Small and medium sized business, a segment responsible for up to 50% of our GDP, is well-poised to shake things up in the social space. Duct Tape Marketing partnered with Vocus, a provider of cloud-based marketing and PR software, to conduct a survey of 400 marketing SMB decision-makers. The results provide interesting data on the amount of money invested in social endeavors, how SMBs use social, and their success metrics.
Image 1: According to HBR, 88% of companies don't believe they currently use social media effectively
Resources invested in social media
Contrary to the popular belief that social media is a "free" form of marketing, SMBs spend an average of $845/month and 25% or more of their marketing efforts on social media. This indicates the continuing growth of social as companies develop more comprehensive strategies and merge paid, owned, and earned media into converged media.
How are SMBs using social media?
Out of the resources dedicated to social, push marketing currently holds the greatest share of brands' effort, with 90% of brands sharing company and product news and 80% promoting posted content. Push tactics do not encompass the full potential of social, which can be used successfully for recruiting, customer support, and two-way value creation.
One enormous opportunity
Four in ten brands don't engage in one-on-one discussions with customers. If a customer tries to engage and is ignored, that brand has lost an opportunity to create value, not to mention the possibility of creating customer advocacy. More importantly, according to Carol Rozwell of Gartner, failure to respond to customers on social networks can lead to up to a 15% increase in the churn rate of existing customers.
Image 2: SMBs push more often than pull, and miss out on potential value from social
How do SMBs measure social media success?
SMB marketers continue to measure success as increased traffic to company websites, referral traffic, and number of 'Likes' and followers. These metrics have a heavy slant towards measuring social as a sales or referral tool, which ignores its many other benefits. In addition, sales-focused metrics fail to measure actual conversion rates and product sales coming from social, which are more important than total website traffic and other measurements not directly relevant to revenue.
Image 3: Most SMBs rely on sales-focused metrics over engagement metrics
One major failure with current SMB success metrics is the lack of tracking the number of conversations happening in social - 58% of companies are not tracking the number of conversations, which means they aren't closely monitoring engagement with their brand. The potential of social extends far beyond direct sales!
The cost of not planning a social strategy
Social can no longer be ignored, and companies need to create a full-fledged social strategy. An SMB Group study discovered that companies using social as part of a "planned corporate approach" were up to two times more likely to experience revenue growth than companies lacking a comprehensive plan.
You can't afford to ignore social, and you can't afford to dive in without a plan. For more information on the state of social marketing, download our latest white paper here,which surveyed over 450 marketers from companies of all sizes.