How small business owners can use social networking to promote their business.

Lacho, Kenneth J. ; Marinello, Craig

INTRODUCTION

Small business owners typically rely on traditional means to advertise their businesses and services. These means typically include direct mail, local newspapers, fliers, radio, signage, and trade shows. With the age of the Internet we have seen the addition of websites and email marketing added to the weapons the small business owner may use. For example, Fishbowl Marketing is a promotion-based email firm in the restaurant industry. It combines restaurant and email expertise to develop email promotion programs for independent restaurant owners. Small business owners who are members of Chambers of Commerce or industry trade association such as the New Orleans Metropolitan Convention and Visitors Bureau (NOMCVB) may advertise their businesses on the organization website or send mass emailing to fellow members.

Currently if a small business owner wanted to develop business relationships he or she could go to a networking session or business card exchange conducted by a local business trade association such as a Chamber of Commerce. A new way of networking has arrived. Social media or network services such as Facebook, Twitter, and other websites have impacted how millions of Americans especially those under 35 interact or network with one another, shop and view brands (Swartz, August 28, 2009).

Businesses are spending money in social media at a faster rate than any other form of online marketing. Studies by Forrester Research show that spending on social networking will increase from $455 million in 2008 to $3.1 billion in 2014, a 335 percent increase. In contrast, spending on email marketing will grow from $1.2 billion in 2009 to 2.1 billion in 2014 (Horovitz, July 24, 2009). In addition, some 25 percent of small businesses surveyed by Adology Research said they would spend more on social networking in 2009 (Horovitz, July 24, 2009).

Interest in and the use of social networking by businesses large and small reflects the growing importance of the use of this medium. This paper illustrates how small business owners can use social networking to market their businesses. Advantages and disadvantages of two social networking tools, Facebook and LinkedIn are discussed. Guidelines for using these tools are presented.

SOCIAL NETWORKING

Social networking is the grouping of individuals into specific groups, like small rural communities or a neighborhood subdivision. Although social networking is possible in person, especially in the workplace, universities and high schools, it is most popular online. This is because like most high schools, colleges, or workplaces, the Internet is filled with millions of individuals who are looking to meet other people, to gather and share first-hand information and experiences about any number of topics from golfing and gardening to developing friendships and professional alliances (whatissocialnetworking.com, 2009).

Social networking online started as a way for friends within a school to stay connected with each other online as opposed to using a telephone or in person. The individual can decorate his or her own personal page with virtual trinkets and photos, thus expressing one's own identity or personality. Within this virtual world, they can share information, experiences, pictures, videos, and purchasing preferences including recommendations of a vendor's products or services. These recommendations have led the business community to take notice of online social networking and the power that virtual word-of-mouth advertising has on the sale of their products and services. Two sites in particular, Facebook and LinkedIn, have become particularly important in the exposure of small businesses and the wares they offer.

Facebook was founded in February 2004 and is a social utility that helps people communicate more efficiently with their friends, family and coworkers. The company develops technologies that facilitate the sharing of information through the social graph, the digital mapping of people's real-world social connections (Facebook's company website, 2009). Since 2004 Facebook has grown its membership at an exponential rate. As of September 2009, Facebook had 300 million users across the globe. The opportunity for a small business to have access to this many people was but a dream years ago, but is very real today. Facebook's ease of use and elementary directions make it a popular choice among inexperienced and advanced computer users alike.

LinkedIn is a business-oriented social networking site. Founded in December 2002 and launched in May 2003, it is mainly used for professional networking. As of October 2009, LinkedIn had more than 50 million registered users, spanning more than 200 countries and territories worldwide (Wikipedia, 2009). LinkedIn is more of an executive form of social networking. Each member fills out his or her profile, which looks more like a resume, with professional information such as work history, professional expertise, and current work experiences. LinkedIn's users are typically more skilled than a Facebook user, and its more sophisticated maneuverability and layout may frighten the inexperienced user.

WHY NETWORK ONLINE

A few reasons why businesspeople and business owners network online are:

* You can manage the information that's publicly available about you as a professional

* Find and be introduced to potential clients, service providers, and subject experts who come recommended

* Create and collaborate on projects, gather data, share files and solve problems

* Be found for business opportunities and find potential partners

* Gain new insights from discussions with likeminded professionals in private group settings

* Discover inside connections that can help you land jobs and close deals

* Post and distribute job listings to find the best talent for your company

SOCIAL NETWORKING METHODS

The use of Facebook and LinkedIn as marketing tools for small business owners is vitally important to the success or failure of these methods. Both social networking sites have advantages and challenges when using them as a medium for marketing a business. Understanding the basic and advanced techniques of both are critical to the success they can provide a small business owner.

One of the things that separates Facebook from LinkedIn is its usage as a social networking site. Facebook has a personal application where people create pages for themselves to connect with old friends, colleagues, classmates and neighbors for personal purposes such as: keeping up with family, sending pictures of kids, reminiscing about past fun and experiences, and rooting for one's favorite sports teams. It also has a professional function, where one can create a business "fan page" to introduce products and services to a massive audience, update "friends" or followers of the new happenings in one's business, alert people to the specials of the day, and/or sending people information through an information page called the "wall." Many users aren't comfortable allowing their prospects and clients to be a part of their personal life. This feature has a tendency to prevent business owners from using Facebook as a marketing medium for their business. This shouldn't prevent anyone from creating a business "fan page" as the two sites are unique to each other and users have control over the content that they expose to their prospects and clients on their "fan page" and the content they provide to the "friends" of their personal page. Depending on what type of business is being promoted, it might be an advantage to a business owner to have the ability to promote his or her products or services to the "home market."

LinkedIn is strictly a professional site, and does not have the personal elements that Facebook provides such as: personal picture and video sharing, games, polls, trinkets and other elements that are distracting to a business owner. Instead, LinkedIn is totally focused on providing a business atmosphere on its site. Even the information that one provides at the initial sign up, is strictly of a professional nature and almost resembles a quasi resume'. For some this is perceived as a tremendous advantage for LinkedIn due to the lack of distractions and professionalism of the audience.

Facebook has a very simple sign up procedure and the features within are very user friendly and easy to pick up even for an inexperienced businessperson. One can start by going to facebook.com and creating one's own personal page, and/or create a business "fan page." As stated above, the "fan page" is a tremendous way to introduce a business, products and services to the community of followers. Once one has created a "fan page" one will be able to add pictures of his or her products, services or events, display videos, post a logo, and communicate with followers. One will also be able to join groups both personal and professional where one can communicate with others, learn about events, gain insight and information, or just for fun.

LinkedIn has a more complicated sign up procedure, and it begins with going to linkedin.com. Once there one will be asked to provide one's name, a summary of one's experience, specialties, education, past business experience, a professional photo, a website, blog, or twitter account, and other business information. This is why LinkedIn is not only a great marketing resource, but can also be a great tool for recruiting top talent. One will also have the opportunity to add personal information, such as: one's birthday, phone number, address, instant message ID, and marital status. You also have control over how others find you as a member of LinkedIn, and will be prompted to add categories by which one would like to be found by others. LinkedIn has many professional groups that one can join and participate. Some of these groups may be exclusive and require acceptance into the group. This allows the group creators to control their membership and quality of the group. The discussions, questions and answers that happen in the groups and among members are some of the true value of LinkedIn. As a participant, one can answer questions and become a ranked expert in one's field.

ADVANTAGES AND DISADVANTAGES

The advantages of using social networking to market a small business can often be the same whether you are using Facebook or LinkedIn. The first advantage is being able to expose products and services to an extremely large market, yet still having a relationship component with the users. To explain this further, a restaurant will be used as an example. If a restaurant signed on to a social networking site in hopes to increase its lunch crowd through word-of-mouth referral marketing, one way that they could accomplish this is by sending out their lunch specials daily through their fan page (Facebook) or business page (LinkedIn). To take this a step further they could videotape the preparation of the meal, or post pictures of the finished product to accompany the description of the specials. In this example, the business owner is taking advantage of the photo, and video components of these social networking sites to create a visual and potentially an auditory experience for the viewer. By sending these out daily, the business will stay in contact with its existing clientele and viewers, as well as gain new viewers when links are shared. This strategy alone helped one restaurant in particular triple their lunch crowd and allowed them to sustain this growth.

Everyone has hundreds of people in their network, and if they like your product or service they might share your link with the people they have in their network, thus multiplying your network. The main difference you will find in this example between Facebook and LinkedIn, is that on Facebook it is a lot easier to spread the word, and invite new viewers. LinkedIn's policies and structure make it a bit more difficult to get a mass spreading of information between users, but this structure can also be viewed as an advantage depending on what type of business someone has and what type of clientele they want to attract. Remember, not everyone is looking for mass viewership and exposure. Some businesses may not want everyone to know who they are and may be more selective in their clientele. For businesses such as these, LinkedIn's policies and structure might be more welcomed. Think about it this way, Facebook has over 300 million users and that number is growing daily, whereas LinkedIn has 50 million viewers in over 200 countries. Executives from all Fortune 500 companies are LinkedIn members. So it all depends on whether you want to fish in a large pond with many different types of users or would rather use a targeted approach in a smaller pond where one can attract a certain type of prospect.

One of the other advantages of Facebook is the cell phone application that is available for most smart phones. This application allows the business owner to update his or her status, send links, add friends, join groups, check messages and overall communicate via one's cell phone with the entire friend list on Facebook. Two unique advantages of LinkedIn are the security features and recruiting information available. Security features allows complete control over who views the information and the control that one has in how people can contact you. They must know you or someone who does know you before they can be introduced. Second, is the recruiting aspect of LinkedIn which allows businesses to promote available positions and openings that they might have. It allows job seekers to display their information and desire for new jobs and opportunities.

As with all marketing tools there are advantages and disadvantages to the mediums you have at your disposal. Let us look at some of the disadvantages of Facebook. One is the personal versus professional mix of the population on this social networking site. Depending on what type of product or service that is trying to be promoted, access to multitudes of users who are not in your target market may be an issue. It can also introduce or re-introduce you to old friends, classmates, neighbors, and others whom you do not want to be connected or reconnected. Second, is the massive amount of games, quizzes, trinkets, and applications that have absolutely nothing to do with promoting your business. The constant updates and invitations pertaining to these nuisances can become quite annoying when trying Facebook as a function of your business. Last on the list of disadvantages for Facebook, is the potential for spamming and security issues that arise from this.

Facebook is not alone when it comes to minor disadvantages, LinkedIn has some as well. First, LinkedIn can be very technical in its methods and sometimes confusing at times. It is not as easy to find the things that one may want in one's initial use of LinkedIn and this issue can often deter users and prevent them from returning to this site. Second, LinkedIn's security features, which are definitely a positive in most cases, can be disastrous for the business trying to reach a wide audience and having very few contacts. Lastly, to obtain the most value from LinkedIn and have the ability to invite multiple people at once among other benefits, a business owner must pay for LinkedIn's premium service.

BEST PRACTICES AND TIPS FOR USING SOCIAL NETWORKING

First, know why you are networking online. Too often business owners join these sites with a desire to grow their business, but spend their time reconnecting with old friends. While it may be great to reconnect with cronies from the past, it's probably not going to give you the return on your investment in time that you had hoped for in the beginning. Second, create a limit of how much time you will spend on these sites and make that time preferably during your non-busy hours or outside of your "golden sales hours." Third, add value to any conversations that become a part of, whether in a group or just a general message sent out from you. Every time you send a message out, your followers will determine whether or not they will read the next one. Last and most important, know who your contacts know. Look at the people your followers are connected to. This will help you ask for referrals and grow your own network. Remember the door of opportunity is easier to open when someone holds it open for you.

CONCLUSION

Social networking is a fast growing phenomenon in both the business and social sectors of the U.S. economy. It is a child of the Internet and provides an electronic way of person-to-person networking, especially through Facebook and LinkedIn. Social networking is a new weapon in the arsenal of promotion weapons at the disposal of the small business owner.

The owners of small businesses must be made aware of the value of social networking in promoting their businesses especially Facebook and LinkedIn. The advantages, disadvantages, and guidelines for use need to be understood. In this brave new world of electronic networking the owner may need to attend workshops to gain an understanding of the use of social networking. Workshops are conducted by area chambers of commerce, trade associations, and technology-related groups such as the Louisiana Technology Council.

Facebook allows small business owners to use targeted marketing. Pattison (2009, November 12) presents an excellent example of this in the New York Times:

   A wedding photographer had had little luck with traditional
   advertising. A full-page ad in a bridal magazine generated zero
   leads and a trade show yielded only four bookings, barely covering
   the cost of the booth. Facebook proved a digital bonanza. The
   photographer aimed at women ages 22 to 28 who listed their marital
   status as engaged and who lived in the Metro Area. The owner
   estimates that he spent about $300 on Facebook ads in the last two
   years and has generated more than $60,000 in business. About three
   fourths of his clients now come to him through Facebook, either
   from ads or recommendations from friends.

Despite successes such as those of the photographer, the use of social networking faces several challenges in the future. Companies fall into two camps. There are those who embrace social networking and those who are leary of it, perhaps due to the lack of understanding it or about the legal implications of customers helping customers (Swartz, August 28, 2009). Most corporations are still wedded to traditional electronic and print media. Still, marketers can't afford to ignore potential customers who are using media in new ways (Swartz, August 28, 2009).

According to Swartz, (August 28, 2009) some 300,000 companies use Facebook, one- third of those being small businesses. Of these 100,000, what are their demographics? More importantly, what are the demographics and industries of the non-users? What industries are they in? Are they rural or urban in location? Why don't they use social networking? What types of education in social networking do they need in order to use it? These questions need to be addressed in future research.

REFERENCES

Facebook.com (2009). Facebook. Author, http://www.crunchbase.com/ company/facebook.

Horovitz, B. (2009, July 24). Back-to-school pitches go social. USA Today, pp. 1B-2B.

Pattison, K. (2009, November 12). The New York Times [on-line]. http://www.nytimes.com/2009/11/12/business/smalbusness/ 12guide.html?em=&pagewa. Retrieved 11/16/2009.

Swartz, J. (2009, August 28). More marketers sign on to social media. USA Today, pp. 1B-2B.

Wikipedia (2010, February). LinkedIn. Wikipedia The Free Encyclopedia. http://enwikipedia.org/wiki/LinkedIn. Retrieved 2/26/2010.

www.whatissocialnetworking.com (2009). What is social Networking. Author, http://www.whatissocialnetworking.com/. Retrieved 2/26/2010.

Kenneth J. Lacho, The University of New Orleans

Craig Marinello, Next Step Resources