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Business Software: Small Business Adoption of Social Media Strong in Some Segments

December 09, 2010
By Gary Kim, Contributing Editor
 

In prioritizing which technology is most important to their companies, America’s small business owners still value business software and their company website more highly than social media sites and services, as you might expect. Core business process software, as you would expect, is considered more important than are websites. And websites are seen as twice as important as social media. 


But the surprise is the relatively high estimation of social media, compared to more traditional tools, is stronger in some notable groups, including small businesses run by women, Millennials and companies with 10 or more employees that are growing.

While software and core Web presence rank highest in helping small business owners to operate more efficiently and acquire new customers, a new study by the Guardian Life Small Business Research Institute also identified specific segments within the small business community that are clearly embracing social media as a communications and business building resource.

The research, fielded in June of 2010, reveals that “using software to make my business run more efficiently” and “using websites to tell prospective customers about our business” are currently the two most important ways that small business owners tap the power of technology. In contrast, “using social media as a tool for communicating about our company” and “using social media as a way to find out about prospective clients or prospects” ranks significantly lower

when viewed, in aggregate, across all respondents, as you might expect. 

The categories of small business owners where social media is more strongly emerging as an important tool include Women, Millennials, Companies with 10 or more employees and businesses that have experienced – or expect to experience – growth in revenue.

Gender differences regarding the importance of technology are striking. According to the Guardian Life Index, women small business owners are far more likely to embrace technology in all its forms and applications than their male counterparts. 

Significantly, women entrepreneurs value social media at three times the level of male small business owners. 

The Institute’s research has previously shown that women entrepreneurs are more customer-focused and more likely to incorporate community into their business plans than male small business owners. These traits may explain why women small business owners are more inclined to embrace new tools like social media to engage with customers and build communities of interest.

Not surprisingly, company size is consistently correlated with the high importance of technology – including the interest in and use of social media.

Small businesses with 10 or more employees more intensely value software, websites and social media as tools that can enhance their business operations than companies with fewer staff members. The importance of social media in turn rises as the number of employees grows.

For the first time, The Guardian Life Index looked at generational differences among small business owners. Efficiency-improving software and websites are equally valued across four generations of small business owners: Millennials (under age 28); Generation Xers (age 29-49); Baby Boomers (age 50-67); and Silents (68-85). 

However, Millennial small business owners are far more likely to value social media than any of their generational counterparts. The importance of social media drops consistently from younger to older generations.

To small business owners, technology means, first and foremost, software that helps them run their business better (4.7). Ranking next in importance is the company website, which is primarily valued as a way of telling prospective customers about the business – or, in other words, as a sales tool (4.0). 

However, using the website as a vehicle or venue for two-way customer dialog channel falls off significantly – rated at about half the importance (2.4). Social media importance ranks about 0.8, and using social media as a way of building a sense of community with the employees actually cross into negative territory (-0.4).

In aggregate, the data suggest that for America’s small business owners as a whole, social media is just beginning to gain traction as a valued tool in comparison with the more established technology resources like business software or a company’s website. That probably does not surprise many of you. 

But it is notable that the value of social media is highest among firms headed by women, Millennials and faster-growing firms with 10 or more employees. 

The Guardian Life Index polled more than 1,200 small business owners representing 12 small business industry sectors. Based on a 21-point scale (from +10 to -10) that measures the positive and negative intensity of responses to a vast battery of issues, positive intensity numbers above 3 are highly significant and indicate strong feelings. Intensity numbers above seven are rarely seen for matters other than family or religion. Negative intensity numbers, even slightly negative ones, are highly significant and indicate strong passions. 


Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Tammy Wolf
 
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