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Poll: Small biz owners not taking advantage of social networking

Are you “into” social networking as a way to boost your business? You could be missing an opportunity to boost your business if you are not, according to a recent poll by Discover Financial Network.

The survey shows that social networking by small business owners has nearly tripled in the past three years, jumping 23% in the past six months alone, but less than a third of owners are using it to promote their businesses.

In polls conducted in April and October of this year, the percentage of small business owners who are members of an online social networking community increased from 48% to 59%. But only 29% of all small businesses said last month that they have ever used social networking websites to promote their businesses.

“Before social networking caught on, small business owners were limited to more traditional methods of finding new business through face-to-face outreach, local advertising, basic e-mail and word-of-mouth, which can be time consuming,” said Ryan Scully, director of Discover’s business credit card. “Now that they see some opportunity for reaching specific web audiences exponentially through their own core contacts, it’s conceivable that skilled entrepreneurs are already using social networking as a very surgical marketing tool.”

Discover has been surveying U.S. small business owners about the issues that affect them for more than four years through the Small Business Watch. The first poll about social networking was conducted in October 2007, when only 22% of small business owners said they were members of a “popular general-interest online community.” In April 2010, the question was rephrased to ask if they were “a member of any online social networking community such as Facebook, Linked-In, MySpace or Twitter,” and 48% said they were. By October of this year, the number climbed to 59%.

Discover’s polls also show that 76% of small business owners are spending more than an hour online every week related to their businesses, up from 66% in October 2007. Looking closer at the numbers, the percentage of owners who were spending more than seven hours a week online for business reasons actually dropped from 26% to 20% in three years, but the percentage of those working from three to seven hours per week climbed from 19% in 2007 to 33% in 2010.

Of the 29% of small business owners who now say they are specifically using social networking sites to promote their businesses, 48% cite the biggest benefit as “getting new business leads” over getting business tips, finding new suppliers, or benefiting in some other way.

“Small business owners don’t have a lot of time to waste, so if they’re online they have a specific reason to be there, and they want to get something out of it,” Scully said. “Because it is a virtual word-of-mouth marketplace, social networking would appear to be a natural extension of what small business owners do every day. The issue is how to make it pay off.”

In 2010, 31% of small business owners say networking online has had an impact on their bottom lines, up from 19% in 2007.

Consumers are warming to the idea of social networking as a way to hear about small businesses: 36 percent of approximately 3,000 consumers told Discover that they would consider using a small business that they heard about through a social or business networking site, up from 31 percent in 2007.

“Friends and family members have been recommending their hair stylists, accountants, plumbers, doctors, decorators and mechanics forever,” Scully said. “Exactly how entrepreneurs will tap into those networks proactively remains to be seen. Now that they’re seeing social networking as a way to get new leads and influence the bottom line, it’s only a matter of time.”

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