Why Mom-and-Pops Will No Longer Pay for ‘Social Media Management’ | Street Fight

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Why Mom-and-Pops Will No Longer Pay for ‘Social Media Management’

33 Comments 06 February 2013 by

smalltown1I own a digital media company that operates a network of local news and niche websites on Cape Cod in Massachusetts. We sell advertising, web design, and Internet marketing services to hundreds of  local clients. Most of them are what I call VSBs, or very small businesses, meaning they have fewer than 15 employees.

They’re the proverbial mom-and-pop companies. They’re very loyal customers, and they’re my bread and butter. If I can’t deliver tangible performance results for their marketing dollars, I’m out of business.

As of this year, we no longer offer social media management services. Why? Demand for these services has dropped off a cliff. The social media hype bubble has burst, and most VSBs have not realized their return on investment in social media. They’re not willing to pay my company — or anyone else — hundreds of dollars a month to market their company on Facebook or Twitter; instead they are diverting those dollars to pay per click options, SEO, optimizing their websites for conversion and mobile, or targeted local media advertising.

I’m located in a tourism, resort and affluent retiree market — in many ways the opposite of the urban hipster demographic. Many of our clients market primarily to customers older than 50. This alone makes social media marketing a difficult fit.

Social media marketers will protest, “You’re doing it wrong. All businesses need social media marketing, which if done correctly for a long enough time, will pay for itself.” But, to them, the mom-and-pops of America respond, “I’ve paid thousands; show me the new customers (and the money).”

This is not to say that VSBs shouldn’t do social media marketing or that it never works for them. I give Internet marketing workshops to VSBs in which I give real-world strategies for time-strapped business owners who don’t have a dedicated marketing staff. My blanket recommendation is that they spend one to two hours a week on social media and use an application such as HootSuite to schedule posts to multiple channels. If they have a reasonably tech savvy employee who they’re already paying to do other offline communications, it certainly makes sense to handle social media this way.

Like so much else in Internet marketing, social media was overhyped to the point where local plumbers and insurance agents thought it would make their cash registers ring early and often. These types of customers requested that we manage their social media for them, so we developed and sold this service. We weren’t alone; many online news companies began offering digital agency services about the same time we did.

Here’s what we learned: On Fantasy Island, your clients dutifully send you their promotions and industry news each week, you write the copy, post photos, track the engagement, and their phone rings off the hook.

In reality, where we all live, Ricardo Montalbán has left the building, and the business owner is too busy wearing 17 different hats to send you any material. You create and post the content, run ads and sponsored posts, and increase the fan base. As for the client’s cash register? Crickets.

In my experience, the type of business most likely to realize a social media return on investment are B2C businesses whose customers are younger than 50 and that focus on entertainment, retail, personal services, or tourism. B2B or home services, or businesses catering to older people, do not fare nearly as well.

Burst bubbles aside, here are the top three reasons for nearly all VSBs to invest a small amount of time on social media:

1.  It’s free or cheap, if you don’t count your time as money — or if you add such duties onto an existing employee’s responsibilities.
2.  It is an important way to reach customers younger than 40 and an essential way to reach those under 30. Have an event to promote? Combine sponsored posts with a contest or other creative marketing, and you’ll get tangible performance results.
3.  Sure, social signals are important for SEO. But as far as knowing that inputting X equals Y placement in search results, we don’t know the equation and never will.

When advising some VSBs on Internet marketing (notice I say some, not all), I offer the following reasons for not allocating a significant portion of their (usually small) marketing budgets to social media management:

1.  It’s sharecropping.  You don’t own your social media presence: Facebook and Twitter do. You can invest large amounts of time and money in obtaining likers and developing custom tabs and functionality, and then Facebook can pull the rug out from underneath you by converting to another format (like Timeline) overnight.

2. Half of all Americans are not on Facebook, and some experts think Facebook penetration in the U.S. market has maxed out. This means half of all potential customers (or higher, if your target customer is older than 50) have no chance at all to see your message.

3.  People do not use Facebook, and especially Twitter, with a purchasing intent. When they want to buy a product or service, they use search. This is why it makes more sense to invest in a professional website optimized for conversions and mobile access, and drive traffic to it through SEO, pay per click, and targeted advertising.

I’d be interested in hearing in comments what challenges and successes other publishers are experiencing.

julie_profilepicJulie Brooks (@juliebrooks) is the CEO of eCape, which is based in Massachusetts’ Cape Cod and publishes the community news site CapeCodToday.com and other local niche sites.


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  • http://twitter.com/NLCuk NLC (UK)

    I think another way of looking at this issue is how much are agencies charging for Social Media services.
    Too many bad agencies here in the UK charge £100s to undertake the simplest Social Media task, and people have cottoned onto that, creating the backlash you describe.
    If Social Media services are sold at a reasonable rate (i.e. not pegged to meet an agency’s extortionate overheads or proprietor’s greed), people will still be willing to invest in them.

    Also, it takes skill and marketing nous to run a good, coherent Social Media campaign. Just because a lot of social media channels are free at the point of use does not necessarily equate to the user being gifted in communications skills. After all, everyone can get behind the wheel of a car, but that does necessarily mean that everyone can drive it.
    I do agree though that there are certain demographics that are currently immune to Social Media messaging, but then it should always be part of a wider marketing mix rather than a Deus Ex Machina in its own right. Again, the wrong perception has been perpetuated by some Social Media practitioners who believe (or, more accurately, sold) it to be the answer to all marketing campaign objectives.
    I think you are right in many respects of your analysis, but I still think there will be a need for genuine Social Media practitioners in the future. I just think they will have to modify their expectations as to what they can charge for their services.

    • http://www.ecape.com/ Julie Brooks

      I agree with your observations about stratospheric pricing. However, if the client provides no material, the agency has to create an engaging marketing message multiple times per week. To really do it right and have contests and other gimmicks, then input, approval, and back-and-forth with the client is needed. Factor in running ads to get likers, and sponsored posts to avoid the low 6% view rate, and you’re talking low hundreds per month, at small-town prices. It’s labor-intensive no matter how you slice it.

      • http://twitter.com/pagepart PagePart

        Thank you for this article. There are many great comments as well. In general I am a “gray thinker” and agree that social media marketing works for some companies, but not all.

        The all or nothing “all VSB’s should dump SM because they are not seeing ROI”, is not a comfortable statement . I have seen very successful VSB social media plans. There’s no consensus on how to measure SMM effort/ROI; it has a halo effect on many things (referrals, brand awareness, loyalty, exposure), using others to spread your word (if its of value), and it’s hard to track whether it had an impact on purchase. If I see, from my friends, a post about a new local restaurant, I may go to the restaurant, but they restaurant owner would not know I was there because of SM.

        And if you measure ROI on a process that’s flawed, of course its not going to show return. Many companies are not using the medium correctly, They talk about themselves, providing no value to the reader. After 15 posts about the store cat, you’ve lost me. Give me coupons, fashion tips, specials, reward my behavior, then you have my attention. But very few use it that way. They use SM as a broadcast systems of their daily grind, or use it like a traditional media outlet. Advertise and Sell. Again, not how to use SM.

        One point, and I question, is that social media will not work for a 50+ market. Having come from a company whose target was that market, I know that the 50+ market is one of the fastest growing segments (many are voyeurs and won’t post many things, but they do it to stay in touch with their family members).

        Thanks again.

        Ann Marie
        PagePart
        annmarie@pagepart.com

  • Dana Ward

    What a refreshing piece!! Julie you write as if creating my startup’s manifesto. I will say one thing about those over 50….many have smartphones. Mobile connections with them is what VSB’s need and I am building now. All based on consumer intent. NOT push, NOT nfc, no other kind of spam either. I will reveal soon. Good work!

    • http://www.ecape.com/ Julie Brooks

      Yes, we’re selling a lot of mobile sites, even the older VSB owners get that their sites need to work well on mobile.

  • http://twitter.com/localsocial localsocial

    Hi Julie –

    Great piece! And I agree. We’re based in Dublin, Ireland, and deal with many VSBs. The themes and issues you raise are universal.

    The VSBs we meet are “on” social media (twitter, facebook mostly), but are often confused, bewildered, and even antagonised by them. For many of them, it’s yet another task to complete in an already packed schedule, which used to include sending email newsletters, or texts, and now includes sending/monitoring/replying on these new media where the rules are unclear and the outcomes often hard to measure. Meanwhile, GroupOn is on the phone and would like them to offer a 70% discount special :-)

    Anyway – a very welcome piece with some calm and sane observations for businesses of all sizes – not just VSBs.

    Cheers, Sean

    • http://www.ecape.com/ Julie Brooks

      Sounds like we’re in the same boat. I’ve been in this business for 16 years and admittedly have a jaded, skeptical eye toward the new and shiny. Which is why we never jumped on the daily deal bandwagon. And why I cut and run when it came to social media and other services. Sustainability first.

  • http://twitter.com/si1very Chris Silver Smith

    I think you’re throwing the baby out with the bathwater somewhat with this all-or-nothing viewpoint. While I’d say you’re right about there being no obvious immediate benefit to social media development, there are indirect benefits that are significant. Good social media work bolsters rankings as both Google and Bing have publicly acknowledged they’re now using social signals as part of their ranking signals. Discontinuing the social media promotion work may put a business at more of a disadvantage in terms of achieving and maintaining good rankings in search engines.

    • http://www.ecape.com/ Julie Brooks

      I don’t advocate an all or nothing approach; I advise a practical, minimal approach for at least half of VSB’s. As I stated in the article, sure Google and Bing fold social signals into the mix, but out on the street, I can’t sell “maybe” to mom and pops. I’d like ot be able to tell them, if you have 10,000 likers and get an average of 100 shares per post, Google will put you in the top 3 organic results for the term “cape cod motels.” But of course that isn’t true. And as I said, “might be” is a tough sell to VSB’s.

  • http://twitter.com/westseattleblog West Seattle Blog

    Another fad we saw as a fad, which has now fizzled – “you must offer social media services too!” (Daily deals was the other fizzled fad we skipped altogether.) Of more value for a publisher who sells advertising is to develop a bonafide, robust social media following of its own through authentic engagement (not stupid post material harvested from elsewhere – I have seen too many VSBs post junk that has NOTHING to do with their business, like “oh look, kittens”) and true value. Then use that to help market your sponsors as well as provide contact. And don’t just “schedule” posts (we do that maybe once a week) – be present in the stream. Oh, one more thing – avoid contests like the plague. Or anything that tries to rope people into “likes,” including the detestable “We’ll give a buck to charity for everyone who likes our page!” type of thing. If you want to donate to charity, just donate to charity, for God’s sake. Don’t force somebody to opt into your marketing, because you’re threatening them with “it’s your fault if we don’t donate a buck to charity X because you didn’t ‘like’ us.” Argh. Anyway, thanks for bringing up an important topic. For a while, businesses were even neglecting their websites, thinking Facebook would save them. Nope, sorry. Don’t neglect your website. It’s (a) where you are FOUND and (b) where you own and control the content. – Tracy

    • http://www.ecape.com/ Julie Brooks

      Tracy, I agree with you as far as advising VSB’s not to stake a lot on social media. However, and this may be fodder for another article, I find that as a publisher, FB is a terrific source of traffic to my sites.

  • http://twitter.com/ahoyPaulChoi Paul Choi

    Fantastic read. I’ve been working with local businesses for a couple of years now and see a lot of the challenges outlined here.

    Bottom line is this…in order for any business to truly be successful at ‘social’ it almost becomes an all or nothing principle.

    An engaging social presence needs a content strategy to stand on…content strategy implies that somebody will produce this content…producing content means a budget on top of the money that is already being paid out to the marketer.

    The best clients that I have are the ones that agree that I shouldn’t be the one managing their FB or Twitter…my primary objective is to be more of a trainer or facilitator. The value that I bring to the table is as a brand manager who understands how to effectively tell the story of the brand.

    • http://www.ecape.com/ Julie Brooks

      Very few VSBs I work with produce their own content for social media or otherwise, and you’re right, doing it in house provides an immediacy and intimacy that is very hard to replicate if it’s outsourced.

  • http://www.twitter.com/fitzternet John Fitzgerald

    I’ve seen the same thing with VSBs (great term, btw). 71% of Tweets aren’t seen and 15% of a FB Page’s fans will see any given message. VSBs don’t have the time to produce enough content to overcome those odds.

    I’ve developed a free text message marketing tool for VSBs that cuts through the noise of Facebook and Twitter. If anyone is interested in kicking the tires for their VSB or SMB, contact me on Twitter @fitzternet

  • Bibard Frederic

    Great article and some great comments too. As it was mentioned before, no need to be all or nothing on social media. But if you want to generate “lead” or “sales” for small business owner, social media is certainly not the best way. Social media guru always forget the context and the local situation. They forget the demographic or the type of customers that some shops might have (as you mentioned in your post). Social media is not free, it consumes times and energy to handle it.

    On the other hand small business needs to understand that social media can be use in another way. Monitor their reputation, use them for advertising. Or they can also use some ads there. I really think people needs to understand that social media is not about collecting like or followers. It can be use for different purpose. But once again, the context is important for your success there.

  • Celeste Manwaring

    I’d like to disagree slightly on this point: “People do not use Facebook, … with a purchasing intent”, as people will be using this avenue to find products services in the not too distant future. With Facebook’s new Graph Search we will see that people will start searching social media avenues for products/services: http://blog.crexendoseo.com/2013/01/16/facebook-announces-graph-search-the-new-search-engine/. They will want to buy products that their friends recommend (same idea as Google+ but with the larger network to back it up) and will be searching through their personal networks to find the service/product that their friends like the most. I definitely will be seeing what my friends recommend before making a purchase.

  • http://www.commencia.com/ Mike Hale

    I still do “community management” for a few clients, but I’ve shifted more to doing it for a while to get them up to speed on it, sometimes more formal training, then handing the reins back over to them.

    It’s worked out pretty well. Now I just give a gentle nudge if I see them starting to ignore it again.

  • williambaranowski

    Finally a breath of sanity. Thank you!

  • onblur

    Thanks for the post, Julie. Great to hear from someone who is actually spending face-to-face time with VSBs.

  • http://www.facebook.com/wanggeng Geng Wang

    Julie – Great article. As one of the founders of Community Elf – a social media management firm, I agree that it can be tough to justify heavy investment into social media for VSBs. My own thoughts on this are:

    1. As NLC (UK) mentions, I think one big issue is their is no good solution for VSBs today that fit the budget they can afford. For us, this is the space we’re trying to solve actually (providing reasonable social media support for VSBs in a efficient and scalable fashion). I agree, social is not probably not worth $500-$1000 / month for a VSB but I could see the value of a well-run program at $200 / month…what do you is the right price range that makes sense for VSBs?

    2. I do agree that success in the VSB space requires involvement from the business itself. Whether it is promoting their social presence online in-store or sharing original content with us, this I think is the biggest difference between our “ok” clients and “great” clients. Love to get your thoughts on how you’ve successfully engaged businesses.

    3. On the ROI issue, I feel this is a problem most businesses can crack but most invest in to do so. The key is to establish a credible baseline for sales (which VSBs are unlikely to have) and to evaluate the effects that social campaigns have on relative to that baseline. We’ve seen larger companies and corporations (especially B2C) use this methodology quite well but understand how it might be a little too sophisticated for VSBs. Have you ever had any luck with VSBs measuring the ROI of their social campaigns?

    Again, great article. Was a good mental exercise to think through the points. Thank you for sharing!

  • TomGrubisich

    This post from the trenches shows — once more if there are still fantasizing true believers — that SMBs can’t buy magic wands in their continual search for new customers. As Tracy Record at SMB affirms, you can’t buy engagement. It has to be earned. It’s terrible that Mike Fourcher in Chicago has to compete against third parties who give away free iPads to SMBs looking for that magic wand, but in the industry shakeout that’s clearly underway — cf. EveryBlock’s closure — solid sites, like Mike’s, will prevail over free iPads. The challenge is that these sites, particularly the “indies,” have to have enough resources to come out on the other side of the shakeout. It may mean to-the-bone cost cutting, but the unique engagement-producing DNA is in the bone. That will make the difference when the shakeout dust settles in a year or two.

  • Victoria Badgley

    Julie, you nailed it on the head. While social media can be a very valuable (and powerful) channel for small local businesses, spending a lot of budget to manage it rarely pays off in measurable terms. The key to a successful presence (as you mention in your article) is having authentic, original, fresh content on a fairly regular basis…and that’s something that is very tough for most multi-tasking business owners to keep up. Having said that, there are some good tools that business owners can use to engage in social media with minimal investment. Instamonial by KnexxLocal is a free iPhone app that lets business owners get photo-based customer testimonials and automatically post them on their webpage and social media pages like Facebook and twitter (full disclosure – I work there). By getting customers to create the content, and building photos into the process, the app is a great way to stay relevant on social media channels with almost no time investment on the part of the owner. Businesses shouldn’t give up on social media – they should just rethink how they can leverage it without overspending.

    • http://twitter.com/RonaldTHunter Ron Hunter

      Victoria, I think you are focused on the right issue. To get the most out of Social tech, both the service providers like Julie and the VSB’s must change their processes to exploit the capability of the technology. As in the example that you gave of how the businesses’ customers could provide the content with the right tools.

  • http://www.facebook.com/profile.php?id=609003340 Mark Swanson

    Bwa ha ha ha ha ha ha! Many are coming back to good old fashioned local print advertising because it works.

  • Ron

    I’ve been saying this to alot of my clients and many are saying that to me first now; that social media is a good way to ‘warm up’ leads, not to get hot leads, and maybe gain some authority in your field. But, I think it’s the least important marketing channel for most small businesses, its better for bigger brands. Finally businesses are seeing the light, also many people are ‘liking’ and ‘sharing’ content on SM sites less because we are all ‘liked’ out and people are just getting bored with it. As soon as Facebook went public, the day of I said that its a ‘loser’ stock, because they don’t offer businesses much value.

    • Pam Jones

      Ron you nailed it on the head for me when you said that “Social media is all about getting those warm leads”.

      However, I have to disagree with the value you feel Facebook offers. (and I fought the social revolution hard)

      It’s all about being engaged and letting “potential customers” know that you are listening. I also live in a small community dependent on tourists and summer visitors, if someone has a negative experience in a restaurant or another VSB here; A caring response online can not only potentially allow them to give it another try, but allow other new “potential customers” see that their concerns were actually addressed by a real person. (It speaks multitudes)

      I always try and view social media (for any business) as a way for people to maintain control of their “online buzz” by being a part of the conversation, not sitting on the sidelines letting others dictate the direction of their reputation and/or success.

      I personally have never targeted VSB’s with the idea that these efforts will send sales through the roof, but rather an opportunity to put a face behind the business. Social media is not going anywhere ever, it is here to stay as it’s just an online world now.

      Every business can (and will) benefit from staying involved to keep that social buzz going in a positive direction. When the consumer is ready to purchase, this is when all those efforts will pay off simply because they created “a connection and level of trust.”

      I always tell my clients (and potential clients), “for every comment left, there is at least fifty more reading it that you can’t see, what you say….and what you don’t say will have a huge impact!”

      Just my thoughts on it.

  • Santos

    If you have the right software and tweak very good your targeted people for offline media then you shouldn’t have a problem. As well if you broke down the math to your clients, I mean deeply break it all down. You should be rocking it.

  • N. Friedman

    Thanks Julie. I completely agree with you. I have a large website development firm based in a number of states and find that your commentary rings true. Nice analysis.

  • http://allisonmediagroup.com/ Allison Nazarian

    Some really great points, here — especially the idea of “purchasing intent” and the #s on new Fb users. Thank you for this post!

  • CF

    I understand why a VSB might not invest in a private company to do their social media if they’re judging on ROI, but they’d have to be committed to doing it themselves. A lot of businesses won’t do this, or are incapable of creating decent content worth reading. Good content creation is an art. As someone who researches restaurants all day, I’m 90% more likely to pass over a place with minimum to null social content, particularly if they don’t update their website. It’s exposure. You’re not just exposing to direct customers, but your local media outlets who might be interested in picking you up or have no idea you exist. I think your second point about why social media is important (hitting demographics younger than 50) is maybe the most important argument ever if you see your business continuing in the long run. Mom and pops need to stop being sold on click-rates, which is precisely why they’re not seeing the direct connection in terms of dollars. Repeat customers are your bread and butter, so retain new ones by incentivizing them. It’s cheaper than traditional advertising.

  • kgal1298

    The only issue is if you know SEO then you know the social aspect is now a part of the algo so those shops would have to keep their social going or the SEO doing it would have too. In the mean time I hate to call it SEO that much anymore that’s just a buzzword that industry has changed so much because of Google that it’s really all encompassing of all things digital and if you don’t know that then you can’t offer SEO services because most SEO’s will spout what a business owner wants to hear and now what they should hear. The goal of a true SEO is to get to the point where you only need them for upkeep or not at all…at least that’s been my successful scenarios.

  • kgal1298

    The only issue is if you know SEO then you know the social aspect is now a part of the algo so those shops would have to keep their social going or the SEO doing it would have too. In the mean time I hate to call it SEO that much anymore that’s just a buzzword that industry has changed so much because of Google that it’s really all encompassing of all things digital and if you don’t know that then you can’t offer SEO services because most SEO’s will spout what a business owner wants to hear and now what they should hear. The goal of a true SEO is to get to the point where you only need them for upkeep or not at all…at least that’s been my successful scenarios.

  • http://www.manobyte.com/ Kevin Dean

    Interesting post. Mom and pop shops won’t buy Social Media Services (Agree). My company ManoByte has stopped offer Social Media Management services as a stand alone. (We actually won’t work with VSBs) Social Media has a place can be effective VSBs if they use it to build a local following and community.

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