My friend Renee Groskreutz of FunCitySocialMedia recently asked me why a small business needs a social media presence. The first question is whether a small business needs a social media presence, and the short answer is it depends! More specifically, it depends on your marketing objectives and target audience. Let’s briefly explore both.
The purpose of all marketing effort is to influence consumer behavior in ways that accomplish your goals. What exactly do you want to accomplish? Define your goals by listing the results you hope to accomplish. Desired results may include multiple objectives, including:
·Business production
·Brand awareness
·Reduce marketing costs
·Consumer education
·Lead generation
·Establish expertise
·Specific promotions
New business production is often difficult to achieve using any strategy. I have spoken with numerous professionals who do not get customers through social media. That mirrors my experience. To be fair, I have not found the traditional web a meaningful source new business either. Someone told me that having a website is now a prerequisite for credibility. I believe that to be true. I suspect it is often true of Facebook and other social media sites as well. On the other hand, I know insurance agents, tax specialists and social media vendors who generate significant new business through social media.
Again, business production is only one of many marketing goals. I recently spoke with an account executive at a large brokerage house. He was told to increase his personal Internet footprint. The assumption is that the odds of a prospect becoming his client are directly correlated to the number of hits when they search his name. He wanted to know how many hits “CFO America” generates. The answer is 7.7 million. While nine of the first 10 are me, many are not. However, if only 1% is, those hits far exceed several regional and national competitors. That exposure can only be explained by an extensive social media presence. It is also consistent with an April 2010 survey by Michael Stelzner of SocialMediaExaminer.com. He found 85% of participants reported social media generated exposure for their business.
Two other marketing goals supported by social media are search engine results and cost reduction. I spent $10,000 developing a traditional website. I was guaranteed a “top 3″ ranking for the phrase “fractional CFO.” While it accomplished its goal, I am still waiting for the phone to ring! Very few people search that phrase, largely because they do not know what it means.
Could I have used social media to boost search rankings and save money? The Stelzner survey found 54% of participants thought social media marketing improved their search rankings. It also found 48% experienced marketing expense reductions. I am now using blogging, Facebook, Twitter and other sites to educate the small business community on what a fractional CFO is and how it can benefit them. Since I cannot afford a national print media campaign, this is the only way I know of to accomplish my goal.
The second area to explore in evaluating the need for a social media presence is your target market. The question to ask yourself is where potential customers turn (Internet, newspaper, Yellow Pages, etc.) to learn about your products or services, and businesses that offer them. The answer is largely dependent on customer demographics like age, education, income level, gender and so on. Statistics can be summarized simply. If your marketing “sweet spot” lies in young, educated, or high-income consumers, YOU NEED SOCIAL MEDIA. Using Facebook’s 600 million users as a proxy, 59% are under age 44, 66% have at least some college education, and 67% have incomes over $50,000. Facebook, like many social media sites, also exhibits a bias in favor of women.
The decision whether your business needs a social media presence is one you must ultimately decide on your own. I hope you will base the decision on an objective analysis of your marketing goals and target audience. I now end by confessing the obvious. I love social media marketing! I am excited about the possibilities it offers small and medium-sized businesses to communicate their message across a wide spectrum of prospects. Having said that, it is difficult to conceive of goals and audience demographics that are not supported by social media marketing. It is impossible to conceive of a more cost-effective strategy.
About the author: Dale R. Schmeltzle, CPA is the founding partner of CFO America, consultants dedicated to helping business owners define, implement and monitor the strategic and tactical elements necessary to achieve long-term success. CFO America provides fractional or part-time CFO and executive management expertise not available on an in-house basis. For more information, please visit http://www.CFOAmerica.biz, or follow him on Facebook at http://www.facebook.com/CFOAmerica.