14 June 2011

Small and Medium Businesses Need Real Plans For Social Media

Social Media for BusinessWithout clearly defined goals for social media activities, small and midsize businesses risk chasing an elusive return on their investment in the technology. If small and midsize businesses want to get serious about social media, they need a plan. Otherwise, they should scrap their social programs and focus their finite resources elsewhere. Without assigning goals to social media efforts--no matter how basic--there is no way for businesses to determine whether they're reaping any benefit from their efforts, or simply wasting their time.

Recent data indicates that plenty of SMBs are indeed going social without any defined strategy. The SMB Group's "2011 Impact of Social Business in Small and Medium Business Study" found that one in five small businesses (1-99 employees) use social media willy-nilly, close to half of all small firms that said they currently use the technology. Midsize firms (100-1,000 employees) are more likely to have a plan, according to the SMB Group study--31% reported using social sites in a "structured, strategic way"--yet nearly one in five still said their social activities remain undefined. AdTech Ad

Small businesses appear particularly prone to use social media in ad-hoc fashion: In March, Techaisle published survey results that showed 70% of companies with up to 100 employees planned to use social sites for marketing purposes in the coming year, but 45% said they didn't know how doing so would help them.

Think about that for a second: Seven in 10 businesses have social media on their radar, and close to half have absolutely no idea why. That's absurd. Simply following a trend--rather than strategically planning to capitalize on the technologies that underpin that trend--sets SMBs up to chase an invisible return on investment (ROI). That's a giant black hole waiting for those businesses.

SMB Group partner Laurie McCabe said that while taking an initial ad-hoc plunge into social media isn't always a bad thing, companies eventually need to formalize their plans--or risk missing out on the potential advantages. Her company's study found that SMBs with a defined strategy tend to use social media for more purposes and across a greater range of channels, and they're happier with the results.

"Businesses, if they're really going to take it to the next level and get more value out of it, have to start doing it with a more strategic approach," McCabe said in an interview. When it comes to social media, McCabe said smart SMBs are "actually thinking about: OK, what are we really trying to get out of this? How will we measure success?"

So why wouldn't SMBs put a plan in place? Social media's minimal barrier to entry might be both a blessing and a curse here. It requires no capital outlay--and not much time--to set up a Facebook Page or company Twitter feed. Ditto for many other sites and services. That's a good thing: Social technologies have a leveling effect--used the right way, they can help smaller companies compete with much larger businesses, without correspondingly big budgets. But that accessibility can also lead to jumping on the business equivalent of a merry-go-round--it might be a fun ride, but you're really just moving in circles.

To be clear, having a plan doesn't necessarily mean spending money. But SMBs that like to bang the limited-resources drum--usually for good reason--have to be smart with their time, too. Going social without a plan isn't smart--it's a recipe for a resource drain. And even if ad-hoc social activities prove profitable, how's the business to know?

The SMB Group's McCabe cited another downside of the unplanned approach: With social media responsibilities often spread across multiple departments, ad-hoc use can lead to inconsistencies and conflicting priorities, especially in external applications. "You may have one thing going on in your little social media world for marketing, and a whole other thing in HR. What if those two things aren't meshing?" McCabe said. "The customer or the prospective employee might be looking at you and thinking: 'Boy, this company is totally schizophrenic.'"

Here are some key points SMBs should consider as part of a coherent social strategy: Who in the company is responsible for social media? What business functions will social serve? (McCabe noted that it can be much more than a marketing tool, and strategic SMBs in particular are using social technologies for a wide variety of external and internal uses.) How much, if any, money are you budgeting? How much time will be devoted to social programs--not just setting them up, but executing and evaluating them?

To that end, SMBs likewise need to set performance benchmarks. They don't have to be directly financial; in fact, until the budget has an actual line item for social, the metrics will likely be non-monetary. Consider areas such as: Number of new leads generated, reduction in customer service calls, number of resumes received for job openings, or feedback for new product development. Tie the assessment directly to the original purpose, be it external or internal.

Having a plan helps gauge return on investment (ROI), discover ongoing improvements and efficiencies, adapt to the constantly evolving social landscape, and ultimately produce bottom-line results. It also has another positive effect: According to the SMB Group study, structured social media users are much more likely to be satisfied with their efforts. For example, 37% of small business users with a structured approach to social media said they were satisfied or very satisfied with social media's ability to generate new leads, compared with just 14% of ad-hoc firms. At midsized companies, close to half (47%) of strategic users expressed satisfaction with social media's impact on customer service and retention, a marked jump from 26% approval among informal users.

Though taking a strategic approach doesn't necessarily mean spending money, it would appear that those companies that do allocate at least a small budget for social media are far more likely to have a strategy behind their programs. "There is a definite correlation between spending money and being a more structured user," McCabe said. "I'm not really sure it's the money, per se, that makes a difference. But if you've got the mindset 'I'm going to be more strategic about this,' yes, you're more likely to spend money." McCabe noted there's a chicken-and-egg relationship between strategy and spending--it's tough to determine if one precedes the other, or if both in tandem yield better results. But the link exists.

Businesses that are unsure if they want to spend money on social media should still approach it as if they are. Make no mistake: Any SMB with a social presence is making an investment, even if it never spends an actual dime. Set a plan, or plan to get sucked into the ROI black hole.

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The above article was originally published by Kevin Casey of the InformationWeek on April 27, 2011 and can be seen at: http://www.informationweek.com/news/smb/229402275