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Tuesday, March 2, 2010

Social Media Adoption Yields New Customers For Small Businesses

The third wave of the Small Business Success Index, by Network Solutions and the University of Maryland's Robert H. Smith School of Business, reports social media adoption by small businesses has doubled from 12% to 24% in the last year. Small businesses are increasingly investing in applications including blogs, Facebook and LinkedIn profiles.

Small Business Social Media Sources and Usage
*Social Media Exposure*	*% of Small Businesses Using*
Company page on social networking site	75%
Post status updates and/or articles of interest on social networking sites	69
Build network through sites like LinkedIn	57
Monitor positive/negative feedback about own organization on social networks	54
Have blog on areas of expertise	39
Tweet about area of expertise	26
Use Twitter as customer service channel	16
Other	8
Source: SBSI/NetSolutions, February 2010

Key social media usage highlights (% of respondents)

75% surveyed have a company page on a social networking site
61% use social media for identifying and attracting new customers
57% have built a network through a site like LinkedIn
45% expect social media to be profitable in the next twelve months

Dr. Alan Glazier, CEO and Founder of an eye and vision care center, said "... I was forced to consider alternative options to keep my business visible... with a very small investment in social media marketing, I was able to generate new business opportunities... (and) most importantly, my marketing budget has been reduced by more than 80%... "

61% of the respondents use social media to identify new customers. The biggest expectation small business owners have from social media is expanding external marketing and engagement including identifying and attracting new customers, building brand awareness and staying engaged with customers.

50% of small business social media users say it takes more time than expected. While social media adoption has doubled in the last year, there are still some roadblocks to small businesses fully exploiting its potential. Another 17% feel that social media gives people a chance to criticize their business on the Internet. Related to this, only 6% feel that social media use has hurt the image of the business more than helped it.

Janet Wagner, director of the Center for Excellence in Service at the University of Maryland, says that "Social media levels the playing field for small businesses... "

Other key findings from the December 2009 Small Business Success Index:

Small businesses experience positive effects from the economic downturn:

72% have found ways to operate more efficiently (up significantly from 66% in June)
47%have been led to find new products and services that benefit customers
43% have become better teams as hard times force people to work together

Building online presence continues to be key focus for small businesses:

Company Web sites seem to be the top technology investment in the next two years, with small businesses either adding new features/functionality to their existing Web sites or building one from scratch
The ability to showcase their products and services online to attract new customers is second in the hierarchy of technology investments
Social media investments rank third in small business investments to be made in the next two years

Customer service the biggest strength of small business owners:

Small businesses are highly successful at answering customer questions, ensuring customer satisfaction, showing empathy, providing consistent service, resolving problems and winning repeat business
Four of the six customer service dimensions have gotten stronger compared to a year ago, and one of these, ensuring customer satisfaction, is significantly higher

Connie Steele, Director at Network Solutions, concludes that "... social media can be the best friend for small business owners who constantly seek new ways to maximize productivity while keeping costs low... "

We use the term research in the broadest possible sense. We do not perform an audit, nor do we analyze the data for accuracy or reliability. Our intention is to inform you of the existence of research materials and so we present reports as they are presented to us. The only requirements we impose are that they are potentially useful and relevant to our readers and that they pass the rudimentary test of relying on acceptable industry standards. We explicitly do not take responsibility for the findings. Please be aware of this and check the source for yourself if you intend to rely on any of the data we present.

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