Small and medium-sized businesses contribute $5.5 trillion in annual revenue in North America, according to the Dun and Bradstreet Database. Hailed as a primary driver of employment and economic growth, the SMB sector is often used as a gauge of the overall health of the national and global economy. When it comes to driving business growth, new research from LinkedIn reveals that eight out of 10 small and medium-sized businesses are turning to social media as their preferred marketing channel.
The study, Priming the Economic Engine: How Social Media is Driving Growth for Small and Medium Businesses, was conducted in partnership with TNS and surveyed just under 1,000 SMBs with revenues between $1 million and $50 million annually.
Lana Khavinson, group product marketing manager at LinkedIn, says the study reveals exciting findings in three primary pillars:
1. SMBs are increasingly adopting social media, and they’re getting results. Three in five small and medium-sized businesses surveyed say they’ve acquired new customers via social media, while two in five say social media helps them retain customers. “Customer acquisition and retention are two of the biggest challenges faced by SMBs, so social media is really solving some key challenges for that segment,” Khavinson says.
2. Success is closely correlated with investment. “What we found in the hyper growth category, or among the SMBs that are growing rapidly, is that there’s a direct correlation between how much time and capital they invest in social media and the benefits they’re getting from their efforts,” Khavinson says. “Seventy-three percent of hyper growth SMBs said they’ve increased social media spending within the past year, compared to just 42 percent of non-growth SMBs.”
3. Social media offers value outside of marketing. “While 61 percent of SMBs say they acquire new customers through social media, 49 percent are also using it to engage with peers, partners, experts and thought leaders, as well as to seek information on financial services,” Khavinson says.
Staying Top of Mind
Social media wasn’t always the preferred marketing channel for small and medium-sized businesses. “There’s a shift from believing that traditional outbound marketing can solve everything. Consumers are out there absorbing information and engaging with businesses long before they’re ready to commit to a purchase. That’s where inbound comes in,” Khavinson explains. “It’s about staying top of mind and continuously engaging your audience so that when the time of purchase comes, you’re on the radar of that customer. They’ve bought into you and your unique specialties.”
Another driver of social media adoption is the availability of analytics tools that can help measure ROI. Khavinson notes that LinkedIn and a few other social networks offer built-in analytics tools, and there are a number of low-cost, third-party applications that also enable measurement.
Khavinson says the most important metric, based on her own observations, is also shifting from the rush to accumulate the most followers to more focused goals. “I’ve seen a definite shift from just looking at sheer volume to more, ‘Am I reaching that exact audience I want to target?’ and building a community with the right audience,” she explains. “They can use metrics to see what type of followers they’re pulling in, how often they’re clicking and whether they’re visiting the company profile, and build those relationships that will drive purchases at the end.”
LinkedIn features a small-business resource, created to remove some of the ambiguity that exists for small companies learning their way around the social media landscape. “Our commitment is to try to break down the mystery of how they should be embracing social media and break it down into bite-sized chunks so they can understand how to leverage the platform and the social space as a whole,” Khavinson says. “With social media providing a significant return on investment, these resources will help them start leveraging and benefiting from the social landscape with a shorter learning curve.”
Read more articles on social media.
Photo: Getty Images