July 13 , 2010

Using social media to win new business

34% of Canadian business have done it

Social networking has become a mainstream business tool. A new global survey commissioned by global workplace solutions provider Regus revealed that 34 percent of Canadian businesses have successfully used social networks to win new business, reinforcing the impact that social media has had on corporations. However  Canada lags slightly behind the global average in this regard, with 40 percent of businesses globally having successfully leveraged social media tools for business development.

Up to now, relatively little analysis has been available regarding the real use businesses are making of social networking and whether true revenue potential can be generated through this channel. To glean whether businesses globally believe that social networking is ready to take its place among an array of marketing tools, the Regus survey asked business leaders not only whether they had achieved any customer wins using social networking, but also whether they believed the channel was effective enough to be awarded its own portion of marketing budget. Proving the faith businesses have in the social networking medium is seen in the revelation that more than a quarter of businesses worldwide (27 percent) have set aside a proportion of marketing budget specifically devoted to social networking activities.

Globally, social networks are still used for their original purposes. The most popular use of social networks is staying in touch with business contacts, with 58 percent of respondents globally declaring they use networks in this way. Joining special interest groups is also popular (54 percent).

Although a number of sceptics (34 percent) believe social networking will never become a significant method of connecting to customers and prospects, 51 percent of companies globally organize, connect to or manage customer groups via social networks. Fifty four percent of firms use social networks to find useful business information. Surprisingly, however, only 22 percent of respondents had found new employment through social networking, in spite of the specific job search functions of networks such as LinkedIn.

In  Canada specifically, although 28 percent of businesses have set aside a proportion of marketing budget devoted to social networking activities, results deviate marginally from the global average. Fifty three percent of respondents used social networking to keep in touch with contacts, slightly below the global average of 58 percent. Only 49 percent declared that they used social networks to source relevant information (globally 54 percent).

Five percent fewer respondents than average (51 percent) declared that the main usefulness of social networking in business is to organize, connect to and manage customer groups.

Wes Lenci, Regus regional vice president for  Canada, comments, “Our global survey has revealed that social networking has finally become a mainstream business tool. Although there is a core group of sceptics globally, who do not believe that social networks will become a significant method of reaching customers and prospects, a significant proportion of firms are devoting real marketing budgets through the medium to acquire new customers and keep existing ones.

“While the most popular function of these networks remains that of keeping in touch with contacts, businesses are also successfully acquiring new customers, supporting their retention efforts and interacting with customer groups. With 33 percent of the country logged onto Facebook(1) and more than two million Canadians on LinkedIn(2), reservations towards using social networks professional seem misplaced. This survey indicates that organizations who have not yet ventured into the world of social networking may be missing out on sizeable business opportunities. This is particularly the case in the  Netherlands (48 percent),  India (52 percent),  Mexico (50 percent) and  Spain (50 percent), where the highest level of new customer acquisition via social networking was reported.”

The survey also analyzed company size differences and found that overall small companies were a little more likely than average to use social networking. In  Canada, 60 percent of medium and 34 percent of small companies successfully found new customers through social networks, compared to only 15 percent of large companies. More small companies (30 percent) also actively devote marketing budget to this activity than the global average (27 percent). Bucking the global trend encountered by the survey, employees of larger firms were the least likely to have found employment via social networking (15 percent) compared to small (17 percent) and medium (20 percent) firms.

On a sector basis, consultancy businesses were exactly on average, with 40 percent of respondents having found new customers through social networking. In this sector 29 percent of companies also actively devoted a part of their marketing budget to social networking activity and 56 percent used social networks to find useful information. Unsurprisingly, fewer sceptics than average were found in the consultancy sector (23 percent) than average (34 percent).