September 25, 2012
By Brent Leary, cofounder and partner, CRM Essentials

The Maturation of the Social SMB

To address the perpetually challenging areas of customer acquisition, revenue growth, and sustained profitability, small businesses are turning to social tools and strategies in growing numbers. In the June 2012 "SMB Social Business Study," conducted by CRM Essentials and SMB Group, 53 percent of the 431 small business respondents (representing companies consisting of one to 100 employees) said their companies use social media to engage customers, up from 44 percent last year. While this increase is impressive, all of the growth comes from companies that describe their social media usage as informal in nature, whereas the percentage of respondents from strategic social users remained the same. Nonetheless, the study found significantly higher benefits for those implementing a more systematic approach.

Connecting the Dots

The value of a strategic approach becomes very apparent from a year-over-year perspective. In 2011, 11 percent of strategic users surveyed said they were very satisfied with the impact their social activities had on Web site traffic, while 9 percent were very satisfied with the impact on lead/sales generation. In 2012, those numbers were 26 percent and 22 percent, respectively, marking year-over-year increases of 137 percent and 144 percent. Five percent of informal social users were very satisfied with lead/sales generation in 2012, the same as in 2011. Informal users very satisfied with the impact on Web site traffic increased slightly, from 3 percent in 2011 to 5 percent in 2012.

The dramatic increase in satisfaction from strategic users may explain the perceived value of social tools. Compared to informal users, those deploying a more strategic approach were:

3.5 times more likely to be very satisfied with Twitter;
2.2 times more likely to be very satisfied with engagement on Facebook; and
2.5 times more likely to be very satisfied with LinkedIn.

And though Pinterest is still in its early days, strategic users are 5.6 times more likely to be very satisfied with it than informal users.

As a result of their efforts, strategic users are five times more likely to be very satisfied with generating traffic to their site, and more than four times as likely to feel very positive about generating sales leads.

Integration and Expansion

This year's study found that 53 percent of all respondents view the need to integrate traditional marketing, sales, and customer service with social media tools as being at least somewhat important. Many strategic and informal users work at companies that have already begun this process. Marketing integration is the top functional area for strategic and informal users—49 percent and 39 percent of these firms, respectively, have integrated their marketing processes with social tools.

When it comes to connecting social with product development, strategic users hold a major advantage. They are 3.5 times more likely to have already integrated these areas than informal users (28 percent versus 8 percent). This coincides with strategic users having a 50 percent higher level of satisfaction with social efforts than informal users in this area. And with many new product ideas coming from social interactions with customers, it's no surprise strategic users are four times more likely to be very satisfied with bringing the voice of the customer into their organization than informal users.

The Journey Continues

There are many interesting nuggets of information coming out of this year's study. The level of social engagement with customers is growing, and companies are more open to experimentation. Just seeing how Pinterest has jumped into the activity stream of many users so quickly is a great example of this.

Companies that get to the strategic level of social usage are able to integrate social more deeply into the overall organization, and are rewarded with higher levels of impact and satisfaction in addressing important business challenges. They are able to better determine what's important to their customers as they leverage social not just to push out promotional material, but to have collaborative interactions with customers and prospects—allowing them to gain valuable insights and solidify long-lasting relationships.

Brent Leary is cofounder of CRM Essentials, an Atlanta-based CRM advisory firm focused on small and midsized businesses. He is also the author of Barack 2.0: Social Media Lessons for Small Businesses.