In conferences I have had the honor of giving throughout Mexico and other countries, I am frequently asked in the question-and-answer session about the failure of social networks as a marketing tool for small and mid-sized businesses, or whether they are useful at all. There is a lot of talk about success and strategies to achieve it, but little time is spent talking about mistakes, which can sometimes teach us more.
A common problem among small and mid-sized businesses is that they place too much faith in their advertising strategy. They expect a lot of an advertisement, a promotion or some strategy, and its ability to boost their sales. The reason for this is their false expectation of achieving a return on investment from the first effort. In advertising, any well-executed campaign will result in brand awareness; but this metric does not usually translate into a short-term ROI. Something similar happens in social networks, because from the impression that they are cheap springs the hope that they can work miracles in terms of results.
In most of these cases, failure is the first step in success. Few true success stories begin with the right decision, and marketing in the social media is no exception. The following are five reasons why, in my opinion, social networks can fail as a marketing strategy for small and mid-sized businesses.
1. Poorly formulated objectives
The social networks can do a lot, but not on their own. For a strategy to prosper, the first step is determining what we want to achieve. It is indispensable that every strategy have a concrete objective, but we rarely stop to ask: what do we want to achieve with this effort? The objectives must be quantifiable in terms of numbers and timeframe; the objective should not be, for example, “to increase sales this year,” because this does not specify a figure or a date. In the social media, we should think of something more concrete, like “achieving an average of 1000 monthly conversations in 2013.”
It is understandable that at first, the desire to start up a project can overrun the need to set objectives; but after a few months, their absence becomes palpable. It is very hard to reach the finish line if we don’t know where it is. Don’t forget: “if it can be measured, it can be bettered.”
2. Emotional heuristics
Human beings make decisions influenced by the images or ideas we have regarding a topic. According to Finucane, Alhakami, Slovic and Johnson, in the case of the social networks, people react positively, almost blindly, since the online community is full of companies that have been successful with this type of marketing strategies, without considering whether their cases applicable to all situations.
Paula Bedregal, a researcher with the Department of Public Health of the Faculty of Medicine of the Pontificia Universidad Católica in Chile, says: “These images or ideas are consulted quickly and with less effort than using rational normative cognitive guides.” This is why people react emotionally when making decisions that should be rational. Instinct is a fundamental part of the work of small and mid-sized businesses, but it is important to keep a cool head.
Not all companies benefit from the social networks. In many cases, introducing these strategies can even damage the brand, such as companies that are highly exposed to clients and with no infrastructure for managing the social media, as often happens with restaurants. In all companies, there is a great temptation to create digital marketing strategies. Because of the low cost of the platform, they often assume that it is the right path for every company, when actually the factor that determines their viability is potential return on investment and effectiveness.
3. Low investment
In the early years of the Internet, the biggest factor for selling its benefits was the low or nonexistent cost of operation. Strategies like e-mail marketing messages or animated GIF banners were seen as virtually free because of how little they cost compared to traditional advertising strategies. This paradigm survives to date, because there is an erroneous idea that it costs nothing to advertise on the social media. We tend to confuse accessible prices with no-cost strategy.
A company’s social network marketing, public relations or advertising efforts are directly proportional to how ambitious its goals are. If we just want to serve 10 clients, the main investment will be the time the owner spends answering messages. The main reason why a company might begin a digital marketing strategy is to hold a conversation with its clients. It must ask itself: how much are we willing to invest to speak with every one of our clients? Not investing reveals a lot about how important the issue is to the company.
It is necessary to measure what “free” really means on the Internet. On line, consumers have different perceptions of what should be free, whether the provision of a service fraught with advertising, or turning over personal or consumer data in exchange for entering the social network.
4. False expectations
The social networks can do a lot, but not on their own. If a product or service is not performing well, it is surely the result of a host of reasons, so beginning a strategy of this type may not help, and it may even contribute to speeding up its demise.
It is indispensable that we weigh the scope of the social network in our market niche. For a company that sells fertilizer to farmers, starting up a community on Facebook may be useful; but it would be futile to hope for more “likes” than Nike. Companies often fail to establish a benchmark inside or outside of their industry. Among the questions they forget to answer are:
What are the parameters for success in my industry?
How much penetration to the social networks have in my industry?
What successes or failures has the competition had in this area?
What are the metrics that apply to my company?
5. Lack of follow-up
The most serious of the reasons why small and mid-sized businesses fail in their social network marketing is the same reason the websites of these companies are often a disaster: lack of commitment and follow-up.
A correctly implemented social network strategy has only one path: upward. These tools tend to become more complicated: there will be more followers, conversations, metrics and competition. The greatest risk of digital marketing for small and mid-sized business is starting out and then not having the time or resources to follow up. The old saying “don’t start which you can’t finish” applies perfectly here.
Conclusion
The limitations of social networks as a marketing strategy lie in the effort, the resources and the time they require, and this is the same for small and mid-sized businesses as for large corporations. For the former, resources are much scarcer, which naturally makes them much more difficult to implement. The trick is to identify the spaces in which a small or mid-sized business can add value through these new communication media.?
Five Reasons why Small and Mid-Sized Businesses Fail in the Social Networks
By: Álvaro Rattinger
In conferences I have had the honor of giving throughout Mexico and other countries, I am frequently asked in the question-and-answer session about the failure of social networks as a marketing tool for small and mid-sized businesses, or whether they are useful at all. There is a lot of talk about success and strategies to achieve it, but little time is spent talking about mistakes, which can sometimes teach us more.
A common problem among small and mid-sized businesses is that they place too much faith in their advertising strategy. They expect a lot of an advertisement, a promotion or some strategy, and its ability to boost their sales. The reason for this is their false expectation of achieving a return on investment from the first effort. In advertising, any well-executed campaign will result in brand awareness; but this metric does not usually translate into a short-term ROI. Something similar happens in social networks, because from the impression that they are cheap springs the hope that they can work miracles in terms of results.
In most of these cases, failure is the first step in success. Few true success stories begin with the right decision, and marketing in the social media is no exception. The following are five reasons why, in my opinion, social networks can fail as a marketing strategy for small and mid-sized businesses.
1. Poorly formulated objectives
The social networks can do a lot, but not on their own. For a strategy to prosper, the first step is determining what we want to achieve. It is indispensable that every strategy have a concrete objective, but we rarely stop to ask: what do we want to achieve with this effort? The objectives must be quantifiable in terms of numbers and timeframe; the objective should not be, for example, “to increase sales this year,” because this does not specify a figure or a date. In the social media, we should think of something more concrete, like “achieving an average of 1000 monthly conversations in 2013.”
It is understandable that at first, the desire to start up a project can overrun the need to set objectives; but after a few months, their absence becomes palpable. It is very hard to reach the finish line if we don’t know where it is. Don’t forget: “if it can be measured, it can be bettered.”
2. Emotional heuristics
Human beings make decisions influenced by the images or ideas we have regarding a topic. According to Finucane, Alhakami, Slovic and Johnson, in the case of the social networks, people react positively, almost blindly, since the online community is full of companies that have been successful with this type of marketing strategies, without considering whether their cases applicable to all situations.
Paula Bedregal, a researcher with the Department of Public Health of the Faculty of Medicine of the Pontificia Universidad Católica in Chile, says: “These images or ideas are consulted quickly and with less effort than using rational normative cognitive guides.” This is why people react emotionally when making decisions that should be rational. Instinct is a fundamental part of the work of small and mid-sized businesses, but it is important to keep a cool head.
Not all companies benefit from the social networks. In many cases, introducing these strategies can even damage the brand, such as companies that are highly exposed to clients and with no infrastructure for managing the social media, as often happens with restaurants. In all companies, there is a great temptation to create digital marketing strategies. Because of the low cost of the platform, they often assume that it is the right path for every company, when actually the factor that determines their viability is potential return on investment and effectiveness.
3. Low investment
In the early years of the Internet, the biggest factor for selling its benefits was the low or nonexistent cost of operation. Strategies like e-mail marketing messages or animated GIF banners were seen as virtually free because of how little they cost compared to traditional advertising strategies. This paradigm survives to date, because there is an erroneous idea that it costs nothing to advertise on the social media. We tend to confuse accessible prices with no-cost strategy.
A company’s social network marketing, public relations or advertising efforts are directly proportional to how ambitious its goals are. If we just want to serve 10 clients, the main investment will be the time the owner spends answering messages. The main reason why a company might begin a digital marketing strategy is to hold a conversation with its clients. It must ask itself: how much are we willing to invest to speak with every one of our clients? Not investing reveals a lot about how important the issue is to the company.
It is necessary to measure what “free” really means on the Internet. On line, consumers have different perceptions of what should be free, whether the provision of a service fraught with advertising, or turning over personal or consumer data in exchange for entering the social network.
4. False expectations
The social networks can do a lot, but not on their own. If a product or service is not performing well, it is surely the result of a host of reasons, so beginning a strategy of this type may not help, and it may even contribute to speeding up its demise.
It is indispensable that we weigh the scope of the social network in our market niche. For a company that sells fertilizer to farmers, starting up a community on Facebook may be useful; but it would be futile to hope for more “likes” than Nike. Companies often fail to establish a benchmark inside or outside of their industry. Among the questions they forget to answer are:
5. Lack of follow-up
The most serious of the reasons why small and mid-sized businesses fail in their social network marketing is the same reason the websites of these companies are often a disaster: lack of commitment and follow-up.
A correctly implemented social network strategy has only one path: upward. These tools tend to become more complicated: there will be more followers, conversations, metrics and competition. The greatest risk of digital marketing for small and mid-sized business is starting out and then not having the time or resources to follow up. The old saying “don’t start which you can’t finish” applies perfectly here.
Conclusion
The limitations of social networks as a marketing strategy lie in the effort, the resources and the time they require, and this is the same for small and mid-sized businesses as for large corporations. For the former, resources are much scarcer, which naturally makes them much more difficult to implement. The trick is to identify the spaces in which a small or mid-sized business can add value through these new communication media.?