Is Facebook for small businesses?

Last week I was asked to present a topic on the use of Facebook for small businesses for local St. Charles chambers.  I’ve thought about this a lot and wanted to put together a frank assessment of the good, the bad and the ugly of Facebook for businesses.  I’ve included that presentation (at the end), along with my thoughts to help businesses sort through whether to use Facebook, and how they can get some real value if they do.

The first thing to do it to really think about whether Facebook is right for your business.  This means taking a step back and thinking about strategy.  Things like: who are my ideal customers, do they know my business exists, what problems they have and how can I help to solve those, how do they find information today, why would they buy from me, and so forth.

The thing is Facebook is really easy to use and everybody seems to be using it. So you need to be using it for your business too, right?  Before you know it, you’re using Facebook without a real strategy.  How are you measuring results?  How are you tracking how much using Facebook is costing you (YOUR LABOR IS NOT FREE)?  Is it bring you the right business?

I really think the strategy step is very important.  At a minimum think about who your ideal client is.  How will Facebook help you reach them to get them to know like and trust you and then try and buy from you?  If they become a customer, is their experience good enough to buy from you again, and to refer you?

Please think about how Facebook fits into your strategy before you invest time, talent and money into using it.

Why have a Facebook Business Page? (The Good)

First of all, every small business should have a Facebook page for their business.  Facebook is an important destination website and you need to have a Facebook page to create a professional image, at a minimum.  There is some potential search engine optimization benefit as well.

Another important reason to have a Facebook business page is because it is the only way you’ll be able to advertise on Facebook.  Facebook can have a big impact for a business in the know and like stages (awareness), and it when you incorporate Facebook advertising it can help with lead generation and lead nurturing (trust and try stages).

Facebook Newsfeed and Reach (The Bad)

According to Facebook, “Of the 1,500+ stories a person might see whenever they log onto Facebook, News Feed displays approximately 300.” Source: Facebook

With Edgerank, Facebook determines what the user sees in their newsfeed, and for many small businesses this means that you have little effective reach as only a small fraction of your fans will likely see it in their newsfeed due to Edgerank and how many other pages, people and groups are posting. Source: socialsprout

Now Facebook has given more control of the Newsfeed back to the user, who can now prioritize up to a total of 30 friends or pages that will show up first in there newsfeed.  Honestly, how many small businesses are going to make that cut?  Only after you’ve gone through the updates from your “See Firsts” will the regular old algorithm-driven Newsfeed take over. 

So let’s face it, in order for most small businesses to be seen in Facebook they will have to advertise.  This isn’t necessarily a bad thing, because Facebook ads done right can be very powerful.  But you should not think Facebook is free… You have to advertise, and you have to spend time and effort posting and managing the page.

Why most businesses get little or no results on Facebook (the ugly)

With little reach for most of their posts, small businesses get frustrated with Facebook, and many only wind up sporadically posting, which hurts their reach even more.  It’s important to maintain a professional appearance on Facebook, so that means posting great content from time to time.  Would you do business with someone if their Facebook page was last update was three months ago?

Facebook can be a big time suck, you spend time reading things that show up in your newsfeed, get distracted, and wind up not spending time on the most important things for your business.  If you don’t have a strategy, I guarantee you are wasting time.

We get fooled into feeling good when there is a like or comment on our page or post, but what is a page like worth?  Not all page likes are equal and are not the right thing to measure.  I assume that most businesses are ultimately on Facebook because they hope it creates more business for them.  If it does create business, is it the right type of business and the right type of customer for you.  Do they share their experience (positive or negative), can you track them as repeat buyers, and are they referring your business to their friends.  Who will measure all of these things, the insights that really matter?

So what should you do about using Facebook for your business?

Come up with a Facebook Strategy.  Who is your ideal customer and how do they use Facebook.  What are they looking for from a business like yours?  Done with strategy in mind, you can achieve some effective organic (non-paid) reach.

Advertise wisely!  Facebook is amazing in its ad targeting, and almost every business can use this very effectively – if they have a strategy and the right expectations about what Facebook ads can do.  Don’t be fooled by the constant promotion that Facebook does to your page (Promote your Page) and to your posts (boost post)… These can be a waste of money that results in unimportant metrics.  I’m not saying to never boost a post – there are great ways to use this time saver.  Just be realistic.

Prioritize your marketing budget and effort.  The fact of the matter is that for many small businesses there are so many other things they need to be doing to be found online, especially local SEO.  Unless your business delivers entertainment, lifestyle, experiences and escapism, Facebook is probably not the place to focus your efforts and budget.  Focus your efforts and budget to build your local SEO instead.

If you are in the entertainment, lifestyle, experiences and/or escapism business, like a restaurant, health and wellness, and travel related businesses, then Facebook might be the best place for you to focus your efforts.  It doesn’t mean that it will be free — you might be able to develop an impressive following — it will take time and Facebook ads could have a big immediate impact.

Facebook marketing for businesses can help to create awareness, build social proof, and send social signals that can help with search engine optimization, all things that are valuable to most businesses.  Just don’t do Facebook because it’s easy (it’s really not easy to do it well) and because it’s free.  Do it with specific business goals, target audiences, and measurable objectives in mind.

Here’s the presentation that inspired this post!