Faced with a weak economy and reduced marketing budgets, many small businesses are fighting back with more creative—and less costly—approaches to marketing, including social mediaaccording to a survey from Network Solutions and the University of Maryland's Smith School of Business.

In 2009, social media adoption by small businesses (fewer than 100 employees) climbed to 24%, up from 12% in the previous year.

Below, other findings from the third wave of results from the Small Business Success Index.
Among small businesses using social media, three-quarters (75%) have a company page on a social networking site. Other types of social media being used by small business include the following:

The Business Case for Social Media

Overall, small business owners say the top business reason for using social media is to identify and attract new customers (73%), followed by developing higher awareness for business targets (56%), and staying engaged with current customers (46%).

In general, business accomplishments have matched expectations, with one notable gap: Though 73% of users expect to identify and attract new customers with social media, only 61% have actually done so.

Does Social Media Pay?

Overall, 58% of small business owners who use social media say using social media has met their expectations, while 12% say it has exceeded expectations.

Over one-quarter (26%) of social media users, however, say it has fallen short of expectations.

Problems With Social Media

One-half (50%) of small business social media users say it has used up more time than expected.

Some 17% say social media has resulted in allowing people to criticize their business, though experts would note this provides a chance to engage critics. Only 6% say social media has hurt more than helped the business image because of negative comments.


Looking for real-world examples of businesses achieving their social media marketing goals? Our 47-page case-study collection, Facebook Success Stories, shows you how to increase brand awareness, target specific markets, promote new products, and create communities that engage users. Also check out The State of Social Media Marketing, a 240-page original research report from MarketingProfs.


Social Media: The Bottom Line

Looking at the past 12 months, 22% of small business owners say social media use has been profitable, while 19% say they lost money, and 53% say it paid for itself.


However, looking ahead, 45% expect social media to be profitable in the next 12 months.

New Business Ideas

Asked to identify where they find new ideas for how to grow their business, 68% of small business owners cited their customers. Other popular sources include the following:

  • Newsletters and trade journals: 52%
  • Competitors: 50%
  • Employees: 45%
  • Suppliers: 41%
  • Conferences: 38%
  • Books: 37%

Common marketing methods for reaching potential customers cited by small business owners include the following:

  • Print advertising: 37%
  • Email marketing: 24%
  • Social media marketing: 19%
  • Telephone sales: 18%
  • Direct mail: 17%
  • Broadcast advertising: 14%

Other key findings:

  • The major ways that small businesses differentiate themselves from competitors are through superior customer service (78%), higher-quality products and services (76%), creative ideas to address customers' needs (65%), and lower prices (44%).
  • Among six primary components of overall competitiveness, based on the Small Business Success Report Card, small businesses perceive themselves at a competitive disadvantage in marketing and innovation, earning a "C-" (70 out of 100) for effective marketing practices, ahead only of the "D+" earned for access to capital.

About the data: The survey of 500 small US business owners (fewer than 100 employees) was conducted by Network Solutions and the University of Maryland's Smith School of Business in December 2009. Small businesses included in the study were privately owned (not publicly traded), for-profits with fewer than 100 employees, and had a payroll or contributed to at least 50% of the owner's household income. 


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Small Biz Adoption of Social Media Doubles

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