Social Media: Marketing Considerations for Small Business

Social media marketing, will it deliver results for my business?

It’s clear that social media has grown dramatically over the last few years and that with more than 800 million active users, the number of Facebook users is easily more than twice the size of the entire population of the United States!

Its growth has been astronomical and today, millions of people are posting more personal and business information online than ever before. It’s happening at lightning speed with thousands of posts, tweets and uploads occurring every hour.

Recent research conducted by the Australian Interactive Media Industry Association (AIMIA) commissioned by Sensis Pty Ltd (May 2011, p. 10) indicates, that “62% of Australian Internet users use a variety of social media sites, with many visiting every day and most at least a few times a week.” It’s no surprise that with the millions of prospective customers from all over the world using these sites, every day, that so many businesses have decided to include social media marketing into their marketing mix. However it also important to get an understanding of how these sites are being used and what’s involved in maintaining or resourcing your business presence on these sites. Your online footprint can stick around for a long time so don’t underestimate how this can affect the perception of your brand in the market place. Spend some time upfront thinking about whether social media is right for your business.

1. Seek first to understand – It is very important that you understand the fundamentals of how is social media actually works and how it’s being used. What are people and businesses doing with social media? What gets them results? Some of you may be thinking, how do I do this? Perhaps you could consider trying it out for yourself by setting up a personal account, then testing some of the features, or get a trusted friend to show you their account and guide you through. Alternatively there are so many resources and ‘how to’ items online about social media, that you could run a search on Google or on YouTube on a particular topic of interest and watch the video tutorials to get informed.

2. Understand your purpose – What is your purpose is for using social media? What do you hope to achieve for your business by using it? It’s really important that you identify your purpose for getting involved in social media (or any other marketing activity for that matter). You need to work out why you are taking part. What do you expect to achieve? Do you simply want to build brand awareness, engage with your customers or identify new sales opportunities? Remember to be realistic about what you believe you will be able to achieve.

3. If you decide to engage in social media, which sites are best for you? – With the plethora of social media sites available, which ones are best for your business? Think about where your target audience would socialize online, and think about the amount of time and resources you would realistically be able to commit to maintaining and administering your site presence. Which ones are right for you? You might find that some are a better fit than others.

4. Quality Content – If you decide that social media is right for your business, carefully consider the amount and quality of information you want to share in the online sphere. Remember it will probably stay there for a long time, so you need to make sure it accurate and reliable information that is valuable to your target audience. It has to be relevant, otherwise people will not read it.

There are a host of reasons for engaging in the social media community including:

  • It’s cost-effective. Many accounts on various social media sites are free to set up.
  • Huge global audience.
  • Enables you to receive feedback in real-time and communicate with customers in real-time.
  • Provides your business with an additional marketing channel, to increase the awareness of your product, brand or organisation.

However social media does present some obstacles for businesses that need to be measured up:

Time and Resources – you must be willing to devote the time needed to come up with fresh new content. So it is important to consider whether you have the time and the resources to effectively manage your social media presence.

Handing over brand control – You hand over some of the control of your marketing efforts and effectively your brand to your target audience. They will have the ability to comment on posts or other content and you need to be prepared for both positive and negative comments. However even if you are not administering a company Facebook page, it’s important to keep in mind that there is nothing to stop customers from posting comments on their own blogs or other public forums about your products and services.

Measuring ROI – The introduction of web tracking and analytics tools also brought with it the ability to more easily measure the success of certain online marketing and advertising campaigns. However the nature of social media means that you might not always be able to see the results of your campaign right away. Your social media efforts might allow your consumers to ask more questions or further engage with your brand or product, but like most other relationship building activities, it takes time to build brand loyalty and repeat sales, it is likely that your social media activities will not have an immediate impact on sales that can be easily measured, there may be a lag.

Social media, how is it being used?

When it comes to consumer adoption, the growth of social networking sites has been exponential, however as more research is being done regarding site usage and consumer behaviour, we begin to gain greater insights into the types of tasks and transactions people engage in when visiting social media sites. Interestingly, the top three reasons identified in the Sensis Social Media Report, for using a social networking site were:

1. To catch up with friends and family.

2. To share photographs and videos.

3. To co-ordinate parties and other shared activities.

The results of the Sensis Social Media report, Sensis Pty Ltd (May 2011, p. 18) were based on the responses of 490 telephone respondents located in Australia who identified themselves as using social networking sites such as Facebook and Twitter. As we can see from these survey results, people are still predominately using many of these sites for the fundamental reason that they were created. I.e. To “socially” interact with their network of family, friends, or peer group. I am not suggesting that we ignore the fact that 15% of the respondents did indicate that they use social networking sites to find out about particular brands or businesses, or that there are some excellent case studies where successful social media campaigns have been launched using Facebook or Twitter, however I think it is important for us to keep things in perspective and understand that just like traditional types of marketing and advertising, social media marketing needs include the fundamental elements of any good campaign for it to be successful. We need to remember that many of the same rules apply online as they do offline.

Further research findings seem to suggest that it is still more typical for a consumer to look to a company website when making a purchasing decision, than on ‘fan pages’ and that a company website provides a more influential source of information. “It seems that only about a third of respondents admit that they are influenced in their purchasing decision by fan pages while almost half say they look to company websites instead.”

It seems social media is here to stay, and that the Web 2.0 revolution and the Internet will continue to evolve, shaping the way we communicate and do business. There are clear indicators that consumers are now much more empowered to use the online sphere to voice their concerns, preferences and needs. This makes it increasingly important for businesses to figure out ways to respond to these evolving customer relationships in order to capture these markets and opportunities.

Social Media Marketing, Truth and Lies

Social Media Marketing seems to be the latest buzz word for anyone looking to increase their online presence and sales, but is Social Media Marketing (SMM) all it is cracked up to be?

S.M.M companies are now springing up all over the place these days and they are telling anyone that will listen about how incredibly important social media like Facebook twitter and YouTube are to your business but, for the average small to medium sized business, does marketing to social networks really live up to all the hype? Is spending a small fortune on hiring a SMM company really worth it? And has anyone really done their research on this before they hired someone to set up there Facebook business page? Some SMM companies are setting up things like Facebook business pages (which are free) for $600 to $1,000 or more and telling their clients that they don’t need a website because Facebook is the biggest social network in the world and everybody has a Facebook account. Now while it may be true that Facebook is the largest social network in the world and yes, Facebook’s members are potential consumers, the real question is are they actually buying? Social media marketing companies are all too happy to point out the positives of social media like how many people use Facebook or how many tweets were sent out last year and how many people watch YouTube videos etc. but are you getting the full picture? I once sat next to a SMM “expert” at a business seminar who was spruiking to anyone who came within earshot about the amazing benefits of setting up a Facebook business page for small business (with him of course) and selling on Facebook. So, intrigued by the aforementioned “experts” advice I looked him up on Facebook only to find he had only 11 Facebook friends (not a good start). So being the research nut that I am, I decided to take a good look into SMM in regard to selling to see if it actually worked, who did it work for and if it did why did Social Media Marketing work for them? And should business rely so heavily on social networks for sales?

As a web developer I was constantly (and now increasingly) confronted with several social networking challenges when potential clients would say that having a website sounds good but they had a Facebook business page and had been told by various sources (the ever present yet anonymous “they”) that social networks were the thing to do, but after discussing their needs it became quite clear that those potential clients didn’t actually know why they needed social networks or SMM to generate online sales, They just wanted it. For small and medium sized business I always recommended building a quality website over any type of social network, why? Well it’s simple really because social media is Social Media, and social Networks are Social Networks they are not business media and business networks (that would be more like LinkedIn). I know that sounds simple but it’s true and the statistics back it up. The fact is that social media marketing fails to tell you that Facebook is a social network not a search engine and despite the number of Facebook users and Google users being around the same, people don’t use Facebook in the same way that they use a search engine like Google (which has around half the search engine market), Yahoo and Bing to search for business or products. They use it to keep in touch with family and friends or for news and entertainment. In a recent study done by the IBM Institute for Business Value around 55% of all social media users stated that they do not engage with brands over social media at all and only around 23% actually purposefully use social media to interact with brands. Now out of all the people who do use social media and who do interact with brands whether purposefully or not, the majority (66%) say they need to feel a company is communicating honestly before they will interact.

So how do you use social media marketing? And is it even worth doing?

Well first of all I would say that having a well optimized website is still going to bring you far more business that social media in most cases especially if you are a small to medium sized local business because far more people are going to type in “hairdresser Port Macquarie” into a search engine like Google, Yahoo and Bing than they ever will on any Social Media Site and if you don’t have a website you’re missing out on all of that potential business. However despite all the (not so good) statistics I still think it is still a good idea for business to use social media just not in the same way that a lot of SMM professionals are today, Why? Because it’s clearly not working in the way they claim it does. Basically SMM Companies and Business as a whole looked at social networks like Facebook as a fresh market ripe for the picking and when Facebook started getting users measured by the millions PayPal co-founder Peter Thiel invested US$500,000 for 7% of the company (in June 2004) and since them a few venture capital firms have made investments into Facebook and in October 2007, Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million. However since Facebook’s humble beginnings up until now (2012) both SMM Companies and Business have failed to truly capitalise on the huge number of Facebook users online. The truth is numbers does not equal buyers. Is it in a Social Media Marketing company’s best interest to talk social networks up? Absolutely. Is it in a Social Network like Facebook’s best interests for people to believe that companies can sell en masse by advertising and marketing with them? Of course it is. In early 2012, Facebook disclosed that its profits had jumped 65% to $1 billion in the previous year as its revenue which is mainly from advertising had jumped almost 90% to $3.71 billion so clearly the concept of SMM is working out for them but it is working out for you? Well… statistically no, but that does not necessarily mean that it never will.

I believe the major difference between social networks and search engines is intent. People who use Google are deliberately searching for something so if they do a search for hairdressers that’s what they are looking for at that particular time. With something like Facebook the primary intent is usually to connect with friends and family. In October 2008, Mark Zuckerberg himself said “I don’t think social networks can be monetized in the same way that search (Search Engines) did… In three years from now we have to figure out what the optimum model is. But that is not our primary focus today”. One of the biggest problems business face with social networks and SMM is perception. According to the IBM Institute for Business Value study there were “significant gaps between what businesses think consumers care about and what consumers say they want from their social media interactions with companies.” For example in today’s society people are not just going to hand you over there recommendations, Facebook likes, comments or details without getting something back for it, so the old adage “what’s in it for me?” comes into play. So the primary reason most people give for interacting with brands or business on social media is to receive discounts, yet the brands and business themselves think the main reason people interact with them on social media is to learn about new products. For brands and business receiving discounts only ranks 12th on their list of reasons why people interact with them. Most businesses believe social media will increase advocacy, but only 38 % of consumers agree.

Companies need to find more innovative ways to connect with social media if they want to see some sort of result from it. There were some good initiatives shown in the IBM study of companies that had gotten some sort of a handle on how to use social media to their advantage, keeping in mind that when asked what they do when they interact with businesses or brands via social media, consumers list “getting discounts or coupons” and “purchasing products and services” as the top two activities, respectively a U.S ice cream company called Cold Stone Creamery offered discounts on their products on their Facebook page. Alternatively there is a great program launched by Best Buys in the U.S called Twelpforce where employees can respond to customer’s questions via Twitter. With both Cold Stone Creamery and Twelpforce the benefit is clearly in the favour of the potential customer & the great trick to social media marketing is to sell without trying to sell (or looking like your selling) unfortunately most social media marketing is focused the wrong way.

Building a tangible buyer to consumer relationship via social media is not easy and probably the most benefit to business’ using social media to boost their websites Google rankings. But business’ need to understand that you can’t just setup a Facebook business page and hope for the best. SMM requires effort and potential customers need to see value in what you have to offer via your social media efforts give them something worth their social interaction and time and then you may get better results.

Now just as a footnote Facebook shares have dropped to under $20 per share, that’s half their original price… and the lawsuits are flying

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