Half of Canadian businesses believe that social media has the potential to increase their profitability, according to a new BMO Bank of Montreal survey. However, while social media tools such as podcasts and social networking sites present significant, cost-effective opportunities for businesses to engage customers, only 29 per cent of Canadian small business owners are taking advantage.
The survey, conducted by Leger Marketing, found that those who think social media can increase their profit believe it can do so through:
- promoting their company’s brand or reputation (64 per cent)
- providing broader access to consumers (63 per cent)
- encouraging word of mouth endorsements and referrals (62 per cent)
- selling products or services (46 per cent)
- gathering ideas/suggestions (42 per cent)
The top reasons business owners cited for not using social media are they:
- don’t think it is a valuable tool (29 per cent)
- lack knowledge about social media (19 per cent)
For those businesses that use social media tools, Facebook is the most popular choice at 70 per cent, followed by LinkedIn (32 per cent), and Twitter (31 per cent).
On average, Canadian businesses owners surveyed say that 28 per cent of their marketing efforts are focused online as opposed to traditional media channels. Those who believe social media can increase their profitability are also more likely to devote a higher percentage of their marketing efforts online on average, compared to those who do not believe it will help the bottom line (34 per cent vs. 22 per cent).
My take: Business owners often underestimate the time and effort required to gain traction in social media. In addition the impact on the bottom line is difficult to measure than some more traditional forms of marketing. This can lead to frustration and disappointment, but those companies that take a strategic, planned approach to social media engagement will see huge benefits.