Social Media for Small Business: Mixed Results or Misperceptions?

Not surprisingly, more and more small business owners are turning to social media platforms to drive performance and to expand their networks. Indeed, roughly half of the small business respondents to a recent Manta study reported engaging more in social media than they had the previous year. Respondents offered several reasons for pursuing social media, including building customer bases, generating leads and referrals, building their company/product brands, and generating a community presence.

However, the returns on the investments in social media by small businesses have been a mixed bag of results. For some businesses, social media has been a boon. Restaurants reportedly dominate social media efforts, representing roughly one-third of share of voice traffic.

Others aren't so certain about the benefits of social media for small businesses.The same Manta study discussed above also indicated that 61% of small business owners had yet to see any positive returns on their social media investments (though few from this group indicated that they would reduce or eliminate their social media efforts). Some small business owners have chosen to remain on the sideline of social media efforts altogether.

And some are downright hostile to the idea of using social media to promote small business. Brandon Mendelson is a fine example of one of these folks, as he makes quite clear in his book, Social Media Is Bullshit. Mendelson also has his own blog where he further professes his opinion that social media is, well, nonsense. Here's a short interview with him in which he sums up his argument:

Generally, Mendelson adopts a very cynical view of the utility of social media for small businesses, arguing that it is a sort of "gold rush" that small business pursue without ever receiving returns on their investments. The real winners, he argues, are those who have figured how to pitch "social media" as a repackaging of the internet that they can profit from. To Mendelson, the internet can only be exploited by those who are already rich and established, because winners and losers are determined by those who have already won. Mendelson concedes that he has over 700,000 followers on his own Twitter account--but points out that Twitter "gave" many of them to him by placing him on a "suggested accounts" list several years ago when he and his then-wife were doing work promoting breast cancer research.

Recently, Mendelson made an appearance on the Explore Marketing Uncensored podcast broadcast produced by website Social Media Explorer. He was hosted by Jason Falls, co-author of No Bullshit Social Media, and his co-host, Jason Spooner of Studiobanks, a consulting firm of "digital thought leaders." During the audio interview/debate podcast, these social media specialists went head to head. (Note:  there is no shortage of use of the "BS" word, so if you're offended by the word or if your children are playing nearby, this may not be the podcast for you!)

The podcast reveals that the crux of the Falls book (which was the first to be published) is to show small business owners what the opportunities are for them to exploit in social media. Mendelson's book was published about a year later, arguing that social media platforms are far less important in determining the success of a business than acquiring a strong understanding of the market that the business is targeting and a sound marketing strategy for doing so. Mendelson attacks the myth of those who have risen to great heights based on social media, arguing instead that they have been the beneficiaries of good fortune and plugs from celebrities and/or media outlets. He also points out the the romanticized "viral success stories" represent the exception far more than the rule for small business social media pursuits.

In response, Falls asks whether it is fair to criticize some of the viral success stories without at least giving them some credit for their successes--even if they weren't completely transparent about the sort of "help" they may have received along the way (support from more established companies in the form of "paid exposure," plugs from celebrities, etc...). Mendelson answers that his beef is with those who do not acknowledge the help that they have received along the way, for this lack of disclosure enables the "snake oil salesmen" of social media to further pitch their products to other unsuspecting small business owners.

The takeaway from this debate? Both sides present arguments that have some merit. I would never dissuade a small business owner from pursuing social media platforms. What I would do, though, it to recommend that the business owner do his/her due diligence on researching the various platforms and truly understanding his/her market. Moreover, it is important for business owners to really think critically about what a social media campaign can do for them as opposed to quickly buying to the snake oil pitch that social media is the magic ingredient for success. Indeed, as Mendelson points out, success is all about the customer.

So, if you're a small business owner, how do you think about your market and your strategy? How do you go about employing social media to your advantage? How do you overcome your confusion about how it should work for you? Some of the answers may be found in this video:

What should be clear from the video, this discussion, and from this ongoing blog that there is no silver bullet of social media that will instantly enable a small business to increase its performance. Social media is a complex world, and there are too many variables:  what might work well for one business might not function well at all for another business. Consider that Twitter has been cited by small businesses as being one of the two least productive social media platforms as far as returns on investment are concerned. Yet, no one could possibly argue about the boon that Twitter has proved to be to the food truck industry. Moreover, it is difficult to determine just how much time and effort businesses put in to their social media investments. So how can one compare their efforts in any meaningful way?

The solutions? First, you have to be able to identify a sound strategy for employing social media for your specific business. You should figure out the resources you possess (especially money and time) and figure out how much of each resource you would want to allocate to a social media campaign. Sure, social media itself doesn't often come with a price tag, though you might have to pay an employee to monitor the platforms for the business. Time might be the more important resource to consider:  an effective social media campaign often involves becoming engaged in constant communication with others in your network. A failure to devote the requisite amount of time may doom a campaign from the start. You might find in some circumstances that the smartest choice is to not pursue social media at all. Again, it all depends on the relevant variables.

If things aren't working out for you, don't become discouraged. Instead, take a step back and evaluate things. Ask yourself whether your expectations were perhaps unreasonable given your circumstances. Consider altering your strategy by identifying areas that show more promise than others and focusing your efforts there. Think about some of the telltale signs of a successful social media campaign, and how you can better aim to achieve such results.

Also, question whether you have exerted yourself and your resources to a sufficient degree. Remember that just as marketing has a threshold effect, so too does social media (after all, social media is in part a form of marketing). A failure to reach the minimal threshold will necessarily result in a failure to achieve desirable returns on investment. And remain mindful that some of the benefits of social media campaigns, such as increases in customer goodwill and brand recognition, are intangible and not as easily recognized. Don't allow yourself to develop blind spots to these benefits.

Why Social Media? It's the Strength of Weak Ties!

Mark Granovetter

I've written much about the importance of small businesses to engage in social networking, specifically arguing that businesses should have a Facebook presence and should be active in LinkedIn. I've also written about the importance of engaging and interacting with others through Twitter. But until today, I've never really discussed the source of the true power of networking and how to unlock it. This discussion is long overdue.

During the early 1970s, a sociologist-in-training named Mark Granovetter was working on his doctoral dissertation at Harvard University. Granovetter was particularly interested in social networking:  specifically, he wanted to see how powerful the effect of a person's close interpersonal relationships, which he referred to as "strong ties," had on the person's ability to find a job.

Much to his surprise, however, Granovetter found that the effect of these strong ties was trumped by the effect of something else:  the "weak ties" that flowed from the strong ties. In other words, the subjects of the study were found to be more likely to secure employment through contact with people whom they may have never even met before than they were through their close interpersonal contacts. Granovetter published his findings in a 1973 article, The Strength of Weak Ties. To this day, the article retains its acclaim as being landmark scholarship in the field of sociology, specifically on the topic of social networking.


Never before has Granovetter's finding been more apparent than in today's world of ubiquitous social media networking. Consider the following discussion of how weak ties function in digital social networking:

This concept and its application in the digital age carry a few key takeaways. First, even though your strong ties may want to help you, they may not be in a position to. Because the number of weak ties will very likely exceed your number of strong ties (and probably by a lot!), the odds of a weak tie being more able to assist you are far greater. Second, if a strong tie is going to help you (find a job, for instance), that person necessarily has to put their own reputation on the line with a third party to do so. Contrarily, weak ties do not know you well--and they can offer that fact as a disclaimer whenever recommending you to a third party. Hence, their own reputation will never be at risk. Finally, weak ties do not require much of an investment of either time or effort. A weak tie may or may not choose to help you. But if not, very little was invested by the person reaching out to the weak tie.

Small businesses need to adopt the same approach. The "strength of weak ties" phenomenon is not limited to job searching. Rather, it is a model for reaching out to other people and organizations through existing strong relationships for the purposes of increasing sales, communicating with potential customers, establishing mutually-beneficial organizational relationships, and building valuable network capacity.

Those who pursue social media platforms for their businesses must understand that these platforms are tools of a greater strategy for driving business success as opposed to being ends in themselves. And within any such strategy, a failure to grasp the significance of weak ties will likely result in a failure to unlock the full potential of social outreach.

Status Updates, "Checking In," and the "Looking-Glass Self"

Statuses of significance?

A few weeks ago, one of my business school professors posed a question regarding why some people post "status updates" on their Facebook accounts. More specifically, the professor wanted to know the possible justifications for postings that just do not seem to be relevant or important (the example he provided was, "I just shaved my dog."). My guess is that virtually anyone who has regularly used a Facebook has encountered the postings of Facebook "friends" that carry equally questionable levels of significance.

The issue is interesting in part because there are compelling reasons for why people should not post on Facebook. Posting certain pieces of information or committing a Facebook faux pas might make you look dumb or annoying or will make your friends want to scream. And some websites warn you of all the terrible things that could happen to you if you share information on Facebook. Moreover, research by Harvard Business School professor Leslie John suggests that people generally underestimate the value of their personal information and fail to understand how it can be used against them.

What followed in class was a lively discussion among the students (who are almost exclusively in their 20s or 30s, and most of whom admittedly use Facebook) about the various reasons that people update their status.

We all acknowledged that many status updates are understandable. For instance, no one saw any problem with announcing one's engagement or one's decision to accept a job offer--such an update is a very efficient way to share relevant news with a potentially large number of friends and family members. However, we reached no consensus over any single driving force behind the sort of seemingly irrelevant posts ("I'm going out to prune the trees in my back yard now...") that some people like to post. Rather, we compiled a list of numerous potential reasons for such behavior.

The discourse revolving around this question was hardly confined to a Tuesday afternoon class at the Johns Hopkins University Carey Business School, though. Indeed, the phenomena associated with interaction on Facebook have been repeatedly studied. One project that surveyed roughly one hundred college students concluded that people who posted status updates regularly were less likely to feel lonely, regardless of whether others "liked" their status updates. Another study placed the onus on Facebook rather than the users, questioning whether the social media platform itself carried the effect of turning users into narcissists.

One possible reason that people update their statuses can be found in the concept of the "looking-glass self," introduced by sociologist Charles H. Cooley in 1902. The gist of Cooley's paradigm is that people view themselves in light of how they believe that others might perceive them. Cooley argued that we engage in a three-step process during which we first imagine how others might perceive us, then contemplate how others might judge us based on what they perceive, and finally react in some way. The reaction might take place in modifications of self-image or behavior or even both.

Of course, the Cooley model only goes so far in explaining the behavior of participants in social media platforms--and for some observed behaviors, it carries virtually no explanatory power at all. But it does tie in with one of the sources that we had been assigned to read for that class. In his article, "If you Love Something, Let it Go Mobile:  Mobile Marketing and Mobile Social Media 4 X 4," ESCP Europe Business School professor Andreas M. Kaplan discusses why individuals might "check in," or share via social media that they are at a certain location, be it an airport, a restaurant, a shopping center, etc... Kaplan notes that some social psychology literature has argued that people are generally more willing to reveal information about themselves that would allow them to be seen favorably by others. Indeed, Kaplan offers the example that an individual might be more likely to let others know that he/she is shopping at a glamorous fashion outlet than at a local grocery store, restocking for the week.

How do this theory and these tendencies tie in to small business? For one, if you're a small business owner (or an owner/manager of a business of any size, really), you need to enable your customers to check in at your location. Of course, your business will have to have a Facebook account first (which I've already argued is a no-brainer!). The good folks at Facebook will walk you through a step-by-step process to set up the check-in system. The start-up costs of doing this are minimal (just a little bit of your time), and no further maintenance is required. The benefit is that your customers will be able to let others know that they are patronizing your business.

Second, it is important to understand the social psychology of revealing personal information so that you can consider how effective the checking-in process might be for your business. If you buy in to the looking-glass self phenomenon, you might expect that Facebook check-ins might be more beneficial to you if you're selling Gucci handbags than if you're selling household cleaning products. Likewise, if you're managing a fast food restaurant, such check-ins are likely going to be less beneficial to driving revenue than if you were managing the local weekend dancing hotspot.

Having a social media presence is of paramount importance to virtually any business--though the associated returns will vary by business. But understanding the behavioral tendencies and motives of your client base is crucial to your ability to develop an effective social media strategy. The looking-glass self and the Kaplan observation offer a sound example of this need.

Tweets and Eats

A few days ago, I briefly discussed the fact that some small businesses are better suited to exploit the Twitter social media platform than others. But for some businesses, the power of Twitter is considerable--perhaps even inconceivable.

Area of Koreatown in Central Los Angeles

In a recent episode of currently-running CNN mini-series, Parts Unknown, noted chef and "life connaisseur" Anthony Bourdain examined the Koreatown area of Central Los Angeles. During the rioting in the aftermath of Los Angeles police officers beating motorist Rodney King and the subsequent acquittals in court of police officers and brass, Koreatown was under seige.

Korean-American store owners defend their livelihoods

Faced with an obvious lack of police presence, store owners of Korean descent banded together, armed themselves, and tried to defend their businesses, their homes, and their families. Some were successful in doing so, but not all. Many businesses were looted and/or set on fire by rioters. (If you're interested in exploring this further, you may wish to listen to the painful story recounted in this audio interview with Korean-American store owner Kee Whan Ha.) Mr. Ha describes the incredible frustrations associated with feeling abandoned by the Los Angeles Police Department, and then later by the failure of the Los Angeles Fire Department to respond either to their reports of buildings on fire or the death of the security guard of Mr. Ha's store.

Considering what Koreatown suffered during the riots--during which 58 people were killed--the area hardly seems that it would be a likely setting for the emergence of an enormously successful food truck business owned by a young Korean-American only two decades later. But this is exactly what has happened. During Bourdain's examination of Koreatown, he highlighted the tremendous success of Roy Choi, a food truck entrepreneur who later became a world-famous chef and multi-location restaurant owner. (Note: especially pertinent footage begins at the eight-minute mark of the segment)

And what has helped Choi to become so successful--and just as important--to maintain his success? TWITTER! As Bourdain describes Choi's Kogi truck business:  "Every lunch shift and every evening, the trucks' locations are sent out over Twitter. The locations change every day, and people flock quickly to find them, as the lines can get long--VERY long." Indeed, the video shows lines forming even before the trucks open for business, and Choi estimates that his trucks have had lines of as many as six hundred people at times. Bourdain also points out that food trucks allow talented individuals without substantial amounts of money to start food businesses and to introduce creative new products to the markets. Implicit in his message, though, is the enabling power that Twitter and other social media platforms can have in fostering the success of these entrepreneurs.


This business model of food trucks reaching out to potential customers via Twitter is hardly confined to Koreatown. Indeed, where I am based in the Baltimore metropolitan area, I can quickly find the constantly updated locations of my favorite food trucks. I can do so by one of two ways, sometimes depending on the actions of the food truck businesses themselves. First, if a vendor that I like has a Twitter account, I can simply become a follower of that business. If not, though, there are a number of Twitter accounts (such as @CHOWagons or @BaltimoreGal) set up by individuals ostensibly disconnected from the businesses themselves who use their accounts as platforms for food truck vendors to post their locations.

One of Roy Choi's trucks, open for business

What makes the operation of mobile food trucks so conducive to using Twitter as a social media platform? First, there's the undeniable fact that food has a limited life span as a product. Once it expires, so does its economic value. This fact provides incentive to food truck vendors to reach out to as many potential customers as possible as quickly as possible. Second, the disadvantage of not having a fixed location is effectively overcome by communicating to the customer base via Twitter. Historically, mobile food trucks have enjoyed the advantages of lower overhead costs (those associated with operating in a fixed location). But these advantages come at the cost of conceding the advantages of customer loyalty given the inevitable fact that customers will be less likely to know where to go to be a patron of the business. Consistent use of Twitter allows a mobile food vendor mitigate the tradeoff of "location ambiguity" while still enjoying the advantages associated with reduced overhead. Third, the medium acts as an enabling tool for mobility and spontaneity, increasing the odds of revenues being driven higher and also further perpetuating the popularity of the mobile vendor business model.

Again, Twitter is not going to offer the same potential benefits to various businesses. But clearly, mobile food vending and Twitter is a combination that was formulated somewhere along the path between the kitchen and the bank.