For small- and medium-sized businesses, social media offers a lot of potential as it is technically a free platform for advertising, marketing, and building a brand. So then, why is it that social media marketing efforts are causing SMEs to hemorrhage money?
Key Social Media Personnel
One obvious reason is that companies have to pay people to manage their social media channels for them. This is done by hiring specialists for their in-house social media teams, or by going to a third-party firm and outsourcing this function. SMEs that have key personnel with social media expertise get to save a bit when it comes to this aspect, but many companies don't have such a luxury.
Some companies simply lump social media functions with the functions of their marketing people. While this might not be an efficient way to approach social media marketing, it's a common practice because of the limited funds of SMEs and also with the limited availability of actual social media experts. When you skimp on social media and the people you have are not trained properly or do not have the skill set to manage this particular channel, then the campaign is likely to fail.
Social Media Tools and Management Software
Take a look at this Vocus and Duct Tape Marketing study on SME social media usage. It points out that the main barrier to SMB use of social media is the idea that this endeavor is "free." There are free tools like Hootsuite (with a more dynamic and robust paid version), and those can be great to start with. However, the study found that SMEs spent around $845 monthly on 3 tools (median figure) for social media management. That's one of the most glaring evidences you'll see that social media is anything but free, at least as far as businesses are concerned.
Social Media Usage
Using social media as a marketing tool isn't just geared toward fostering more awareness for a brand or an event; it's also about driving traffic to company sites or e-commerce sites. When you put it in its simplest form, social media use is all about sharing information, whether it's about a product, a brand, or a promotion. The majority of SMEs believe this idea to be true, which is why they invest in social media.
Social media efforts should go beyond Facebook updates and Twitter posts. Take this RingCentral online contest, for example. It's not just a matter of promising some prizes (which of course likely involves some expenses on the part of the company); the contest engages readers and tries to get them involved in the brand by featuring elements related to the business itself. That's why it's important for marketers to be creative in social media as well, as this will help generate more buzz and keep the social media channel lively.
When efficiently done, social media helps connect the source (the company) and the target (the readers or prospective buyers). For a decent percentage (29 percent of SMEs, says Vocus), social media efforts have actually resulted in significant sales increases as well as provided insights into the needs and requirements of their clients.
Customers expect companies to have online identities, and the best way to achieve this is through a carefully planned and executed social media campaign. Of course, what's important for SMEs is to realize early that, while social media is free, getting things done on its various platforms will cost some money in order to bring a measure of success. Going the social media route is still fairly cheap when you compare it to conventional advertising or other types of marketing, and it can be really effective and beneficial for the brand when done properly.