US SMBs look for new customers on social media

Small businesses are delving into social media marketing with fervor. Small and medium-sized businesses (SMBs) surveyed in April 2011 by Pitney Bowes rated social media as highly cost-effective and easy to use, rivaling email in its benefits, according to a report by eMarketer.

More than seven in 10 SMBs in the US surveyed by social marketing platform Roost in May said social media was effective as a marketing channel, and nearly 90 per cent thought it was at least somewhat important to their marketing efforts, the website added.

Also read: What is there in Google+ for SMBs

These benefits have led to solid usage rates among small businesses. Half of SMBs surveyed by business process outsourcing firm Affinity Express in June 2011 had used social media marketing and 83 per cent of the small businesses, including many sole proprietorships, polled in May 2011 by small-business solutions provider Deluxe Corporation planned to do so this year.

Nearly two-thirds of local business owners polled in June by niche social network MerchantCircle said they used Facebook alone to promote their business.

In the same Deluxe Corp. study, the No. 1 area of marketing small businesses said they needed the most help with was acquiring new customers. This problem was cited nearly four times as often as the second-place choice, “getting found on the internet.”

Website solution provider Webs Inc. also found attracting new customers was the primary reason for SMBs to use social media, at 40.8 per cent. And research suggests social media marketing can be successful in helping them with this challenge.

Also read: Smartphone an alternative tool for SMBs

“Creating a profile on a social network” was named the most effective marketing or advertising tactic used according to the nearly 5,000 local business owners polled by MerchantCircle in June 2011. Additionally, 34 per cent of respondents in the Deluxe Corp. study who had used social media said it helped them reach new potential customers and 15 per cent said it increased sales.

One emerging area of social media that shows promise for small local businesses are the daily deals offered by sites such as Groupon. In the MerchantCircle study, only 9.4 per cent of the businesses polled had offered a daily deal with a group buying site, but 77 per cent of those businesses said they would do so again. Of those that said they would offer a deal again, 58 per cent cited it as being effective for customer acquisition, and 24.3 per cent even turned a profit.

It appears, then, that small businesses are diving into social media with good reason, providing them with much needed exposure. And the recent emergence of daily deal sites is also fueling that fire.

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