Online businesses using social media are more likely to earn higher revenues on their websites, a new survey from Melbourne IT reveals.
But while more companies are adopting social media and mobile marketing, the survey of over 3,400 small businesses reveals many are hesitant about entering the unknown world of cloud computing. Several, however, are thinking about mobile apps.
The survey found about 39% of companies using social media earn over 20% of revenue directly from their websites, compared to just 23% of SMEs not using social media.
But the biggest trend was found in indirect sales, with the survey revealing 53% of businesses using social media achieved the 20% revenue figure, compared to just 38% of non-social media SMEs.
Overall, 34% of online SMEs use social media, with Facebook the most popular platform at 75%, followed by Twitter at 47% and LinkedIn at 42%.
However, 36% of online businesses not using social media say they aren’t convinced using these platforms will actually do anything useful. Additionally, 32% say social media is irrelevant to their business, and 28% say they have no time to keep up with a social media strategy.
Melbourne IT eBusiness solutions general manager Damon Fieldgate says the problem is a lack of education – many businesses don’t actually know how social media can help them.
“I really do think this is about a lack of education. These companies aren’t saying they don’t want to use social media, they’re just saying they want the guidance to do so. They need an environment where they are taught.”
“We use social media quite actively, have a very strong online presence, and we do see a revenue lift through engagement, special offers and so on, and other businesses can have that benefit as well.”
Fieldgate says businesses using social media are pushing products and events through Facebook posts, Twitter messages and other promotions. As a result, they are gaining more revenue and are providing themselves with a good social media reputation.
But there are two problems. The first is education – many businesses don’t know how to start using social media.
“They probably see these mediums for celebrities and so on, and many businesses haven’t realised the benefits. They don’t know they can talk to consumers directly, and therefore, don’t realise the power of social media.”
Secondly, he says, there are problems with how businesses are actually using social media. Many don’t know how to interact with customers on the internet.
“We saw some big players make some pretty serious errors in social media by getting into arguments, justifying their positions on certain topics and we saw a lot of opposition to that. They may have been right, but it doesn’t matter. These response mechanisms require a great deal of care.”
“This is a medium that requires a degree of serious calculation. They need to take it seriously, it’s not just as easy as setting up a Facebook page. There needs to be a set strategy, and they need to make sure it’s properly handled.”
But the survey also shows small businesses are adopting to mobile technology relatively well. About 23% of online SMEs are considering a mobile app, or have one in development. However, cloud computing isn’t as popular – only 46% of online SMEs actually understand what it means.
“I was really encouraged by this,” Fieldgate says. “SMEs are looking to adopt new technologies, even slowly. I think it’s good and encouraging to see SMEs are looking at mobile technology like this.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
