Posted November 11, 2010 8:06 am by with 6 comments

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For all the talk of social media, the importance of the communication revolution and the industry spouting on ad nauseum about how the social web is changing the way we breath, you would think that SMB’s are getting it.

There are some that absolutely are. They have embraced the web and the options it provides. The trouble is that when we parade these success stories around there is a perception that all SMB’s are on board when nothing could be further from the truth at least according to a recent study. In fact most SMB’s are spending more on getting their website right than anything else. How Year 2000 of them!

According to eMarketer, Zoomerang and GrowBiz Media 39% of the SMB’s surveyed were planning to spend 20% or more of their online budget on their websites while only 14% would do the same with social media.

The never-ending saga of trying to get the SMB market to more fully embrace the online space continues. Why is it such a battle?

In the realm of word-of-mouth marketing, SMBs relied mostly on the traditional: 70% said they used in-person networking and 50% customer referral rewards, while a comparatively small 34% used social media.

This is nothing new for sure. What needs to be new, though, is how we as the online marketing industry approach this huge market. I think the fault lies squarely on our shoulders for the initial “all of nothing” message that was given to the SMB and the virtual discounting of how these people have traditionally done business and how they still do business today.

Many local businesses are still driven by referral and word of mouth. That’s a good thing but we talk to them as if that is the antiquated way of doing business. That’s short-sighted and arrogant on our part. What we as an industry should be doing is accepting how these businesses do business, recognizing that the “old-school” way is still effective even in the world of mobile computing and that the digital channel can be an incredible complement and/or supplement to their current efforts. They don’t need to scrap “business as usual” for a digital re-working of their marketing to be more successful. They need help in integrating these new techniques into their old business fabric in a way to strengthen their business.

The result of this compulsion by the online industry to continually move to the next great thing without ever truly figuring out the last great thing is a large sector of businesses trying to figure this out on their own. As a result, they appear behind the curve when you see a chart like the one below.

The reality is they are doing the best they can without much help from companies like Google, bing, Facebook. Twitter and others. I’m sure some of you are saying that these companies are providing services and opportunities for these businesses like never before so how can I say this? Well, that’s just the problem, there is incredible innovation going on all around us by these and other tech players. The trouble is they almost all have a “built it and they will come” approach and even worse they think that because they built something cool from an engineering standpoint that everyone else will get it. Guess what? Most people don’t get it and it’s the fault of the industry from the producers to the service providers for not putting all of this opportunity into words that the regular person can understand and, more importantly, apply.

So while this is a rant of sorts, I think it’s an important one because there is a significant amount of opportunity being left on the table by not truly helping the group that makes up over 90% of the business in the US. If we continue to talk amongst ourselves and pull the “If they don’t understand how cool we are then screw them” act then we will stunt the growth of our own industry.

Everyone talks about scale as the big deal. Well, until we scale beyond the big brands and largest players who are the Madison Avenue type clients then even that growth could be hampered because if SMB’s aren’t getting it do you really believe that all 500 million account holders in Facebook do too?

  • Frank, You bring up a great point here. These numbers don’t surprise me at all. We have a fairly high attrition rate at my PPC management company. That is because we help SMB’s that don’t have their website right yet, but they want to test. So they come to me, I tell them they shouldn’t till they improve their site, they say, I’ll go to your competitor if you won’t run a test campaign for them. I do run the test, they see that their site sucks and doesn’t convert, so they stop, and they go spend more money on a site, and hopefully they are all coming back as they get their site where it needs to be. We have been offering some website help, and we always consult them on ways to improve their site, but we have tried to stay focused on our core competency just doing PPC management. Sigh.

  • Frank,

    Very Interesting….Not Surprising…but Very Interesting.

    In working with a large number of SMB’s, I would agree that most companies are somewhat more willing to invest in their website content than in other areas. The most amazing number in the entire schedule is the 78% of companies who have “No Spend” for SEO Services.

    While cold calling, direct referrals and word of mouth still generates more new business than search results…there are a hugh amount of companies that could be getting more online exposure with a very little SEO investment….Thanks again

  • A couple points stood out for me. 1) A lot of SMBs NEED to invest in their website. If they’re thinking of using social media to drive traffic to it, then they don’t want their visitors to be disappointed when they get there.

    That brings me to 2) I’m not really hearing anyone say that social media is an “all or nothing” proposition, nor that anyone needs to “scrap ‘business as usual’ for a re-working of their marketing.” At least no one in my circle is saying that. Nonetheless, it does seem that many SMBs are interpreting the message that way. Or, perhaps they’re just hoping that social media, for all the hype it’s getting, is a magic bullet, and will allow them to scrap business-as-usual. But that’s just naive thinking.

    These are turbulent times in the communication industry. We have lots of bright shiny things to try and we’re under tremendous pressure to save money and make sales. People are scrambling, and the options, while plentiful, are fleeting. That makes it very difficult to take this advice: Have a plan. Consult an expert. Give your plan time to work. (There are no easy answers, and no overnight solutions.)

    • Debi – Your response of “that is just naive thinking” is where we run into trouble. They don’t know better and we don’t work to educate them like we should. They are naive because we don’t educate. Instead we pontificate and that’s where we lose them. As a result we scratch our heads over why they “don’t get it” when there is no reason for them to get it. It’s not natural and it’s not intuitive so why should we expect anything other than naivete on their part?

      No one likes to have a finger pointed at them (me included) but the messaging when you read about SM is often implying that it is truly a silver bullet. So what if it’s not being said directly. Perception is reality and the perception we give is that it’s “the place to be”. Why? Because that kind of talk sells and we are all selling something.

  • Mr realists

    How many friends and acquaintences on your Facebook, MySpace and LinkedIN account are TRUE friends or TRUE business associates who you work with on a regular basis?

    In reality, in many businesses, relationships are bought and retained from ongoing interations, over time; (just like friendships are.) I didnt meet my true friends on Facebook nor did I meet all the wonderful folk that I interact with for business on LinkedIN.

    Hey, (dont get me wrong), there are certainly leads out there online, for sure! However, some businesses are connected and dont have to be so reliant on social media, nor even the Google sphere. However many businesses would fly far higher by embracing the online medium, as we know and as we see.

    – As ever – it is all about the mix, keeping your egg’s in one basket can crack them all at once if you are not careful…

  • Frank, when I put in a legitimate comment on a blog post, that adds some value and thought to what is written, I would expect to see it approved – or at least edited and approved. By not posting my comment, I wonder what else you aren’t posting and really makes me wonder the objectivity and transparency of your work. I won’t bother commenting again.