Small Businesses Use Social Media to Pursue Customers

February 18, 2010

Small businesses are steadily increasing their adoption of social media to attract and retain customers at a relatively low cost, according to the Small Business Success Index.

Small Biz Social Media Adoption Doubles
Social media adoption by small businesses doubled from 12% in 2008 to 24% in 2009. 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.


Small Biz Has Multiple Uses for Social Media
Leading ways small businesses are using social media include:

  • 75% 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 12 months.

Social Media Concerns Exist
Small businesses have a number of concerns about social media, including:

  • 50% say it takes more time than expected.
  • 17% say social media lets people criticize their company on the internet.
  • Only 6% say social media use has hurt the company more than helped it.

Other Findings

  • Company web sites are a 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 small business owners plan to make in the next two years.
  • Social media investments rank third in small business investments to be made in the next two years.

Facebook, Twitter Grow More than 100%
Social media usage among consumers exploded during 2009, according to the comScore Digital Year in Review. Growth was particularly strong among users of the Facebook and Twitter social networks. Facebook surged to the number one position among social networks for the first time in May 2009 and continued its strong growth trajectory throughout the year, finishing with 112 million visitors in December 2009, up 105% from about 55 million visitors during 2008. Twitter finished the year with nearly 20 million visitors to its website, up 900% from just 2 million visitors in 2008.

Formal SocNet Policies Offer Benefits
Small businesses concerned about negative implications of social networking should enact formal policies, according to research from employment services provider Manpower Inc. A recent study found that 75% of employers worldwide say their organizations do not have a formal policy regarding the use of social networking sites at work.

Despite widespread lack of formal policies, most employers both globally and in the Americas have not been negatively affected as a result of employees’ use of social networking sites. Globally, 89% of employers say they have not been negatively affected, and 4% say they have been negatively affected. In the Americas, 89% of employers say they have not been negatively affected, and 8% say they have been negatively affected.

Manpower recommends that businesses enact formal policies regarding social networking in order to harness social networks’ effectiveness in areas such as providing customer service and building direct channels to customers.

About the Survey:The Small Business Success Index is sponsored by Network Solutions and the Center for Excellence in Service at the University of Maryland Smith School of Business.

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