We have all heard about the indispensability of social media in today's business world. The focus seems to be not on if your business uses social media, but rather how it uses social media. The common wisdom of the pundits seems to suggest that only a lunatic would not utilize social media to the fullest, never mind not use it all (after all, pundits would have us believe the latter business person would be beyond lunacy and not worthy of civil discussion). However, as someone who has been through the ringer and back , I make a point of always questioning the wisdom of the pundits. Furthermore, my observations even suggest to me that social media has a net negative impact on micro-sized small businesses, and I will explain why.
First of all, what is a micro-sized small business? We actually all kind of know what they are. These are the single or two member LLC owners, the sole proprietorships, the business owners who make sales when they randomly come (eg, the hot dog stand owner parked on the side of the road). They are not drowning in cash, and as such, this brings me to my first point.
In social media-based advertising, he or she who yells the loudest is recognized by the masses with highest probability. Facebook advertising starts at $ 10 per day, and Google AdWords uses a pay-per-click bidding model based on keyword searches. The higher the amount you pay for advertising, the more exposure you get. This system rewards the businesses with deaf pockets, because research has shown most eyesballs (literally) do not move down (in a search engine keyword search) beyond the first couple of results. Who do you think gets the priority placement at the top for these keyword searches? The highest bidders do, of course! This is the first way in which micro-sized businesses suffer as a result of social media.
Secondly, because there is the perception that you must “actively engage your audience”, many businesses actually try to do this using social media. However, in a micro business, the one or two people running the business (remember, they do not have employees) wear many hats, including the social media hat. All of the content produced must be produced by the micro business owner (s), taking him or her away from the actual business of making money! Did you actually think all that social media content created itself, or that high-quality content is quickly created?
A third way micro businesses are hurt by social media is with ratings systems (usually stars). I recently contacted a small business owner to advertise locally for me, and I spoke with him and found him to be highly knowledgeable. I started to work with him and found him highly capable and reliable. Then, I came across his business Facebook page, and saw one rating, which was a 1 of 5 stars with no reason for the low rating (the rater was probably an aberration). I have to admit I wished to continue working with him to the point I would need to pay him for services rendered! Then, I considered our history up to that point and thought better of it. I made the right choice. However, what about the people who are not as open-minded as me? I could see people walking away because of that one-star rating. Statistically-aberrative ratings (the ratings from the random troll or from a competitor) hurt the micro businesses proportionately much more because the ratings for these businesses are much less frequent, and therefore, undeserved poor ratings make a significant negative impact.
I suggest the following solutions for micro-sized businesses. Involve yourself minimally with social media or avoid it and instead advertise creatively or through word of mouth for free . If using social media, create content to leverage existing strengths of your business instead of trying to make the content a strength of your business. In addition, Facebook and others would do the right thing by making the rating stars invisible until a statistically significant number of ratings (eg, 10 ratings) were provided by customers.