Priming the Economic Engine: How Social Media is Driving Growth for Small and Medium Businesses (SMBs)

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Commissioned study conducted by:

Priming the Economic EngineHow Social Media is Driving Growth for Small and Medium Businesses (SMBs)

©2013 LinkedIn Corporation. All Rights Reserved. 2

Why should you care about SMBs?

SMBs contribute $5.5 trillion in annual revenue(Source: Dun and Bradstreet)

Small businesses create seven of every ten new jobs.(Source: SBA Office of Advocacy)

Young firms in growth mode are the

largest contributors to job growth.

(Source: Goldman Sachs)

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They’re optimistic about 2014 and focused on marketing

8 in 10 think 2014 will be better than 20131

41%say increasing marketing

and brand presence is their top business priority1

10.7%YoY increase in

marketing budgets2

1 - RocketLawyer, 2013 Semi-Annual Small Business Survey 2 - Borrell Associates, Dec. 2013

©2013 LinkedIn Corporation. All Rights Reserved.

We wanted to understand how and why SMBs use social media

DEFININGSMBs

Small$1M to $9.9M USD

Medium$10M to $49.9M USD

998 Small and Medium Businesses surveyed in the US and Canada

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Key Findings

There is a prime opportunity for financial companies to influence SMBs on social media – especially on LinkedIn• 68% use social media for finance-related reasons

• 93% are driven to take action after using social for both discovery and consideration

• SMBs are most open to receiving financial information on LinkedIn

There is a strong correlation between increased social media spend and hyper growth• 73% of hyper growth companies reported increased social media spend

• 82% of hyper growth SMBs say it is effective for generating new leads

Social media: ideal for marketing, but also for learning• 94% of SMB social media users use it for marketing

• Half use it for learning and deriving business insights

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Social media: ideal for marketing, but also for learning

8 out of 10 SMBs use social media for their business

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81%of SMBs are Current Users of Social Media

9% are Future

Users

Among social media users, nearly all use it for marketing

*Base: Current Social Media Users Small Businesses are significantly more likely vs. Medium Businesses Medium Businesses are significantly more likely vs. Small Businesses

Use Social Media for Marketing Needs

94%

TOP MARKETINGREASONS*

Maintain a company presence and identity

Generate word-of-mouth

Deliver content and new information about company

Advertise to help increase awareness

Advertise to generate new leads

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The reason? Social media addresses their #1 challenge

65%State that attracting new customers is their top business challenge61%

Find social media useful in gaining new customers

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Half also use social media to learn and share resources

Use Social Media for Learning

49%

TOP REASONS FOR LEARNING*

Access a network of peers to ask questions

Learn from experts in my industry

Obtain insights or best practices

Find information and opinions to answer my questions

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10*Base: Current Social Media Users Small Businesses are significantly more likely vs. Medium Businesses Medium Businesses are significantly more likely vs. Small Businesses

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Strong correlation between increased social media spend and hyper growth

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The majority of SMBs are growing and one in six are in hyper growth mode

Small Businesses are significantly more likely vs. Medium Businesses Medium Businesses are significantly more likely vs. Small Businesses

GROWTHIncrease in Overall Revenue Compared to Last Year

48%

36%

16%

NON-GROWTHDecrease/No Change in

overall revenue YoY

HYPER GROWTHSignificant Increase in Overall

Revenue YoY


Hyper growth and increased spend on social media are strongly correlated

Report Increased Social Media Spend

Hyper Growth

73%Non-Growth

42%


SMBs in hyper growth find social media to be very effective in achieving key marketing goals

% Reporting That Social Media Is Effective For...

WORD-OF-MOUTH

CONTENT MARKETING

LEAD GENERATIONBRANDING

90%Maintaining a

company presence & identity

88%Generating word-of-

mouth about a company

89%Delivering content &

information about company

82%Advertising to

generate new leads

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Social media is one of the most influential touch points when SMBs choose a financial service provider

Over two-thirds of SMBs on social media use it for financial services

Have Used Social Media for Finance-Related

Reasons

68%

TOP REASONS*

Keep up-to-date on financial trends

Gather preliminary financial information

Seek advice on a financial decision

Evaluate or re-think a previous financial decision

Recommend a financial product to others

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Top 6 Actions As A Result of Hearing on Social Media

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Conducted additional research on a financial product

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Asked a financial professional for additional info

Shared information about financial trends, products

Discussed a financial product with a friend or colleague

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Learned of a new financial company

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Learned of a new financial product

Social media triggers SMBs to learn more about financial products and companies


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Among SMBs who use social media for both discovery and consideration, almost all are driven to action

Path to Purchase

DISCOVERYGather info / stay up-

to-date

CONSIDERATIONSeek advice/info to make a

purchase

DRIVEN TO ACTION(Learn / Discuss /

Purchase)

93%


...and about two in five are driven to purchase

Path to Purchase

DISCOVERYGather info / stay up-

to-date

CONSIDERATIONSeek advice/info to make a

purchase

DRIVEN TO PURCHASE

37%

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29%

22%

21%

20%

16%

There is a significant opportunity for financial service providers to cater to SMBs’ unmet needs

*Base:: Current Social Media Users**Base: Those who expected info

Top 5 Types of Finance Content expected on social but not received*

Best practices, how-to guides, checklists

New innovation and technology developments

New product information

Company background

Industry news/strategy information

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In the path to purchase for financial services, SMBs consider LinkedIn to be one of the most trusted platforms

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LinkedIn is the destination SMBs are most receptive to learning about financial products

*Base: Current Users of Each Social Media Site

Openness to Receiving Financial Information On Social Media Sites*

57% 49% 47% 47% 45% 38%

of hyper growth companies are receptive to finance content on LinkedIn

69%

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Only LinkedIn provides the 4 C’s

CREDIBILITYNearly 3 in 4 agree LinkedIn allows them to build credibility.

CONNECTIONOver 2 in 3 agree LinkedIn lets them connect with vendors or potential partners.

CONTEXTOver 2 in 3 agree LinkedIn provides a relevant context to promote and advertise their company.

COMMUNITYNearly 2 in 3 agree LinkedIn provides access to a broader community of other companies to seek opinions.

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...providing a valuable resource across different activities in the SMB value chain

*Base: LinkedIn Users.

Open Innovation

Marketing& Sales

Sourcing

Customer Service

Build relationships through multiple touch points on LinkedIn

Build your followers

Encourage referrals and recommendations

Provide real-time assistance

Build community

Publish thought leadership

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UPDATE

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GROUPS


v

Best practices for marketers

Enable learning throughout each phase of the purchase path

Fulfill unmet content needs

Target hyper growth companies

Provide resources for the entire SMB value chain

Build your credibility by facilitating open dialogue with SMBs

...LinkedIn has given us great access to new and potential customers. A level of trust is able to be established and thus, contacting these folks isn't as much of a cold call.

- Small Business, Healthcare industry

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Download the whitepaper:http://lnkd.in/SMB-research

For the full results....

http://lnkd.in/SMB-research