Very-Small Businesses Use Social Media, But Spend Little

Very-small businesses, especially those with one to 10 employees, do not spend much money on their social media efforts. In fact, perhaps 42 percent say they spend nothing additional to support their activities, and perhaps 17 percent spend $100 or less on an annual basis, a survey by Zoomerang suggests. As many as 74 percent of respondents further say they do not employ anybody to manage social media programs.

None of that should be terribly surprising. One of the attractions of using social media is that, while it takes time, it does not necessarily require incremental spending.

Nearly half of the surveyed SMBs use social media to market to customers; of those, an overwhelming majority (86 percent) have Facebook accounts.

The top three favorite features used by both SMBs and consumers are photos, messages and status updates. At the same time, the reported "most effective" tactics for businesses to reach customers are wall posts and direct messages.  Zoomerang SMB survey:

The top three reasons SMBs use social networks are: connecting with customers, visibility and self-promotion. In other words, SMBs use social media for a mix of reasons, including lead generation and branding, loyalty and customer acquisition.


The top three things businesses want to know from customers on Facebook are customer satisfaction with products, customer satisfaction with service provided, and ideas for new business promotions. In other words, "how do you like our products," "how do you like the experience of buying" and "what can we do to convince you to buy more?"

Facebook Dominant Social Network for SMBs

Among the 44 percent of SMBs using social media, more than half (59 percent) spend less than $100 on social media marketing, however. As we often say, social media in some ways does not take lots of money, but it can take lots of time.
Where it comes to online marketing, small and medium-sized businesses have their work cut out for them.

Time- and money-strapped, SMB marketers often receive light budgets and minimal staff to help them promote their business and generate leads across a variety of formats ranging from social media to search marketing.

As a practical matter, according to Zoomerang, the first priorities are the company website and email marketing.

Social media, however, is gaining in momentum: 44 percent
of U.S. SMB decision-makers have used or are using social media in 2010, up 10 percentage points from 2010.

SMBs are sticking predominantly to the three main social networking sites: Facebook, Twitter and LinkedIn. 


However, SMBs were twice as likely to turn to Facebook (86%) as they were Twitter (33%) or LinkedIn (41%).

Facebook Dominant Social Network for SMBs

Social Media Works for Small Business

A survey of 3340 largely small business managers and owners finds the respondents believe social media has helped them close business. Some 72 percent  of marketers who have been using social media for more than three years report it had helped them close business. More than half who spend 11 or more hours per week also believe they have gotten the same results.

Of course, that likely is a self-selecting sample. Almost by definition, a business that continues to invest energy and time in social media believes it works.

About 48 percent of the self-employed and small business owners with two or more employees believe they have closed business because of social media.

Even with a minimal time investment, the vast majority of marketers (81% or higher) indicated their social media efforts increased exposure for their business. Owners of small businesses (2 to 100 employees) were more likely than others to report greater exposure was a direct result of using social media. (89 percent of respondents reported benefits).

By spending as little as six hours per week, 52 percent of marketers reported lead generation benefits with social media.

Small businesses were more likely than others to strongly agree that qualified leads were generated (21% strongly agreed, compared to 14% or less with other types of businesses).

Also, a significant percentage of participants strongly agreed that overall marketing costs dropped when social media marketing was implemented. The self-employed (59 percent) and small business owners with two or more employees (58 percent) were more likely than others to see reductions in marketing costs when using social media marketing.

The largest group who took the survey was self-employed (33 percent) followed by people working for a company with up to 100 employees (30 percent). Some 19 percent of people taking the survey worked for businesses with 100 or more employees.


Social Media Marketing Industry Report 2011 from Michael A. Stelzner on Vimeo.


read more here

Why Twitter Is a Big Win for Small Businesses

Not every small business will find these results, but Chanel Huston, owner of Boutique de Bandeaux, an Etsy shop selling handmade couture-inspired hair accessories for thick, curly and kinky natural hair, says her business has tripled since she started using Twitter to find customers and promote her business.

"I noticed that between the four-month period before I started using Twitter and the four-month period after I started using it, my sales tripled," Huston says.

"I was on a message board for natural hair first, called Black Hair Media, and it turned out that a lot of the girls were on Twitter," Huston says. "Once I got on Twitter, I found out that there was a big natural hair community that would meet and give tips and secrets to each other.”

"Twitter helps me find the people who are actually going to be interested in my products, who have the disposable income to spend on them and have the hair type that’s going to be appropriate for my products," she says.

“Finding people on Twitter is actually easy, if tedious at the start, she says. "I started by making announcements on the message board that I frequented to let everybody know that they could now follow me on Twitter. After that, she went looking for Twitter users that have a target audience similar to hers and become a "follower."

Now she says she has a little over 3,000 followers, and for the most part, she responds personally to all incoming tweets.

There’s a lot of temptation to follow everyone, but avoid the temptation, she says. If you sell children’s clothes, for example, add people who are following parenting magazines or are in parenting groups.

Why Twitter Is a Big Win for Small Businesses

U.S. Small and Medium Businesses to Spend $32 Billion on Voice and Data in 2010

U.S. small and mid-sized businesses will be spending about $32 billion in 2010 on voice and data services, according to Analysys Mason.

Small Businesses Challenged by Social Networking

As often is true in the communications business, tools that large enterprises find useful and helpful are not necesarily so helpful or useful for small businesses. Social networks likely fall into that category.

A survey of small business executives by Citibank, for example, found owners and managers giving short shrift to social networks as a help for their businesses.

The survey of 500 small business executives across the United States by Citibank / GfK Roper found 76 percent of respondents saying they have not found social networking sites such as Facebook, Twitter and LinkedIn to be helpful in generating business leads or for expanding their business during the last year, while 86 percent say they have not used social networking sites to get business advice or information.

The survey found that general search engine sites such as Google and Yahoo! trump small business-focused sites and the WSJ.com as destinations for small business owners to seek business advice or information. 61 percent of respondents say they rely on these search engine sites.

"Our survey suggests that small business owners are still feeling their way into social media, particularly when it comes to using these tools to grow their businesses," says Maria Veltre, Citibank EVP. "While social media can provide additional channels to network and help grow a business, many small businesses may not have the manpower or the time required take advantage of them."

That's a lesson even some mid-sized companies already have encountered. It isn't that social networking takes much capital or imposes much operating cost. What it does require is time. So the typical pattern is that a firm launches a social networking effort of some sort with time borrowed from executives and professionals who are very busy and scarcely have time to tackle the other issues on their agendas.

Over time the effort dwindles. That's one reason few small businesses have made sustained and vigorous social networking efforts.

One trend confirmed in other studies is that small businesses are making greater use of Web sites to support their business operations, marketing and sales.

About 42 percent of small business owners and managers reported that in the past year they have made greater use of their company's Web site to generate business leads and sales, though.

Among companies with 20 to 99 employees the percentage rises with 57 percent saying they have made greater use of their Web site.

Survey respondents are also using email marketing (28 percent) and online advertising (25 percent) to generate business leads and sales.

But the evidence on how well social networking works for lead generation is contradictory, so far.

A recent survey by Ad-ology found lead generation is the biggest benefit of social networking for U.S. small businesses, cited by one-half of respondents as being the case. Social networks were also considered a good way to keep up with the industry and monitor online chatter about the business.

Small businesses rated Facebook the most beneficial social networking site, with 33 percent of respondents reporting it was at least somewhat helpful. It was also the social network most likely to be used. Use of LinkedIn was less common, but the business-oriented site was claimed as beneficial by 21 percent of small businesses, compared with 19 percent that said the same of Twitter.

The biggest roadblock, however, was the perception that “our customers do not use social networks,” which 31 percent of respondents said they believed.

And as has been the case noted above, nearly 50 percent complained that they did not have the time or staff available to do a good job with social network marketing.

Small Business Commits to Social Media, Email, Search

About 75 percent of small businesses will increase their spending on email marketing in 2010, while nearly 70 percent will spend more on social media, according to VerticalResponse.

The findings might not suggest small businesses are spending wildly. In most cases the firms likely are testing new media. But the testing seems very widespread.

Almost all businesses with 500 or fewer employees will use email marketing next year, the company says. Only 3.8 percent of small business executives say they will not be using email marketing in 2010.

More than 70 percent also indicated they would not use TV or radio advertising.

Search advertising is used by about 72 percent of small businesses, but banner advertising is used by about 40 percent of small businesses, VerticalResponse says.

Facebook, Twitter and YouTube, as well as other social media sites, are used by about 78 percent of small businesses, the firm says.

Cable Targets Small Business

The coming year is when we see just how formidable U.S. cable companies will be in the small business communications market. To be sure, many veterans of the business communications market don't think cable will much of a factor in the enterprise market. Maybe not. That's not where cable companies are going to focus, which is the small business customer.

Comcast Corp. apparently plans to spend $3 billion to sign up 20 percent of small companies in its territories by 2012. Time Warner Cable Inc. is also pursuing businesses with fewer than 1,000 employees. And Cox Enterprises has been signing up lots of business customers for years.

Phone companies dominate the $25 billion annual market, which can generate profit margins about 10 percent higher than services offered to consumers or enterprises.

On the other hand, large telcos don't generate nearly as much money from phone lines and calling as they used to. In fact, small business lines provide only about five percent of at&t's revenue these days.

Cable providers, with less than five percent of the small business market, may seize one-third by 2012, saus Sanjeev Aggarwal, AMI-Partners VP.

So two things are going to happen. In some cases telcos will cut their own prices to match the discounts cablers are expected to offer. They'll keep share but sacrifice margins. Or, telcos can simply accept the loss of some share to maintain margins for a while longer.

Anticipating the onslaught, Verizon and at&t seem to be prepared to cut prices and bundle services to keep small-business customers who sign up on contracts.

Verizon offers 20 percent off Internet access for companies taking unlimited local and long-distance calling plans for one year. Customers buying voice services from at&t pay roughly 40 percent less with an annual Internet service contract.

About 54 percent of AT&T's small and mid-sized-business customers in areas where cable may compete have might already have signed new contracts, some observers suggest.

Covad and McAfee Partner

Make a note of this: Covad Communications and McAfee are partnering to deliver bundled services for small-business customers. The companies say Covad will bundle McAfee Total Protection for Small Business services with its broadband products in a new offering called Business Essentials.

Here's why you need to take note: retailers in the telecom space are used to selling services on a monthly recurring fee model. So the next big shift in business model is to start selling other services in the application realm that are delivered as a service, not a product, not a "box" or "device." Up to this point, most retail points of contact have had difficulty whenver they have been asked to behave in ways different from past behavior.

Data equipment resellers often have stumbled when asked to sell recurring fee telecom services. Telecom resellers have flopped at selling hosted PBX services. Interconnect dealers have not been able to sell Cisco router-based services.

Increasingly, hosted applications, sold just like telecom services, are going to be the way some legacy retailers make a jump "up the value stack" into applications, in a way that is culturally comfortable. This is a big deal and Covad is on the leading edge. Sure, you might argue, security services are a natural, and are sold by cable companies and telcos to consumer buyers.

That's true. What's more interesting here is the move to create a new services model extending beyond connectivity services and up into the applications layer, in a way that makes sense for the retail sales partners. The next step is further in the direction of services for the desktop and back office.

This is going to be a big deal.