Is Social Media Right for the SMB?

I've waved the white flag and thrown in the towel. I am now a social media convert. It may be the primary domain of the twenty-something's, but you can't deny the pervasive creep of all things social media into our everyday personal and business lives. So the million dollar question is, how can social media help grow a small (or mid-sized) business? Since most SMB organizations are too busy worrying about their day-to-day business operations, I will attempt to shed some light on the history of social media as well as some of the most commonly used tools and technologies.

The earliest social networking platform was born in the late 1980s from AOL (America Online) chat rooms. Users were able to network and connect with others from virtually anywhere an Internet connection was available. Chat rooms created a new social dynamic, and for several years, this was pretty much what passed for social media. AOL then found ways to embed advertising into the application, and thus created a new revenue stream. This was just the beginning of the social network explosion.

Even with the crumbling of the dot com industry in the late 1990s and early 2000s the desire to connect to the Internet didn't wane, it only grew stronger. The next prominent milestone in the social media timeline was the introduction of web logs or blogs. These tools enabled Individuals and/or organizations to post information on just about anything. Mini-websites such as Blogger and Wordpress allowed these posts to be accessible to anyone with an Internet connection and they gave the reader a chance to interact with the author by leaving comments.

Of course the social media timeline would be incomplete without marking the beginning of one of the largest outlets the Internet could facilitate - shopping! During the dot com boom there was no shortage of sites for shopping, and even after the shakeout there were still plenty of options left. Many sites included the ability to share information about the products which was just another way for people to connect and share, and as a result, retailers took notice.

One particular retailer embraced this new dynamic and became the powerhouse of online retailing we are familiar with today - Amazon.com. Another popular online retailer, eBay, wasn't far behind with their "swap meet/auction" business philosophy of allowing the community to buy and sell to each other while taking just a percentage of the item's final sale price. Again, a key differentiator for eBay was the direct interaction between buyer and seller which was another pivotal point in the social media evolution.

In the early years after Y2K, Tom Anderson and Chris DeWolfe created MySpace which was one of the first social networks to become a hot acquisition property. The pair sold to Fox's NewsCorp unit for $580 million! Not a bad payout for Anderson who first rose to fame as a computer hacker at 13 and who was raided by the FBI not long after. You can ask him yourself. He's automatically added to the "friends" list of each of the 240 million MySpace subscribers, but don't hold your breath for a quick response! While MySpace was created mainly as a way for musicians to network together, seven months after its birth a Harvard student named Mark Zuckerberg and some of his buddies built their own private network for Crimson students. The offspring of this union was Facebook and it quickly gained traction at other Boston-area campuses such as MIT and Boston College. After its initial launch it spread like wildfire to college campuses all across the country and eventually anyone with an email address ending in.edu were allowed to join. Those boundaries couldn't hold, and before long networks were created for those outside of the educational borders. The march has continued unabated ever since to the point where "The Social Network" became an Oscar-winning film about Zuckerberg and his creation.

Twitter came onto the scene in 2006 as an internal project by a group of employees at a San Francisco podcasting company. Initially it was a micro-blogging site that focused on small messages to inform others in the group about what was happening. While the initial site was entirely web-based, a team led by Jack Dorsey wanted to create a service that leveraged SMS or text messaging on mobile phones to transmit information. The 160 character limit on these transmissions proved to be an obstacle, so they decided to limit messages to 140 characters to allow room for the username and colon at the beginning of the message. In those early days there was slow adoption because many users didn't have unlimited text plans and the costs to participate could have easily skyrocketed. However, once phone plans began to include unlimited texting everything changed, and the sky was the limit. Then watershed moment #2 occurred. During the 2007 MTV Video Music Awards, Twitter was used to create an online community and a conversation around the live event.

The use of the social media platform engaged a new generation of users like no ad campaign ever could. From that point on, Twitter was everywhere. Apple featured Twitter during their worldwide conference in the same year, there were television news stories, print articles, and the world would never be the same! Jack had a terrific team which included Dom Sagolla who wrote about Twitter history and the genesis of proper messaging techniques called "140 Characters: A Style Guide for the Short Form," likely available on Amazon.com I'd bet!

These were all great innovations for the general public, but what about the business community? Ironically, there was already something in place that had flown pretty much under the radar. A visionary named Reid Hoffman started LinkedIn for business professionals in late 2002, but in the post dot com bust, finding funding and the desire to risk it on an Internet venture was a daunting task in a suddenly skittish Silicon Valley.. Unlike MySpace and Facebook, LinkedIn started on a much flatter trajectory and retained a laser focus on being the end-all site for business professionals looking for networking opportunities. Networking in the business community had long been the domain of in-person interactions at trade shows, chambers of commerce, and the like. LinkedIn was seen as a way to expand those interpersonal relationships online without limitations of time and distance. As it has added more monetization through job boards and "premium" memberships, the valuation of the company tipped the scales at over $1 billion in 2009.

Lately, newer tools have come out like FourSquare and Pinterest which show promise. FourSquare is an application that allows users to "check in" to places they are visiting such as the local coffee shop or the peak of Mt. Everest (if you can get a cell signal up there!). Pinterest is much newer, and is only recently gaining momentum. Users are able to save and share favorite things found on the web through pinboards, as well as browse and save those of others.

So now we have a historical framework for the main players in social media, but why should the SMB care? It doesn't take a rocket scientist to see that as a consumer, both Facebook and Twitter are inexorably linked to the seller. "Like us on Facebook" and/or "Follow us on Twitter" are almost always included in any retail-type business communication, and over the last few years, savvy businesses have tied discounts and coupons to those social interactions.

For traditional SMB entities that are strictly business- to-business driven, the approach to social media will likely be different and combine several approaches including Facebook and Twitter. Additionally, LinkedIn should play a prominent role especially since it's designed purely as a business tool as well as contributing regularly to an industry specific blog. The key to social media is maximizing your reach to the prospects and customers you are hoping to make an impact with. However, not every SMB entity believes this. Hiscox, a small business insurance provider, commissioned a study that stated, "47% of respondents indicated they did not use social media for business purposes at all." (Hiscox Inc., 2011) Furthermore, the study continues with, "For those that did use social media for their business, 19% are using Facebook, 15% are using LinkedIn, and 4% are using Twitter." (Hiscox Inc., 2011) The study concludes with, "When all respondents were asked about how they felt about using social media for their business 12% describe it as a must, they do it all the time; 24% do it when they have time; and 14% indicated they don't know enough about it." (Hiscox Inc., 2011) I'm actually not that surprised by the findings as those firms who are not using social media feel they don't know enough about it and that it takes too much time to manage it.

It doesn't take long to feel overwhelmed with the constantly changing world of social media. So what can an SMB do? Be smart and find tools that sort the wheat from the chaff.

    Tumblr is a free tool that combines your Facebook and Twitter feeds with blogging.
    HootSuite is a social media aggregation tool that allows you to see the four major social media applications in one place.
    Postling is another site aggregator but one with a price tag associated with it.
    Other great tools include Tweetdeck, TubeMogul, and Posterous.

These tools are just a few options that ease the management of social media. Just jumping into social media without a plan is not advisable. You can employ an outside consultant or designate an internal resource to help design and manage a social media campaign. Don't forget, social media analytics have to be employed as well. Having a strategy is somewhat half-hearted if you have no way to measure it! So, now that you have the background and some tools of the trade, the next step us much like that of an anxious parent teaching their child to swim. Start slow, gain confidence, and then see how fast you can take off!

Works Cited:

Hiscox examines social media usage by small business. Retrieved February 13, 2012, from Hiscox: http://www.hiscoxusa.com/small-business-insurance/newsroom/press/2011/hiscox-examines-social-media-usage-by-small-businesses/

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Article Source: Bryan_Ramona