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Each issue of CMO Close-up features an interview with a CMO, as well as other marketing executives answering that issue's "Big Question."
This week's feature:
Close-up with Laura Howard, CMO, ECI Telecom
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Looking for small-business owners? Try advertising on social networks
Kate Maddox
Story posted: June 9, 2008 - 6:01 am EDT
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Small businesses are rapidly venturing into social networks, providing a prime opportunity for marketers trying to reach this sometimes elusive segment.
Warrillow & Co., in new research released at last month's 2008 Warrillow Summit in Las Vegas, found that 28% of small-business owners had registered for at least one social networking site. The most popular social network for small-business owners is Classmates.com (18%), followed by LinkedIn (15%), MySpace (14%) and Facebook (10%). The study was based on an online survey of 2,036 small-business owners, conducted in March.
About 450 marketers gathered at the Warrilow conference to discuss strategies for reaching the lucrative small-business market, while small-business owners talked about their needs and how to best market to them.
One of the hottest topics was how to use social networking, both as a tool to reach small businesses and for small businesses to market to their customers.
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FAST-GROWERS LINKED IN
Warrilow's research found that fast-growth companies, defined as those having annual revenue growth of 20% or more, are much more likely to participate in professional social networking sites than slower-growth companies. For example, 67% of fast-growth companies surveyed had signed up for LinkedIn, the survey found.
The study also looked at how small businesses are using social networks.
The No. 1 application is personal use (52%), followed by marketing or promoting a business by creating a profile page (49%) and peer-to-peer dialogue (37%).
In a keynote presentation, LinkedIn CEO Dan Nye discussed how marketers can use social networks to market to the small-business market.
“Communities will continue to play a significant and influential role in the business decision-making process,” Nye said. “Often it is not clear to marketers what to do with the information or how to put social networks to use.”
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ENGAGE IN DIALOGUE
Nye gave marketers several strategies for using social networks to market to small businesses. The first is leveraging a company's employee base, having employees set up profiles and engage in dialogue with customers.
“Your employees' profiles are part of your brand,” Nye said. For that reason, companies should issue guidelines on how to set up profiles in order to provide brand consistency. IBM Corp. currently has about 116,000 employees registered on LinkedIn; Microsoft Corp., about 25,000, Nye said.
Another strategy is understanding customers and addressing their needs, using polls and question-and-answer features (such as LinkedIn Answers) to show expertise on a topic.
Companies can also use social networks to build their own communities of customers and prospects. Bank of America, for example, ran a campaign on LinkedIn giving small businesses a chance to connect with other small businesses.
A key strategy in using social networks is to add value to the community, Nye said. Recently, Southwest Airlines CEO Gary Kelly posed the following question on LinkedIn Answers: “How could an airline make your travel more productive?” and solicited feedback in order to learn how to improve the carrier.
Nye said marketers need to be proactive in regard to dialogues among customers on social networks. “With community, someone can be your biggest advocate or your biggest adversary,” he said.
During a panel discussion titled “Is Old Media Dead?” marketers and media executives discussed how they're using new media, along with traditional media, to grow their businesses and communicate with customers.
“We have more and more choices to make on the corporate side, and we have tougher choices now for the money we have,” said Andy Miller, advertising manager at FedEx, pointing to increased media fragmentation. “You have to spend the money to get the awareness up and get certain messages out, but you also have to find ways to have conversations with customers in meaningful ways.”
Miller said FedEx uses a broad mix of old and new media—from Super Bowl commercials to viral marketing—to communicate with customers.
“The biggest change in the last 24 months is the increased focus on ROI,” said Evan Blank, executive director, multimedia business development at The Wall Street Journal and the Wall Street Journal Digital Network. “Every marketing dollar spent needs to have a return. There has been a big change in metrics. How do you measure the 30 different marketing messages that got a person to click? Those are the big questions being asked that weren't being asked two years ago.”
Jennifer Howard, head of b-to-b markets at Google, said marketers are finding innovative ways to engage with customers. For example, 3M recently ran a video campaign on Google-owned YouTube, asking people to post videos of ways in which they use 3M Post-it Notes.
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"LET'S NOT BE AFRAID'
“Let's not be afraid of [new media],” Howard said. “We need to be open to taking some risks with the media plan. We need to make sure we have digital experimentation budgets set aside to take advantage of new media when they come out.”
In a series of panels, small-business owners discussed the most effective ways that marketers can reach them.
“I do 90% of my stuff at night, away from the office,” said Cathy McBride, president of M-Truss & Components, a manufacturer of steel trusses and frames. “The easier you make it for me to access your information on the Internet, the easier it will be for you to be able to get into my office.”
Brannon Allison, president of event organizer SourceOne Events, said the most important thing for marketers is to understand his business.
“It is important to understand the cyclical nature of what we do and understand our business as a small business and how it differs from a larger one,” he said. M
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