Social Media’s Impact On Small Businesses
If you're currently running a business, odds are pretty good that your company has a Facebook, Twitter, or some kind of other social media presence.
However while setting up a Facebook page or Twitter handle doesn't take much know-how, many business owners are wondering how can they turn social media in tangible profits.
The week of May 21st is Small Businesses Week. Gail Goodman, author and CEO of the marketing company Constant Contact says what makes social media so important is its ability to reach new customers.
"When you engage your current customers online, you create socially visible interaction that gets through your customers and gets to their friends, family, and colleagues."
Goodman notes that word of mouth is important in attracting new businesses, and social media allows for the best scenario in which something can go "viral" and reach the most people possible. When comparing the three most common forms of marketing, traditional mail, email, and social media, Goodman says Social Media allows for the easiest way for people to share the information.
The old standby of direct mail was proved to be the least viral according to the CEO.
"I have never passed on a piece of direct mail to anybody." Says Goodman.
Email, however, allows some potential for word of mouth, but Goodman says there would have to be a particularly good offer for a person to warrant hitting the "forward" button. What makes social marketing so effective is its simplicity since all it takes is a click of a "like", "retweet", or "share" button and all of you followers and friends see that.
"So just like the same word of mouth that used to happen on the kitchen island or back fence, is now happening on social networks."
And how powerful is word of mouth for a business? Goodman says a recent Nielson report shows that 92% percent of consumers trust word of mouth recommendations from friends and family and even from strangers. Conversely only 14% still trust in traditional advertising.
A preponderance of 'review" sites like Yelp, Angies List, and Google Reviews also all play in how your business is perceived and digitally recommended. Goodman notes that customers who feel engaged by the company will be more likely to write the review in your favor.
However directly reaching out to customers via social networks is more effective because by engaging with customers through social media, Goodman says you are also simultaneously reaching out to their peers "who are very likely to be in the same location, neighborhood, and the same tastes. Same socioeconomic background and same age group."
The mantra of engaging with clients via social networking isn't just beneficial for any one kind of industry. Regardless of whether you own a retail company, a non profit organization, or anything else, Goodman says the only thing that changes is the way you engage with people.
"A business to business enterprise would engage much more with advice. They would share industry trends and case studies. Whereas a consumer business would be much more about what's going on right now, what's the latest product, what's the latest menu offers. And a non profit would be all about the mission."
While getting the all important "like" is the goal, there is some concern as to whether the "like" has lost it's value? Goodman says that while some people tend to be looser with their decision to follow companies, the general populous hasn't entered "like fatigue" just yet.
"I'm not sure we're going to get there because I think we're all going to get pickier about what we're willing to "like", and "like" will hold its weight."
Facebook's recent departure onto public trading has spurned some critics to say the social media uber giant is just a flash (similar to one time fellow giant MySpace), however Goodman says though there will be an ebb and flow, there will always be some kind of social media in the future.
"It'll keep moving and as small businesses one of the big challenges will be staying up to date."
Goodman's book "Engagement Marketing: How Small Businesses Win in the Socially Connected World"