How Well Does Social Media Support SMB Customer Acquisition? - eMarketer
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How Well Does Social Media Support SMB Customer Acquisition?

Small and medium-sized businesses look for new customers on social media

July 12, 2011

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

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% 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.

US Small Businesses that Plan to Use Social Media Channels for Their Business, May 2011 (% of respondents)

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%. And research suggests social media marketing can be successful in helping them with this challenge.

“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% of respondents in the Deluxe Corp. study who had used social media said it helped them reach new potential customers and 15% said it increased sales.

Most Effective Ad/Marketing Channels Used by US Small Businesses, Feb & June 2011 (% of respondents)

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% of the businesses polled had offered a daily deal with a group buying site, but 77% of those businesses said they would do so again. Of those that said they would offer a deal again, 58% cited it as being effective for customer acquisition, and 24.3% even turned a profit.

Reasons that US Small Businesses Liked Offering a Daily Deal, June 2011 (% of respondents)

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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Check out today’s other article, “How Media Buyers Should Approach Display Campaigns.”


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