How does social media affect a small business's bottom line? The answer may come as a surprise to many business owners.
While social media is clearly here to stay, a recent Manta poll reveals that 61 percent of the small-business owners surveyed have yet to see a return on investment from the effort. At the same time, nearly half the respondents said that they spent more time in the first quarter promoting their companies on social media compared to the same period of time a year ago.
Was that time wasted? Not necessarily. The takeaway from the survey: Social media success—the number of business opportunities that come from online platforms—can't be calculated simply by looking at the time invested in social media. How and where that time is invested may be more important.
The Dynamic Platform: Social Media as a Team Effort
To increase ROI from social media, you may need to think about the number of people in-house who are contributing—and who's contributing as well.
Consider these results from the survey:
- Only 3 percent of the respondents said they have a dedicated resource in place to manage their social media activity.
- Only 3 percent said they've made any kind of budget increase to support social media development. Meanwhile, 2 percent say they've decreased what they spend on it compared to Q1 2012.
- 53 percent said their social media management came down to just one person.
If more than half are only dedicating a single person to the task, and the resources available to that person are limited, the time spent in hopes of bringing in new business via social media is an uphill struggle from the start.
Small-business owners would do well to rethink their social media approach, carving their presence into several segments that different voices can handle well.
For example, if you're a small winery, you could tap into these three different perspectives:
- Your winegrower could be a once-a-week vine reporter.
- Your bottler(s) are ripe sources for input.
- The manager of the shipping floor and your reps in the shops and eateries that carry your bottles are other voices that can offer perspective.
Dynamism is the word: Creating new points of input, reducing the amount of time that any one person spends on a platform, while diversifying and creating interesting material for new potential customers to see and read.
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"Social media is not a stationary phenomenon," says Pamela Springer, chief executive officer at Manta. "As SMBs shift from the experimental stage to a results-focused phase, their social media usage will evolve to maximize the value."
The Bright Side: ROI Does Exist
It's important to note that 39 percent of the small businesses polled did indicate ROI on their social media front in Q1. Here's a breakdown:
- 30 percent made more than $2,000 from social media activity in Q1 2013.
- 13 percent made $1,001 to $2,000.
- 40 percent made $100 to $1,000.
- 17 percent made less than $100.
Among those creating customers from online networking is Allan Cooper, president of Bin There Dump That, a dumpster delivery service based in Florissant, Colorado.
"Eighty-five percent of incoming phone leads are due to my online presence," Cooper says. One important feature of his social media effort: He directs most of his time toward small-business-focused social platforms, and less toward other kinds of chatter that may not lead to convertible leads.
The lesson: To foster a more dynamic and return-friendly environment, cater your outgoing efforts to the platforms you identify as lead generators.
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James O'Brien's work can be found at Mashable, Forbes.com, TheAtlantic.com, and elsewhere. He writes about media, finance, business, travel, food, wine, and tech.
Photos: iStockphoto, Thinkstock