Already a Bloomberg.com user?
Sign in with the same account.
Comedian Jim Gaffigan has a suggestion for preparing a Hot Pockets frozen entrÉe: "Take out of package. Place directly in toilet." Gaffigan is not a big fan of Hot Pockets. He doesn't like exercise, either. But he loves bacon. "Without bacon, no one would even know what a water chestnut is," he says. Gaffigan's also a fan of social networking sites.
You'll see him on Facebook, Twitter, and News Corp.'s (NWS) MySpace. He keeps fans up to date on his concerts, albums, TV appearances—and naps. In short, he's a social networking success story. For a one-man band like Gaffigan, who probably has a decent amount of free time between eating bacon and being on stage, social networks and blogs have proved effective vehicles for marketing his business and staying close to his audience. But for many business owners, social networking is as valuable as a Hot Pocket is nutritious.
We've been misled as to the benefits of social networking sites. Many of us are finding that these tools do not live up to the hype, especially for small business. Once we start digging deeper, we're finding a lot of challenges. Are you thinking of using Facebook, Twitter, or the like in your business? Before you go any further, consider the following myths:
1. Social media sites are free.
Using social media sites isn't as easy or cheap as many people think. Sure, most let you set up an account for free. And you can integrate other services, such as your blog or Google's (GOOG) YouTube videos, at no charge. But there's a significant cost: your time. Because there's nothing worse than a site that's not current. And to keep it current, someone's going to need to spend time. This includes responding to visitors' questions, posting brilliant thoughts, adding graphics, and monitoring activity—basically trying to generate buzz.
Comedian Gaffigan seems to peruse his sites all the time. Bacon is still yummy days after it's cooked. But old information—a stagnant site, comments left without response—are death in the social networking community. I recently moderated a small business town hall forum. The company sponsoring the event had two full-time "social media writers"covering the event. They recognize that keeping a presence on these sites takes resources. Unfortunately, many of us don't have that kind of time—or cash—on hand.
2. Social media sites are a great place to find new customers.
In fact, the major sites aren't necessarily the best places for a business owner. Some of the most avid users of Facebook and MySpace are pimply adolescents and goth teenagers. Sure, there's a growing number of fortysomethings—but many are merely nostalgic to check out boyfriends and girlfriends from youth to see how fat and bald they've become; whatever they're doing on Facebook, it's typically not engaging with a small business brand. Twitter has millions of users, but apparently only four of them actually understand what it does and spend much time updating their tweets. Are these the people who will buy the plastic polymer gaskets your company manufacturers? I don't think so.
Where, then, should a small business owner go online? Often the best social networking sites are specific to business owners. For example, Intuit's (INTU) social media people are on their own small business community. Another good one is Bank of America's (BAC) small business community. These and others like them are tailored for people who run their own companies. Industry groups have started their own communities. Technology manufacturers have them, too. They used to be called "newsgroups" and "support sites," but now the vernacular is "communities." Same thing. These are places where business owners and managers go to post and answer questions about product problems, customer service queries, saving money on taxes, generating leads, hiring employees, eating bacon. You don't hear about these sites much because they're boring as hell. Then again, so are most of us who run small businesses.
3. You need to be on all the big sites.
Besides spending a lot of time and effort, business owners I know who have succeeded with social networking sites generally focus on just a few of them. Although he dabbles in MySpace and Twitter, Gaffigan's main vehicle is Facebook. Some companies prefer to build a business community on LinkedIn. I know a few nerdy guys who live on a couple of technology community sites and generate leads from them by consistently responding to questions and helping other users. Just because the media says it's cool to tweet doesn't mean it has anything to do with your business. If you're going to to frequent social community sites, don't spread yourself too thin. Most of the guys I know who use these things successfully pick their weapon and give it their all.
4. Social networking sites are for marketing.
Baloney. I've learned from other smart business owners that social communities are not for marketing. They're for service. I recently spoke to FreshBooks CEO Mike McDerment, who views these places as ways to get closer to his customers and respond to their needs. "Wherever they are, that's where I'll go," he told me. By providing quick and helpful customer service through these sites, he believes he will foster loyalty and satisfaction, resulting in more sales. In his own way, Gaffigan does the same. Makes sense. So whenever someone tells you that you should explore social networking "marketing," you should run in the other direction. It's the service, stupid.
5. Social networking is the future.
Really? Some of these cool and trendy sites aren't going to be so cool and trendy in the near future. The percentage of Twitter users in a given month who return the following month has languished below 30% for most of the past year, according to Nielsen Wire. And MySpace recently suffered a decline in monthly visitor traffic. Remember GeoCities? Yahoo! (YHOO) is shutting it down. A lot of business owners aren't thrilled about committing time and resources to a vanishing trend. Maybe social networking is a permanent phenomenon. That doesn't mean its main players today will be the main players tomorrow.
So should a business owner use social media sites for business? Maybe. Then again, maybe other customer service approaches make more sense. Remember newsletters, phone calls and support, seminars, partnering, and the like? Just because the media have determined that social networking is "in" doesn't mean your customers are there. Hot Pockets may taste good now, but they're not going to do much good for you in the long run.
Gene Marks, CPA, is the owner of the Marks Group, which sells customer relationship, service, and financial management tools to small and midsize businesses. Marks is the author of four best-selling small business books and writes the popular "Penny Pincher's Almanac" syndicated column. He frequently speaks to business groups on penny-pinching topics. More penny-pinching advice from Marks can be found at www.quickerbetterwiser.com.