Why Small is the New Big in Social Media Marketing

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It’s social media’s David and Goliath story. And, it’s all about ROI…

Scenario #1 MegaCo.

An international consumer goods company is looking to explore new ways to market it’s product in a tough economy. They learn about this new social media/Wed 2.0 thing and, even though the people in legal are massively freaked out about employees running around, talking smack and causing potential PR debacles, they give the okay for marketing to “explore” social media.

So, MegaCo goes out to it’s ad agencies and even a few “specialists” to get the 411. And, of course, the big questions they keep circling back to is the very same question nobody who wants to take their money can answer in a remotely convincing way…”what’s the ROI on social media?”

The agency and other consultants come up with all sorts of valid points about building community, opening lines of communication, improving customer feedback and even mining social media for product research. All good stuff, but still, MegaCo is having a tough time biting the social media bullet. So, rather than ramp up something real, they allocate a teensy bit of money to play around because who knows, maybe it’ll work. And, besides, GiantMegaCo is doing it, so they don’t want to be late to the party…if there is a party.

Maybe someday there’ll be an ROI connection, but as of right now everyone’s telling them, “you just can’t measure it like that.”

Scenario #2 – Mountainbike Madness

Mountabike Madness is a local bike shop run by two college friends, Mario and Eva. It’s a real business with a great product and it’s growing nicely. But they’re always interested in finding new ways to get customers to the shop. Along with trying out street teams, the local pennysaver, mailings, sandwich boards and a bunch of other marketing ideas. Eva gets the idea to start to play around with twitter.

Actually, she already has a personal account. So does Mario, so they’re familiar with the nature of conversation in the communities, because they’re already regular users. So, they set up a Mountainbike Madness account and use Mario as the name associated with the account.

They use twitter’s search function and a number of other tools twice a day to find people in their neighborhood who either have some variation of the word bike in their profile or their tweets. They broaden it out to various forms of outdoor activities, too. They see what these potentially likeminded folks talking about, then follow them and join in the conversations they are having.

They also start to share all sorts of funny, quirky, edgy quotes, ideas, and stories. And, here and there, they throw out tweets about instant giveaways for the first person to tweet their favorite rider, grip or trail. They do daily or weekly specials on bikes, parts, clothing and other schwag. They share cool tips and riding strategies and aren’t afraid to show their personalities. They announce weekly Rave Rides where everyone has 4 hours to show at a particular trailhead for an epic group ride. And, once a month, they do a one-day 20% off twitter-only sale from the back of a truck and you have to be following them to know where it will be.

After 3 months, they can track twitter related sales to an average of 30% of daily sales and total sales have gone up 20% since starting on twitter. Not only is it great for the community, for customer service…they’re using social media to put money in the bank.

That all elusive ROI that MegaCo will likely never be able to quantify is trackable income for Mountainbike Madness.

The truth about social media and ROI…

Right now, small businesses have a huge advantage over big business in actually being able to convert social media conversations into dollars and cents. Here’s why:

Small business:

  • Can be less censored – They don’t have to wade through layers of social media do/don’t policy and legal sign-off on every tweet, update, post or comment. And, in social media, people respond to real and spontaneous. So, it’s much easier to build the conversation
  • Can have a personality – All too often, the voice of the company that filters through to social media is almost entirely devoid of personality. People connect with color, not gray (unless you live in NYC).
  • Only needs to connect with hundreds or a few thousand, not hundreds of thousands or millions – If a small business connects with a few thousand people, that could make a huge dent in it’s business, making it worth the effort. A large business may need to connect with millions to feel the same impact and that may well not be worth the effort from an ROI standpoint
  • Can tap into local energy, events, traditions – By having a shared experience based on the local community, it’s a lot easier for people to bond with the voice of that business
  • Can implement instantly and tailor highly relevant offers – When it’s one person behind the mic, it’s way easier to carry on a real, spontaneous conversation and also create an ongoing series of highly local, highly-relevant and time-sensitive offers that will convert followers into customers.

So, if you’re a small business or solopreneur Career Renegade and you’ve been wondering about the value of this wacky thing called social media, fact is you’ve got a huge advantage over large corporations right now. You have the ability to actually convert time spent on social media into money in the bank. And, have a lot of fun doing it.

So, what do YOU think?

Anyone have a story like Mountainbike Madness to share?

Let’s discuss…

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39 responses

39 responses to “Why Small is the New Big in Social Media Marketing”

  1. Pace says:

    For a whole lot of internet-based small businesses, mine included, 100% of our sales come from social media, if you count blogs as social media. All of our clients found out about the Freak Revolution either through word of mouth, blog posts, or Google, which isn’t social media but it indexes our blog posts, which (arguably) are. We haven’t done any traditional marketing at all.

    How many other internet-based small businesses are in the same boat here?
    .-= Pace´s last blog ..The little girl and the hammer =-.

  2. Why You Can’t Measure the ROI of Social Media (unless you’re a real person)…

    Love this David and Goliath tale from Jonathan Fields at Career Renegade. The moral of the story? [I]f you’re a small business or solopreneur Career Renegade and you’ve been wondering about the value of this wacky thing called social media, fact is you…

  3. Molly Gordon says:

    Mega Company et al could star in “Dumb and Dumber III.”

    Maybe one reason big companies can’t track the ROI of social media is that it’s too much fun… Really engaging with people is, after all, entertaining and enlightening.
    .-= Molly Gordon´s last blog ..Authentic Imperfection =-.

  4. The best statement I have heard on the ROI of social media has popped up a few times lately: your investment is $0 to use Twitter and Facebook because you’re already paying your employees for their time, and their time is all you need to get started. In fact, your employees might already be doing this. Why not make it part of their jobs and give them a new responsibility, something they already do to break up the day? If this small initiative shows anything positive, and odds are within a few months it will, then go for something bigger.

    If all you want are metrics, then crunch baseball statistics for a living.
    .-= Jonathan Vaudreuil´s last blog ..Goodbye Porter Square =-.

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  6. chris yates says:

    You are totally correct. Funny I just wrote an article yesterday on why this is the best opportunity for small business owners to compete with the larger companies.

    The main ingredient is the distribution channel. In the past the power was with the money and the control of the message. That is no longer the case. Here is the story and also a video interview with a blogger that gets 1 million hits.

    http://chrisyates11.com/2009/08/03/smaller-companies-can-compete-thanks-to-social-media/
    .-= chris yates´s last blog ..Small companies can compete with Social Media =-.

  7. Scott says:

    I currently work for Mega Company. And good gosh is that all so true.

    This company has the resources to be GIANTS in the internet space in all facets. I think they want the internet to just go away like some fad so they can get back to direct mailings and newspaper ads.

  8. Jonathan Fields says:

    @ Pace – No doubt, blogs are a huge source of leads for small businesses…if done right

    @ Yep, it IS fun, but there’s actually some real validity to the ROI tracking challenges for MegaCo that little co’s don’t really have to deal with. Still, there are big companies that are leveraging social media in a sort of hybrid direct response way that allows for more measurability

    @ Jonathan – Good point…but, the response is that the time those employees spend on SM is time they spend away from other potentially more assured revenue producing activities. Forget the fact that a huge part of most employees’ days are wasted, there’s still some merit to the argument, which is why bog companies are so caught up in ROI. When you and I play around with it in a small biz it’s one thing if there’s a bit of lost productivity as we explore. But, if 50,000 employees are taken away from income producing tasks one hour a day, times 250 working days, that’s a tougher sell. So, I get where BigCo is coming from, don’t necessarily agree with the call, but I get the argument

    @ Chris – Interesting point about distribution channels, I’ll check out your post

    @ Scott – Yeah, I think the trick with MegaCo in trying to persuade them to allocate time to something different is to stand in their shoes, understand their agruments, then respond in a way and with language that makes them feel like they won’t feel like idiots if they try it and it doesn’t work out. Speak the the 800 pound gorilla, which is the need to be able to CYA

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  10. I’m with Pace. Given that my business is online only and email-based, if it weren’t for social media, I wouldn’t exist!
    .-= Alex Fayle | Someday Syndrome´s last blog ..August is Happiness Happens Month: Win a Book! =-.

  11. Jon says:

    Being small has many advantages but so does being big, it all depends on your customer base and what you are after, both can be equally profitable at the end of the day though.

    Jon
    WoodMarvels.com – Create Unique Memories

  12. Hi Jonathan – Anyone working at a Mega Company could print this out as a sell (or a template if they’ve got the nod already) for a social media presence, but the re-tooling toward “thinking small” would add to the ROI calculation. In some orgs it would be well-nigh impossible. The sad fact that we see on Twitter and elsewhere is Megas that understand the value and need, but still don’t orient correctly. Sort of like rolling up the drawbridge but shouting from the parapet. So much of public communication in the past has been the town crier sort, and pivoting is not something easily adapted in the middle of the game. Thanks.
    .-= Betsy Wuebker´s last blog ..PASSING THRU: A YEAR =-.

  13. Sara says:

    I think one of the key factors is passion. The small-biz guy loves his shop, loves the industry he’s in, wants to connect with the market on all sorts of levels. MegaCo is lucky if 20% of their employees are devout fans. Passion makes the conversation, and so many of the big brands are forcing the passion, forcing the conversation, and instead it just comes off as push marketing, push sales, and the customers tune out (or never tune in, in the first place).

  14. frank says:

    Like where you are going with this. It makes a LOT of sense.

    A question your post left me asking my self … based on this:

    “After 3 months, they can track twitter related sales to an average of 30% of daily sales and total sales have gone up 20% since starting on twitter.”

    How did they track/measure this to know for sure their sales grew due to Twitter?

    http://twitter.com/franswaa
    .-= frank´s last blog ..Is Twitter and Facebook Important for Event Fundraising? =-.

  15. Justin Parks says:

    This post really struck a cord with me as Im actually meeting resistance from businesses here in Europe and Spain that are both small and large.

    ROI is the first point always raised, to be sure, when a larger company investigates the potential of social media and indeed they do like to take their time in understanding whats involved and how it will at the end of the day generate revenue to them which then spirals into long drawn out deliberations of “ifs” and “buts”. Jonathan Fields has however pointed out exactly what the problem is and inded where the danger lies.

    Small businesses, on the other hand and at least here in Europe, still look at social media as some sort of distraction or toy rather than understanding the potential to reach out and draw attention (in a positive way of course, just like this post describes) to them and their businesses combining all the flexibility and personality that an small business can bring to the table.

    Nothing else for it but to keep trying I guess and lead by example as for the unconverted the proff really is in the pudding and rhetoric means little, most especially in hard times.
    .-= Justin Parks´s last blog ..Should I unfollow everyone on twitter? =-.

  16. Great article, and spot on. A great example of this working really well is a little cupcake store that’s not in my neighborhood, it’s actually about a 40 minute drive(and I have 2 cupcake shops around the corner that I never go to), but were hooked on Retro Bakery. She is totally active on Twitter and Facebook, Her business is doing well because people feel a connection to the bakery… their url is http://www.retrobakerylv.com @retrobakery on twitter. She gets power of the medium
    .-= Doug Sandquist´s last blog ..Real Time Search and Real Time Compliments and Compliments are here to stay =-.

  17. This is why I’m developing my business for individuals and small business owners. I’ve spent way too much time with MegaCo and just don’t have the patience to slog through the bureacracy anymore. Give me the folks who are passionate about their biz and are eager to try new ways of connecting with their customers (and making some $ along the way!)
    .-= Jennifer J. Breazeale´s last blog ..TGIF =-.

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  19. Jules Pieri says:

    Having been on both the big and small sides of corporate life I think this boils down to one thing: it is really hard for an established company to suddenly “grow” personality. Even if they want to. Even if they remove legal and admin obstacles. It is infinitely easier to do this when you are small or have a passionate founder (Zappos).
    .-= Jules Pieri´s last blog ..Halo Performance Layering Pieces with UPF 30+ Protection =-.

  20. Jonathan,

    Valuable.

    Additionally, to find these MegaCo’s look in the classifieds. They already realize they need help. So you’re 90% the way to getting a new client. I work with a biotech and herbal company just this way.
    .-= Bob Wan Qi Kim -@journik´s last blog ..The simplest fastest and obvious DUH way to monetize your site =-.

  21. This is a great post, Jonathan. I should add that big brands can still gather more market share, but it’s absolutely more difficult to actually *see* the ROI since their brand is likely being talked about on the same channels that they’re being marketed in — and that’s besides the actual marketing message itself. When you’re known, people are always going to talk about you — and if you choose to actively market on these channels, you may not see much of a bump. If there is some sort of bump, though, and that happened after your own marketing was introduced to the mix, you’re likely making waves, but yup — it’s harder, and that’s why small is the new big. 🙂
    .-= Tamar Weinberg´s last blog ..The Importance of Networking on the Internet =-.

  22. I think that ROI on this kind of thing is very difficult to monitor because most ‘marketing’ on the web is inherently viral, so while your initial target audience for a campaign may only give a small click through, the chain of people it slowly gets passed to are less simple to track, infact, the number of people becoming impacted by the media grow inversely proportionate to the ease to trace, the deeper your campaign gets the harder it becomes to track.

    You then have to throw into the mix two ‘x’ factors in the fact that these types of campaigns that get people talking all generate link backs to your site which is all part of SEO which can indirectly effect your search rankings and therefore drive business in the long term.

    Direct ROI is almost impossible to trace, even with all the marketing automation software in the world you’re only going to get so far, I think you just have to accept that as Molly said above, it’s fun and engaging, you’re promoting a positive image for your brand, it doesn’t cost much and so can only serve to be a good thing, right?

    Rob

  23. MLDina says:

    Small businesses have huge advantages when using social media platforms. I’m always impressed when I see a smaller business taking advantage of Twitter, LinkedIn and Facebook, but I expect it of larger brands. It’s not expected for home-grown businesses and startups to use social media, so when they do it’s an advantage. The same can’t be said of larger companies- they should be using social media as a given, and their credibility goes down for me if they aren’t.

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  26. Mary says:

    What do you think of JetBlue and their offering last minute discounts, etc. via twitter? Do you think they’re a MegaCo who might be starting to figure it out? Would be interesting to find out how effective it is for them.

  27. […] Why Small is the New Big Filed under: Marketing, Small business, Twitter — Word Girl @ 2:47 pm Article:  Career Renegade […]

  28. Deni Kasrel says:

    Jonathan,
    You make good points about why big cos may not make the most of social media.

    Another is that big companies are less prone to having a one-to-one relationship with customers, so they don’t know how to get personal, which is so much of what social media is about. They see customers as demographics and target audiences, as opposed to individuals, whereas small biz often goes in the other direction. If social media is about relationship-building, it’s a steep hill to climb to try and build a relationship with a amorphous demographic that is likely not as cohesively defined as the big corps reckon.

    Meanwhile, what I’m hearing from the soc media buzzsters is that Return on Investment is being upsurped by Return on Influence.

    In any case, enjoyed reading your post.

  29. Tom Martin says:

    Great post. So true. But not sure I agree with the conclusion. Two major differences.

    First, small businesses don’t have the luxury of budgets so they have no choice but to try things like Twitter, etc. They have to get creative because they can’t afford to carpet bomb consumers into submission.

    Second, ad agencies are by in large scared shitless to fail. Therefore, unless they pretty much know something will be a slam dunk from the get go, they are unlikely to attach hard ROI stats to anything new. But in their defense, clients have themselves to blame. They’ve created a world in which any misstep by and agency often leads to review and agency getting fired. Shame really because both parties lose.

    Again, nice post. Thanks for sharing.
    @TomMartin
    .-= Tom Martin´s last blog ..Can You Make People Buy? =-.

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  32. […] Why Small is the New Big in Social Media Marketing (Jonathan Fields): Jonathan Fields explains why small businesses have a real advantage over large ones when it comes to biting the social media bullet. This is a great read. […]

  33. […] Why Small is the New Big in Social Media Marketing (Jonathan Fields): Jonathan Fields explains why small businesses have a real advantage over large ones when it comes to biting the social media bullet. This is a great read. […]

  34. […] Why Small is the New Big in Social Media Marketing (Jonathan Fields): Jonathan Fields explains why small businesses have a real advantage over large ones when it comes to biting the social media bullet. This is a great read. […]

  35. erin says:

    Psst — it should be “its” — not “it’s” in your first sentence under the Scenario #1 title…

    🙂

  36. erin says:

    Pssst again — same comment for your first sentence in that 2nd paragraph. 🙂

  37. erin says:

    Last one — (and of course you don’t have to publish these comments live) — I won’t make any more correct updates, I promise!! You said “Mountabike” instead of “Mountainbike” as the first word in the Mountainbike Madness section…

    Hope this helps!

  38. Jia says:

    I couldn’t agree more. When you’re small, you’re flexible. That’s a big advantage for small or start-up enterprise. Great share!

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