SMBs Still Unsure of Social Media

Nearly 70 percent of U.S small and midsize businesses (SMBs) use social media, nearly double the number two years ago. Despite that high percentage, SMBs -- small businesses, particularly -- may be struggling to find the business case for social networks. According to research conducted by Access Markets International (AMI) Partners, thirty percent of small businesses and 61 percent of medium-sized businesses say they perceive social media as strategically important to their business success. While it's clear SMBs are stepping into social networks and perhaps experimenting with things like blogs and Facebook pages, Chad Thompson, vice president of AMI's Marketing Strategy Group says that how and why SMBs are getting social is less obvious.

"There's not a whole lot of clarity around the true purpose of why SMBs are using social media," Thompson says. The recent AMI research looking at usage and influence of social media is aimed to help SMB IT marketers in positioning campaigns in the social space. In a chart depicting both small and medium business usage of social media, professional social networking takes the top honors, with general social networking sites coming in a close second, and job sites coming in third. In each of the areas, medium businesses have slightly more usage than small businesses, except for forums and product focused sites. 

"When you look at the data, it looks like they are used in the same way," says Jacqueline Atkinson, social media manager of AMI-Partners. However, it's impossible to paint SMBs with the same brush, the analyst insists. Use cases differ based on the size of the organization, how long it has been and business and its vertical industry, Atkinson says. 

Amidst the differentiation, Thompson outlines three overarching reasons that SMBs turn to social media:

1. Social media's low commitment nature: Organizations can tap into the Word of Mouth (WOM) benefits of a Facebook page or a Twitter handle without the structured and required maintenance of say an email marketing blast. It's easier for prospects or fans to "like" a Facebook fan page than it is for an SMB to gather phone numbers or email address. 

2. The differentiation of products and services: "A lot of SMBs are finding ways to integrate social media sites and services into their actual business," Thompson says. Rather than one-way communication, SMBs are finding that social networks help broadcast a message to a large group, but also enable them to gather tips from other providers and customers. 

3. Establishing and maintaining credibility: More savvy companies are using blogs, networks, and forums to demonstrate expertise and knowledge in a line of business. SMBs with more social media expertise are beginning to differentiate the purposes of social networks. For example, a small business may use Twitter to listen and monitor key word around its industry, but it engages in a blog to demonstrate to customers that it keeps on top of trends. "They know that it's not enough to be on there," Thompson says, "They have to show greater analysis and understanding and expertise." 

Not only does the size of a small business (fewer than 99 employees) differ greatly than a midsize organization (99 to 1,000 employees) but so do the industry and the company's age. Younger businesses, Atkinson says, seem more apt to experiment and may even allocate marketing spend on less conventional and more cutting edge social media marketing tools. "Younger business, starting off with a clean slate may look to low cots [social media tools] for marketing needs instead of investing in more traditional marketing tools."

AMI-Partners share the top five social media activities US small business participate in:

  • Keeping in touch with customers: 66 percent
  • Advertising/promotion for your business: 42 percent
  • Blogging: 39 percent
  • Keeping in touch with your business partners/associates: 39 percent
  • Sales/marketing: 36 percent

Networking and keeping in touch remains a strong use case, whereas sales and marketing remains low. Thompson says that although usage will likely grow, it's unclear if SMBs will look to social media as a replacement for current technologies -- or rather add-on functionalities. For small companies, the nature of the beast, Thompson says, is that even if costs are low, it comes down to resources. "A small business, because its so lean, they don't have that many people dedicated to doing social media activities," he says, adding that its not uncommon for a SB's Facebook or Twitter activity to taper off when more pressing issues take precedence. A medium business, may, however, have the luxury of time to find out more about social media uses and to experiment more. 

Thompson has three predictions for the future coupling of social media and SMBs:

  1. Overall social use will continue to grow in SMBs.
  2. The question around ROI will bubble up to the surface. Beyond hard costs, SMBs will question whether the time is worth the effort to be involved.
  3. Professional service-type organizations will emerge as savvy social media participants, with the eye on extracting intelligence from social media.

The next wave of social media usage among SMBs, Atkinson says will be about gathering intelligence, rather than just establishing a presence. "It's about ... seeing the customer demand," she says, "And using that to actively engage your customer base."

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.

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