How and why small businesses must adapt to social media

How and why small businesses must adapt to social media

3:41 p.m. PDT August 3, 2015

Among the countless factors a small business owner must consider when running his or her business, social media is quickly becoming one of the most important.

“What happens in an establishment now has a much further reach,” said Marcia Bagnall, director of the Chemeketa Small Business Development Center in Salem.

“Business (owners) have to keep these things in mind. The world is their stage.”

Perhaps nowhere was that more clear than at Daynight Donuts in July.

Early in July, an anonymous writer published a story on Craigslist about a woman and her husband allegedly being banned from Daynight Donuts in Salem. The story said that after years of daily patronage, the couple was banned because of the husband’s physical disabilities, which the owners believed were causing a disturbance to the other customers.

All involved — the business owner, the couple, and the anonymous poster — declined to comment, although the owner of the doughnut shop released a public statement.

The public reaction was notable. Within an hour, more than 300 people commented on the Statesman Journal’s post of the statement on Facebook. Hundreds of people shared it, liked it or replied to one of the hundreds of comments.

Many said that, while the business owner might have done something insensitive, he was well within his rights to refuse service to a customer. Others declared that they would never visit that establishment again.

Data suggests similar online backlashes have happened to a number of businesses using social media.

According to the small and medium businesses surveyed by Panda Security in 2010, 38 percent of businesses lost employee productivity, 17 percent experienced reputation damage, 33 percent ended up with malware or infections, and 23.2 percent experienced privacy violations in loss of sensitive data as a result of social media use by individual employees.

Bagnall said this is a good example that the scope of a business’s social media can be both a good and bad thing.

Using various programs, business owners can track their social media metrics to more effectively utilize their outlets. Their metrics tell them who they are reaching, when they are reaching their target audience, what are the most effective posts, what is the best time of day to post something, and more.

In a B2B report in 2015, 93 percent of small businesses in North America use social media content, other than blogs, as a marketing tactic, and experts say that small-business marketers continue to increase their focus on social media every day.

In this way, social media can be used as one of the most powerful tools in a small business’s artillery.

But with great power, comes great responsibility.

“What you’re posting, and how you post it, needs to be a strategic decision,” Bagnall said.

And no business is exempt.

Just days before the alleged incident at Daynight Donuts, a message against the Supreme Court’s decision on marriage equality was displayed on Town & Country Lanes’ marquee by the owner  — which caused similar reactions.

This is also true of large businesses.

For instance, many are familiar with the anti-gay sentiments expressed by Chick-fil-A President and CEO Dan Cathy in 2012 that landed him and his business in hot water with the public.

Some effects of such a mistake can be devastating to a business. According to David Houlihan, principal analyst with Blue Hill Research, a company loses an average of $3.5 million from one social media incident. In his paper “The Foundations of Social Media Risk Management,” he said the costs include direct financial costs ($641K), reputation damage ($638K), lost revenue ($619K), reduction in stock price ($1M) and litigation costs ($650K).

There is always the option to hire a brand rehab company, which specialize in recovering businesses from online scandals. These companies teach business owners how to respond to the issue at hand and redefine themselves moving forward with positive, calculated posts and reviews.

But what do smaller businesses without the wealth and resources Chick-fil-A has recover when their supporters and followers refuse their business? What happens if the incident was done by an individual and not on behalf of the whole business?

Bagnall said that these negative situations can and most likely will impact the businesses. She said the most important thing is how the businesses react.

“The more reviews you receive as a business, the higher your chance is of getting a bad review,” she said.

In a 2013 survey by BrightLocal, 73 percent of consumers said positive customer reviews make them trust a business more, which was up from 58 percent in 2012. This means that costumers place high value in what other patrons say about an establishment.

“The way business owners respond (to bad reviews) is crucial,” she said.

Bagnall said business owners need to listen to the customer’s side of the story — what they believe to be true — even if the owner sees the situation another way.

She said to respond respectfully, promptly, and professionally. She also suggested training your employees on social media protocol and to make sure that anything that is posted or shared via social media is thoroughly thought through before it is posted.

Bagnall said another error many owners make is not properly separating their personal social media from their business social media.

“Social media is a large platform to share your personal opinion,” she said. “But is business so good that you don’t want people coming in just so you can share your personal view on something?”

npate@StatesmanJournal.com, (503) 399-6745, or follow on Twitter @Nataliempate