While the majority of SMEs are aware of the importance of networking their businesses, many small firms are not clued up on how to go about promoting their products and services in this way. This was the overall analysis to come from a report commissioned by accountancy firm, Kingston Smith.

During the research, business academics from the Universities of Greenwich and Surrey were tasked with gathering information from more than 1000 top SME leaders. The findings revealed that a massive 94% of smaller companies regard direct referrals as a vital component in achieving success, yet they sometimes struggle with getting the process right.

Most of the SMEs questioned believed social media was a “necessary evil” and, despite 90% having various accounts already in place and LinkedIn being considered to be just as important as traditional networking, 35% of the firms did not consider their social media usage to be effective.

Danger of too much social media activity

Professor David Gray, project co-leader from the University of Greenwich, believes there are both potential benefits and dangers of spending time networking on social media.

He said: “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 report recommends that small and medium companies should develop a social capital strategy within their business plan and work to monitor activity in order to ensure a realistic return of investment for the amount of time and effort put into campaigns.

Fitting in social media marketing alongside face-to-face events was also deemed to be important, but there was a warning to avoid event overload.

Sir Michael Snyder, senior partner at Kingston Smith, added: “In an increasingly connected world where virtual relationships are valued more highly than ever, it is essential that SMEs take a co-ordinated approach combining traditional face-to-face networking with online tools such as social media.”

Is social media an important part of your marketing strategy? Do you struggle to work out how much time to spend on this? Tweet us with your thoughts @TheInsuranceOct.

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