, you have no other recourse but to take advantage of its soaring popularity to attract new customers and connect with existing ones, or completely miss out on the global phenomenon.

In fact, according to tech services provider BaseKit (via the Financial Times), social media has already beaten out legacy media like Yellow Pages now that small businesses are focusing their marketing efforts in sites like Twitter and Facebook, and rightfully so since social media is:

  • Easy to use
  • Not time-consuming
  • Cheap
  • Used by many customers

Social media spending

Interestingly, an infographic made by software firm Intuit revealed that while small business are now using social media sites, majority of businesses put in fewer than $100 in their social marketing campaigns. In reality, 42 per cent of businesses allot no funds for the medium while others spend more than $5,000 to market to their customers. Unfortunately, there were no details as to what these businesses spend on while using social marketing to reach their customers. Could this be money spent on special promos and discounts or pay per click campaigns?

But while businesses allot resources for marketing themselves in services like Facebook or Twitter, there are still companies that haven’t established an online presence. According to a report by BaseKit, more than half of small businesses in the U.K. alone (i.e. 600,000) "have yet to get themselves online at all", even if around 75 per cent of those who have an online presence say that social media is important in getting new leads and building the company’s reputation.

In Australia, only 27 per cent of small businesses are utilising the power of social media.

Dedicated employees

One possible reason why not all small businesses haven’t joined and taken advantage of the social media movement is that a greater majority of them (according to the Intuit infographic, a whopping 74 per cent) do not hire employees dedicated to handling their social media marketing. Only 12 per cent employ a full-time employee, while the rest have either a consultant (6 per cent) or a part-time employee (8 per cent).

In contrast, those that do have a social media and/or online presence seem to be missing the mark when it comes to choosing the appropriate approach. When asked what they think is the most effective tactic to reach customers in Facebook, 51 per cent of small business owners think it’s through wall posts, while others believe it’s either direct messages (20 per cent), testimonials (7 per cent), special offers and discounts (10 per cent) likes (6 per cent), surveys (2 per cent) and ads (2 per cent).

What customers think

Here’s where it gets interesting: when Facebook users were asked the same question, they answered quite differently. Around 37 per cent of consumers think the best way to reach them is through special offers and discounts. Others consumers think this should be done through wall posts (18 per cent), direct messages (18 per cent), likes (9 per cent), ads (6 per cent) and surveys (5 per cent).

The results show that there is a disconnect between what small businesses think and what its target market believes. So if the business keeps using wall posts to reach out to customers, many wouldn’t be as receptive since they would rather hear about special offers or discounts, making the marketing effort ineffective.

The main takeaway here is that businesses, regardless of size or platform, should listen to what its customers say. When leveraged correctly, social media can be a very potent tool for engaging customers, generating website traffic, getting feedback, announcing new products or services, generating leads and building brands. Social media can be so effective that it can level the playing field among companies, allowing small businesses to compete with multinationals when it comes to customer mindshare.