SMEs are aware that they must improve their “social capital” in order to develop and grow their business, but many do not know where to start.
A new report, Generating Social Capital, undertaken by the Business Schools of the Universities of Surrey and Greenwich and commissioned by accountancy firm Kingston Smith, reveals that while 94 per cent of SMEs consider direct referrals important to their continuing success, most regarded social media as “a necessary evil”.
Although SMEs considered LinkedIn to be of equal importance to traditional networking events, and nearly 90 per cent use networks and social media, over 35 per cent of SMEs do not consider their use of these to be effective.
“Successful SMEs are mindful of both the potential benefits, and dangers, of spending time networking on social media,” explains Professor David Gray of the University of Greenwich, who co-led the research.
“While they value LinkedIn for showcasing their business and establishing their brand, they are wary of getting too sucked into discussions, losing sight of the need to find new customers.
“The same is true of Twitter – it can be a highly effective tool for SMEs when used in conjunction with other social media, such as the business’ website and blogs; but there is the danger that tweeting may replace genuine business activity.”
The findings also make clear that social media are not a substitute for face-to-face networking and events.
“In an increasingly connected world where virtual relationships are valued more highly than ever, it is essential that SMEs take a co-ordinated approach which combines traditional face-to-face networking with online tools such as social media,” explains Sir Michael Snyder, senior partner of Kingston Smith.
“Devising a strategy that incorporates both online and offline activities is central to SMEs’ business development, particularly if they are to compete with their larger counterparts.”
Face-to-face networks are highly valued by SMEs, both to supplement a social media presence and in their own right. But the research shows that it is vital to be selective about these so as not to suffer from “event overload”. Having a clear strategy for networking events is just as important as having a marketing strategy.
“Our research shows that SMEs need to be strategic in their use of offline and online activities to maximise their effectiveness and avoid falling into the time-wasting trap,” adds Study co-director, Professor Mark Saunders of the University of Surrey.
“Social capital – the quality of goodwill created through these activities – provides information and influence from which SMEs can yield valuable business development opportunities.”
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