Sanjeev Aggarwal's Blog

August 6, 2012

Today’s SMB Social Media Market Creates Opportunities for Tomorrow

SMB businesses are increasing their adoption of social media solutions year over year–rising from 44% to 53% in small business (1-99 employees) and 52% to 63% in medium business (100-999 employees). But what business functions are SMBs using social media for, and what social media tools are they using in different areas?

Just released results from the SMB Group’s 2012 Small and Medium Social Business Study paints a comprehensive picture of the functions that SMBs are using and planning to use social media for in their businesses. The study, which is the second annual survey we’ve completed on this topic, queried 665 U.S. executives in detail on this topic. As we look at trends from 2011 to 2012, we see several data points that reveal interesting opportunities for vendors to better serve this market.

Data Highlights

We found that similarly to our 2011 study results, SMBs in 2012 are adopting social media mainly to help them achieve their sales and marketing goals. Only a small percentage are using social media for non-sales and marketing functions, such as human resources, customer service and product development. However, use of social media in several of these areas is rising. For instance, social media use is up year-over-year:

  • From 47.5% in 2011 to 60% in 2012 for “Generate more web site traffic”
  • From 45% in 2011 to 59% in 2012 for “Connect with people who aren’t customers”
  • From 45% in 2011 to 47.5% in 2012 for “Service/support and customer retention”
  • From 23.5% in 2011 to 28% in 2012 for “Input for product development”

SMBs are using different social media tools for particular types of business functions, as indicated in the heat map below (Figure 1), which shows which social media tools SMBs are using to accomplish different business functions. For instance, LinkedIn is a the most widely used social media tool for  “new employee recruitment” while “geo location tools” are least used in this areas. Note that the tools above the blue line on the heat map are most frequently used for each business function, while the tools below the blue line show only marginal use. LinkedIn forums, Facebook, YouTube and Blogs are most frequently used social media tools to accomplish various business functions.

Source: 2012 Small and Medium Social Business Study, SMB Group

LinkedIn has been breaking out of the employee recruitment mold as SMBs extend its use into different areas. Although everyone knows about Facebook (and may have used Facebook for personal collaboration) and some small and medium size businesses have created a business page, many are still challenged by how to utilize Facebook’s potential to increase awareness of company brand, increase leads/traffic of website and drive revenues higher–and are testing out other social media tools.

As shown in Figure 2, although Facebook continues to remain ahead of the pack, adoption is tapering off. Meanwhile, other tools, including Twitter, YouTube, company blogs and Pinterest, have seen the strongest growth over the past year.

Figure 2: Social Media Tool adoption timeline
Q. How long have you been using social media for these functions?

Source: 2012 Small and Medium Social Business Study, SMB Group

To a large extent, SMBs are still experimenting to see how social media can help them, and which tools are best suited to helping them accomplish different business goals. Relative newcomers–such as Pinterest–can have a big effect in a short time if they hit the mark for specific business needs.

Because its relatively easy and low cost to test out different tools, SMBs will remain loyal only as long as they believe that they are getting beneficial business results. Since only 7% of small and 17% of medium businesses currently measure return-on-investment from social media, this is still a decision made by and large on anecdotal evidence and gut instinct.

This means that social media vendors must not only provide tools, but also training, services and metrics to help SMBs maximize and measure the value the get from these tools. For instance, a vendor could provide tools to help SMBs perform A/B testing–similar to what’s available for landing pages today– to hone their social media efforts.

As the market matures, pressure will also increase for SMBs to more accurately measure the results they’re getting across social media platforms. They will need better, easier to use analytics than are available today–ala Google Analytics for social. Vendors that provide these next-generation social media analytics solutions can capitalize on a big and growing market opportunity to bring today’s fuzzy picture into sharper focus. In addition, if they can harness these metrics across a broad base, they have the potential to build some very interesting data aggregation services akin to Nielson ratings for television and radio.

The bottom line is that there is still a lot of play in the nascent social media market–and unbounded opportunities for vendor innovation.

March 22, 2011

Social Business: Why Having a Plan Matters


Co-authored by: Laurie McCabe and Sanjeev Aggarwal, SMB Group, and Brent Leary, CRM Essentials

 

Good plans shape good decisions. That’s why good planning helps to make elusive dreams come true.
Lester R. Bittel, The Nine Master Keys of Management

This seems to be especially true when it comes to getting business value out of social media. We recently wrapped up fielding for our joint SMB Group-CRM Essentials “2011 Small and Medium Business Social Business Study,” in which we surveyed 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers regarding their use, plans and perceptions about social media.

Although SMB interest and adoption of social media to assist with a variety of business functions—from generating leads to product development—is sky-rocketing, the question remains of how and where SMBs are actually deriving business value remains. Our study took an in-depth look at the specific activities and functions that SMBs are using social media for.

While Sanjeev Aggarwal, partner Brent Leary of CRM Essentials and I are just beginning to immerse ourselves in this very rich gold mine of data, one thing is clear:  SMBs that use social media in a “strategic and structured way” to interact with customers and prospects are much more likely to be deriving benefit from their social media investments than those who are using social media in an “ad hoc, informal” way.

Today, SMBs are most likely to be actively using social media to help with marketing and sales functions–including generating more web site traffic, generating more leads, connecting with people who aren’t yet customers, improving market awareness for their brand, reputation enhancement and creating more/better interaction with customers.

As shown on Figure 1, survey results show that those that have a more formal and structured strategy are more likely to be satisfied or very satisfied with the outcomes than those that are using social media in an informal, ad hoc way. For instance, among small businesses:

  • 39% of respondents using social media are very satisfied/satisfied with the results of using social media to “create more/better interaction with customers/prospects,” as opposed 24% of those using it an ad hoc manner.
  • 37% of structured users are very satisfied/satisfied with using social media to generate more web site traffic, compared to just 14% of ad hoc users.
  • 37% of structured users are very satisfied/satisfied with using social media to improve market awareness for the company, in contrast to 16% of ad hoc users.

Figure 1: Comparison of Small Business Satisfaction with Social Media for Business Activities: Structured vs. Ad Hoc Users

 

While we have about 30 other questions and a seemingly endless array of cross-tabs to mull over in terms of the study, one thing is already crystal clear: To get the most business value from your social media investment, you need to pause and plan—in addition to playing with—social media activities.

For more information about this study, click here.


June 3, 2009

Social Networking – The SMB challenge and how the SMBs can gain value from Salesforce.com Cloud Service solution

Social networking sites like Twitter, Facebook, LinkedIn, WordPress are all the range in the B2B and B2C world today. But does the SMB business owners/CEOs or a lone marketing person have the time to devote to track and follow these sites without spending an inordinate amount to time and effort – especially when there is no clearly identifiable direct linkage that this leads to increased sales. How can SMBs participate in and leverage these market trends effectively to address their business and marketing needs?

All these social networking sites present vast amount of unstructured information to the SMBs. In addition, SMBs are also beginning to see a large number of e-mails sent to our e-mail In-boxes from these social sites – leading to information overload, and in many cases turning away the SMB that could benefit from it. What is needed is a solution that aggregates information from all these social networking/community knowledge sites and presents it to the SMBs in a manner that make the information (which at times is very valuable) more easily consumable and easily searchable.

I was at the Salesforce.com CloudForce.com seminar some time ago, where they showcased their social networking integration and service cloud strategy. The Service Cloud shows an elegant and easy-to-use dashboard to present and search the popular social networking sites to the SMB and mid-market enterprises – this will help the SMBs take advantage of all the community knowledge without spending a lot of time and effort following individual solutions like Twitter, Facebook, LinkedIn, WordPress, etc. CRM platform has the potential to pull together information/community knowledge from the various social networking sites and meaningfully relate it current customers, prospects, and partners to deliver more engaging conversations and communications – providing significantly better ROI compared to an ad-hoc social networking access.

Social networking & community services do have the potential to:

  • Improve customer interactions and relationships
  • Actively engage customers and partners
  • Engage potential customers in technology education and learning
  • Interacting with the channel/VARs for information exchange and support

SMBs are actively exploring how to participate and incorporate all of these social networking sites/feeds to develop a social networking strategy that drives a broader marketing and services strategy.

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