Report: Most Small Businesses Still Not Sold on Social Media

Report: Most Small Businesses Still Not Sold on Social Media

By Chris Crum – Wed, 04/21/2010 – 5:05pm.

Many Businesses Still Ignoring Social Networks

Citibank put out a new report indicating that most small businesses still are not leveraging the social media tools available to them, despite the “relentless buzz” around them.

Are you ignoring social media?
Tell us why.

According to the survey of 552 small business executives across the United States, in the last year 37% of small businesses haven’t used a Web site for marketing or expanding their business and 84% have not used ecommerce to sell their products or services. 62% aren’t using basic email for marketing their business.  Yet among those businesses that do have a Web site, 74% say their site has been effective at generating more business.

“Many small businesses today have yet to really harness the marketing and communication power that online tools can provide them,” says Raj Seshadri, the head of Small Business Banking at Citibank. “Our survey reveals a huge opportunity for many businesses to begin using some of the basic online tools, such as email marketing, to drive their sales.”

65% of small businesses are not placing online ads to expand their business and 67% have not used search engine optimization, according to the survey.

Other Noteworthy findings include:

– 72 percent say they are likely to use a Web site for marketing or expanding their business in the next 12 months – up 14% from those who do today.

– 24 percent will likely use ecommerce to sell their products or services online over the next 12 months – up 50% from those who do today.

– 30 percent say they intend to use social networking sites such as Facebook, LinkedIn or Twitter for marketing or expanding their business – up 58% from those who do today.

“This survey shows that many small businesses have yet to add new tools to traditional marketing methods that they have found effective in the past,” said Seshadri. “This may be because the online world does not fit their business model or other factors such as inexperience with technology or lack of time to effectively enter these marketing channels.  It’s encouraging, however, to see that many intend to utilize more of these tools in the next 12 months.”

According to Citibank, there is a disconnect regarding the importance placed on word-of-mouth marketing by small businesses.  63% say word-of-mouth marketing is the most effective way to market their business and find new customers, but interestingly many don’t view social media as a word-of-mouth channel. 81% say they have not used social media sites such as Facebook, LinkedIn or Twitter.

Among those not using social media sites, 47% don’t think these networks have value to their business. 21% think they’re more for personal than business use, and 18% don’t know enough about how to use them.

Michael Stelzner, founder of SocialMediaExaminer.com released another interesting report this week, finding that 22% of marketers were just getting started with social media marketing and another 43% had only been doing it for a few months.

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