Businesses Wary of Facebook, Twitter Usage

While midmarket companies find social media sites alluring, recent surveys suggest that many question its true business benefits.

Small businesses are unsure about the impact of social networking on reaching customers, according to a recent survey from RatePoint, a provider of customer reviews, testimonials and online reputation-management services. The survey revealed that while 36 percent of small businesses agree their customers spend time on social networking sites, 27 percent are undecided and 20 percent disagreed that their customers were spending time on social networks.

Small businesses also are conflicted about the use of social media for business, according to the results of RatePoint's survey, which is based on a poll conducted in August of more than 150 small businesses, most with five or fewer employees.

Twenty-five percent of survey respondents agreed that their customers want to hear from them on social networks, while 36 percent disagreed and 20 percent were undecided. When asked if social media is a quick way to connect with prospective customers, 35 percent of businesses surveyed agreed, 28 percent disagreed, and 22 percent were undecided.

However, the survey also found small businesses that are proactively using social networking to reach customers are finding a strong return. Of those that indicated they would be using social media as the main tactic to drive new customers to their business in the next 12 months, 70 percent said they do so because social media is the least expensive option.

"Social media use is no longer limited to one demographic; everyone is adopting," said Neal Creighton, CEO and co-founder of RatePoint. "While many small-business owners are uncertain, big brands are investing heavily in social media. Social media can be a great equalizer for small businesses to compete alongside larger brands, and SMBs are missing out if they are not involved."

While small and midsize companies often think managing social media is time- and resource-intensive, many SMBs have found tools to help them make the process more efficient and effective, Creighton explained. "SMBs need to talk to customers via social media so they can find how to meet customer needs, build relationships and make sales," he said.

Research from Internet market monitoring specialist eMarketer shows an estimated 57.5 percent of all U.S. Internet users, or 127 million people, will use a social network at least once a month in 2010. By 2014, nearly two-thirds of Internet users will be on board.

IT research firm Forrester reported that while young people continue to march toward almost universal adoption of social applications, the most rapid growth occurred among consumers 35 and older.

Despite the benefits social media can bring to small businesses, another recent report from Panda Security found social networking sites can be dangerous for midmarket companies. A September survey of 315 SMBs with up to 1,000 employees revealed 33 percent of these companies had experienced a malware or virus infection from social networks, with 23 percent citing employee privacy violations resulting in the loss of sensitive data.

The Panda survey found that to minimize the risks associated with social media, 57 percent of SMBs currently have a social media governance policy in place, with 81 percent of these companies employing personnel to actively enforce those policies. In addition, 64 percent of companies reported having formal training programs to educate employees on the risks and benefits of social media. The majority of respondents (62 percent) did not allow the personal use of social media at work.