For small businesses competing against larger companies, the battle for new customers may sometimes seem lost before it begins. Besides having the name recognition that comes from being an established and sizable company, large businesses gain an advantage by having advertising budgets that most small companies can’t easily compete against. However, in this battle of economic Davids and Goliaths, small businesses have a tool in new forms of media. Social media, used properly, can be powerful enough to level the playing field and help small business owners overcome the mightiest of competitors.
The massive reach of social media can level the playing field for small businesses wishing to advertise to potential customers. Unlike radio and television advertising, which may be too costly for some small businesses, social media advertising is cheap and extremely targeted. It takes less than $50 to promote content on Facebook or Twitter in a way that would reach more than 10,000 people in a targeted age group, location, or gender. This makes is much easier for companies to gain the kind of brand recognition that can influence people to use their services for the first time.
The fact that content on social media is easy to share is an additional benefit. This means that marketing content promoted on social media will spread much faster than it would on traditional media channels. To illustrate, if a commercial is shown on TV and someone wanted to show it to a friend, they would have to record the commercial on a video and then bring the video to the friend (with DVR, you’d have to bring the friend to your home). But if a person wants to share a commercial they saw on YouTube, there are more than half a dozen way to email, text, or share the content. So for the relatively low cost of promoting the content on social media, a small business owner can give their popular marketing content an expansive reach.
Most 18 to 35 year old spend more time watching YouTube than network television, so the low cost of social media advertising means that small business can truly compete with larger companies for the attention of consumers. Instead of having to pay for quality content and for advertising placement on television networks, small businesses need only worry about the content, and depend on the power of social media to spread the message for them.
Small businesses can also use social media for market research that was once only available to larger companies. The audiences of social media channels form a diverse population that has members of almost every possible demographic (age, gender, race, location, etc.). Additionally, the fans of an organization’s social media channel are normally the strongest supporters of the brand. By asking questions, hosting polls, or directly messaging key clients, an organization can inexpensively gain valuable information from consumers they would normally pay for through focus groups and surveys.
Another subtle, but meaningful, benefit for small businesses that use social media is the ability to reinforce their connections with customers. Small businesses benefit from the close relationships they have with their clients. In an era where many feel that customer service is lacking, small business owners stand out by being able to meet face to face with clients and handling their concerns personally. By engaging people through social media channels, small business owners can develop a rapport with their clients that leads to greater customer loyalty.
Loyal customers are a business’s greatest asset because it’s cheaper to sell something to an old customer than it is to acquire new customers. This bit of common sense is supported by data. The technology research firm Gartner released a report which stated that 80 percent of a company’s future revenue will come from just 20 percent of its existing customers. By using social media to build a strong base of loyal customers, small businesses can increase their profitability, which makes them more financially able to challenge larger competitors in other ways.
There are certainly challenges associated with social media marketing, but the research on the subject has shown that social media platforms have a massive reach and that people respond to messages they receive through these channels. This makes it just as valuable to small business owners as television or radio advertising. And the best part is, that the power of the content is what drives social media, so small businesses can effectively compete against larger competitors if their message is strong enough. Because of this, social media truly helps to level the playing field for small businesses.