SOCIAL MARKETING MEDIA AND SMALL BUSINESSES: WHAT’S THE REAL COST?

Certainly, online social media appears to be the new “it” thing. We all have seen how the users scope of the social websites have been widen significantly in the past years, especially with the birth of something you might be familiar with called Facebook. A couple of months ago a professor in a course I was taking asked to the audience of 50 how many of them have a Facebook account. Only 1 person said no. Furthermore, when you realize that your 10 years old sister and your mother of 53 are both using the social website, it is apparent this might be a tool that could be use to reach different types of public.

This is exactly the perception of many businesses nowadays. Regardless of the enterprise’s size, there seems to be a trend of using online social media to advertise products and to develop customer relationships. We now see how companies include references of their Facebook and Twitter accounts in their radio and television advertising. Clearly, something has changed!

In the case of small businesses, social media marketing can represent an important opportunity for growth. As shown in the Social Media Trader article called “Social Media Marketing for Small Businesses”, increased brand awareness, low cost, impact on searching engines, compatibility with traditional marketing and the possibility of recommendation among costumers are all benefits that could be provided by this tool.

Let’s take a look at the cost factor. Is it really low? Or small business might be paying a disguise price in the form of risk? Compared with traditional advertising methods, there is no question online social media is cheaper in terms of what companies have to pay (if any payment is required) to have an active account. But what about how much will it cost to have an immediate widespread discredit campaign from discontent customers. This works both sides: customers could recommend your product, but could also post any bad experience with your brand and make that known worldwide with a simple click. Wouldn’t be “cheaper” not having that possibility at all? Going “online social”, as mentioned in the previously referred article, means having your product under constant scrutiny. Small businesses could be facing a phase in which they don’t possess a “strong” product. If this is the case, giving to the customers the power of recommendation can have very harmful side effects.

On the other hand, isn’t an opportunity cost the allocation of resources, particularly time, for budget constrain small businesses in a not yet proved effective method of marketing? The CNN article “How can Small Companies Make Money from Social Media?” shows that many companies remain unsure about what social media marketing really does for their business.  It also noticed that “one of the challenging aspects of social media is getting concrete data on how effective it really is”. "If someone recommends a product on Twitter or Facebook, seeing the impact of each recommendation is very difficult."  Furthermore, the method has not proven formula or path of effective implementation.

Small business should take these aspects in consideration when using the online social marketing strategy. Regardless of the possible side costs, the trend for the near future does not seem to be avoiding the use of this tool, but on the contrary joining it whether the company likes it or not just to avoid staying behind the competition out there.