Four in five small businesses are blindly investing in social media without a strategy or a measurement for success, according to research published this week.
The Sensis report reveals just 24% of small businesses using social media have a plan in place for its use, while only 17% formally measure the return on their investment.
As social media’s ability to create authentic customer relationships is made clearer to SMEs, there has been a significant spike in the amount of money they are willing to shell out on social media marketing.
On average, small businesses are investing $4560 a year in their social media campaigns, a big jump from the $1970 spent in 2013. Medium-sized firms are forking out $38,804, up more than three times from last year.
Social media strategist Dionne Kasian-Lew told SmartCompany many small businesses still thinking social media is a fad or doesn’t offer good return on investment.
“They think social media is nice to have, but it’s not a core part of their business strategy,” says Kasian-Lew.
She says often SMEs are cut to the bone with time or money, are afraid to make mistakes on social media or don’t want to air their dirty laundry in the form of customer complaints.
Kasian-Lew’s advice is to first know your business, understand the channels your customers use, and then target them in a focused approach.
“Don’t be afraid to limit your choice of channels,” she says. “A lot of people feel they need to have a presence on every channel and say, let’s whack up a Facebook account, let’s whack up a Twitter profile. That leads to sites that are dormant.”
Kasian-Lew says different channels are better for different businesses. Businesses looking at products should focus their approach on Facebook, while services should look to LinkedIn or Twitter.
“Strategy is about using your resources the best you can for the best results. If you don’t have a strategy, you won’t get results and you’ll blame the channels,” she says.
Kasian-Lew says while measuring ROI on social can be done, it is often complex.
“We have plenty of metrics that measure the whole social media journey. But it has always been harder to measure brand awareness,” she says.
She suggests free tools such as Google Analytics or enlisting the help of social media ROI experts, such as HubSpot.
“The main thing to take away is that small businesses already have these skills. They are the same business principles they’ve always used, such as making great relationships, managing difficulties, and creating great products. The skills are all there, they just need to ask, how do I use them in a new way?”
Kirsten Robb is a former journalist at SmartCompany. Previously, she worked at News Corp as a property reporter for Leader Newspapers and the Herald Sun, and holds a Masters of Journalism at Melbourne University.
