Small Businesses Show Social Networks Some Love

Think small businesses are more hesitant than their enterprise counterparts to get involved with social media? Not according to recent research from AMI-Partners.

According to the report, sponsored by Sage Spark, an online business network operated by business-software provider Sage, more than 260,000 small businesses (SBs) in the United States and Canada currently use social networking for business purposes. AMI-Partners analyst Nikki Lamba also notes in the report that the number of small businesses using social networks has grown by 33 percent year-over-year. The most popular type of social networking site visited by SBs are general sites such as Facebook and Twitter; more than half of the SBs in the U.S. and Canada are utilizing these sites for business purposes.

"As economic conditions deteriorated, small businesses have struggled to find a balance between cost-cutting and maintaining client relationships while growing their revenues," Lamba writes. "And with limited financial resources, SBs face greater pressure to effectively market their products and services." There are even indications, Lamba writes, that SBs have begun replacing traditional marketing endeavors with those on the social Web. 

Lamba gives the following three reasons for small-business involvement with social networks:

  • Cost: Social networks often provide free tools that can be used in place of traditional services for marketing or sales. 
  • Customer Engagement: Small businesses list customer engagement as the number-one priority in their use of social networks for business purposes. (The second-most-popular reason? Networking with peers.)
  • Image: The majority of SBs feel that social networking helps improve their companies' image. They think they appear more forward-thinking and innovative to customers and peers.

The research reveals additional points about small businesses: 

  • Nearly two-thirds of small businesses feel more comfortable using digital social media than they did just a year ago.
  • Close to 40 percent of small businesses are spending less time on traditional marketing in favor of social media tools such as blogs, social networks, and online messaging.
  • AMI's research points to a growing trend occurring not just among small businesses: The lines are blurring between professional and personal use of online social networking. Lamba's research shows that small businesses are using the same sites for both business and personal use. In fact, 80 percent of small-business respondents say that they use social networking in their personal lives. 

"SBs primarily start using social networking because their peers and clients also use social media, and they are drawn to the availability of free tools available through social networking," Lamba says.

Even among SBs, Lamba writes, experience with social neworking -- as with any technology -- leads to a nonlinear growth in time spent interacting with it. "Looking at businesses that have been using social networking for more than three years, we see an interesting trend emerge," she writes. "As time goes on, more employees within SBs use social networking and individuals spend more time on social networking. They have a greater comfort level and trust in such services, and they realize greater benefits."

In other words, the biggest obstacle a small business faces with regard to social networking may simply be getting started in the first place. 

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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