Is twitter a viable commercial use platform for small businesses? An empirical study targeting two audiences in the small business community.

Geho, Patrick R. ; Smith, Sara ; Lewis, Stephen D. 等

INTRODUCTION

The Internet community is abuzz with talk about Twitter, blogging about Twitter, and of course, tweeting on Twitter. Twitter is a mini-blogging tool that gives its users 140 characters to answer one question: What are you doing? The character limit makes Twitter different from other social networking sites. Simplicity makes the learning curve for Twitter short, drawing in a diverse group of users looking for a way to stay in touch with friends and family, networking with professionals, keeping up with industry news, or staying in tune with their favorite celebrity tweeters. Twitter's growth is evident, but the media suggest that businesses are flocking to Twitter looking for a simple, cheap way to market their business and communicate the latest industry news about their company. Small business owners might ask: Is Twitter a viable marketing tool for my business?

TWITTER USERS

Who is using Twitter? According to Quantcast.com (2009), a website that offers audience data for any site on the Internet, recent data indicated:

* Twitter reaches approximately 23.5 million people per month in the U.S.

* 54% are female

* 44% are between 18 and 34

* 72% are Caucasian, 14% are African American

* Typical household income is between $30 thousand and $60 thousand

* 1% of the addicts contribute 35% of the visits

* 72% are passers-by, while only 27% are regular users

With this vast audience it would seem that small businesses would be embracing social media as a part of their marketing plan.

Pear Analytics (Kelly, 2009) conducted a study to determine purposes for which people are using Twitter. They compared their research with other studies that were conducted recently, getting similar results. Their sample consisted of 2,000 tweets from the public timeline every 30 minutes for two weeks. The resulting tweets were then categorized into six areas: news, spam, self-promotion, pointless babble, conversational, and pass-along value. Here are their findings:

Table 1: Twitter Uses

Category                   Number     Percent

Total news                   72        3.60%
Total spam                   75        3.75%
Total self-promotion        117        5.85%
Total pointless babble      811       40.55%
Total conversational        751       37.55%
Total pass-along value      174        8.70%

Self-promotion usage was less than expected at 5.85% of all tweets. This may be enlightening to some, as there appears to be a flurry of companies and businesses joining Twitter to promote products and services. Business Twitter users appear to be well established national and multi-national firms.

A Twitter activity study conducted by Sysomos, Incorporated, a social media analytics company, indicated that 5% of the users contribute 75% of the tweets. This finding was based on indexing 11.5 million accounts, and then looking at the top 5% of users who accounted for the most Tweets. Furthermore, they found that 32% of all tweets made by the most active Twitter users were generated by machine bots that posted more than 150 tweets/day. The most active Twitter machine bot users were operated by sources such as hotels offering deals, regional and national news services, regional weather services, the top news within Digg (a web site where users are news and information contributors), tags within Delicious (a social bookmarking website), and financial aggregators. These very active bots represented one-quarter of all tweets (Cheng & Evans, 2009). Though extensive in nature, the study did not indicate Twitter use by small businesses.

SOCIAL MEDIA: FREE OR FEE?

Although Twitter's current business model has yet to generate revenue, it is just a matter of time before this social networking application goes from free to fee for commercial users. Twitter's growth has attracted the attention of Internet blogs and news stories, and there are even social networking consulting businesses that offer expertise in online promotion of individuals and companies. Large businesses, like Starbucks (over 409,000 followers) and Apple (over 77,000 followers), are developing strong followings, but little evidence is shown of Twitter's value for the Mom and Pop shop.

To be more relevant to the business advertiser, Twitter has been making more acquisitions as it continues to grow, according to recent statements made by Twitter co-founder Biz Stone. To that end Twitter bought search engine Summize in 2008. Stone said Twitter will "start making money" through "non-traditional" advertising (Scheer, 2009).

Even with Twitter's textbook "hockey stick" version of a growth chart, there must be sustainability through user activity. "Such lofty plans may prove premature if Twitter can't find a way to maintain its popularity among users. Recently, traffic to Twitter.com has started to decline month over month" (Luechtefeld, 2009). A study by the Nielsen Company shows Twitter traffic dropped 27.8 % between September and October, bringing it down to 18.9 million unique visitors according to eMarketer. This is all the more reason Twitter must revamp its business model.

Small businesses are initially attracted to Twitter as a free advertising platform. However, at some point Twitter must generate a revenue stream. This might be accomplished through commercial-use fees based on the number of followers a business has or through user opt-in charges to access specific information tied to Twitter search features. These Twitter user fees could provide a rich environment for both Twitter and its business advertisers. The question then is this: Would the small business user be priced out of the market?

With the emergence of location-based applications via smartphones, other social networking sites may offer opportunities for small businesses to market through social media networks. Applications like FourSquare, Brightkite, and Google Latitude utilize GPS enabled smart phones to connect users. FourSquare, for example, allows users to "check-in" with other users through the GPS feature. Points are awarded to users who check-in from their location, say at a restaurant. These points can be used as a marketing tool by the restaurant that Foursquare users could exchange for goods. However, for these location-based applications to work, there must be a large user base, which has yet to develop.

COMMERCIAL USES

Developing a brand and user following on Twitter may be challenging for a small business, but it is free. The only resource needed is time. Because of the massive population that uses Twitter and the wealth of information and communicative power that it provides, small business owners should definitely explore its application to their business. Twitter does not just expose its users to what others are saying or doing, it has the power to introduce users to the entire World Wide Web. Tweeters post links to other websites, news articles, and blogs. Twitter allows its users to search locally, so small businesses in a single city can find people in the area, view their tweet activity, determine if they are potential customers, and follow them.

Searching for followers is not the only way small businesses can use Twitter, but caution should be exercised. Businesses contemplating using Twitter for public relations, customer service, or advertising should first apply due diligence to determine the practicality and feasibility for using social media, since the time investment required in managing a Twitter- based marketing program may not be cost effective. The small business entrepreneur should visit web sites and blogs of successful business tweeters and investigate their Twitter persona, because seeing the real thing is a more efficient use of time than reading articles about how to drive success using Twitter and other social networking sites (Comm, 2008).

If business owners are not using Twitter to follow customers or potential clients, they may be using Twitter for market research. Owners can determine what people are saying about their company or their competitors. As any entrepreneur knows, conducting market research before opening a business is essential. What is the current market lacking, and what do customers want? Is there an appropriate niche in the market for my idea? Twitter is a way to find out. Twitter tools like Internet surveys and search features allow ideas to be exchanged, followers to be acknowledged, and questions to be asked and answered.

Twitter can be used as a company account; or employees can be advocates, tweeting and promoting the business to their followers (Englander, 2008). The balance of power shift between companies and customers in today's technologically driven business market has resulted in a new marketing paradigm. Social networking has allowed customers to interact with each other, share experiences with a company (whether good or bad), and create an image about which the company had no input. Customers are "defining their own perspective on companies and brands, a view that's often at odds with the image a company wants to project" (Bernoff & Li, 2008). Some suggest that businesses need to take back the control of their branding, and one way to do that is by getting involved with social media themselves and monitoring what customers are saying about them. Twitter can be a tool that small businesses use to manage their online identity the same as larger companies. Otherwise, today's social media savvy users may define your business first!

Small businesses have seen the benefits of using Twitter, and these success stories drive the idea that Twitter can be valuable for marketing. It can work, and it has worked. Success typically shows for a small business when loyal customers tweet about them. Subsequently, business owners have access to all of their followers who could be potential customers and clients. Success stories have been told about how Twitter has helped to double business clientele and interest, increase website traffic, and even drive sales. For instance, a local coffee shop in Houston, Texas, started taking pick-up orders through Twitter direct messages. This personal, immediate customer service is truly something a small business can offer. So by using that leverage and not simply tweeting about promotional offers, small businesses can capitalize on adding a personal touch and can use Twitter to do it (O'Grady, 2009).

First American Bank, Norman, Oklahoma, decided to use an unconventional approach, at least in the banking industry, to promote their bank, products, and events on Twitter. As one of the early adopting banks of social media marketing, First American Bank has seen an increase in "followers," as well as an increase in traffic to their website, promoting products and services via "tweets" on Twitter by using giveaways to attract customers (McAuley, 2009).

Mom and Pop shops have seen a few benefits, but the hypothesis is that this is not common. Larger organizations, like Comcast, Dell, and Southwest Airlines, use strategies that reach a larger audience and have greater results. Comcast, which delivers customer service through Twitter, made the headlines throughout 2009. The company employs half a dozen employees to talk to customers through the real-time site, answer their queries, and discuss any problems. Comcast currently boasts 35,470 followers on Twitter (Marshall, 2009).

According to Marshall (2009), in terms of how social media strategies translate into revenue, Dell announced in December that promoting its PCs using Twitter had generated more than $6.5 million in sales in 2009. Reports indicate there had been a 23% rise in the number of users following Dell on Twitter in a recent three-month period, resulting in 1.5 million followers. Other social strategies that have attracted public attention include Southwest Airlines, which employs a chief Twitter officer to alert flyers of bad weather and to monitor and respond to dissatisfied customers who use the Twitter site to complain.

METHODOLOGY

To get a representative, diverse sample from the small business community, a survey for small business owners was communicated to the target audience using two methods. First, the survey was sent to Small Business Development Center (SBDC) clients via email. SBDCs are programs within the U.S. Small Business Administration that provide free business start-up assistance and entrepreneurial development. The services provided by SBDCs nationwide include one-on-one counseling to nascent and expanding businesses as well as business training on a wide range of business and regulatory topics.

Clients who visit the SBDC for one-on-one counseling or for group training sessions provide their email address for future correspondence. This list of over 4,000 email addresses was used by the Tennessee Small Business Development Center (TSBDC) to reach a large audience of SBDC clients. SBDCs in Georgia, Iowa, and Kansas also participated by sending the survey to large client email lists and posting the survey link to their state SBDC website.

The survey was the primary method for gathering quantitative data from a large sample; but exploratory, qualitative research was conducted by using Twitter to investigate how it is used by the small business community. In addition to email requests, the survey was posted a total of seven times between the initial survey launch date and the closing date through the Tennessee Small Business Development Center's Twitter page. The survey was "tweeted" to an estimated 116 followers during different hours of the day to target different audiences. The Small Business Administration (SBA) also posted the survey to their followers two times to an audience of 3,160 followers. A third Twitter account was targeted, and the SBDC News twitter page posted the survey one time to 65 followers.

A second survey targeted business counselors at all Small Business Development Centers nationwide. Counselors at SBDCs provide a variety of services, including working one-on-one with current and prospective business owners and creating and administering training sessions. The purpose of the second survey was to provide insight into the other side of social media marketing and to determine how counselors communicate social networking marketing techniques to their clients.

Survey Design

Respondents were asked to answer survey questions via computer, and their confidential and anonymous responses were sent to a password-protected Internet database. Questions about basic demographics, small business type, Twitter use, and opinions about the value of social media marketing were included in the survey.

Survey A.

The design of the survey for small business owners filtered respondents to different sections of the survey based on their answers to certain questions. For example, respondents might answer "No" to the question, "Do you currently own (or work for) a small business?" In that case, they were directed to a set of questions at the end of the survey exploring their intentions to use social media marketing should they open a small business in the future. This survey design was used to ensure that the specific questions about their business were not answered by individuals who were not the intended audience.

Another filtering technique was used to assess the appropriate audience of Twitter users. Small business owners who indicated they did not use a Twitter account skipped the questions that specifically addressed Twitter and were directed to the end of the survey. To address specific users who use Twitter for marketing purposes, those who answered "Yes" to the item, "My Twitter account is for promoting/marketing my small business," were directed to a portion of the survey seeking opinions about Twitter's value as a marketing tool. The internet survey is accessible via the following link: http://www.surveymonkey.com/s/99X6QKS.

Survey B.

The survey for SBDC counselors did not use filtering techniques, and counselors answered all questions. The same Internet survey provider was used for this survey administration. Questions were asked about the location of a small business development center, their familiarity with social media websites, and the amount of encouragement given to clients to utilize social media for marketing. The Internet survey for SBDC counselors is accessible via the following link: http://www.surveymonkey.com/s/6CJLZGB.

FINDINGS

Survey A was directed to small business owners. Because the survey allowed for skipping questions, not all questions were answered by every respondent. The estimated sample size for Survey A is 694. The first question of the survey asked participants how they were contacted to complete the survey. This question was used to gauge how well the survey was communicated to the Twitter community and through e-mail. Of the 694 respondents, 6 were reached through Twitter; the remainder heard of the survey through email communication.

The survey design filtered respondents based on their answers to certain questions. Since 75 of the survey respondents did not currently own a small business, they were directed to a different set of questions assessing their intentions to use social media for marketing should they open a small business in the future. Of 607 small business owners who responded, 140 indicated they use a Twitter account. Those respondents were directed to questions that addressed Twitter marketing. Fully 93% of small business owners who responded had heard of Twitter, but only 23% were Twitter users.

Several demographic questions were asked. Most respondents (82%) were White; 15.5% were African-American. Hispanic and Asian individuals accounted for the remaining respondents. Gender was equally representative--slightly less than 50% of respondents were male. Over half of respondents were between the ages of 41 and 60 (See Table 2 for additional demographic information).

Of the 624 respondents who stated that they currently own or work for a small business, 46% of the businesses were relatively new, open from less than 6 months to 2 years; and 69% of those surveyed indicated that the gross revenue/sales of their most recent business year was less than $250,000. A diverse representation of business types was collected. Businesses in service (such as retail, food, professional, scientific, and technical), manufacturing, entertainment, construction, and many others were represented in the sample. Sixty-six percent of small business owners surveyed said they conduct business online for a variety of purposes, including sales, advertising, and marketing.

Twitter Information

Although 93% of the 600 small-business owners surveyed had heard of Twitter as a social networking site, only 23% use a Twitter account at all, reducing the sample size for the remainder of the survey to 140 Twitter users. Specific questions about Twitter usage provided information about frequency and time devoted to using Twitter. When asked how long they had a Twitter account, 41% said for only 1-6 months, and 45% had a Twitter account for over 7 months to 2 years. The majority of respondents (77%) were occasional or rare tweeters, posting mini-blog messages on their Twitter page monthly or weekly. Over half of the respondents follow between 1-50 other Twitter users and have 1-50 followers; 38% have between 51 and 500 followers.

Next, the survey explored the purposes of using Twitter by small business owners (See Table 3). The most frequent use (78.5%) of Twitter by the small business owners was for marketing and promotion. The second and third most frequent uses of Twitter were for business networking (76.5%) and social networking (59%).

Of the 135 Twitter users, 106 said they used Twitter for small business marketing. Those who used Twitter were directed to answer questions regarding the value they see in using Twitter for marketing (See Table 4 for a summary of opinions about Twitter's value as a marketing tool).

Table 5 details several specific Twitter marketing strategies. Survey responses suggest that small business owners are not yet using Twitter extensively in marketing their products or services.

Respondents were asked their opinion of brand Twitter pages or Twitter pages written by a company or business. Fifty-two percent said Twitter pages were an interesting way to gain insight into business, and 39% said it was a good way to keep up to date with the company. As for other social networking sites, 85% of Twitter users also use Facebook to market their small business; only 21% of them use MySpace. Many (59%) Twitter users also used LinkedIn for marketing.

Non-Business Owners

The survey design allowed participants to skip questions that did not pertain to them. Respondents who did not own or work for a small business were directed to questions addressing their intentions to use social media. Of those who answered, 85% were interested in starting their own business. Sixty-five percent indicated agreement with the statement, "Social media is a valuable tool to research the business market." Sample respondents also indicated intentions to use social networking sites to market their small business should they open one ([mu] = 3.9). Non-business owners were asked to indicate what other social networking sites they use, and 38% said none. Over half (56%) use Facebook and 35% use LinkedIn.

Small Business Development Center Counselors

Survey B was sent to a representative sample (n = 184) of SBDC Counselors from each region of the U.S. The largest segment of the sample was from the South (35%) followed by the Midwest (34%). The remaining counselors (32%) were located in the Northeast and Western U.S.

Familiarity with Social Media.

Counselors were asked about their familiarity with three popular social networking websites: Twitter, Facebook, and LinkedIn. On a 5-point scale where 1 = not at all familiar and 5 = extremely familiar, counselors were least familiar with Twitter ([mu] = 2.8) and were slightly to moderately familiar with how Twitter can be used for small business marketing ([mu] = 2.7). Participants were most familiar with Facebook in general ([mu] = 3.4) and moderately familiar with LinkedIn ([mu] = 3.0).

Encouragement of Social Media Use.

Counselors were also asked to indicate the amount of encouragement they give to clients to utilize social media, particularly for marketing. On a 5-point scale where 1 = never and 5 = almost always, counselors indicated that they sometimes encourage business clients to utilize social media for marketing and sometimes discuss how to use social networking websites with clients, [mu] = 3.4 and [mu] = 3.1, respectively. Counselors indicated that sometimes their clients are interested in learning how to use social networking websites for business purposes ([mu] = 3.2). Regarding encouraging potential business owners to conduct market research using social networking sites, the counselors responded seldom to sometimes ([mu] = 2.7).

CONCLUSION

Social media provide opportunities for entrepreneurs, but they also present unique challenges for small business marketing. Is Twittering expected? If a business does not "tweet," is it shrugged off or not taken seriously? Not having a Twitter account may send a message; but an inactive, dead Twitter blog sends a different kind of message. When small business owners start a Twitter account, they have a responsibility to monitor it and develop a solid following and do so without the human capital, infrastructure, and financial capacity available to large companies engaged in a social media marketing campaign. An inactive Twitter account with dwindling followers and unanswered customer messages would obviously be contrary to a business's social media marketing objectives and one reason why small business owners are not embracing Twitter as a marketing tool.

A Citibank/GfK Roper survey conducted in October 2009 suggested that small business owners are not widely using websites like Twitter and Facebook as much as the media suggest. The survey found that 76 percent of small business owners did not use social media and did not find them helpful in generating business leads. Eighty-six percent did not use social media sites to get advice or other information (Baltimore Business Journal, 2009). The Executive Vice President of Citibank's Small Business Segment suggests, "... many small businesses may not have the manpower or the time required to take advantage" of the opportunities social media can provide to help network and grow a business.

The current study supports Citibank's findings, also suggesting that small business owners are not using Twitter. Minimal Twitter use in the small business community cannot be attributed to a lack of knowledge since 93% of small business owners surveyed have heard of Twitter. However, only 23% use a Twitter account at all. Although the most frequent use of Twitter by small business owners (135 people) was for marketing and promotion of their small business, this number is small in comparison to the number (607) of small business owners initially surveyed. Interestingly, when small business owners were asked in general if they believed Twitter was a valuable marketing tool for their business, the average response was undecided. For the more specific questions about Twitter's value as a marketing tool, the majority suggests that it is undecided and leaning toward slight disagreement that it added any value to their marketing efforts.

When the small audience that used Twitter for marketing was asked specific questions about Twitter marketing strategies, including tweeting promotional opportunities, monitoring what others are saying about their business, and responding to questions that followers ask about their small business, most respondents indicated they seldom use these strategies at all. Could this be why they are not seeing value in using Twitter? Small Business Development Center counselors are moderately familiar with social media but only sometimes discuss using them with clients for business purposes or as a way to conduct market research. This connection between the two surveys demonstrates that not only are small business counselors not informing owners about how to use Twitter effectively, but small business owners are not using the strategies that Twitter marketing bloggers and consultants suggest.

Small businesses will expend more time and effort in developing a brand on Twitter than will brands like M&M, whose Twitter persona is the recognizable green M&M, or Coca-Cola, with its signature logo that is one of the world's most recognizable commercial brands. So how can small businesses capitalize on the social media trend? They need to be informed about how to use it effectively and manage their time with the social networks that offer the most return. However, the majority of small businesses will have difficulty justifying the time investment and expense associated with self-promotion using Twitter. Those small businesses currently using Twitter are for the most part engaging in loss leader marketing where goods or services are priced at a loss and widely advertised through social media in hopes this method of promotion will draw new or returning trade to the business. This cost of promotion is too time consuming for most entrepreneurs because Twitter followers must be cultivated to ensure they stay engaged.

Advertising through social media has not matured to the point of either reliability or the predictability of the targeted audience responses. That inability to quantitatively measure a return on investment drives most small business owners away from using or continuing to use a marketing strategy that yields no solid indication of success for the substantial commitment of time and money required. Further research will be conducted if and when Twitter and other social media venues are able to develop a commercial user structure that enables users to calculate their return on investment.

REFERENCES

Baltimore Business Journal, by Dayton Business Journal. (October 2009). Survey: Small businesses not using social networking. Retrieved February 15, 2010, from http://baltimore.bizjournals.com/baltimore/stories/2009/ 10/12/daily3.html.

Bernoff, J. & Li, C. (2008). Harnessing the power of the oh-so-social web. MIT Sloan Management Review, 49(3), 3642.

Cheng, A. & Evans, M. (August 2009). Sysomos, Incorporated. An in-depth look at the 5% of most active users. Retrieved February 15, 2010, from http://www.sysomos.com/ insidetwitter/mostactiveusers/.

Comm, J. (2008). Twitter secrets: How short messages can make a big difference to your business. Joel Comm and InfoMedia, Inc.

Englander, D. (December 2008). Ultimate guide for twitter marketing. Retrieved September 3, 2009, from http://blog.shoeboxed.com/ultimate-guide-for-twitter-marketing/680/.

Kelly, R. (August 2009). Twitter study reveals interesting results about usage--40% is "pointless babble." Retrieved February 15, 2010, from http://www.pearanalytics.com/2009/ twitter-study-reveals-interesting-results-40percent- pointless-babble/.

Luechtefeld, L. (November 2009). Despite declining traffic, Twitter eyes acquisitions. Retrieved November 24, 2009 from http://www.imediaconnection.com/content/25227.asp.

Marshall, R. (December 2009). 2009 in review: Social networking. Retrieved December 31, 2009 from http://www.v3.co.uk/v3/analysis/2254959/social-networking-2009.

McAuley, S. (July 2009). Pass-the-aspirin: New media marketing challenge. ABA Banking Journal. Retrieved December 30, 2009 from http://www.ababj.com/briefing/ pass-the-aspirin-new-media-marketing-challenge.html.

O'Grady, E. (November 2008). Twitter to go: One Houston coffee shop makes its mark. Retrieved February 15, 2010, from http://pistachioconsulting.com/twitter-to-go/.

Quantcast.com. (2009). Retrieved February 15, 2010, from http://www.quantcast.com/twitter.com.

Scheer, S. (November 2009). Twitter eyes acquisitions, sees making money in 2010. Reuters. Retrieved February 15, 2010, from http://www.reuters.com/article/idUSTRE5AN1TB20091124.

Patrick R. Geho, Middle Tennessee State University

Sara Smith, Middle Tennessee State University

Stephen D. Lewis, Middle Tennessee State University

Table 2: Demographic Information by Percent

Gender     Female                 50.4
           Male                   49.6

Race       White/Non-Hispanic     81.5
           African-American       15.5
           Hispanic or Latino      1.9
           Asian                   0.9

Age        21-30                   9.8
           31-40                  19.5
           41-50                  29.1
           51-60                  28.9
           60+                    12.4

N = 685

Table 3: Twitter Usage by Small Business Owners

Purpose                                       Percentage of Use

Small business marketing/promotion                  78.5
Business networking                                 76.5
Social networking with friends                      59.0
Keeping up with industry news                       55.2
Looking up products or services                     37.6
Keeping up to date with hobbies/interests           37.4

N = 141

Table 4: Twitter as a Marketing Tool

Statement                                                      Average

Twitter is a valuable marketing tool for my small business       3.6

Using Twitter helped people in the community know more about     3.3
my business

Since using Twitter, I have seen an increase in interest in      3.3
my business

I have seen an increase in traffic to my business website        3.3
since using Twitter

Marketing with Twitter has increased the customer base of my     3.0
small business

Twitter marketing has helped increase business revenue           2.8

I have seen an increase in customer satisfaction since using     2.8
Twitter

I have seen an increase in repeat business since using           2.7
Twitter

N = 94 Note: 1 = Strongly Disagree, 2 = Disagree,
3 = Neutral/Undecided, 4 = Agree, 5 = Strongly Agree

Table 5: Use of Specific Twitter Marketing Strategies

Statement                                                      Average

I tweet about promotional opportunities on my Twitter            2.9
business page

I use Twitter to monitor what other Twitter users are saying     2.5
about my small business

I respond to questions my followers ask about my small           2.2
business

N = 92 Note: 1 = Never, 2 = Seldom, 3 = Sometimes, 4 = Often,
5 = Almost Always