As some of you might have picked up from my previous blogs, I am torn when it comes to the value of social media due to the investment in time it requires. And, in the fast-paced Wall Street world we all know and love, time is money. Don’t get me wrong, I see its benefits as far as brand recognition and developing client relationships, and social media has led to a gain in new clients, but as a small business owner, is my time better spent doing something else? Will I see a tangible ROI for my time in the social media universe?
Therefore, I was intrigued to see a recent article in the WSJ debating this very issue. The article, Debate: Does Social Media Deliver Results for Small Businesses?, includes viewpoints from two business owners. One that owns a small consulting firm that sells a service and the other an owner of a product based business that sells tangible widgets. The small business owner that sells a service believes in social media, but at a big price – her time. While she admits to gaining customers through utilizing social media outlets, she feels she has not seen a “sustainable return on investment.” She spoke to me directly as a business owner when she wrote “During my work day, I am managing my team, my clients, my candidates, my calendar and my family. And though I do see the potential value in social media, I do not see the time slots where I can possibly squeeze anymore hours (or tweets) into my day.” Although she does see the benefits of social media, she feels she experiences true social media success when she hires a full-time social media strategist at a cost of $70,000 per year.
On the other hand, the company that sells actual widgets has a different view point. When he started his company, he didn’t have money for advertising and saw time as a less expensive way to get the word out, so he spent countless hours promoting his company through social media and Facebook in particular. Six years later, he claims that 50% of his sales come from their social media efforts purely by customers posting reviews and pictures on their Facebook page. He did not, however, mention how he is able to measure this number.
So, after reading these two stories, I am still not quite sure it’s helped my cause or changed my point of view. In my opinion, a Facebook page works better for a company that sells an actual product than for a company selling research or consulting. I think our industry in particular is tough because while social media is accepted by a lot of service providers (who do make up a large part of our client base), there’s still a stigma within the financial services community. A large number of hedge funds, investment firms and securities firms have bans against using social media. This leads me to question whether social media is more beneficial to the company that sells products and has an infinite customer base.
The woman that owns the consulting company has decided to hire a dedicated social media employee in 2012, and I’d be curious to get a follow-up from her on whether it’s been a worthwhile investment. But, what do you think? Is the time spent on social media worthwhile for the small business owner?