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Social media has made a positive impact on the world and for business, however, is social media too expensive for small business?

Most small businesses struggle with lack of cashflow, lack of skills to manage all the facets of running a business and importantly a lack of time.

Social media has provided a way for prospects and customers to directly communicate with the business sometimes bypassing the official communication channels that have been created, by the business, to reduce running cost such as providing customer service self-help forums and websites. But when we look at social networks such as Twitter where there is a need to have a “bum on seat” to monitor the profile for any communication. You can see how the cost of providing this channel can be an expensive endeavor.

The likes of Telecom and TelstraClear providing this service is not really an issue when it comes to cost – its more of an issue on how to officially process the communication coming in and how to deal with irate customers. For small business the “bum on seat” is more than likely the owner of the business and done mostly after hours since the day is normally full managing the normal operations of the business.

How much time should a small business dedicate to social media?

How much time on Twitter, Facebook, LinkedIn and any other social networks?

If you are reading one of the many case studies ranting about the benefits of social media and how you must be on there “engaging” or you will go out of business – take a step back and look at the examples they provide of the successful New Zealand businesses using social media. I have talked about this before here: “Vital Tips for New Zealand Businesses New to Social Media“ but normally the examples are either major businesses such as Telco’s and banks or two small businesses here in New Zealand namely Giapo and Wine Vault TV both of whom are fantastic on social media but the time spent by both of them within social networks is unsustainable by most small businesses.

Added to that the fact that only 34% of New Zealand businesses have a website (!!) you can see that social media can actually be an expensive and steep learning curve for small business if not managed correctly.

Why?

Because participation in social networks at the time of writing this piece requires some level of technical awareness and knowledge of how social media works. For example, if your staff member loses it on Twitter and becomes less than professional with an irate customer then the customer can spread the entire conversion around the Internet – remember – its all public. The customer can send links to the dialog to their friends which they, in turn, can pass on the conversation to their friends and so on… Now, I bet you can show me examples of this being done via email but with email you need an email address so the impact spread is confined to some degree and the chances of the story being of interest to the media is slim. Not so with social networks where the network is the media.

So one irate customer can in fact cause a considerable PR disaster that remains forever on the Internet.

I am not saying you should run from social media. What I am saying is understand why you want to be on social media and look at how to control not only the cost to your business participating in social networks but how do you deal with the unofficial approach to communication and the demands and expectation of having to instantly respond to any communication coming in.

I have over the last 12 months of providing social media solutions to New Zealand businesses via CampaignHub (New Zealand social media case studies) come to the conclusion that how businesses use social media will change because right now we are in the early adopter stage with social media as a business tool and when the early and late majority come onboard most will balk at the current time and cost it takes to successfully use social media without any proof of ROI.

It comes as no surprise to me that our social media solutions for business, which utilise smart engagement technology to reduce cost and effort and the fact we leverage off our on large social networks to bring prospects to our clients doors, has been in demand since day one and is now the most profitable source of revenue for our businesses.

I hope you all have a profitable 2011! Why not download our FREE eBook for Business owners. Just click the download button below.