MerchantCircle (recently acquired by lead-gen site Reply) put out its latest quarterly Merchant Confidence Index. In general this measures SMB attitudes about the state of the economy. There are also marketing questions, which are more interesting to me.
The latest Q2 survey (from about 4,000 SMB respondents) offers some interesting findings about social media and daily deals in particular. All the data and findings below must be qualified by the statement that MC’s SMB member base is generally more “socially savvy” than SMBs in general. Below is a selection of the data released.
The first chart below reflects that more MC SMB members are using Facebook to market themselves than any other single site or method. This number is higher than the SMB general population, but directionally consistent.
Asked about which marketing tools, methods and tactics were most effective, respondents answered social networks followed by email, followed by “local review sites” (e.g., Yelp). Online yellow pages was right behind that, but PPC ads on search engines was in ninth place.
MerchantCircle asked about use of Facebook Ads (as opposed to Pages/Profiles). The great majority had not used them. Of those that had roughly 2/3 said they would again, but a substantial minority of SMB Facebook advertisers said they would not. This probably reflects inexperience and a lack of knowledge of best practices.
Now on to daily deals. This respondent pool has mostly not used daily deals (82% had not). Of those that had, a large majority (77%) said “yes,” they would do so again.
The results above stand in contrast to a survey I did with MerchantCircle in February (n=8,514), where we saw 54% of those who had done a deal say “no,” they would not again.
Right now there’s no easy way to account for this discrepancy expect to say that perhaps the deal sites are doing a better job of education and/or the merchants have become more savvy in the intervening period.
Those who had a good experience found that daily deals were an effective customer acquisition tool. A significant number also found they could “negotiate” with the deal vendor — something that’s becoming more common. But what about the negative experiences?
Those who had a bad experience complained that deals were an ineffective customer acquisition tool and were too expensive for them. This may be a function of inexperience or poor planning on the SMB’s part — or a lack of proper expectation setting by the sales reps.
The chart below reflects that sales outreach is the primary way that SMBs are becoming aware of daily deal sites, followed by advertising and PR. The question was “How did you find out about the group buying site you used?”
The big takeaways here for me are:
- SMBs are rapidly embracing social as a marketing medium
- They’re experimenting with a broader range of tools and media (and paid search is not high on the list)
- SMBs are often ignorant of how to effectively market themselves and the medium gets blamed
- Sales reps are a critical link in the process: bad reps/over-promising = bad SMB experience
What do you think is most interesting about the data above?
June 9th, 2011 at 4:23 pm
I have to believe that there is a serious misconception that FB (not the ads within) by itself is where SMBs need to be focusing. People follow trends and obviously FB is currently a trend. Everyone from plumbers to nationwide commercial construction companies are creating Facebook pages in efforts to:
1.) Be mainstream…..everyone else is doing it and so should they
2.) Hope that this typically free form of advertising pays off (time investment wise) with new client acquisition.
A couple of observations with these results
1.) How could FB pages be more valuable than Local Search (Google Places..etc) and traditional SEO efforts for the average SMB?
2.) The hype of “hopping onto Social Media” is causing tons of small and large “Media Companies” to start offering cookie cutter packages for what they brand as Social Media. The companies are preying on the SMB owner’s misconception that Social is for everybody and that is where they should focus. It reminds me of major IYPs and YPs trying to sell anyone and everyone in their account database…their cheapened version of a Pay Per Click campaign on Adwords. The result was that most campaigns fail to renew their contracts with these companies for Adwords (etc) and in the mind of the SMB owner “Google doesn’t work”.
Just my .02
June 9th, 2011 at 4:45 pm
Couldn’t agree with you more, Jim. I am continually astounded that only 39% of SMBs are using Google Places (and keep in mind this is a sample of MC’s member base). It’s still safe to describe Google Places/Local Search to SMBs as “the greatest marketing strategy you’ve never heard of”.
Also, as MarketingPilgrim blogged about these results:
“For those who would use Facebook ads again the number one reason was ease of use. For those who wouldn’t it was because they didn’t get any new business. When ease of use is the top reason for using a marketing tool vs. it actually generates bottom line results then something is wrong.”
June 9th, 2011 at 5:13 pm
My company, Clarinova, gives retailers a free service that improves local Google search rankings ( with third-party microsites ) and provides a content feed for re-publishing to Facebook. We’ve moved nearly all of our effort to Facebook, since for our Action Sports customers, Facebook is far more valuable for the retailer.
For brand oriented retailers, like surf shops, skate shops, or outdoor retailers, consumers will spend a lot of time on Facebook affiliating with brands and retailers, so I think Facebook has more long term value to them. It isn’t about inertia or ease of use, it’s about results. They can get in front of consumers more easily, more quickly, with a good Facebook page.
Non-brand oriented retailers, or retailers that sell brands that consumers don’t get excited about, may still find Google to be more valuable. Consumers probably aren’t interested in the Facebook page for Home Depot, but they will search google to find the address of the nearest store.
These sorts of studies don’t differentiate the retailers on factors like consumer demographics or behavior, so they can hide a lot of the most interesting nuances.
June 9th, 2011 at 6:20 pm
[...] Facebook Top Marketing Method for SMBs | via screenwerk.com [...]
June 10th, 2011 at 1:41 pm
Another great post Greg! For retailers its important to claim your Google Places listing, build your community through Facebook, and to have your site up. Now once that’s done, how do you cost effectively capture consumers looking for where to buy the brands they want in the local market place. That’s where Clarinova comes in. We leverage Google and Facebook to help brands and their retailers guide consumers to the local stores carrying their brands. For Google we assist brands and their retailers by boosting their organic rankings in brand specific and product local searches. For Facebook, our system compiles all the best brand content for easy distribution to the Facebook Pages of retailers. Together, its a powerful combination. As the market continues to evolve and retailers learn that the starting point is the combination of a website, Places, and Facebook, they and the brands they carry will be looking for cost effective tools to give them an edge.
June 13th, 2011 at 3:24 pm
Great findings Greg,
I would be very interested to find out what actually having a presence on Facebook means…is it:
+ I have a personal profile
+ I have Page
+ I have a Place
June 13th, 2011 at 3:35 pm
Simon: for most of the SMBs it means a profile, although FB is trying to migrate them to Pages.
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January 6th, 2013 at 2:40 pm
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