My Internet2Go program (via Opus Research) and MerchantCircle recently conducted an online survey of small business marketing practices, using the MerchantCircle member base. Because MerchantCircle wanted to maximize completes there was an incentive and they targeted more active members of their community. In this context “active MerchantCircle members” were those that have done one or more of the following: created an enhanced profile, uploaded pictures, created a blog, coupons and newsletters and/or connected with other merchants through the MerchantCircle website.
The survey received more than 2,500 responses, 2,403 of which qualified as “small businesses,” using the definition of 99 or fewer employees. Here was the headcount breakdown:
Here is the respondent distribution by years in business:
Here’s the respondent distribution by industry:
Here were the marketing budgets:
In terms of headcount distribution, annual marketing budgets and other characteristics this group of 2,403 US SMBs, respondents were fairly typical of the larger SMB population. However there were other ways in which they were not. For example, 90% claimed to have a website (beyond the presence on MerchantCircle). The average is about 52% for the broader market.
The “bombshell” findings in my view were the following:
- 45.2% indicated they had a Facebook page for their business (a different question yielded a 53% response re “created a profile on a social network”)
- 46% indicated they had a presence on Twitter, either business or personal account or both
Earlier this week a Citibank survey found that SMBs were generally not relying on social media as a marketing platform. That had 500 respondents and was based on a telephone survey. Just like online surveys, telephone surveys are imperfect, especially in the era of mobile phones. There is also no “representative” SMB sample in the way you can mirror the US census with consumer data. So what we have are two diametrically opposed set of findings. I’m showing you what the industry, headcount, and marketing budgets distribution was so you can judge for yourself how representative these findings are.
This group of respondents in my view represent a leading indicator of where a big chunk of the SMB market may be headed. These are scrappy SMBs, trying to find ways to promote themselves on a shoestring (44% spend less than $1K annually on marketing). Facebook and Twitter are easy and free and thus offer very low barriers to entry. But there’s also a gap between adoption and perceived effectiveness. We asked what types of media are you using and then, separately, which ones are the most effective. Again, this is based on perception but here are the media types that yielded the largest “gap” between usage and effectiveness rating:
- Social media profile
- Online yellow pages
- Print yellow pages
- Coupons/direct mail, email marketing (tied)
In other words, lots of respondents were using social media but a very large number did not rate it as effective. In the case of social network profiles 53% were using them but only 22% rated them “effective.” This may go to the inability to track or measure response as much as actual performance.
We also asked “What is your biggest complaint about online marketing?” Here were the top answers (aided response):
- Too costly
- Not enough time to do it well and still run a business
- Too many places to advertise
- Needs a dedicated person and don’t have the budget to hire one
- Not effective
- Too complex and confusing
In other surveys, too complex comes out as the top or one of the top two responses — another indicator that this population is somewhat different and “ahead of the curve.”
I want to reiterate that the survey population is more active and “engaged” but that this was also a very large sample (2,400) and in my belief shows:
- There’s pent up demand for simple, cost-effective online marketing solutions/tools
- There’s a large group of SMBs that will self-serve if the options are simple and the value proposition is clear
- There’s considerable danger for traditional media as SMBs are starting to more aggressively investigate alternatives
There’s more here and I2Go clients got access to the broader data set and my analysis. But if there are questions, let me know.