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The Socialization of Small Business

Social Media impacts every business, every brand, and in doing so, connects a network of distributed communities of influence, making the world a much smaller place in the process.  Small businesses are in fact at an advantage in Social Media Marketing as they can focus on hyper-local activity that can offer immediate rewards or at the very least, the real-time feedback or lack thereof says everything about next steps.

A recent survey conducted by Citibank offers a contrary point of view, citing small business executives who believe social networks offer no benefit or promise to expanding their business. This isn’t all that uncommon however. The truth is that without knowledge or direct experience, it’s virtually impossible to envision the potential of something where they’re most likely absent as a consumer themselves.

But, if a conversation takes place online and you’re not there to hear it, did it actually happen?

Of course it did…and it continues – with or without you.

The “I” in ROI does not stand for ignorance. It does however stand for investment and in cases where new media is “new,” it also stands for intelligence. We’re learning together and that’s both an opportunity and an impediment. We need guidance to better understand the promise and also how to reap its reward.

Ad-ology published its “Small Business Marketing Forecast 2010” report that revealed that among the other benefits of social media, lead generation is the biggest benefit of online networking. Other benefits ranked as follows…

Keeping up with the industry

Very Beneficial: 16%
Somewhat: 29%
Not Beneficial: 55%

Monitoring what is being said about your business

Very Beneficial: 16%
Somewhat: 28%
Not Beneficial: 55%

Generating leads

Very Beneficial: 16%
Somewhat: 34%
Not Beneficial: 50%

Competitive intelligence

Very Beneficial: 14%
Somewhat: 29%
Not Beneficial: 57%

Improving customer experience

Very Beneficial: 12%
Somewhat: 29%
Not Beneficial: 59%

Resolving problems

Very Beneficial: 11%
Somewhat: 22%
Not Beneficial: 67%

Finding vendors/suppliers/partners

Very Beneficial: 10%
Somewhat: 28%
Not Beneficial: 62%

Recruiting for new employees

Very Beneficial: 8%
Somewhat: 19%
Not Beneficial: 73%

Background checks – employees, suppliers, etc.

Very Beneficial: 7%
Somewhat: 20%
Not Beneficial: 72%

Among those surveyed, Facebook appeared as the most beneficial social network. Perhaps tied the reverberation of activity across social graphs. LinkedIn, while cited less often, ranked just below Facebook, but ahead of Twitter – for now at least.

Facebook

Very Beneficial: 10%
Somewhat: 23%
Not Beneficial: 14%
Do not use: 53%

LinkedIn

Very Beneficial: 6%
Somewhat: 15%
Not Beneficial: 13%
Do not use: 67%

MySpace

Very Beneficial: 6%
Somewhat: 11%
Not Beneficial: 15%
Do not use: 68%

Twitter

Very Beneficial: 6%
Somewhat: 13%
Not Beneficial: 12%
Do not use: 69%

YouTube

Very Beneficial: 5%
Somewhat: 10%
Not Beneficial: 12%
Do not use: 73%

The study shows that education and awareness are needed among small businesses to better understand the promises, advantages and the commensurate commitments necessary to generate visibility and ultimately the activity necessary to sustain or at the very least, contribute to a lucrative and growing business.

31 percent of small businesses claimed that their primary hurdle was the perception that “our customers do not use social networks.” Equally, business owners complained that they do not have the time or resources necessary to run an effective social media marketing campaign. Sound familiar?

While yes, it’s true, small business owners must focus on the core products, services, and values of their business. However, without visibility, customers do not possess the information necessary to connect the dots between their want or need and you.

The Top 10 Ways to Monetize Real-Time Conversations in Social Media

No story is complete without providing ideas to move forward and compete for the future. By competing for the future, we also cultivate a flourishing state of “now.” One of the primary advantages of social media for small businesses is the relatively low cost associated with uncovering relevant conversations within your geographic or service area. It’s how we can identify and personally connect with customers. It’s how we learn what they’re seeking. It reveals interests and cravings.

For example, take a moment to run a real-time search activity search using Collecta to get a feel for the volume and velocity for relevant conversations online. Then, run a local search on Twitter (choose by geography) using a keyword related to your business, but not necessarily that of your business or product name. For example, Pizza, Coffee, and local yogurt shops are searching those words specifically to offer specials and free items to those within proximity to stop in and give it a try. Business owners report that while offers and freebies reflect a notable investment, they always increase clientele and business overall.

To help entrepreneurs and small business owners capitalize on the “now” or real-time conversations populating social media, Web 2.0 investor extraordinaire Ron Conway offered his vision for the top 10 ways to monetize real-time conversations.

10. Lead generation
9. Coupons
8. Analytics, analyzing the data
7. Enterprise CRM
6. Payments
5. Commerce
4. User-authentication, verifying accounts
3. Syndication of new ads
2. Advertising – Context and display ads
1. Acquiring followers

New mobile social networks such as FourSquare, Loopt, Gowalla are also emerging that connect people within local areas based on where they are and what they’re doing. These services require you to “check in” to a location or an establishment and as such, local businesses are encouraging patrons to do so by offering incentives, “check in here on FourSquare and get a free slice of pizza or a free beer.” Why? Each time someone checks in, their social graph follows the establishments they frequent and as such, brands the venue within a very trusted circle. There are also opportunities for paid sponsorships. Each time I check in to venues in Redwood City, a local wine shop and tasting room, Savvy Cellar, pops up with a “nearby special.” If I pop in and show my iPhone with the special, I receive 50% off any tasting. Brilliant.

To learn more about specific examples for increasing awareness and revenue using Social Media, please read Forbes’ piece on 21 Top Twitter Tips (Story | Through Pictures)

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122 COMMENTS ON THIS POST To “The Socialization of Small Business”

  1. jacksonwightman says:

    Thanks Brian. I saw this http://www.torontosun.com/money/2010/01/07/1237… last week in the Toronto Sun. I think small business owners (my girlfriend is about to be one) are still, like all of us, learning about these mediums and their use as tools. What I found interesting in the Sun piece is that owners are TRYING their hands en masse. Inevitably there are failures, naysayers etc but people realize the need to test the waters and are doing so.

    The other thing, as you point out is that different tools work for different industries. The social media goldrush that involved “getting the company up on Twitter/Facebook/insert network name RIGHT AWAY” has led to lots of failure and disillusionment among small biz people. As things evolve I suspect owners will take more time to assess whether a given tool is right for their particular industry and business and what precisely it application is.

  2. debraellis says:

    The third hurdle for small businesses is the exclusionary behavior of the social media power brokers. There is a dichotomy between their words and their behavior. When you read their blogs, there is a lot of talk about conversation, interaction, and being social. But, if someone tries to participate, he or she is often ignored or reprimanded for not knowing the “rules”. It is hard to convince people that social media is a viable marketing channel when it looks like a high school cafeteria filled with people tussling for position.

    • stephenbryer says:

      Debra, I guess I am not the only one that experiences this grade school-like click behaviorism on “Flakebook”. Poor etiquitte, endless posting of drivel and the banal, not responding to attempts for professional and or meaningful discourse and collecting more and more “friends” for collecting sake – these all seem to be more the norm than the exception. There is coming a time of saturation when folks say enough of this and will only engage and relate in a very refined, deliberate manner with those they like, admire, value, etc and the relationship is mutual. Like it use to be before Social Media.

    • debraellis says:

      Stephen,

      Thank you for replying to my comment. A few small businesses are creating their communities and populating them with customers, prospects, and vendors. They are developing unique business models that integrate social media with traditional marketing. And, they are seeing a strong ROI. Most of the ones I know are still in the testing stage. All have found the channel to have merit and are planning to expand. I'm looking forward to the time when this behavior is the norm instead of the exception.

  3. Daniel Love says:

    Thanks for publishing these stats Brian.
    “The “I” in ROI does not stand for ignorance” <———- SO true!

    • briansolis says:

      Hello from Franfurt en route to Oslo. Thank you for the comments. Will chime in once I get to the hotel. Please continue to share you thoughts and experiences.

  4. Erik Boles says:

    Brian, a few great points, but there is a major component you are missing here (I know your writings, so I don't think *you* are missing, it, but your article is).

    Small business owners, just as they were 15 years ago with “web pages” don't understand social media, new media, whatever you want to call it. As such, they are afraid of it and looking for guidance. Unfortunately, just as it was 15 years ago, there are “social media experts” coming out of the woodwork, for little to no money, just trying to get their names on the wall. Because Bob the small business owner cannot afford someone like you, or Chris Brogan, or Gary Vaynerchuk, or Altimeter Group or Jason Falls, or…. they settle for the local guy in the community that huffs and puffs the loudest and has, through honest means or not, gotten 100,000 twitter followers and uses that as a benchmark of their influence in the social world.

    As can be expected, Bob the small business owner walks away very frustrated even more confused over what just happened. After all, he just paid hard earned money for someone to show him how to use twitter and facebook, he has yet to see any monetary gain from it and he has gotten backwards in ROT (Return on Time) because he now spends part of his day tweeting and updating facebook.

    So where is the big failure? The business owner hasn't done the basic homework that he did with every other successful component of his business: needs analysis and integration with existing business practices. The social media guru that he hired didn't do it either because he has no real world business experience, has never been in a startup at a level that significantly impacted the growth of the company, etc.

    You offer a solid top 10 in way for immediate engagement, but the biggest thing that everyone seems to gloss over is the prequel, the part before you start.

    1. WHY do I think I need social media (you do need it, but you need to be able to visualize why, and “because
    everyone else is doing it is a horrible answer).
    2. WHAT do I expect to get out of it? (is it direct revenue or a marketing tactic that will increase revenue in
    another area of my business?)
    3. HOW is it tied to the rest of my business goals?
    4. WHO will be in charge of this? (its a team effort, but someone needs to take point, you can't tell all 3 of your
    employees “we're all going to use twitter now”)
    5. ROT – you are investing time here, and little else, however, time is the one thing in business that doesn't scale
    well on a 1:1 ratio, so make sure you are tracking everything you do with metrics, it is absolutely critical.

    The quicker we all change the mindset of the business folks out there, the faster they will realize that most of the social media experts are giving the term a greasy, dirty feel to it and the quicker we can move forward. It costs more to engage the right people, and while folks like Guy Kawasaki (@GuyKawasaki) may be out of reach, and others like @ChrisBrogan, @JasonFalls and @BrianSolis might be more than you wanted to pay for, the return on your investment, if you are honest with your consultant and with yourself, will be much more satisfying.

    Not ready to pay someone or don't think you need to? I STRONGLY recommend you, as a small business owner, go out and grab Trust Agents by Chris Brogan (http://www.amazon.com/Trust-Agents-Influence-Im…) or maximize your time, download it on iTunes and listen to the audiobook while you work. It is a great starting point, and he recommends other great resources from there to get you on your journey. Want real world statistics behind the social movement? Check out Ground Swell by @CharleneLi, its a bit “numbery”, but a great resource as well, or just follow @jowyang on twitter.

    Erik Boles
    http://ErikBoles.com
    http://twitter.com/ErikBoles

    • briansolis says:

      Erik, what a fantastic comment! You bring up very valid points. This post is but one of the angles a small business must consider. There are also hundreds that reside on this blog alone that will offer a prequel and also help them scale beyond where they are today. I suppose everything begins with being open to learning and experimentation. Again, thank you so very much for sharing your comment and passion with everyone.

    • tallulah says:

      Erik,

      Love this list of prequels. I need to say, the ROT point is one big set back when planning SMedia adoption. Some clients have asked me and other PR colleagues to blog on their behalf, and of course we've said “No” and had to explain why that would be unethical (Brogan's Trust Agents explains this cleary, and I agree, good book). I think the fear of investing Time a big deal breaker, perhaps even more than the $ investment. I've seen it stop SMedia programs from even launching. Blogging, Tweeting, etc. these aren't only “campaigns” but they are commitments. Even I can understand that phobia.

      Thanks again for such a great reply to this post.

      T

    • Bill Hanifin says:

      Erik, You got to the heart of the matter with your post. I do see distinct camps of persons and the ones that are small business, professionals, or those building “personal brand” are most susceptible to rushing in without clear goals set and therefore stand greatest likelihood of encountering a poor ROT.

      For mid-large enterprise, they will make an evaluation of “why” and will build measurement plans but that also means that they will often sit on the sidelines way too long and stumble in execution as their tweets are monitored by the legal department.

      The beauty of SM is that the answers are made available by the tools. The information is out there and as consumers, we just need to exercise good judgment in who we listen to.

      PS: I have both Groundswell and Trust Agents on my bookshelf … good recommendations.

  5. EdHartigan says:

    Hi Brian. Really interesting stats. I think the face these questions were pre-loaded with 'social media' in front of them, resulted in the surprisingly low 'very beneficial' percentage. As Erik Boles points out (very well), if there is the initial explanation to small business owners of how social media can tie in with their business objectives, what they can expect to get out if it, what resources it takes etc then it can become another marketing tool in their armoury. I am sure, if asked, all those business owners would put Improving Customer Service, Generating Leads, Intelligence etc as 90-100% important…they just aren't seeing how social can help the process. I blame the name 'Social Media'…we really need a new one for 2010!

    • Tyrone says:

      Social media for me should be then not only stressed to communication, interaction between users and growing more numbers of followers but how these relationships build in connections that helped you enhance the business. Indeed, it's not only a starting point but can also be considered as product of people's interests which should be targeted by marketers. Thanks for sharing the great ideas!

  6. Bill Hanifin says:

    Those that don't believe in the importance of social media probably have not tried it first hand and/or fall prey to the belief that sites like Twitter are about not much more than telling people what they ate for breakfast.

    Social media tools can be used to drive business results, but you have to get your feet wet…..

    Good post.

  7. Dave says:

    Our experience has been that small business owners have to think about everything and this is just something that slips past them. Once they hear about social media marketing, how easy it is, how little it takes and how cheap it is, they immediately get it. They aren't idiots, after all. They just have WAY too much on their hands at the moment.
    They especially understand that social media alone doesn't always work for small business, and that being able to quickly connect with multiple networks with one message means speaking to the greatest number of potential customers with the least effort.
    Of course, if they can get a decent social media marketing tool and some expertise on the cheap, that's even better. Like Erik mentioned, not all of them have the resources to get access to the real gurus when they need it.

  8. Jenn O'Meara says:

    Brian,

    Great data. Regarding the YouTube/online video angle, I wonder if small businesses aren't using video sharing sites because the sites are too broadly targeted. Without a doubt, web video marketing does increase audience engagement and is especially effective for lead generation. While video sharing sites may ultimately help with website SEO, small businesses may ultimately find it more beneficial to incorporate video into contextually relevant areas of their websites and to use online video in direct communications capacities. The audiovisual nature of video presents an effective way to tell a story that can educate prospects and convert leads into customers.

    Jenn O'Meara
    http://www.flimp.net
    http://www.twitter.com/JennOM

  9. Hello Brian & commenting friends.
    I welcome this post for the topics and discussion it ignites. I think there's a few reasons quite rightly pointed out by folks why we aren't seeing more adoption by small business, which are predominately in my view, because of a lack of awareness and education about how SM can be put to practical use to deliver.

    @EdHartigan picks up on a gem of a point which I believe when he says that: “I am sure, if asked, all those business owners would put Improving Customer Service, Generating Leads, Intelligence etc as 90-100% important…they just aren't seeing how social can help the process.”

    There is the assumption made by people here that SM is for everyone and while I think that largely this is true in some shape or form, Jeremiah Owyang mentions that implementing a full blown SM campaign as large part of overall marketing activity does not apply to all – something which I also agree with. I wonder where the line is drawn to determine whether to allocate resources to SM or traditional forms, what small business owners should be looking at in their analysis to determine viability (500 forum threads / blog posts, 5000, 50,000, etc?), how many discussions qualify SM implementation and so forth.

    I read many articles, blogs, comments and so forth about the merits of SM, the planning process, launch cases, integration, implementation mechanics, metrics and so forth but as a small business owner I find it difficult to work out a dependable plan that I know will generate whatever amount of return. Erik Boles would say that I haven't done my planning, but until I actually execute and measure a SM campaign, it appears to be more very difficult to estimate return even within a range which makes it difficult to commit to implementing SM, especially where the net is rife with the skeletons of empty Twitter and Facebook accounts.

    Very often the cases I find are in completely unrelated markets, give only a small glimpse into strategy, their market and do not report actual results over time – I'm missing the meat and transparency to gauge success even if it is in a completely unrelated industry.

  10. amymengel says:

    It would be interesting to see more demographics on the types of small businesses surveyed and their owners. Many small businesses are currently run by Baby Boomers, who are often on the late adopter side of the innovation curve. I wonder how much of these results are a generational/age issue.

  11. Nicole says:

    Nice study – Thanks for the info! Small businesses as a whole have yet to see returns on social media efforts, but we've also seen it be very rewarding for some. We think the key is to stick with it… And we blog about it often!

    Example: Find B2B Social Media Difficult? Yea, Because You Need a Strategy http://tinyurl.com/yh6ylh7

    Nicole
    http://www.flashtweet.com

  12. tallulah says:

    Brian, I just told everyone that I wish I could take that line you wrote – The “I” in ROI does not stand for ignorance – and put it on a shirt. SMedia ROI is THE topic this week. Todd Defren, DM Scott have also been talking about it.

    There’s a big debate as to whether ROI can really be determined in Social Media campaigns and programs, and that makes It tough for many PR and Social Media consultants who are still trying to convince clients of SMedia benefits.

    I think the best (and first) way to prove to yourself and your clients that Social Media is worth while for their particular industry/company is to FIRST monitor the web – “Who’s talking about you?”–The answer to that question may better justify the decision to engage with one’s online audience than any measurements. One thing Executives hate is a published complaint (“negative press”). Who would pass up an opportunity to learn how to respond to this audience/complaints/debates? Maybe the issue of ROI comes second. Maybe vanity is an easier leverage point when convincing people of SMedia boons.

    Thanks for the post, I loved your last one too btw, the one on The Predictive Web. Great Read.

  13. 31 percent of SMB claimed that their primary hurdle was the perception that “our customers do not use social networks” . This is by far the highlight of the article.

  14. Deepak Bista says:

    I think there some value not very high though. Having said I tried to be in touch with some social media outlets.

  15. AndrewPeel says:

    I think it very much depends on the type of small business. Most could use Twitter as an excellent free customer relations management system for free and with very little effort. Facebook, Myspace and YouTube well Fan Pages on Facebook are only really useful if you can keep the content coming, MySpace is another planet now and only really fit for fashion, music and entertainment, YouTube great if you can put together nice informative things about the business you run – Whole Foods are a good example many could follow. ecademy and Linkedin are the obvious choices for most small businesses as they are like global online BNI Chapters.

  16. The upside for small biz as well is their ability to integrate these tools quite quickly. And they don't need massive infrastructure. The downside is the requirement to engage across multiple platforms and the resources to engage with them…but I suspect that will work itself out.

    We've seen small businesses also suffer very quickly from negative coverage in social media.

  17. chefchuck says:

    Thanks Brian, You have taught me much!

  18. robate159 says:

    Small business

    1. Often we forget the little guy, the SMB, in our discussions of the comings and goings of the Internet marketing industry. Sure there are times like this when a report surfaces talking about their issues and concerns but, for the most part, we like to talk about big brands and how they do the Internet marketing thing well or not so well.

    2. The Center for Media Research has released a study by Vertical Response that shows just where many of these ‘Main Street’ players are going with their online dollars. The big winners: e-mail and social media. With only 3.8% of small business folks NOT planning on using e-mail marketing and with social media carrying the perception of being free (which they so rudely discover it is far from free) this should make some in the banner and search crowd a little wary…….

    http://www.onlineuniversalwork.com

  19. Mel says:

    Brian, thank you for this interesting analysis and view of social media. But I think that the shown statistics are not quite realistic. In my opinion social media are a little bit underestimated. I think it's hard to measure the usefulness of social media for business as it is a matter of various circumstances regarding the different kinds of business.
    It depends on the customers, on the type of the product/service, on the business sector, the right choice of social media etc. I believe social media would always be of help to ANY kind of business if the right media is chosen wisely, summing up all specific circumstances about a business. Where there is willingness and motivation, there comes along success..Don't you think?

    Mel
    mel@socialpowerweb.com

  20. NENewMedia says:

    Eventhough this article is from the beginning of 2010 it is still relevant. Small businesses that are trying to get themselves educated on the social media should certainly read this article. The advisors of the small business such as us have a great resource to point our clients to. Thanks.

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