American small businesses are pushing the limits on new ways to improve efficiency in the prolonged downturn, including a steady increase in social media adoption. The third wave of results from the Small Business Success Index(TM) (SBSI) sponsored by Network Solutions and the Center for Excellence in Service at the University of Maryland's Smith School of Business reports social media adoption by small businesses has doubled from 12 percent to 24 percent in the last year.
The SBSI found that nearly one out of five small business owners are actively using social media in their business. Small businesses are increasingly investing in social media applications, including blogs, Facebook and LinkedIn profiles. The biggest expectation small business owners have from social media is expanding external marketing and engagement, including identifying and attracting new customers, building brand awareness and staying engaged with customers. Sixty-one percent of the respondents indicated that they use social media to identify and attract new customers.
Key findings include:
Small business owners use social media to attract new customers:
-- 75% surveyed have a company page on a social networking site
-- 61% use social media for identifying and attracting new customers
-- 57% have built a network through a site like LinkedIn
-- 45% expect social media to be profitable in the next twelve months
Small business owners still have concerns with social media:
-- 50% of small business social media users say it takes more time than expected
-- 17% express that social media gives people a chance to criticize their business on the Internet
-- Only 6% feel that social media use has hurt the image of the business more than helped it
Small businesses experience positive effects from the economic downturn:
-- 72% have found ways to operate more efficiently (up significantly from 66% in June)
-- 47% have been led to find new products and services that benefit customers
-- 43% have become better teams as hard times force people to work together
Building online presence continues to be key focus for small businesses:
-- Company Web sites are a top technology investment in the next two years, with small businesses either adding new features/functionality to their existing Web sites or building one from scratch.
-- The ability to showcase their products and services online to attract new customers is second in the hierarchy of technology investments small business owners plan to make in the next two years.
-- Social media investments rank third in small business investments to be made in the next two years.
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