Small Business Labs

Small Business Blogging Declines

U Mass Dartmouth marketing professor Nora Barnes has caused quite a stir in social media circles with her latest study on the usage of social media by Inc. 500 companies.  The research shows the number of Inc. 500 companies blogging declined in 2011.  

It actually declined quite a bit.  In 2010 half of the Inc. 500 blogged.  But in 2011 only 37% did.  

While blogging is down, social media usage is up.  Facebook is used by by 74% of Inc. 500 members, LinkedIn by 73% and Twitter by 64%.  Overall, 91% of the Inc. 500 report using some form of social media.

So why are fewer small businesses blogging?  Based on our research the reasons are:

1. Blogging is hard and takes a lot of time
2. Most small businesses fail to see a solid ROI from blogging
3. Small businesses are seeing a higher return from other forms of social media.  

Based on our research, the main reasons small businesses fail to see a solid ROI is their customers/prospects: (1) don't read blogs in general, (2) aren't interested in reading/engaging with the specific small businesses blog, and/or (3) don't read the blog because they don't have time and/or are more engaged with other content.  

Not only is the R low for most small business bloggers, the I is high.  Blogging takes time, and time is a precious commodity for small businesses.  So for most small businesses, other social media makes more sense.  

Before you send me hate mail saying blogging is good for search results, let me add that relatively few small businesses we've studied have seen a pick-up in search results - and business coming from search - based on their blogging.  

But small businesses are seeing solid returns from other forms of social media, which is why usage of Facebook, LinkedIn and Twitter are up.

We're not negative on blogging.  For many small businesses blogging is an excellent marketing tool.  But like any tool or marketing method, it's not for every job or every company.

Do Online Social Networks Make Us Better Social Beings?

The Smithsonian's How Technology Makes Us Better Social Beings covers research showing that online social networks like Facebook may make us more social.  Key quote:

“There has been a great deal of speculation about the impact of social networking site use on people’s social lives, and much of it has centered on the possibility that these sites are hurting users’ relationships and pushing them away from participating in the world,” ..... “We’ve found the exact opposite—that people who use sites like Facebook actually have more close relationships and are more likely to be involved in civic and political activities.”

The study the article references found that Facebook users:

• Are more trusting of others
• Have more close relationships
• Get more social support
• Are more politically engaged

Interesting stuff.  It also fits nicely with some of the work we've been doing that shows online networks are leading to more local interaction. 

The research was conducted by University of Pennsylvania sociologist Keith Hampton and Pew Internet.  The full research report can be found at Pew Internet. 

Local News Publisher Drops Website, Moves to Facebook

The local news company, Rockville Central, recently stopped publishing new content on their Web site and instead is publishing on Facebook.

We've posted in the past on the growing trend of small businesses replacing traditional websites with Facebook.  We get a lot feedback telling us this isn't happening and isn't going to happen, but we keep seeing more and more examples. 

And because we keep seeing new examples, we continue to think that over the the next 5 years Facebook is going to become the primary web presence for roughly half of all small businesses that are online. 

This does not mean all of these firms will get rid of their traditional websites.  It means Facebook will increasingly be the primary online place will interact with their stakeholders, and their traditional website - if they keep it - will be of secondary importance.

InboxQ's Excellent Twitter Q&A User Survey

I wasn't familiar with InboxQ until I saw a reference to a survey they'd done in Entrepreneur's Why Savvy Businesses Field Customer Questions on Twitter.  The key quote from the article:

"58 percent of Twitter users said they’re likely to follow businesses that answer their questions on Twitter, and 64 percent said they’d be more likely to make a purchase from a company from which they’ve received an answer to a tweeted query."

The research shows Twitter users like to ask questions, and when they ask companies questions they like to get answers.  This pretty clearly illustrates the power of Twitter as a customer support channel.

It will come as no surprise that InboxQ provides a service that "delivers a realtime stream of questions related to your business, products, industry or general interests from Twitter directly to your browser."

Because of our blog, we get sent a lot of surveys to review.  To be honest, most are poorly done.  But the big problem is not survey methodology, it's how the results are presented.  Often the marketing hype and spin of the survey data leads to claims that clearly aren't supportable based on the survey methodology, data and results. 

InboxQ&A did not do this.  They clearly explained their methodology and results in a ScribD document.  It was a non-scientific online survey, which I think is fine given their goals, objectives and market.  They don't hype their results and don't make unsubstantiated claims. 

Because of this, I would certainly consider becoming a customer of theirs. 

Why Surveys Show Wide Differences in Small Business Social Media Use

You many have noticed that different surveys show very different small business social media usage rates. They also show very different views on how effective social media is for small businesses.

For example, the Wall Street Journal article Facebook Tops for Small Business reported on a survey that found small businesses quite positive about social media.  Key quote on the survey results:

"About seven in 10 small-business owners say they “strongly agree” that social media is important to their business ..."

Also, if 70% think it's important it means more than 70% of small businesses use social media (at least a few must think it's not important). 

Another point of view comes from Citibank.  They recently released a survey and their press release headline is Citibank Survey Reveals Small Businesses Not Joining Social Media Conversation.  Their survey shows only 36% of small businesses use social media and a mere 24% have found social media useful for finding leads or generating revenue.

So why the wide difference in results?  The answer lies in methodology and sampling techniques.  

The survey in the WSJ story - The 2011 Soclal Media Marketing Report -  was done online and used Twitter, Facebook, other social media and email to find respondents. 

Not surprisingly, if you use social media to find survey respondents you end up with a large percentage of respondents that use and like social media.  Because of this, the survey mostly reflects the usage and attitudes of small businesses that use social media - a subset of the overall small business sector. 

The Citibank survey was done using a random sample and by phone.  A random sample draws their respondents to reflect the overall population being studied.   In this case it means including small businesses that don't use social media and even small businesses that are only marginally online, or not online at all.    

Because of the methods used, the Citibank survey is much more likely to accurately reflect social media usage and attitudes of the small business segment in general.  The results from the Citibank survey are also consistent with other random sample surveys on social media usage by small business. 

This does not mean surveys that don't use random samples are bad.  The 2011 Social Media Marketing survey does an excellent job of meeting their goal of informing us how marketers are using social media.  I found the report to be insightful and full of useful information.  But it's not a good source on social media usage rates or attitudes for the entire small business sector due to how the sampling was done.

The lesson for users of surveys is to understand the survey methods used to collect and analyze the data.  If you don't, you can easily end up drawing the wrong conclusions. 

Defending Twitter

There is a growing backlash against Twitter these days. 

This tends to happen in the tech field when something has been as hyped as Twitter. 

Fortune's recent cover story - Trouble@Twitter - is an example. 

It spends most of its time on management discord at the company.

But the article also points out that Twitter traffic has leveled off, users are spending less time on the site, and almost half of the registered users aren't active. 

The picture above, BTW, is from the Fortune article and nicely illustrates the article's point of view. 

BNET's Twitter: A Marketing Has-Been That Never Was is another recent example.  Key quote:

"The majority of small business owners can confidently relegate it to second-tier status as a marketing tool."

Because of our February post, Why a Lot of Small Businesses Don't Need to Use Twitter, a lot folks think we're anti-Twitter. 

We're not.  We're strong supporters and active Twitter users.  But we like to think we have a balanced view of Twitter, which is it's useful for some businesses/applications and not useful for others. 

A recent article from The Street - No Need for Jitters Over Twitter - nicely illustrates the balanced view (disclosure: I'm quoted in the article).  Key quote (not from me):

"In other words, Twitter is simply another potential business tool -- not a magic bullet that will bring customers to your door."

Just as small businesses should not be swayed by the hype around Twitter, they also shouldn't be swayed by the backlash.  Twitter is a hugely successful company and for the right applications and businesses a great business tool. 

Our Twitter advice to small businesses remains the same. Learn about Twitter and experiment with it. Test it for a mix of business purposes, measure your results and use it if you're getting a strong return on investment relative to other uses of your time and money.

Groupon for Golfers

The full impact of the Internet's power to identify and aggregate demand is only starting to be understood.  Social shopping isn't just changing ecommerce, but commerce in general. 

A great example comes from one of my favorite iPhone Apps, GolfLogix.  This App turns my iPhone into a golf range finder and electronic scorecard. 

The range finder gives me GPS distances to hazards, the green and the pin.  They have thousands of courses in their database, and I've found it to be accurate - or at least more accurate than my game requires. 

GolfLogix is $40 per year, which is a lot for an iPhone app.  But golfers (even mediocre golfers like me) are pretty price insensitive and willing to try new equipment that might help us play better. 

Which is why I think their new Groupon-like service is going to be a hit.  I just got an email from them that said:

"Starting this month, all GolfLogix members will receive a special offer email every Thursday with an exceptional, exclusive, limited-time deal on a golf product or service.  Right now we are reaching out to various golf manufacturers and finalizing deals that will not be available anywhere else.  You will be amazed at what we are finding!"

GolfLogix adding social shopping is a good example of the stunning number of Groupon-like imitators that are springing up.  We think the new entrants that serve vertical or niche markets are most likely to be successful, especially if like GolfLogix they have an existing user base.

Communicating With Small Businesses Using Facebook

I'm a bit behind on my reading (we've been swamped this quarter) and just got caught up on the Enterprise Council on Small Business (ECSB) blog.

For those not familiar with ECSB, it's a research and marketing firm that helps big companies market to small businesses and small business owners.  It used to be called Warrillow, but their name changed when they were acquired by the Corporate Executive Board several years ago.

The founder, John Warrillow, now lives with his family in Aix-en- Provence in France.  He no doubt spent some of the money he made selling his business getting a room with a view.  John is about to release a new version of his book Built to Sell, which we will review later this month.    

But I digress.

The blog post I found most interesting shows that Facebook is the preferred social media network small businesses want their suppliers to use to communicate with them. 

The chart below is from the ECSB blog post on this topic and based on a January survey. 

On which of the following social media networks would you want suppliers to actively participate in (e.g., communicating directly with you)?

 
Yet another example of the growing power of Facebook.

Will Facebook Replace Traditional Websites?

There's some really interesting data in the Network Solutions State of Small Business report on the impact of social media on traditional websites. 

When asked how social media usage is impacting their spending plans on their traditional websites, 62% of small businesses said that social media didn't change their spending plans for the coming year.  27% said they are planning on increasing their spend due to social media.   

But 9% plan on eliminating (4%) or spending less (5%) on their traditional website due to social media.  While 9% sounds low, last June only 2% reported plans to spend less or eliminate their traditional website due to social media. 

In the forecasting world, we call a 6 month shift of this magnitude a signal. 

Last year we wondered if social media in general and Facebook in particular could replace traditional websites.  The general consensus of the feedback we got was a solid no. 

But despite the feedback, many small businesses are using Facebook for their firm's primary website.  We're also seeing a growing number of new small businesses choosing Facebook over a traditional website for their web presence. 

As our post earlier this week shows, the trend towards Facebook becoming an important web presence site for small businesses is clear. 

What is unclear is how big this shift will be, and whether or not Facebook will fully replace traditional websites or simply augment them. 

We don't think Facebook is going to fully replace traditional websites, at least not in the next 5 years. 

But we do think over the next 5 years Facebook is going to become the primary web presence for roughly half of all small businesses that are online. 

What do you think?

27% of Small Businesses Using Facebook

Network Solutions recently released its 2010 State of Small Business report and it has lots of interesting information, including data on social media usage by small businesses.

As the chart below (chart 14 from the report) shows, Facebook is used by 27% of small businesses for business purposes.  That's up from 17% just last June. 

     
This is stunning growth and another data point suggesting Facebook is taking over the web. 

The chart also shows strong growth in the use of LinkedIn, with Twitter and blogs showing solid but less spectacular usage increases. 

You may wonder why this survey shows lower social media usage than other surveys.  The answer is survey methodology. 

Most small business social media surveys use online surveys and don't attempt to create samples that statistically represent the entire small business sector.  Instead, these surveys are trying to gauge usage of online small businesses or active online small businesses - not the entire sector. 

This isn't wrong or bad, but can misleading if you're interested in the entire small business sector.

The State of Small Business survey uses phone interviews and samples in a manner that insures the survey respondents are representative of the entire U.S. small business sector.  Because of this, their results are much more likely to accurately capture what is happening across a the entire small business segment of the U.S. economy. 

We'll be posting on other interesting results from the Network Solutions 2010 State of Small Business report over the next few weeks.