mall business owners are posting and tweeting their marketing messages out to the masses as they look for new ways to connect to potential customers. That's according to the latest monthly survey by Newtek Business Services, a provider of services to more than 100,000 small and mid-sized businesses. The survey found that 58 percent of small business owners are using social media to attract new customers and more than 60 percent are using these tools to communicate with existing customers.
"What we are finding from our customers is Facebook by far is the most effective and cost friendly communication tool out there for small business. And they are using it aggressively," said Barry Sloane, chairman and CEO of Newtek. "They can promote their product and get instantaneous feedback from customers."
While small business owners are embracing social media, there are some that are more popular than others.
The majority of respondents, 60 percent, said they use Facebook as a marketing tool. Twitter, a less popular choice, is used by 30 percent of small businesses surveyed. The social recommendation site Yelp is currently being used by 7 percent of those surveyed, while social check-in site Foursquare is used by just 3 percent.
"[When customers have a public platform] negative comments are possible, and companies can have missteps."
Respondents said they are using these social media tools to reach out to customers in many ways, including developing a new market base, making offerings instantly and cost effectively, and replacing or enhancing their online presence.
It's become a cost-effective way to do all of these things, said Sloane. While it used to be common for small businesses to hire a developer and buy an expensive web hosting plan, now, with a couple of clicks on social media platforms, a small business can be connected to its customers for the cost of an internet connection. "We have customers that are now building their web presence on Facebook instead of a traditional web site." Sloane estimates that the cost savings of eliminating such hosting plans could exceed $20,000 a year.
While the cost savings are important, Sloane cautions that people need to understand how to use and manage these mediums; otherwise, the cost of damage to your professional reputation could negate the savings.
[When customers have a public platform] "negative comments are possible, and companies can have misteps," said Sloane. "They also have to learn to manage negative comments in a timely matter."
As more and more small businesses include social media as part of their marketing strategy, the next question will be how they are differentiating their message in order to stand out from the competition.