Small businesses use social media tools to attract customers

Angela Cortright, founder of Spa Gregories, which recently opened a branch in Del Mar, uses social media to find new potential customers.

“We’re trying to reach out to the local community through Facebook and Twitter,” she said, “It helps us by word of mouth. This is just a new mouth — it’s a digital mouth, instead of calling my friends.”

Cortright and about 75 other business owners attended a workshop on “Internet Marketing 3.0″ last Friday in Mission Valley. The event organized by Score, a non-profit business training group, was the first of its kind offered by the national network and the highest-ever attended in San Diego. The workshop will be held again on Tuesday, Aug 18 in Carlsbad.

Social media brings fear and opportunity to many business owners.

“They’re very fearful because they don’t understand,” said Score counselor Fred Schlaffer. “These are small businesses usually that have very, very limited resources. So to get involved with social networking means more of their time or (the need) to hire somebody.”

But Twitter, Facebook, Yelp, YouTube and other networking sites are places to attract customers, build loyalty and ultimately generate more revenue, said workshop leaders.

“The opportunity is huge, because it’s a very cost-effective way to get to a large group of people and build that (customer base) with little investment,” said Schlaffer.

Building trust

Trust is a critical part of social media, said one workshop leader Bill Trumpfheller, president of Nuffer, Smith, Tucker, a public relations agency.

He cited statistics showing that:

— 91 percent of 25 to 61 year olds buy products and services from companies they trust.

— 80 percent of 34 to 64 year old read online reviews.

— 90 percent avoid hotels with bad reviews.

Companies that build trust develop “brand advocates,” who help market the business online by word of mouth. This is a more powerful, yet cheaper form of marketing than traditional advertising, he said.

Stonyfield Farm, an organic dairy company, has five blogs targeted at each of its market segments. The blogs convey the ecological values, issues and activities that the brand supports. These blogs have built large followings of customers who share these values, while solidifying brand loyalty.

Bad management

The reverse is also true. For United Airlines, one online rant was a PR disaster. A customer who was upset at the company for breaking his guitar wrote a song and uploaded the video on YouTube.com. Posted July 6, the video has had more than 4.5 million views.

In another case, Lifestyle Lift was fined $300,000 for posting its own positive reviews. The cosmetic surgery company required its employees to write glowing testimonies on consumer Web sites, to counteract negative reviews from real customers. The New York attorney general’s office nailed the company.

“Ethics need to be part of the social media space,” said Trumpfheller. “If you’re not operating in an open and transparent manner, and really managing that trust with your customer, you’re gonna get caught.”

Attract customers

Companies can improve service by listening to what customers say in social media. When Trumpfheller started working with the makers of WD-40, the do-it-all lubricating spray fluid, his team noticed that many customers were griping online about losing the long, red straw that comes with the can.

The company responded by sending replacement straws to these customers. It also changed the product design so the straw is permanently attached to the can. Such actions create happy customers, who become brand advocates, said Trumpfheller.

Grow business

Customers can also use social media to grow business. In one case, Splitends Salon in Orange County noticed it was not attracting new customers, despite ads in the Yellow Pages. So it started asking customers to write reviews on Yelp.com, a consumer-driven site. Now, the company gets five to 15 new client calls a day, said Trumpfheller.

KogiBBQ, a Korean-Mexican food truck which travels throughout Los Angeles, sends daily messages stating its next location. It shares these messages to its more than 38,000 “followers” on Twitter.com, which caps posts at 140 characters.

The mobile vendor typically has hundreds of customers waiting at a location by the time it arrives. These fans then write Tweets while standing in line about how good the food is.

Social media has its detractors too.

“Who cares?” asked one woman in the workshop, wanting to know how such niche companies build a following on Twitter.

“Are people really searching for Korean tacos in a truck?”

“People follow people who have content they are interested in,” said another workshop leader Teresa Siles, an executive at Nuffer, Smith, Tucker agency. One Tweet that interests one person else can get forwarded, or “reTweeted,” to others who share the same interest, thus creating a community of followers.

But companies need patience, said Siles. “It’s a slow build.”

Add value

The key to a strong social media program is to consistently add value to conversations, said Siles. In addition to listening to customers online, this also means contributing comments that are relevant to a particular community.

Siles noted that when she sends out messages on behalf of clients on Twitter, only about one-third are brand messages, while two-thirds are interesting comments, tidbits or forwarded “reTweets” pertaining to its followers.

“You have to add value,” she said.

Helen Kaiao Chang is SDNN’s business editor. You can follow her on Twitter @HelenChang.

Tags: Array, facebooklifestyle lift, internet marketing, internet search, nuffer smith tucker, score, score san diego, SDNN, spa gregories, stonyfield farms, Twitter, Yelp, YouTube

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