Study Finds that Small Businesses Invest in but Still Struggle With Social Media

April 17, 2013

While many small businesses nationwide have recognized the importance of social media in their success, many are still struggling to use such social media resources effectively, Forbes reported on Wednesday. According to a press release by Manta, an online community for businesses that conducted a survey of 1,235 small business owners on their recent use of social media, almost 50% of small-to-medium business owners have increased their investments in social media. In addition, nearly 55% of those surveyed also indicated that they are using social media platforms specifically to attract new customers or generate sales leads. Despite these increased investments, however, less than 40 percent of small business owners reported seeing a return on their investment.

Forbes noted that this seeming contradiction is actually not surprising at all. "First of all, small business owners are being sold on the strategy of social by 'experts' who are trying to get them to pay to set up accounts," says Ted Rubin, social media expert and chief social marketing officer at Collective Bias. Secondly, Rubin points out, many small business owners have unrealistic expectations about how social media engagement can help their business. Many small business owners believe that simply setting up a Facebook page or Twitter account will automatically lead to more sales leads. "Small business owners are being told social can generate leads and bring in new customers, so they often consider it as another direct marketing vehicle, like getting their company into a weekly ValPac or Penny Saver circular," Rubin told Forbes. Such is not the case. Social media sales leads, he argues, do not come without dedicated and consistent work.

"Social actually can be a powerful lead generator," Rubin said, but not in the way small business owners typically use it. Instead of passively checking in on one's social media platforms on a weekly basis, Rubin recommends that small business owners take a more involved approach and hire an entry-level employee who is dedicated solely to "listening" and responding to the social media scene. For example, for small businesses that are in the service industry, he advises them to "[l]isten for people who are complaining about their current service providers. Those leads are worth pursuing."

Rubin advises small business owners to be patient and to view investment in social media as a long-term project rather than as a pay-in that results in a direct payoff. "[S]ocial […is] really a place to build loyalty, answer customer service questions and to build a community," he says. Trust and community, Rubin asserts, are the key to long-term customers. "If people trust you they're going to be loyal. If they're loyal, their average order will be higher, the frequency of their purchases will be higher and the life expectancy of them as a customer will be longer."

In addition to devoting more strategic time to social media engagement, small businesses can also enhance their ability to reach customers through other means. Small Business Bonfire recently published a list of ways that home-based businesses can advertise their services and/or products. One marketing method that the website suggests is notifying local newspapers and reporters of your business and specific field expertise so that they may call upon you for interviews, thereby generating publicity for your business. Another suggestion is sending press releases about your company to local radio stations or news outlets. Message boards and business cards can also prove helpful, the blog stated.

Compiled by Kaitlin Louie


"5 Inexpensive Ways to Advertise Your Home-Based Business," smallbusinessbonfire.com, April 9, 2013, Emily Suess

"Manta's Q1 SMB Wellness Index Reveals Small Businesses Find ROI in Social Media but Struggle with Facebook," online.wsj.com, April 16, 2013, Manta

"Why Small Businesses Are Losing on Social Media," forbes.com, April 17, 2013, Meghan Casserly

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