Small- and midsized businesses (SMBs) are routinely lauded for their big contribution to the U.S. economy. Now that social media has gained favor among these companies, their marketing efforts are adding social elements with increasing regularity and efficiency.
A new study commissioned by LinkedIn reports that 81 percent of SMBs are currently using social media to drive business growth and 94 percent are meeting marketing objectives through social media.
Nearly half of respondents say they use social networking to learn and glean insights about their industry. The study surveyed 998 SMBs in the United States and Canada and was conducted by market research firm TNS on behalf of LinkedIn.
Getting Social Brings New Business
Almost three out of every five SMBs surveyed say social media helps their business gain new customers. Collectively, these companies with revenues between $1 million and $50 million accounted for a 10.7 percent year-over-year increase in marketing budgets last year, according to local advertising research and consulting firm Borrell Associates. LinkedIn's "Priming the Economic Engine" study also highlights a strong correlation between SMBs that have increased social media spending and those that achieved "hyper growth."
Hyper-growth companies with significant year-over-year increases in revenue -- one in six of the companies surveyed -- are among the most active in social media marketing. Of those in hyper-growth mode, 73 percent reported an increase in social media spending. Branding, word-of-mouth, content marketing and lead generation were each widely identified as the most effective use cases for social marketing.
"Through the study, we found that SMBs that are in growth mode rely heavily on social media for multiple activities in their value chain, including finding and researching financial service providers," Jennifer Grazel, category head for financial services at LinkedIn, noted in a blog post.
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"Given their willingness to market their businesses and seek knowledge within social networks, financial marketers with an eye on SMBs should invest time and resources meeting them where they are. Hearing or reading about a financial services product or service on social media is likely to trigger SMB decision-makers to take further action, whether that means educating themselves, engaging in discussion or purchasing a product," Grazel says.
The businesses surveyed for LinkedIn's study also identified the most valuable social media content in terms of business insights. Industry specific news articles lead the pack, followed by testimonials, reviews and opinions from customers, clients and industry experts. Best-practice guides from other companies and news articles about relevant companies were also cited.
LinkedIn Targets Small Businesss
A new hub for small businesses from LinkedIn is designed to provide resources such as best practices and guidelines for social marketing.
The site includes playbooks for crafting profiles, sharing insights and expanding audiences. The five best practices outlined include targeting hyper-growth companies, providing a clear path to learning, taking advantage of unmet content needs, providing resources for the entire SMB value chain and building credibility for facilitating open dialogue with SMBs.
SMBs generate $5.5 trillion in annual revenue, according to the latest data from the Dunn and Bradstreet Database cited by LinkedIn. The impact on job growth is even more profound, with seven out of every 10 new jobs being created by small businesses, according to the U.S. Small Business Association.