Small business not using Social Media

The Optus Business Social Media Index, released in association with the Council of Small Business of Australia (COSBOA), has found that only 28% of SMBs currently use social media, investing on average over 6.6 hours per week, while 56% do not use it at all nor have any near-term plans to start.

More than 50% of SMBs not involved in social media believe that social networking is not appropriate for their industry, while 25% believe there is no clear way to build a business case for an investment in the area. However, non-users cited customer satisfaction measures (44%) and sales data (37%) as the key measures of success that might convince them to use social media in the future.

In the next 12 months, a further 16% of SMBs plan to use social media, although more than two thirds are still unsure of the exact benefits. Despite this uncertainty, 77% of SMBs planning to use social media cite increasing sales by reaching more prospective customers as their primary motivation for getting involved.

While the majority of SMBs are still uncertain about the value of social media, the 28% of businesses that actively use the tool are embracing the medium. Encouragingly, 47% of SMBs sold products or services through social media sites, with Facebook emerging as the tool of choice for 58% of sellers, followed by YouTube, Twitter and LinkedIn.

Of SMBs active in social media 61% cite the number of followers/friends as the key measure of success, while 82% cite increasing sales through loyal or engaged customers as the primary benefit, followed by networking at 78%.

Facebook is the number one social media site used by SMBs (53%), followed by YouTube (30%), Twitter (27%) and LinkedIn (19%). Setting up a profile on a social media site is by far the most common social media activity, with 77% establishing a presence in this way and 68% actively responding to posts. Only 27% have set up a blog for their business.

Despite nearly two thirds of SMBs having an annual marketing budget of less than $10,000, social media is yet to emerge as the marketing tool of choice. Nearly 80% of SMBs currently allocate less than 20% of their marketing budget to social media and only 5% allocate more than 50%.

Social media usage is relatively even across Australia, with 30% of SMBs in metropolitan Australia using social media versus 26% in regional areas. SMBs in Victoria and Queensland lead social media usage at 32% each, while South Australia and NSW follow suit at 28 and 27% respectively.

SMBs in the goods industry are the most active in social media (18%), followed by retail (13%), accommodation, café and restaurants (12%), and marketing and media services (10%) as these industries rely more heavily on word of mouth marketing. The information technology services and transport and storage sectors are the least active in social media at 3% and 4% respectively.

Optus has launched a comprehensive suite of ‘how to’ social media guides and case studies which are available for free on their web site www.bizthinktank.com.au advice portal.

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