Report: Small Businesses Not Ready to ‘Friend’ Social Networking

By Katie Kindelan Comment

Small businesses remain unsure about the impact of social networking on reaching customers, and are conflicted about the use of social media for business. Those are the findings of a new survey that provides more evidence of the wide open business market that social networks have yet to tap, or vice versa.

20 percent of small business owners do not believe that their customers are using social networks at all, and 36 percent are not convinced their customers even want to hear from them on social networks, according to the survey from RatePoint, an online reputation management firm.

A separate survey released last week by American Express OPEN found that only four out of ten small businesses use social networking sites to communicate with customers and market their products.

And those numbers represent a substantial increase. The same report last year found that only one out of ten businesses with less than 100 employees relied on social networking.

Both surveys attribute any rise in social media usage among small businesses to the slow-to-recover economy.

70 percent of the small businesses in the RatePoint survey, in particular, said they would use social media only because it is the ‘least expensive option.’

A clear discrepancy between the two studies’ findings emerges, however, when you look at the size of the companies each surveyed. The more optimistic American Express OPEN report surveyed businesses with 100 employees or less, while the RatePoint survey reached companies with five or fewer employees.

Why have small businesses in particular been so slow to join the social networking bandwagon that corporations, politicians and even the government jumped on long ago?

One reason may be privacy. An earlier report from Panda Security found that 33 percent of companies were hit by a virus from social networks and 23 percent lost sensitive data through employee violations of social network policies.

With that concern foremost in the minds of small businesses, there is no telling how this statistic will change after this week’s news of yet another Facebook privacy breach.

Among the businesses willing to wade into the social media jungle, Facebook is by far the most popular platform, with 27% of survey respondents on board.