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Social Media Not Good for Local Business

Social Media LogosIf you’re running a small business and your market is primarily your local area, then social media may be of little value to business success.

The Pew Internet Study

A recent Pew Internet study looked at where people are getting information about local businesses.  They found that most people are turning to the interent (51%), over newspaper (31%), word of mouth (23%), and TV (8%).

A small business website is critical for the success of your business.  Since the turn of the century, the most important component of your small business has been a website.  With the advent of social networking sites like Facebook and Twitter, there has been a growing push to have your business on these networks.

Social media may not be good for local business marketing . . . yet.

According the study, only 3% of the responders used social media to get information about a local business.  Only 3%.  This seems counter intuitive with so many people using the social network.

Social Network Fails

Social networks are great for connecting with people.  They seem to work well for larger businesses that are marketing to build brand awareness and community.  These companies spend a larger amount of time, energy, and money using social networks to grow their market share and build affinity to a brand.

Most local businesses use the web to gain more business and/or generate more leads.  They are not trying to build brand awareness or develop community.  There just isn’t enough time or money for most small business owners to divide their resources to develop a quality social media strategy that would generate a great return.

Social media is great for business, but it doesn’t seem to be ideal for most local business.  There has to be strategic design to get a return.

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  1. I don’t agree with a blanket statement that says “social media may be of little value to business success”. Just ask the growing list of food truck owners whose business success relies on Twitter and social media word-of-mouth.

    On my last trip to L.A., I visited the famous Kogi food truck which owes a large part of its success to Twitter. Here’s a great write-up by NPR on how social media helped Kogi not only build a royal following, but get out-of-town foodies like me to seek them out:

    Granted, social media won’t work for many local business, but with a little imagination and creativity, it can do wonders.

    • The interesting thing about the Pew Internet study was that 97% of internet users do not use Social Networks to get information about local business. While it is true that there are success stories where social media has played a crucial role in local business success, the majority of local business owners are going to find more success with search engine optimization.

      Local business owners should diversify their online marketing effort. But the data suggest that investing in social media for local business, may not have the greatest ROI.

      • Well, I think you also have to look at how much of an “investment” social media really is. With something like Twitter, it’s a pretty low-cost way to get some exposure, and possibly some new clients.

        The food truck model is specific, and successful, and obviously doesn’t work with every type of business, but it’s worth thinking about. Could local businesses use Twitter or LinkedIn to meet like-minded people? If so, it’s probably worth doing, even if it doesn’t lead directly to measurable ROI.

        Also, my understanding is that Google includes a lot of social media activity in its search algorithm, so this might actually be another way to do SEO for local businesses, even if their potential customers aren’t following them on Twitter, etc.

        • There is no doubt that there is value to social media for small business. There are many examples of success. However, when people are trying to discover new local businesses of interest, the data strongly suggest that social media is not where people go to get this information. People go the newspaper before social media when trying to get news or information about local business.

          Can a local business leverage social media to grow its business and develop relationships? Sure.

          But according to the research, people are not using social media to get information about a local business. They are using search, however. This means that if I have small budget to dedicate to online marketing, it is better to invest in good SEO and web design instead of social media. The data is very compelling.

  2. It’s interesting to see the statistics from Pew but I think they are missing an important piece of information. It’s true that when people “look” for small business information they are still going to search engines. However people don’t “hang out” on search engines or web sites. They hang out on facebook and twitter. So if a business wants to be where the people hang out and have the opportunity to be visible then social is a perfect strategy. I’ll give you an example of a social business that has been started in my home town. It’s a Facebook group called East Cobb Snobs. They have over 4000 local residents and are working with businesses to do awareness campaigns. They are doing free offerings, discounts and other advertising direct to the local community. It’s truly a beautiful business model using social media and they’ve grown very quickly in only six months.

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