August’s Question of the Month

Q: How can I improve my cash flow?

- William M., Seattle, WA

A: Cash flow management is critical to the success of any business, but especially smaller ones. Typically, cash flow problems are the first signs of financial trouble for many small businesses. But even a profitable business with booming sales can be forced to go under because they owe too many vendors too much money while waiting for their customers to pay up.

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July’s Question of the Month

Q: How can one use social media to increase traffic to their website?

- Steve, Portland, OR

A: Social media is quickly becoming an essential tool for savvy business owners who want to increase their web traffic and don’t have a large marketing budget. To get started, figure out which of the larger networking sites such as Facebook^® or Twitter™ will provide the best access to your customer base and set up a free user profile. (For more on selecting the right site, read our “In Their Facebook?” article) Be sure to complete all the requested information as well as add company photos, events and links to your blog and/or website. Then, start adding “friends” or “followers.” Create a “fan page” and invite people to become a fan of your business and look for relevant groups to join. Use status updates or “tweets” to provide interesting comments with links to your website, blog, articles, products or promotions. Really think about what would make customers curious enough to want to click through to your site. An offer for 10% off probably won’t generate many clicks. As you attract more fans or followers, an increasing number of users will find their way onto your site. But it’s also important to understand some of the basic ins and outs of social media before you start “tweeting” your head off. If you’re not careful, you could actually do as much harm as you do good.

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Using social media to market your business.

If you’re like many businesses, you spent a lot of time and money developing your company’s website only to discover it’s not generating the kind of return you’d expected. Thousands of entrepreneurs have learned that having a website doesn’t necessarily translate into increased traffic and sales. That’s why businesses of all sizes are rapidly jumping on the social media bandwagon.

What is social media? The term “social media” refers to popular social networking websites such as Facebook, Twitter, MySpace™, LinkedIn^®, YouTube™ and countless others. But these conversational forms of media are more than just a way to connect and share with family and friends. They have tremendous potential for businesses to build relationships with consumers and open lines of communication never thought possible by a previous generation of marketers – and usually all for free.

Spreading like wildfire. According to Facebook, their site now has over 400 million users and is continuing to grow at an incredible rate. In fact, Facebook just topped longtime leader Google^® in March 2010 as the most visited site on the Internet. But if you think those 400 million users are mostly teenagers, computer geeks and young adults – think again. In a recent survey by the Institute for Corporate Productivity, about 65% of business professionals use personal and professional social networking sites also. Therefore, the question you should be asking yourself nowadays isn’t whether to use social media but how you can put it to work for your business.

Changing the communication model with consumers. The key difference between social media and other forms of advertising is its communication model with consumers. In this forum, businesses no longer speak at their potential customers, they have conversations with them. Social media allows small businesses to engage with their customers and help build a trusted relationship. The Chunka Munka Cookie Company often gets suggestions directly from customers using sites like Facebook and Twitter. “Our fans and followers are an unending source of great ideas and creativity,” says owner Shannon Murphy. “We use status updates and tweets to have fans help us name a new gourmet cookie, thank customers or take suggestions for new flavors.”

Another small company, Kid’s Busy Box, which features kits with arts and crafts projects for kids, estimates that 75% of its business comes from social media leads. Co-founder Christine Hutchison says, “A favorable review from a blogger or website with a large following can result in significantly more sales than any paid advertising we’ve ever tried.”

Even large corporations like Starbucks are now putting social media to work for them. Just over a year ago, the coffee giant introduced MyStarbucksIdea.com and received about 70,000 ideas on what they could do to improve everything from their food and beverage offerings to in-store experiences and the microsite itself. From those 70,000 ideas, Starbucks implemented 25 of them and gained valuable insight into what their customers are looking for. Plus, the company’s microsite helped to make their customers feel valued and as if they were real partners in the business.

Lack of control. While communicating directly with customers has been a major plus for many companies that have dipped their toe into the social media pool, there is also a negative: you can’t control where the conversations go. All it takes is one negative post about your business and what was once a great tool for marketing your company has turned into a public bash session. However, with a little experience and a mild proficiency of some basic social media tools and tactics, businesses can learn to influence those conversations and turn that negative attention around to their advantage.

Influencing the conversation. Most sales experts will tell you that influence is the foundation of creating any successful relationship, whether it’s with customers, employees, family or friends. But businesses need to be careful as to how much they try to influence online conversations. Social media content, for the most part, is created by the people, for the people. Many of the failed online communities created by businesses did so because they only thought of what the community could do for them, not what they could do for the community. Businesses that try to control the conversation too much or send out too many tweets will lose their credibility and be considered spammers. Social media marketers need to avoid the temptation to get too sales-y and instead make the effort to become a trusted resource for information.

Going viral. The tremendous power of social media marketing is really now just beginning to be harnessed and applied by businesses. Considering the average Facebook user has 130 friends¹, a great offer or bit of news can spread exponentially over the web in a matter of days, or even hours. This kind of high-speed sharing is referred to as “going viral.” And while a tremendous reach like this was once only a dream to most small businesses, some companies have also discovered it can be a little too much of a good thing. Quiznos^® Subs found that out the hard way in February when they announced they were giving away a million free subs to promote their new lower prices. In just three days, a million coupons were downloaded and many customers were left annoyed when some stores did not honor the promotion or ran out of food.

Social marketing tips. Social media can offer a better return than almost any other type of marketing, but clearly there is a bit of a learning curve for many. It takes a tremendous amount of time and effort to truly engage consumers and take full advantage of this emerging medium. Here are a few tips to help you along the way:

• Don’t spread yourself too thin. Start with only one site first. Then, once you get the hang of it, add others. It’s far better to only do one or two sites well than to try and be everywhere at once and fail.
• Study other businesses using social media. Pay attention to companies that have been using social media for a while and study how they craft their messages to get customers to click through to their websites. See how they use tweets or status updates to offer promotions or announce new products in an engaging way.
• Update interestingly and often. Have something interesting to say and express it with a compelling approach to pique a consumer’s curiosity. Tweet, blog or update your status frequently so you’re always appearing near the top of your connections’ status pages.
• Listen, listen, listen. Pay attention to what consumers are saying about you and your competition online. The idea for your next promotion or product could come directly from your very own customers. Respond to negative posts politely and use the opportunity to possibly even convert some of them into new customers.
• The conversation never stops. Your online media marketing duties don’t stop once you’ve created your profile. Social media is an ongoing conversation that can be quite time consuming and addictive.
• Connect your sites. If you participate in more than one site, like Facebook and Twitter, use an app to connect them all and save yourself some time. Send your tweets to Facebook and feed your blog to Twitter so you can maximize your visibility and minimize your time online. You might even consider appointing one person to handle all the social media duties for your company.
• Improve your website content. If you’re going to be directing people to your website, don’t just let it be an online brochure for your company. Make it a valuable resource for consumers. Provide useful content that isn’t just about your business, and make yourself an authority in your area of expertise. Once people realize your site is full of useful and constantly updated information, they’ll visit more often and refer others to it.
• Facebookers. Create two profiles: One for your private life and one for your business. (You don’t really want customers seeing pictures of you from that crazy weekend in Vegas.) Try to get a vanity URL, which is a personalized address (e.g., http://facebook.com/johnsmithsplumbing). In addition, set up a fan page so customers can become fans of your business. Then, set up your own group page relative to your business and join other groups that discuss similar topics to increase your exposure. Other ways to increase traffic with Facebook are paid Facebook advertising, Facebook widgets/badges for your site or blog, creating a Facebook-enabled app and integrating Facebook into your site using Facebook Connect.

¹ Facebook Press Room page.

June’s Question of the Month

Q: I am desperate to find ways to make my home-based business’ website search engine-friendly. Any ideas?
- Carlos, Killeen, TX

A: There’s nothing more frustrating than pouring a lot of time, money and hard work into a website only to be ignored by all the search engines. Ideally, you want to be on the first page of results when a user types keywords associated with your business. After all, the difference between ranking number one and ranking number 10 on a search page can mean thousands dollars to a business. Read more…

May’s Question of the Month

Q: Among the most common questions we receive every month is “How do I access my Business Profile” or “How do I use my account?”

A: To help answer those questions, we’ve created an online tutorial that explains everything from logging in and editing your profile, to highlighting your business and responding to customer reviews. Your Business Profile is your chance to tell prospective customers everything they’ve ever wanted to know about your business. It features an interactive mapping tool and the ability to display your print ad, logo, and more. Plus, you can highlight your phone number and website link, and you’ll appear above all the free listings on search results. If you haven’t already viewed the Business Profile tutorial, it’s definitely worth a few minutes to ensure you’re making the most of yours today.