Six Key Benefits of Using Social Media for Small Business

This blog entry first appeared on openforum.com, American Express OPEN's award-winning site providing insights, advice and connections for small business owners. You can find more articles and updates at http://www.openforum.com.

You can also follow me on Twitter at @jasonrudman and follow OPEN Forum at @openforum. This post was written in collaboration with Courtney Colwell at Federated Media.
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Occasionally, I’ll read an article suggesting that small businesses aren’t seeing the value of social media, the evidence most often cited being a lack of direct sales for some business owners. And each time I want to ask, what were their initial strategies for using social media? What about the other benefits they might see?

Given the impressive array of social media tools you can choose from – such as blogs, Twitter, LinkedIn, and OPEN Forum – it’s become increasingly important to first develop your strategic goals for how social media might help your business, and then determine which tools will help you achieve those goals. This first step cannot be underestimated, as how successful you are with social media should be measured against those goals.

In thinking about your strategy, consider the following key benefits I most often hear from small business owners:

• Search results: In a previous article on building exposure through search results, I discussed how using social media can help you improve your ranking in search results. By extending your presence onto other sites, especially those of high “quality”, and building links from those sites back to your own, you can help elevate your ranking in search results and thus increase exposure for your business. But you should be thoughtful in your approach, as how and where you build those links carries different value. To be more efficient, focus on sites and engagement most relevant to your existing and potential customers.

• Brand management: As Yelp and other opinion sites gain momentum, you should consider your options for protecting your brand reputation, remembering that advocates as well detractors can comment on your business. By using social media to proactively find and build relationships with customers; you may be able to turn them into fans to help deflect any negative opinions that may arise. As the saying goes, the best defense is a good offense. Also, by building more positive sentiment for your brand through social media, you can help ensure that when someone searches for your company, they’re less likely to find any negative comments or that any they find are far outweighed by positive sentiment.

• Relationships: More than a broadcast tool, social media offers a unique opportunity to network online and build your business. Paul Rosenfeld, CEO of Fanminder, has found partners, customers, investors, and employees through social media, including on OPEN Forum’s Connectodex. Donna Johnson, CEO of Indie Business Media, said recently about Twitter, specifically: “I use it to have conversations and share information with my customers and business colleagues. I reach out to them, they reach back to me. We share, connect, learn and talk business. How can that not be a benefit to my business, even if every Tweet does not result in a sale?”

• Brand awareness: Social media presents an incredible opportunity to generate brand awareness among a targeted audience. Begin by researching what channels and tools your customers are using, and then start engaging and linking back to your own website. While you may not see an enormous spike in traffic, you can be reasonably assured that those who do follow the link are more likely to be future customers. “I’ve gotten quite a few leads from OPEN Forum,” Suzanne Vara, founder of Kherize5 Advertising & Marketing. “It’s taken time to build a consistent presence, but eventually, people have noticed how involved I am in the community and have started reaching out.”

• Innovation: Social media can be a great learning tool, as well. By knowing where your customers are talking about your products and services – or better yet – giving them a place to do so on your own site, you may find new areas for improvement or innovation. Many of the improvements we made to OPEN Forum came after paying attention to feedback we’d received on the previous version of the site, as well as engaging our customers in conversations about how best we can meet their needs.

• Competitive Research: Besides the concern that your competitors may already be using social media, the upside is that by following what your competitors are doing and saying, or what customers are saying about them, you may find ways to differentiate your brand and get better results. Rosalie Kramm, President of Kramm & Associates, says, “Keeping track of competitors and clients’ activities is very valuable. I can see what competitors are doing on social media and see how they’re marketing themselves.”

Given these benefits, it is worthwhile noting that not all social media tools are right for every small business. While it may offer a less-expensive marketing option, social media marketing can sometimes cost more in time than in money. That’s why it’s so important to start with a strategic vision for how social media can contribute to building your business. As Anita Campbell says in this article on social media, “From a business perspective, if this is done aimlessly it can be more noise than signal... Often this disappointment results from approaching social media without a clear strategy and plan.”

Social media should be considered as part of your overall marketing plan, tying back your activity to specific goals, such as generating awareness for a new product or event or creating a feedback channel for customers. Once you determine some clear objectives – as well as where your audience is – you can develop a plan for what channels to use and how much time to dedicate. This will help you separate social media as a business tool rather than diversion, and then you can better assess if the time invested is paying off.

If you are an American Express OPEN Cardmember and haven’t created a profile on OPEN Forum, I invite you to do so – simply log in to OPENForum.com with your Americanexpress.com user name and password to get started.