Increasing Sales with Social Media – Facebook, Myspace & Twitter.

There’s no doubt about it – small businesses are beginning to utilize social media tools and tactics with more frequency than ever before. A recent study by eMarketer reports that 260,000 small businesses across the US and Canada are employing social media tactics. 51% of small businesses are using social media for professional social networking using tools like LinkedIn.com and 28% are involved in microblogging using tools like Twitter.

There are several things to think about before just jumping right into using these tools. The most important is your time. Viral marketing through social media really requires a dedicated amount of time each day and you have to understand the value of your time. Many of the available tools are free to use. But that does not mean they don’t come at a cost, because they certainly do. The cost is human capital. Think of it as a pet. While the pet may cost a little or even nothing, caring for it takes a lot of time. The same is true for social media marketing and networking.

Before you start, make sure your strategy is clear! There is a lot of social media hype and peer pressure to use these technologies. Just make sure you clearly understand your key goals and objectives. For example, are you trying to build direct sales with customers, improve positioning of your product or service, or build your authority in a specific area? Answering these critical questions will help you move forward with your strategy.

Your first step should be to verify whether the audience you are trying to reach is already using social media. If your target market isn’t using Twitter or Facebook, then why are you? You also need to do your homework on where the audience you are trying to reach already exists. Are they on LinkedIn, Facebook, YouTube, Twitter? Are they joining groups or creating new ones? These are all key questions to understanding your audience and how to best engage them.

What are some of the immediate benefits that small businesses are finding with social media? Well, most small businesses will tell you that social networking can help foster stronger relationships with customers, enable a faster vehicle to answer customer questions, incorporate customer feedback, and build awareness for their expertise. However, many small businesses are still trying to understand how social media can ring the cash register.

A New Orleans-based pizza company called Naked Pizza has used Twitter to successfully ring the register. The company has over 4,700 followers on Twitter. That means every time the company has something to say, 4,700 people will receive the message and could forward it to their friends and so on, potentially reaching way more than Naked Pizza’s 4,700 followers. Jeff Leach, the CEO of Naked Pizza, reported that nearly 69% of sales were generated during a one-day Twitter advertising blitz.

Other companies are also seeing direct-to-customer sales via social media. For example, Barbershops, Spas & Salons is using Twitter to let customers know that walk-in times are available due to cancelled appointments. Before Twitter, this was lost profit.

Another great example of Twitter ringing the register is The Albion bakery. When there’s a fresh batch of bread out of the oven, it notifies Albion customers via Twitter and Facebook. If you are ready to take a dip into social media, Ad Age offers 5 tips for marketing on social media platforms:

1. Track sales made on social media.
2. Don’t use Twitter as Facebook (and vice versa).
3. Create a conversation with friends and followers.
4. Sell last-minute inventory.
5. Alert followers to changes.

As a small business, the way you spend your time is critical. So if you do decide to pursue social media, make sure that you have the proper tools to help you succeed. For example, a smartphone makes it incredibly easy for you to update your Twitter, Facebook, YouTube, and blog accounts.

In today’s fast-paced business landscape, you don’t have time to get back to the office to engage your customers or react to their online comments. You have to be mobile and equipped at all times or lose that business to your competitors.

Marketing via Facebook, Twitter Yields Results for Some, Others Say It’s Overrated; ‘Hype Right Now Exceeds the Reality’

By SARAH E. NEEDLEMAN

Last year, Jackie Siddall described in a blog post how a message she received on Twitter prompted her to buy a folding kayak for around $1,900.

The vessel was one of about just 600 sold in 2009 by Folbot Inc., a small retailer in Charleston, S.C. “You can’t buy that exposure,” says the firm’s co-owner, David AvRutick, who claims the incident speaks to the value of using marketing with social media.

But Mr. AvRutick’s experience may be the exception, rather than the norm. In its short lifetime, social media—services like Facebook and Twitter—have become popular marketing tools for small firms due to the low cost and easy-to-use format. Some entrepreneurs say they’re highly effective, but new evidence suggests otherwise.

“The hype right now exceeds the reality,” says Larry Chiagouris, professor of marketing at Pace University’s Lubin School of Business.

Last year, social-media adoption by businesses with fewer than 100 employees doubled to 24% from 12%, says a survey released in January of 2,000 U.S. entrepreneurs from the University of Maryland’s Smith School of Business and Network Solutions LLC, a Web-services provider in Herndon, Va.

Meanwhile, a separate survey of 500 U.S. small-business owners from the same sponsors found that just 22% made a profit last year from promoting their firms on social media, while 53% said they broke even. What’s more, 19% said they actually lost money due to their social-media initiatives.

“It could harm you if you end up inadvertently saying something stupid, offensive or even grammatically incorrect,” says Mr. Chiagouris.

A business owner’s time and energy spent on social-media marketing—Folbot’s Mr. AvRutick says he dedicates about an hour a day—could also go to waste. Fifty percent of the latter survey’s respondents say it requires more effort than expected.

To gain positive results, entrepreneurs need to regularly interact with consumers through these sites and not simply create static profiles, says Jacob Morgan, co-owner of Chess Media Group Corp., a consulting firm in San Francisco that specializes in social media.

Some small businesses opt to hire outside firms to handle their social-media marketing or advise them on the best ways to use it, but such services can cost hundreds of dollars a month.

For Chris Lindland, owner of Cordarounds.com, an online clothing retailer in San Francisco, converting consumers into customers using social media has required a “patient investment.”

“My business has been visited millions of times, but I haven’t made millions of sales,” says Mr. Lindland, whose four-person staff spends up to 90 minutes a day managing Cordarounds’s accounts on Twitter and Facebook. “People have told me they finally got around to buying from my business after reading about it on social media two years ago.”

Some entrepreneurs say they’ve found early indicators that their social-media efforts are paying off.

“The people coming from social media have been buying,” says Stephen Bailey, who oversees social-media and other marketing initiatives for John Fluevog Boots & Shoes Ltd., a footwear and accessories retailer in Vancouver with about 100 employees.

As evidence, Mr. Bailey points to a 40% increase in online sales in 2009—the first full year the company engaged consistently in social-media marketing—compared with 2008 when it was just getting started. He says he can draw a correlation between those figures and social media by looking at traffic to the company’s Web site from Twitter using Hootsuite, a free Twitter-management service from Invoke Media Inc. Other free services that track Web traffic from social-media sites include Google Analytics, CoTweet and Lodgy.

“The second we started using social media, it became one of the biggest drivers of traffic outside of search engines,” says Mr. Bailey, adding that his research shows these visitors spend as much time on Fluevog.com as those who come from other online destinations. The company doesn’t invest in paid advertising on social media, he adds.

Other business owners are soliciting customer feedback and monitoring what’s being said about their firms to determine the impact of sites like Facebook and Twitter on consumers’ buying decisions.

Mr. AvRutick says he regularly searches Twitter for tweets that mention kayaking and then sends messages to the people who wrote them. He connected with Ms. Siddall, the blogger who credited Twitter for exposing her to Folbot, after she posted a tweet that mentioned she wanted a kayak.

Ms. Siddall, a 37-year-old senior designer for Idea Couture Inc., a creative-marketing agency in Toronto, says she was unaware that folding kayaks even existed until she heard from Mr. AvRutick. She spent the next few months researching different brands, which included perusing a networking forum on Folbot’s Web site about kayaking.

Ms. Siddall says she later asked Mr. AvRutick via Twitter if he would send her some photos of her folding kayak being made, and he provided about 20. After it arrived, she says she decided to write a blog post about the whole experience.

“I didn’t find the same level of information or communication online from the other brands,” she says.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

Great article in The Wall Street Journal | Small Business By RAYMUND FLANDEZ –

These days, a great danger lurks just a few clicks away: the online review. By Googling your company’s name, anyone can read and track your business’s performance – including missteps, poor service or less-than-stellar products.

Protecting your company’s reputation is now a 24-hour vigil. Negative reviews – whether they’re merited or not – can turn away potential customers and vendors, and reflect badly on your company’s brand.

The good news is that small-business owners can be proactive in securing positive reviews by asking satisfied customers to share their experiences. But what if it’s already too late?

Here are the three best ways to improve your online reputation:

1. Reach out immediately to dissatisfied reviewers. Their negative comments don’t need to be the end of the conversation. Small-business owners should attempt a dialogue, experts say, as complainers might improve the review or take down the post. Oguz Ucanlar, president of SpaForever LLC in Chicago, managed to turn around bad reviews on Yelp.com by contacting the aggrieved posters. He apologized, explained the situation and offered the reviewers discounts or a free massage. The result? One bad review was deleted, and the spa’s overall rating went up. “I take it really seriously,” he says. It also helps that Yelp now allows business owners to respond publicly to any customer comment, giving others a window into how the business treats its most finicky customers.

When a bad review surfaces, an apology goes a long way, says Lisa Barone, co-founder of Outspoken Media Inc., a Spring Hill, Fla., Internet marketing company. “Most people just want to be heard,” she says. “They just want to know you’re listening and you care, and that you’re going to try and fix it.”

Keep in mind that a negative review can sometimes be helpful. Case in point: an online customer of Nationwide Candy LLC of Albuquerque, N.M., complained after she received the wrong bubblegum product. Turns out, the candy wholesaler had posted an incorrect image on its site. “It just casted a bad image on us,” says Ken Hanson, its general manager, who immediately corrected the error.

2. Flood search engines with content you can control. Use digital media’s reach to your full advantage, says Evan Bailyn, founder of First Page Sage LLC, a New York search engine optimization company. Mr. Bailyn says he often helps clients put “good publicity on top to knock bad publicity off the first page” of search engine results. To do that, he suggests releasing press releases through prnewswire.com or pr.com and building Twitter, Facebook and YouTube accounts since these social-media sites show up high on search results. “The overall strategy is inundating the Google results with as much good or neutral content as possible so that the bad seems like an anomaly,” Mr. Bailyn says.

3. Appeal to bloggers to review your company or your product. Getting others to weigh in can be an effective way to generate neutral or positive reviews to counteract negative ones. Influential bloggers in your niche market can bring instant credibility to a company. If you already know bloggers in your industry, read or reach others by simply scanning their blogrolls, a handy list (typically placed in the sidebar) of potential contacts. Alert them to news about your product or service as a first step in building the relationship.

While it’s controversial, some business owners say they’ve improved their reputations through sponsored blog posts. Netfirms Inc., a Web-hosting company in Markham, Ontario, is paying $10,000 to SocialSpark.com, a marketplace for paid reviewers, and to about 60 bloggers to write 200-word reviews of its new Twitter service. “The more positive feedback that we can have, the better,” says Dan Feferman, its product specialist and community manager. Other sites to consider are PayPerPost.com, SponsoredReviews.com and ReviewMe.com, Mr. Bailyn says. Costs can range from $15 to $150 per posting. While some business owners liken sponsored posts to traditional ads, keep in mind you could turn off potential customers. To prevent that, make sure the blog post contains a disclosure that it’s a paid or sponsored review.

Write to Raymund Flandez at raymund.flandez@wsj.com