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Why Facebook is important for your small business

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Marc Andrew Deley/Invision for Facebook/AP/File

(Read caption) Facebook's head of SMB community engagement Bess Yount speaks to a sold-out crowd at Facebook's Boost Your Business Boston event in 2015.

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Small businesses are beginning to see the value that social media can add to their bottom line. There are more than 50 million business pages on Facebook, and they have a variety of features that businesses can use to interact with potential customers. They also have marketing tools that Facebook provides to help increase the awareness of their brand, and these businesses often become advertisers on Facebook. The social media company is taking advantage of this mutually beneficial relationship by launching new tools and handbooks that will help small businesses increase effective engagement with their consumers.

Not only is Facebook helping small business owners better manage their communications and retain their customers, but the tech company is also trying to help small businesses expand their consumer base on a global scale. As a result, Facebook has launched its “Lookalike Audience” tool to help businesses further increase the likelihood of these relationships by helping them find consumers in other countries that fit their target audience, allowing them to reach and advertise to people who might want their products. Other ways to improve engagement on Facebook include holding contests or giveaways, which will entice consumers to get involved with the business and help the business gain publicity.

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The messaging feature can also help increase consumer engagement. In 2015, the amount of messages exchanged between businesses and consumers doubled. Previously, potential customers visiting a Facebook page for a business could see the average time it took for a business to respond to a consumer. Now, businesses are able to exercise more administrative control over their pages, which means that even if a business typically responds to a consumer’s message within a few hours, the administrator can change the setting to inform consumers that it usually responds within one day. This may be helpful and convenient for managing customer service and communications. Facebook is also debuting improved designs for inboxes and comments pages for administrators as well as providing more analytical tools, handbooks and demographic data on consumer behavior for businesses to use.

How can optimizing your business’s Facebook page contribute to its success? Having a strong social media presence is becoming more important for small businesses, especially as lenders are increasingly using a business’s social media metrics in loan applications. For owners of newer small businesses, getting the necessary funding to jumpstart your business can be challenging. Traditional lenders typically require businesses to be at least two years old and business owners to have FICO credit scores above 700. Therefore,businesses that are just starting up will not meet the minimum age requirement, and owners with low credit scores may not be able to obtain the capital they need. This issue has led to the rise in popularity of alternative online lenders in recent years, which tend to have less stringent eligibility requirements, allowing more small businesses to qualify for loan products.

Many of these online lenders factor social media into the equation when determining if a business should gain approval for a certain product or amount of funds. For instance,Kabbage, a popular online lender, may reference the number of Twitter followers or likes on Facebook to determine if a business has a strong consumer base. Kabbage also uses nontraditional ways of evaluating a business for its line of credit product, including analyzing sales that the business has made through Amazon, PayPal or Etsy. Positive customer reviews and comments on Facebook can contribute to the overall success and image of a small business.

This article first appeared in ValuePenguin.