Study: Social Media a Bust for Small Businesses

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

About 61 percent 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 percent say they've increased their time spent on social media, and only 7 percent have decreased their time.

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

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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 Systems 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 percent 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."

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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.

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