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Tuesday, June 22, 2010

Why social media matters to small businesses

Lately I've bee working with a number of various organizations and individuals, most of whom are just starting to jump onto the social media bandwagon.  Many have simply been too busy to put much time into their social media efforts.  Others have taken a more patient wait-and-see approach, wondering if this new phenomenon is just a fad or a legitimate business tool.  Others still have simply refused to join in, steadfastly refusing to be sucked in by the latest online gimmick, as they see it.

I understand all of these opinions.  Small business owners and non-profit staffers are busy.  They often don't have time to spend researching how to use things like social media effectively.  Some were bruned by the internet business bubble of the late 90's/early 2000's. 


But lately one of the questions I've been dealing with more and more is this: "Is social media really worth it for my business?"  What is frustrating is that this is coming from successful business people, folks who know what they're doing and yet they still struggle to see the benefits of social media.  Imagine my surprise when I read recently on Facebook that "Twitter is dead" and not worth using.  The person to whom that post was targeted later asked me if Twitter was really useful.  This is the kind of thing to guard against.  Just because one person or a few folks don't understand how to use social media or have had a bad experience with it, doesn't mean that it's not useful or, indeed, a powerful way to connect with potential customers.

Again, I understand their caution, even if I don't agree with it.  As I sat down to craft a response to this question, I tried to look at the biggest obstacles and concerns regarding small business and social media.  There are a few big reasons why social media still seems as undiscovered territory to most small businesses:
1.  Lack of deliverables:  When a company invests in a product, they expect to get something for their money and time.  Social media doesn't come in a box.  It's not something you can hold, touch, feel or see.  The major deliverables come in the form of effort.  In other words, the product you pay for usually comes in the form of somebody making posts, doing research, linking stories, etc.  Even with public relations, you have a deliverable product in the form of interviews, newspaper stories, TV coverage, face to face meetings with members of a target audience.  Social media remains ethereal and elusive to most businesses, more of a concept than an actual item.


2.  Fuzzy Results:  This is perhaps the most important factor when it comes to making businesses nervous about social media.  In business-speak, it's hard to pin down the Return On Investment (ROI) for social media.  It's easy to determine a ROI for public relations or marketing.  If you invest in 1,000 direct mail pamphlets, you can guess that one-percent of those will result in sales; at least that's the traditional thinking.  You can identify the value of a newspaper interview or a tv segment.  Right now, determining the value, the actual ROI of a social media campaign is difficult for most small businesses.  However that's changing.


3.  The New-ness:  Let's face it, while it might seem like social media has been around forever, it's really only been a viable business tool for less than ten years.  Compare this to longstanding and proven methods such as direct-mail marketing, advertising and PR, and social media looks like a newcomer trying to barge into a party where it wasn't invited.  For marketers, social media is an annoying sibling that is best to be ignored.  For PR folks, social media is that confusing cousin that intrigues you, but you just don't know how to talk to.  For businesses and non-profits, social media is a baby that could grow up into a Senator or be the kid who you have to bail out of jail every other weekend.  It's just too unknown and therefore, scary.
And Now, Reality:

The truth about social media is this:  Small businesses and non-profits have been engaging in social media since the very instant they began to exist.  Talking to potential customers, telling individuals in your neighborhood about your organization, targeting specific groups that you feel would benefit from your product or service, attempting to generate positive word-of-mouth.  This is all social media.  Actually, it's called social networking, social media is actually the tools you use to engage in social networking.

For instance, Facebook, Twitter, Blogs, LinkedIn, Foursquare, Myspace, Catbook, Dogbook, Digg, Reddit, Google reader, Google Buzz, etc., are all social media platforms.  They are tools available to you to reach out to the public.  What you DO with those tools is social networking.  Every time you post, make a blot entry, connect with a friend, follow a page or Tweet a thought, you're engaging in networking.

If you think about it more along the lines of basic networking, with social media being high-tech tools to make your networking more effective and far-reaching, perhpas it will seem less mysterious.

Nothing is Guaranteed:

Every time you spend money as an organization, there is risk.  It doesn't matter if you're spending it on food for your deli, fliers for your promotions or PR for an upcoming event.  There's no gaurantee that your food will be fresh, your fliers will be read or your PR will be effective.

Social media is no different.  One of the major misconceptions I constantly run into is the idea that creating a Facebook page and Twitter account and then posting a few times will automatically result in an immediate increase in foot-traffic to your door.  It doesn't work this way.  In order for your social media efforts to work, you have to have an overall communications strategy in place.  This includes having a solid and consistent message, knowing who you want to get your message to and understanding how all the different moving parts work together to achieve your goal.  Social media is simply one part of a larger overall communications plan.

This leads us to the ROI portion of the program.  

Before you embark on any kind of social media/networking campaign, you have to ask yourself what your goals are.  Just like with any marketing or PR effort, you have to know what you're trying to achieve.  It doesn't make sense to start off on a journey if you don't know where you're going.  That's called wandering and it doesn't make much business sense.

Do you want to drive more traffic to your website?  Do you want to drive more customers to your business?  Do you want to simply raise awareness of your organization?  These are important questions to ask and answer.  Erase the thought that social media/networking will instantly result in more money in your pocket.  As I've said many times and will continue to say, it takes time; three months at a minimum before you start to see any real impact from your efforts.  Patience is truly a virtue when it comes to social media.

More Than Just Marketing:

Most businesses and non-profits simply see social media/networking as a way to boost sales or donations, but nothing could be further from the truth.  Remember, you're not just talking to yourself out there, you're not a tree falling in the woods with no one to hear you fall.  You make a noise, you have an impact every time you post something.  There are people out there reading what you write, even if they don't respond. 

And that might be the most frustrating part for businesses and non-profits.  They want immediate response, and when they don't get it, they assume the effort was a waste of time.  Again, not true.  When I worked in radio, I worked with a host that insisted that she had to have full lines in order for her to have a good show.  I countered that even though people weren't calling in, it didn't mean people weren't listening.  Most people who listen to talk radio never ever call in.  Only a small percentage of folks ever do.  But as we all know there is a HUGE talk radio listening audience out there.  Just because someone doesn't respond to your posts doesn't mean people aren't reading or paying attention.

But social media isn't just about posting and responding, it's about listening, watching, being interactive.  Social media gives you an opportunity to read what others are saying about your and your organization.  It allows you to respond to potentially troubling issues.  It allows you to ask questions of your current and potential customers and respond to their inquiries.  Social media is about conversations, only it's online and it's public.

When you go to networking events, do you try to put a ROI on your activities?  Do you assign a dollar value to every conversation you have at a party?  Of course you don't.  You try to make connections that you hope will result in future sales or at the very least a relationship that will help your organization in some way.  You don't know how that conversation will end up helping you, but you hope you do and you take the time and effort to make that connection.

Social media/networking is no different.  That's why it's so hard to put a ROI value on it.  You can look at the numbers of visitors to your website, you can see who is responding, you can even sift through analytics to see if you're efforts are working.  But in the end, it comes down to simply making connections.  You could have ten-thousand people viewing your website, but still not have it result in sales or value.  On the other hand you could have 100 viewers and see your sales skyrocket. 

In other words, don't think of social media ROI, simply look at it as another way to connect, just like you would at a party or other kind of networking event. 

Why It Matters:

You own a small business, you run a non-profit and your budget is limited, as is your time.  You understand that you have to network, that you have to raise your profile, that you have to brand yourself and your organization with a recognizable identity. 

But you don't have the money to pay for an advertising campaign.  You don't have the cash to hire a big PR firm and marketing is risky and expensive.  You could go to several networking events, have a glass of wine, rub elbows and spend a few hours mingling. But do you really have time to do that one, two, three times a week?  Probably not.

This is where social media/networking comes in.  It allows you to reach out to literally millions of people at once without spending a dime.  It gives you a chance to spread your message, talk about your product or service, raise your profile awareness and brand your organizational identity all for free.  Your biggest investment is time.

In this case, you can do your networking from your computer, allowing you to remain at your office and connected to the daily activities of your organization.  You can make connections without having to buy a glass of wine and spend time talking to people you might not want to talk to.

Social media/networking allows you to target the specific individuals or groups that you want to talk to.  You can establish connections, build relationships online before you ever meet face to face.  Plus, social media/networking allows you to use other people's networks to spread your message.  Sharing and retweeting and forwarding is just another word-of-mouth campaign that can be highly successful.

One Final Thing:

Unlike traditional marketing, PR or advertising, social media/networking allows you to respond to your customers or potential customers quickly and effectively.  Here's an example, which is also posted on the Growing Communications website.

LOFT, a subsidiary of Ann Taylor Fashions recently posted pictures of their new silk cargo pants. As you would expect, the pants were shown on stick-thin models.  Apparently, this didn't go over so well with many of their customers who posted and tweeted their displeasure with the use of the thin models to show the pants.  Many encouraged LOFT to show the pants on women of "regular size" in an effort to see what the pants looked like on an average woman.

The outcry was so large, that the very next day, LOFT reposted pictures of the new pants, only this time they were shown being worn by office staffers of all shapes and sizes.  The response was enormous.  Thousands of emails, Tweets and Facebook posts commented on the pants and the use of regular women to model them.  LOFT hasn't mentioned if the new pics resulted in increased sales, but here's what the new pics DID end up doing: they helped LOFT connect with their customers, attract new potential customers, build brand loyalty and raise their profile.  Before I read this story, I'd never heard of LOFT, ever.

This is the kind of interaction that is possible only through social media/networking.  You can hear what your customers are saying and react to meet their needs.  Not in a week, or a month, but immediately.

Three Reasons Why:

So you've seen how social media can make a difference, you can see how it can save you time and money and still have a positive impact on your bottom line.  Hopefully, you can also see the futility of trying to attach a ROI to your social media efforts.  If all of that hasn't convinced you, here are three basic reasons why small businesses/non-profits and social media is a match made in heaven. (as seen in Mashable)
Information:
There is a wealth of information out there about your customers, potential customers and even about you.  Ignoring this information is bad business practice.  Knowing what people are saying about you matters, from the person who loves your service, to the one who spends their time blasting you, knowledge is power and the more you know, the better prepared you are and the better you can react to any problems that may arise. 


Simplicity is Effective:
Finding the right way to use social media can be daunting, especially when there are so many examples of big brands pushing the limits of creativity and possibility when it comes to their Facebook, Twitter and Foursquare initiatives. Often times the big guys forget that it’s the simplest of gestures that can have the greatest impact. But simple works.
On the simple side things, just take the time to acknowledge customers that mention you. Did someone tweet about dining at your restaurant? Did they checkin at your venue? Did they share a story about your small business on Facebook? These actions that take place in the public domain are all opportunities to connect with a current or potential customer and make them feel special.
Responding is easy — a simple “thanks for stopping by,” or “how can we make your next visit better?” tweet can go a long way and even make someone’s day. Yet, it’s something most companies take for granted. People like to be recognized, but often times they’re never presented with an opportunity to associate restaurants, stores and other venues with the people behind him. You can create that opportunity by recognizing their patronage, which in turn should help ensure that they return for a future visit.
Another simple thing you can do is post signage — on your website and in your store — to indicate that you’re social media-friendly. The Express retail chain has their chief marketing officer’s Twitter handle printed on all their bags, which works to reinforce that the company cares about person-to-person connections. Take that idea and apply it to your own business. For that extra touch, make stickers, punch cards or window decals that showcase your small business’s online personality and reinforce that you’re interested in conversations with your customers.

Your Size Helps: 
Starbucks is the perfect example of an early adopter brand that gets social media right, and yet their size prohibits them from engaging with every customer that walks in the door.As a small business, your size is your friend in social media channels. Use your small size as an advantage and respond to each and every person that mentions you. Since you’re working with a smaller customer base, you can also build customer Twitter Lists to separate different categories of customers into groups, which should help you offer more personalized customer service — something the big businesses don’t have the time or resources to support.
Here’s an easy example: Who are your most frequent customers? Make a Twitter List called “Regulars,” and add your regulars on Twitter to it.
In doing so, you’re associating patronage with prestige. Your efforts could even inspire semi-regular customers to frequent your business more often just so they too can get added to the list. This tactic might also serve as a catalyst for one regular to connect with another, though you could also facilitate customer-to-customer connections with introductory tweets. So if a customer tweets for a recommendation, you could respond with something simple as, “@customer1 good question, I like the cheesecake but @customer2 really loves the custard.”
These types of personal exchanges highlight the advantages afforded to small businesses using social media.

1 comment:

  1. Love the LOFT example. Another way to think about PR and social media is long-term ramifications. Just like a small business who does a lax job in accounting or training, sooner or later cutting corners will catch up with them. Likewise, a company who lets PR pass them by, in the long run, will eventually see that they should have been part of the media/social media dialog all along.

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