More SMEs are on social media, but still lag behind consumer habits: Sensis survey

More Australian small businesses have a social media presence than ever before, but are still far behind the number of consumers on social networks, prompting warnings for SMEs to start investing more in their social strategies.

The Sensis 2013 Yellow Social Media Report released this morning found 30% of Australian small businesses and 47% of medium-sized businesses have an online presence, but these numbers are still well below the 65% of Australians overall who use sites like Twitter, Facebook and LinkedIn.

The survey of 1959 Australian businesses and 932 consumers found SMEs which had embraced social media were more likely to report better business performance through increased sales, profitability and employment.

More SMEs based in regional Australia used social media than in metropolitan areas, with 35% having a social media presence.

Sensis executive general manager of digital partnerships and innovation Kelly Brough told SmartCompany 51% of regional Australian consumers connect to social media daily, compared to 44% of metropolitan-based users.

“What we’re starting to see is the everyday pervasiveness of social media. This shows all SMEs need to make use of digital opportunities, even if it’s just being there,” she says.

The survey found the amount SMEs spent on social media in the past year has declined, with the average investment from a marketing budget just 13.7%.

Small businesses on average spent $1970 on social media, down from $3410 in 2012. Medium businesses invested on average $11,780 in the past year, down from $16,920.

Social media is also having an increasingly tangible impact on the shopping behaviour of consumers, as the survey found 74% of social media users read reviews online before making a purchase and 58% of these users go on to make a purchase, up from 40% last year.

SR7 founder James Griffin told SmartCompany this should inspire brands to spend time managing and communicating with their online followers.

“Instead of concentrating on growing the number of followers, they should be focusing on managing the community they already have. The survey showed 27% of social media users would actually change their opinion of the company if it responded to a negative comment or bad review.

“If you want to minimise the negative impact, you should focus on responding to the community you have,” he says.

Despite the growing importance of social media for small businesses, 29% reported not having a strategy to drive traffic to their sites and only 25% measure the ROI of their social media spend.

Brough said SMEs should develop a clear social media strategy in order to better measure their ROI.

“One of the things you need to think about first is the strategy and what outcomes you want to achieve from using the platform. Businesses need to be able to measure against these objectives to determine their ROI,” she says.

Griffin says there is a “missing connection” between SMEs using social media and their ability to measure success, but he says by understanding their social media followers businesses can develop better strategies which will provide measurable data.

“If you look at what people were interested in and why they follow brands, you can work out ways to achieve better returns.”

“Sixty-six per cent of social media users were following a business to receive discounts, so if you have a steady flow of discount offerings on social media platforms, then you can track how many followers come in and redeem them in store, and you can start putting a physical metric around what you’re doing online and actually drive traffic into the store,” he says.

Earlier this month, an Optus survey also found a disconnect between consumers and businesses on social media, with experts saying measuring ROI was an important tool to determine if the money being invested was going to good use.