Are 87 Percent of Small Businesses Using Social Media Wrong?

Vocus teamed up with Duct Tape Marketing to survey 400 decision makers at small- and medium-sized businesses to learn about their struggles and successes using social media.

Specifically, the survey sought to discover the social sites most used by small businesses (SMBs), how they were managing their efforts, challenges they were facing, and the metrics they were using to judge success. While the results were strong in affirming the power of social media for SMBs, they also made me wonder whether or not many business owners were looking at social media correctly.

First, the findings.

As Vocus notes in its post about the survey, there was a lot of good news revealed here.

  • 87 percent of SMBs believe that social media has helped or somewhat helped their organization.
  • 77 percent say social media accounts for 25 percent or more of their total marketing efforts.
  • 73 percent of SMBs are now using Facebook in their marketing.

Time and time again in the survey we’re shown that SMBs are using social media, they’re engaging with their customers, and that most feel social media has helped their organizations. Interestingly, even those that said social media was not helpful also admitted they had invested little effort.

But how are SMBs using social media sites? To me, the findings in this section were particularly interesting.

According to the results:

  • 91 percent share news about their organization
  • 90 percent share news about products
  • 81 percent promote content they have posted
  • 70 increase or optimize our presence
  • 69 percent advertise sales or specials

Essentially, SMBs continue to use social media as another push method for selling to their customers. It’s a broadcast medium the same way direct mailings and email newsletters have been in years prior. Just 46 percent of SMBs said they use social media to handle customer service issues. To me, that may represent a missed opportunity if business owners aren’t using social channels to reach out to customers in a more pro-active way. It also represents a chance for SMBs to see even more of a benefit should they start using social media as a vehicle for customer service, and not just promotional efforts.

Another area of the survey I found especially interesting looked at the metrics SMBs are using to gauge their efforts. Basically, how are SMBs judging “success” and what does “success” look like to them.

Seventy six percent of SMBs see success as increased foot traffic, 70 percent see it as customers hearing about them via social media, 67 percent view success in terms of likes and follows.

Again, while these metrics make for good baseline numbers, they’re not what is most important when it comes to judging whether or not your social media activities are successful. It’s concerning that it’s not until the very bottom of that graph that we see 42 percent of SMBs using social media are tracking conversions. Some quick math tells me that 58 percent of SMBs are not.

As a SMB, you always want to be tying your actions down to conversion metrics. Likes and follows are great, but if that’s not resulting in more people converting from your website, you’re missing the larger goal.

While it’s certainly encouraging that 87 percent of small business owners believe that social media has helped their business in some way, I can’t help but wonder if that number would be higher if SMBs were using social media for considerably more than just another push medium or if they were focusing their efforts on metrics related to conversions rather than generic likes and follows.

Sure, we all use social media to promote our brands and daily activities, but the opportunity in social media to right perceived wrongs, to better customer service, and to learn more about the people that we’re serving should be a top priority.

What do you think? Am I being too harsh? Or is a maturation process for SMBs and social media on its way?

More in: 24 Comments ▼

Lisa Barone Lisa Barone is Vice President of Strategy at Overit, an Albany Web design and development firm where she serves on the senior staff overseeing the company’s marketing consulting, social media, and content divisions.

24 Reactions
  1. Thank you Lisa, you make a very important point. My assessment is the reason SMBs avoid social media for customer service is fear of fall out: the transparency involved in revealing issues with a product or service. However, I subscribe to Scott Stratten’s philosophy that tackling a problem, and solving it is a chance to turn customers into evangelists. Good customer service is good marketing.

  2. Lisa – another excellent article and great lessons for small business social marketing. Great stuff – you’re not too harsh but spot on.

  3. Ouch. 58% aren’t tracking conversions? It’s as easy as building a tracking URL and then the shortened link will pass through all the variables.

  4. I often use this Swedish word for social media: “konversationsmarknadsföring” (“conversational marketing”): Is it time to have a conversation with your existing and potential customers?

  5. Likes and follows can be compared to search engine rankings…they are not the end goal. Conversion is everything. Agreed…many more SMB’s should be tracking conversion on social media than currently do.

  6. I think the beginning of your blog really makes the point for me:

    “87 percent of SMBs believe that social media has helped or somewhat helped their organization.”

    They “believe” it has helped. They just don’t know! But they keep doing it without knowing if it’s helping, where, why and how to improve results. Probably a lot of wasted time and effort that could be better used on measurable tactics.

    • Actually Shawn, if you look at the data, SMBs are amazingly focused on tangible measurement metrics like traffic and sales. The idea that SMBs are not measuring their efforts is not supported by the data.

      • Frank, in my view traffic doesn’t count as sales. The data shows only 42% are tracking conversions. So perhaps we can assume 58% have no idea if their money and efforts are leading to sales. That (sales)is what really matters unless your purpose is to distribute information.

        Social media is the new yellow pages for most businesses. The money is wasted unless you know why you’re there, who uses it and what you expect to happen as a result. I consult with many business owners who think social media and yellow pages are great sources of leads until you ask them about conversions.

        Just my $.02

  7. I’d agree completely that sales is the best metric. But there’s a path to sales too, and trust takes time to build. Traffic is not sales, but it is a good indication of momentum, which is especially important for B2B companies with longer and more complicated sales cycles. Also, conversions are harder to track for SMBs with brick and mortar store fronts; but I wouldn’t toss out traffic for that segment either. Still and important marketing metric. Appreciate your view though — and I bet this idea — “Social media is the new yellow pages for most businesses” would make an outstanding, and perhaps controversial blog post. I’d love to read it!

  8. Social Media has definitely become a requirement if you hope to drive traffic to your small business website.

  9. Lisa, I agree that most businesses are not using social networks as well as they could but I think the idea of a two-way engagement is oversold.

    While I think it is true for businesses of all sizes, let me use Pepsi as an example. There may be a billion Pepsi drinkers around the globe. They have more than 9 million “likes” on their Facebook page. They certainly do care about getting some feedback but they can do that through marketing studies, focus groups, etc… They don’t need to have conversations with each of their billion customers or even their 9 million Facebook fans. It would take a tremendous amount of resources to do that.

    The same is true of a small store that has 1000 customers as Facebook fans. Trying to engage even a significant percentage of those customers in a true dialog could be a full time job for several people. If it paid off in increased sales that more than covered the additional salaries, then it would make sense. Of the stores that I am personally familiar with, I would be shocked if that effort was a good economic decision.

    Should small businesses be more open to experiment with social media? Definitely. But it is part of marketing and like all marketing, they should attempt to measure and evaluate the results. If it only pays dividends when used for push marketing, then they need to use it for that.

    • Well put. CMO’s wouldn’t dream of engaging in conversation with every customer in-store, let alone developing a relationship with them, so why would they try to do the equivalent online where there are many more potential pitfalls and the effort required is disproportionate to the return? It’s important to recognize social media for what it is — a social channel, not a sales channel — and use it as appropriate in the contact, relationship, sale, nurture matrix, which all have their own KPIs.

  10. Absolutely appropriate, I’m guilty of the same loss of focus on the final word: conversions.

  11. Michael Neuendorff

    I don’t think the 87% are wrong. I do think they are vastly under-utilizing the medium. You can recruit, support, sell, converse, promote, research and the list goes on. This is the learning curve that SMBs are facing.

  12. It’s not as easy to track the conversions offline. You can do a sample effort to track those conversions offline, but the ROI is deeply diminished for many SBM’s if they were to constantly track offline transactions that were tied to their social media presence. You can have a gauge through coupons, but that skews the data slightly and asking every single customer why they came to your store that day is simply inefficient.
    Online sales should be at 100% obviously, but for small retailers, restaurants and the like it becomes increasingly difficult to track those offline conversions that were generated via social media.

  13. Hi Lisa,

    I think this is a great post and I completely agree with you. I own a internet marketing blog / and consulting business. I use social media to broadcast my blog post updates to my following but I also use it to engage and interact with my following as well. This activity has dramatically increased both my traffic to my site and my visitor to email subscriber conversions.

    I believe that if more small businesses focus on using social media as a true medium to connect with and engage their customers, they would see a much higher increase in profits and customer loyalty.

    Thanks for sharing this info and your insights with the community. I appreciate it!


  14. It’s a great tool as long as i is used to create trust, a hard sell approach simply puts off people on social media and is counterproductive. engaging with people takes time, effort and a giving mentality.

  15. With social media, the contribution made by different types of user interactions to search rankings and in-network visibility varies by platform, so it pays to segment strategic Web activity –traditional and social — as you would your customer base. Some interactions are quickly indexed, others aren’t; some indicate instant popularity but have a short shelf life, others are less immediate but are permanent. Platform and user engagement
    characteristics like this should guide a brand as to where in the sales and marketing cycle to focus social media effort more than anything else.

    It also pays to look beyond the usual heavyweight social networks. It’s common for a brand to be discussed in venues where the brand owner doesn’t have a profile. This is especially true of niche venues, which show high involvement by users and which are often a lot more productive in terms of mining for customers than horizontal, catch-all, low involvement venues like Facebook and Twitter.

  16. Kind of shocked that 14% of SMB’s surveyed that are using social media marketing aren’t using Facebook, you would think that would be the first place you would use. I run the Facebook page for the company I work for and I love the results. As the page grows more and more fans over time it really makes a great marketing reach to your customers and more possible customers. It’s been a steady increase. Results are dull at first but well worth the effort in the long run.