The use of social media by SMEs is still in its early stages. As with any new technology there is a question mark over how it might be best used and whether it is useful at all. For some advocates of social media the opportunities are significant. However, to use social media properly requires a commitment of time and a well-considered strategy. Facebook and Twitter need daily monitoring, while blogs should be refreshed with new content weekly or at least monthly.
According to Ken Lacho and Craig Marinello from the University of New Orleans, any small business owner who decides to use social media for their business must first know why they are doing so. Writing in The Entrepreneurial Executive in 2010, they noted that it is common for small business owners to set up Facebook, LinkedIn and Twitter accounts hoping to grow their business, but instead spend most of their time connecting with old friends.
They suggest setting limits on how much time that is spent on social media sites. This time should be allocated to the periods when more important work is to be done. However, if social media is to be used, the owner-manager should seek to add value to any conversations. People within the network will be engaged if they find what is being communicated has value, but will quickly turn off if it is not.
According to the Sensis report 81% of SMEs surveyed had not developed a strategic plan for their online business activities. A further 4% did not even know what such a strategy was. This suggests that Australia’s SMEs need help in developing an online strategy. Ideally this should be integrated with their broader business planning and configured appropriately to their needs.
While SMEs do not have the resources of larger firms for eCommerce the cost of online engagement has fallen dramatically in recent years. Websites can now be built for relatively small costs. Open source software and low-cost hosting services enable even the smallest business to have websites with a high degree of functionality. Social media sites and blogs are already available for small business owners to access for modest costs and these can be integrated into their online strategy.
The penetration of the internet into Australian households has now reached about 90% and there is an increasing use of mobile smart phones and tablets. According to the Sensis e-Business Report the two most common uses of the internet by people are searching for information on products and services (91%) and looking for suppliers of products and services (85%). For SMEs seeking to find new customers and make more sales it is therefore surprising that more owner-managers are not making greater use of website marketing and eCommerce.
The components of a digital business strategy include a general approach to the use of the internet as a tool for customer and possibly supplier engagement. Website design should be carefully thought through with attention given to the purpose for which the site is to be used. Is it to be just a static page or two with names, contact details and few photos of products, or will it seek to engage the customer? Websites are increasingly becoming the centre of a firm’s marketing and customer service activity. Other advertising and promotion should serve to drive customers to the website.
Social media is still a new frontier for businesses, although its use is growing rapidly. It can offer an excellent medium for customer engagement and a source of valuable feedback. However, social media can be challenging for many businesses. By its nature it is not able to be controlled and it can be unsettling for businesses to see customers commenting both positively and negatively about their products and services. However, the key to social media is to avoid trying to control what takes place there and focus on engaging and facilitating. It is more about information and the sharing of ideas and knowledge than advertising and promotion.
As the National Broadband Network (NBN) rolls out – regardless of its final form – the opportunities for online commerce by SMEs will increase. This will need strategies and well-considered action to take advantage of these opportunities and avoid becoming a digital dinosaur. The future of the market space is increasingly digital, online and mobile. How well our SMEs to embrace this online challenge will have significant consequences for the future of our economy.
Tim Mazzarol is the Winthrop Professor of Entrepreneurship, Innovation, Marketing and Strategy at University of Western Australia. This article first appeared on The Conversation.
