Small enterprises thrive online
Study shows small businesses increasingly use digital tools to reach customers, boost sales, hire employees.
A new study by a trio of tech-focused organizations demonstrates how small outfits are using social media to their advantage.
Facebook, the U.S. Chamber of Commerce’s Chamber Technology Engagement Center (C_TEC) and Washington, D.C.-based technology and media research firm Morning Consult recently published a report called “Examining the Impact of Technology on Small Businesses: How Small Businesses Use Social Media to Grow, Sell and Hire.”
The 20-page report is based on two surveys: a national poll of 1,000 small businesses and 50 state-level polls of 100 small businesses; and a national consumer poll of more than 5,000 adults on the perceived benefits of digital platforms on business and employment outcomes.
Laura McGorman, public policy research manager at Facebook, said the social media giant partnered on the study “to hear how Facebook can do its best to help small businesses.”
“At a national level, we found exciting results with progress in online tools,” she said. “Eight in 10 small businesses are using digital tools to run their business, and three out of four are selling online.”
She noted almost two-thirds of U.S. small businesses consider digital and social media skills an important factor when hiring.
“Two of three are looking for candidates with digital platform skills, and a higher proportion reported this as a more important consideration than where a candidate attended school,” she said.
In Michigan, the interest level in tech-savvy job candidates is even higher.
“Three out of four (Michigan) companies are looking for candidates with digital platform skills,” she said.
McGorman said a social and digital media skills gap persists in Michigan, which is why Facebook announced last June a two-year partnership with Detroit-based Grand Circus to train 3,000 workers in Detroit and Grand Rapids in the use of such platforms.
“We’re finding businesses are interested in a wide range of skills. They know they need to be able to do things like build a website that looks good on a smartphone. Many are aware of this need, but very few people claim they’re proficient in the skills they need to do that.
“We saw that as a real goal for Facebook, to assist in that training,” she said.
Other findings from the national small business survey:
84 percent of small enterprises are using at least one major digital platform to provide information to customers.
80 percent are using at least one major platform to show products and services and to advertise.
79 percent are using digital tools to communicate with customers and suppliers.
75 percent are using tech platforms for sales.
Of the 1,000 U.S. small businesses surveyed, more than 60 percent reported using Facebook as a tool for business, of which:
32 percent said they built their business using the platform.
42 percent said they’ve been able to hire more employees due to growth since joining the platform.
56 percent said they’ve increased sales because of Facebook.
52 percent said the platform allows them to sell their products and services to other cities, states or countries.
70 percent said the platform helps them attract new customers.
Jarrett Blackmon — co-founder and creative director of Kalamazoo-based Damn Handsome Grooming Co., a maker and seller of beer-based men’s beard care and other grooming products — said although he did not fill out the survey, his company has experienced similarly positive outcomes using digital and social tools.
“We started in a kitchen about four years ago, and we grew into the little workforce we are right now,” he said.
Blackmon and his five employees do everything in-house, from branding and photography to production, sales, fulfillment and marketing.
He said Facebook, Instagram and Pinterest have proven to be the most helpful tools in growing the business since they are visually based and reach the right customers for Damn Handsome products.
The company’s social media strategy has evolved since 2013.
“When we started off, it was mainly brand awareness, a very loose strategy,” he said. “But as our company has developed more, we split it equally between brand awareness … and wanting to reward our current customers. So, we do sales campaigns and basic e-commerce through social.
“We want to give people insight into what we do, opening the curtain and letting people see what goes on in our daily life, whether it’s a sale, what we’re working on or how some products are made. We spend a lot of time at breweries, and so we let people see the inside of that.”
Blackmon said Damn Handsome works to give customers a consistent experience across social channels, so they know they can depend on the company.
“We want to have a cohesive feel, so if you learn about us on Instagram, you can go to our website and Facebook page and have it be the same experience,” he said.
Doing so has resulted in an “amazing” customer base and has driven sales, Blackmon noted.
“We see a complete direct correlation with whether we’re launching or announcing a new product on social (and) our sales for that day. If we’re doing a Valentine’s Day sale, we’ll see direct orders come in from the person we’re having that conversation with online,” he said.
“It’s less like traditional marketing, where you’re not pushing, pushing, pushing — you just say, ‘Look what’s going on,’ and you’re talking to them about it, and then all of a sudden you see sales directly from that interaction.”
He said big-box stores can leverage more elaborate and costly strategies, but small businesses have the opportunity to treat their social media platforms “like a dinner party conversation.”
“People making their own handbags, roasting their own coffee — they have the opportunity to be completely genuine,” he said. “Facebook and Instagram give you that platform for free to share it.
“A lot of brands are making significant gains just by being real.”
McGorman echoed that.
“Something we have quantified (in this survey) is the digital tools small businesses are using are free,” she said. “Across the world, 70 million small businesses have a Facebook page. Only 6 million actively advertise.
“What we’re saying is small businesses are using digital tools that are costing them nothing, and that is amazing. Yes, it’s important to advertise, but we want small businesses to know that they can find new customers and make sales using free tools.”