June 13, 2013

New Study on Social Media and Small Business This post is outdated

In my last small business, which was semi-successful in that I secured a few large consulting contracts, I spent maybe $200 and countless hours on building my Facebook page (via paid ads) -- I did build up to about 500 likes in a few weeks.  How many of them paid off? Zero. All my business came from other sources, like word of mouth or e-mail marketing. Unless you have a lot of money to spend to secure top placements, it's best, as a small business, not to count on Facebook to drive any actual customers your way.  I think it can, however, make a small business appear more relevant and reputable.


Most small businesses feel like they are wasting their time on social media, according to a new survey (via USA Todaty).

About 61% of small businesses don't see any return on investment on their social-media activities, according to a survey released Tuesday from Manta, a social network for small businesses. Yet, almost 50% say they've increased their time spent on social media, and only 7% have decreased their time.

What businesses are trying to get out of social media: 36% said their goal was to acquire and engage new customers, 19% said to gain leads and referrals, and 17% said to boost awareness. Facebook was most cited as the hardest to maintain social-media platform, according to the survey.

In an age where a company such as Netflix is so heavily integrated into social media that it plans to make disclosures to investors on Facebook and Twitter, and a tech giant such as Enterasys Networks makes headlines by hiring based on tweets rather than résumés, many small businesses worry their customers will leave them behind if they don't interact with them on social media. Plus it's been a smash hit for some. Of the businesses that saw a return on investment in social-media activities, 30% measure that amount as above $2,000.

Terry Benton, owner of Terry's Fabric Cottage in Sulphur, La., was surprised to hear that her quilting store wasn't in the minority of businesses disappointed in the way their social-media campaigns have panned out. She says she created accounts for her business on Facebook, LinkedIn and Twitter a little over a year ago, spending about five hours a week updating the platforms.

She built it, but no one came. She's backed off in the past three months after scoring only 60 "Likes" on her Facebook page at its peak, she says. "I love reading things on the internet, so I thought the social-media stuff would be great for me, but it really has not turned out well at all."

Pam Springer, CEO of Manta, says small businesses get returns from social media — they just don't know what they are when they see them, and she says it's "good news" that companies are spending more time on social media. If they're really getting no returns, she says, it's probably because they don't know how to launch a successful social-media campaign, and they give up too fast if the campaign falls flat. Businesses, she recommends, should use online resources like forums, and yes, social media, to connect with each other for advice. According to the survey, only 36% of businesses do this.

"They have a high propensity to become maybe not as patient as they should be," Springer says. The attitude becomes "I don't want to deal with it. I don't have enough time. It's intimidating to me."

Many small business though, just don't have a place in social media, says Stephanie Schwab, CEO of Crackerjack Marketing. They join because of peer pressure and media pressure even though they don't understand what they're trying to get out of a social-media campaign. Some businesses make the mistake of prioritizing social-media activities over marketing techniques already proved to work, such as having a website.

"Just thinking that Facebook alone will send droves of customers to your doorstep is a mistake a lot of people make," she says.

Regina Hartt, owner of Hartt's Pool Plastering in Turlock, Calif., says social media hasn't helped her business because there are too many disreputable companies in the construction business, and no amount of "Likes" on Facebook is going to sway a prospective customer to spend $5,000 to $40,000 on a pool-plastering job. Hartt created a Facebook page for her business over a year ago, but she says out of the 200 to 300 jobs she does a year only three or four come from people who have found the business online.

"They want someone who's going to do a good job, and seeing someone's comment on a Facebook page isn't going to be enough," says Hartt, who gets most of her customers through referrals.


Thea Shopify Employee
June 18, 2013

Hey Jeffrey!

Thanks for sharing. While Facebook may not be a sole contributor to sales, customers often do research before making a purchase. Having a well maintained Facebook page shows that you're active and in business, but shouldn't be the sole focus of your marketing efforts.

Good conversation, thanks again.

Shopify Guru | thea@shopify.com


Last edited June 19, 2013

Hi Jeffery,

I agree completely that poor and/or ill-informed social media campaigns can be wasteful. But my personal experience has been completely the opposite of yours.

I started my t-shirt business entirely on Facebook- I shared the initial ideas on Facebook, got a good response to it on Facebook, and initially, I took orders entirely through Facebook alone.  I've never spent a single cent on advertising, and I hardly spend any time worrying about it, but I've got over 1330 likes at the moment. And I run my store as a hobby!

I don't use Facebook hoping that it'll drive customers to me. I use it to have fun and to have conversations and share interesting and cool things with my customers and fans, and THEY drive customers to me.



Increase your word-of-mouth sales with ReferralCandy!
Last edited June 20, 2013

So Visakan - how exactly do you do this?  My Facebook pages are active, feature various kinds of posts, including about our products and purpose. I am speaking more about my old business page, which had over 500 likes, not my current one which is new and building toward 100 - though I am following the same formula. I even have people interacting with my posts -- but no one is buying that way -- mostly through Google AdWords and word of mouth/Craigslist (the few sales we've had - about 5 - in the last 2 weeks).

June 25, 2013

I think there's definitely an expectation for savvy, successful companies to have a social media presence, but I believe that the key problem is that people don't have solid goals or metrics in place to measure the ROI from their social media campaigns.  Too many of them are launched into the void without returning any useful information, and we're stuck in a space where either we feel that they're worthless or that we have to spend 24/7 looming over Twitter and Facebook to get anything out of it.  Adobe stated in a recent white paper that over 88% of over 750 surveyed social marketing professionals didn't feel they could effectively measure the effectiveness of their campaigns, and 52% felt that measuring social media ROI was their largest frustration. 

Basically, you need more data.  Data is your friend.

I'd suggest anyone who has an active Facebook presence to check out one of their Ads Manager tools called Conversion Tracking.  This will help you determine the actions people take after clicking on your ads - you're paying for them, you should know how they're performing https://www.facebook.com/help/435189689870514/

Try to get a measurement of interaction investment, too.  The average piece of Facebook content - a picture, video, text post - takes only seconds to digest.  An average like would take seven seconds per person viewing the content, and friends of theirs viewing the shared content will take a similar amount of time. Multiple that by your likes received will give you an interesting perception of the traffic those likes are generating

I'd look at comparing the costs of a conventional PPC (pay per clicks campaign) per user against how many free users your social media presence gives you, too.  That'll help give you a dollar sign on the value of your Facebook / Twitter traffic as well as giving you an idea of whether or not it's of value to go with PPC instead of / in addition to it. 

And I can't state this strongly enough - do everything in house.  Be the real person behind the Twitter account, or similar. This definitely helps build investment in your brand and most of our businesses are small enough that you are your brand.  Helps on budgeting, too ;)





July 05, 2013

Hey Jeffrey, sorry I missed this!

1: I posted the t-shirt ideas on my personal Facebook page, and they got a lot of Likes and positive feedback (including "Hey, I'd buy that! How much is it?").

2: So I set up a
 proper Facebook Page and asked my friends (who'd already liked the images earlier) to Like the Page, which they happily did- and they even shared it and invited their friends, because they liked the idea so much

3: People kept (and keep) PMing the Page with requests to buy our t-shirts.

Let me know if there's anything that doesn't make sense,


Increase your word-of-mouth sales with ReferralCandy!
Thea Shopify Employee
July 05, 2013

Hey Visa!

Thanks for sharing your insight. The other thing you could do is add your products to your Facebook page using an app like Fliptabify or the Facebook StoreOr you could incorporate deals for your customers when they are interacting with your page - the app Justuno Social Bribery might be a good one to check out too.

Also, we just did a post on the new Facebook ads on our blog that I would recommend checking out!

Cheers all,

Shopify Guru | thea@shopify.com


July 06, 2013

There are three ways to explain why 61% of small businesses don't see any return on investment in social media activities:

  1. They aren't using social media correctly.
  2. They don't know how to measure the success they are having. 
  3. Social media is not profitable. 

In my experience as a social media manager, I've definitely seen that #1 and #2 are the most typical reasons for companies not seeing good ROI on their social media work. And if I had to dig down even deeper and say "why", my observation would be that many companies that are selling products flock to Facebook and Facebook advertising when they should be utilizing platforms that will allow them to really engage, in real conversations, with their customers. I did a lot of social media work with small businesses in the luxury items market and found over and over again that Twitter and Instagram were incredible at driving sales. I also noticed that Facebook's main value seemed to be in connecting with current customers and making sure they were happy. 

So long story short, I would agree that jumping into Facebook advertising might not be the right approach. I would definitely recommend getting active on Instagram/Twitter, and other open platforms and start engaging your target audience there. You might be surprised at how quickly you start to sell product! 




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