Many small and mid-sized businesses, especially etailers, conduct a substantial amount of their business on Facebook.
Eighty percent of U.S. businesses with 250 employees or less use Facebook for marketing, suggest results of a G2 Crowd survey eMarketer cited in a report released last month.
Seventy-one percent of 351 U.S. businesses with 500 employees or less used social media, a Clutch survey found; 86 percent of them used Facebook. Women-owned businesses were more likely to use social media.
Nearly 42 percent of the U.S. SMBs Netsertive polled last month credited Facebook as the best social network for driving in-store sales and foot traffic, eMarketer noted.
Here’s the thing, though: 51 percent of consumers surveyed by Sprout last year said they would unfollow a brand that irritated them on social media; 23 percent would walk away completely and never buy that brand again; and 27 percent would mark irritating content as spam and block it.
The Facebook-Cambridge Analytica Scandal
Facebook’s luster may have dimmed with the recent revelations that data on 50 million of its members, collected without their knowledge through an online personality test, had been accessed by political consultant Cambridge Analytica. Facebook’s responses to the uproar have been criticized as feeble, at best.
That could qualify as Facebook itself as being an irritation.
A movement to quit Facebook has gained some momentum, and SpaceX and Tesla CEO Elon Musk recently deleted his companies’ Facebook pages, apparently in response to a Twitter dare.
Facebook’s business model, which is based on selling advertisers highly granular user data, is the real problem — and it could give customers of the SMBs that use the network cause for concern.
Facebook CEO Mark Zuckerberg has pledged to clamp down on third-party apps harvesting data without subscribers’ knowledge and in breach of Facebook’s terms, and company COO Sheryl Sandberg has indicated the company will accept government regulation.
However, that could have a negative impact on Facebook’s business model.
To Stay With Facebook or Not
Fallout from the Cambridge Analytica issue “could affect small businesses with operations entirely online,” noted Clutch spokesperson Kristen Herhold.
Consumers might be less willing to click on their ads or otherwise interact with them on Facebook, she told the E-Commerce Times.
If the scandal drives a significant number of people off Facebook, SMBs’ marketing effectiveness on the network will decline, said Rob Enderle, principal analyst at the Enderle Group.
“Currently, it appears to be driving an impressive number of people off that platform,” he told the E-Commerce Times.
The Cambridge Analytica disclosures damage the trust Facebook has from its users, which “minimizes the ability for SMBs to confidently reach their target audience,” remarked David Thomas, CEO at Evident ID.
However, Facebook is sticky, observed Mike Fratto, research director at Global Data.
“#DeleteFacebook is trending, but it’s a fad and nothing more,” he told the E-Commerce Times. “There is no viable alternative for users to flee to for most of the world,” with China the notable exception.
Further, details around the issue “are murky enough, and the people reporting it generally don’t have an accurate understanding of what happened,” Fratto pointed out. This “causes conflicting reports that lead to confusion and eventually exasperation, and users simply move on with their lives.”
What SMB Etailers Can Do
There are some practical steps small etailers can take to protect themselves from Facebook fallout:
- Proactively engage customers.
“Clearly outline the policies and procedures that are in place,” Evident ID’s Thomas told the E-Commerce Times. “Reaffirm your commitment to protecting user information. Give users more control over when and how their data is used. Go above and beyond expectations to eliminate potential breaches.”
- Make data security a priority.
Implement strict data policies, train employees to recognize risks and threats, and re-evaluate how data is stored and handled, Thomas suggested.
Some companies “are no longer storing data in one centralized database,” he noted. They have begun restricting access to users’ sensitive data and minimizing exposure to user information.
- Develop a separate Web presence.
“If a retailer’s only online presence is Facebook, they’re already doing online retail wrong,” said Global Data’s Fratto. “Not everyone is on Facebook or wants to use Facebook. Keep the Facebook site going, since that’s a way to attract and interact with customers, but also have your own presence that you can control, where you can showcase your products and services, and have direct interaction with customers.”
On their own websites, SMBs “should have a very clear statement about what they do with any data they collect, and provide tools to let users opt in to any ongoing interactions like email flyers and coupons,” he advised.
- Assemble a response team.
Companies with the funds and manpower should set up a crisis team and develop core marketing skills, Enderle suggested. “This will undoubtedly not be the last crisis they undergo.”