3 Ways Small Businesses Can Use Social Media To Drive Customer Loyalty

The Social Media PyramidCustomer loyalty is at the heart of every business, both large and small. One common industry statistic that is referenced time and again is that it is five times more profitable to spend marketing dollars to keep your best customers rather than acquiring new ones. Small businesses get this equation in spades.

A Harvard Business Review study demonstrated that recovering only five percent of abandoning customers could increase profitability by 30 to 85 percent.

Recently, Marchex asked several hundred small businesses in a customer survey what was most important, and “keeping existing customers” was on top (46%) followed by “getting new customers” (26%).

The importance of customer loyalty isn’t a new concept for small businesses, but understanding what loyalty means in this digital age is a new imperative.

Small businesses have to understand how quickly consumers are shifting their conversations and other social actions to the online world. The adoption of social sites such as Foursquare, Yelp, Citysearch, Twitter, Facebook and blogs is growing at a rapid rate.

Turn Customers Into Your Best Advertising

Soaring usage of social media is creating an interesting dynamic in the marketplace by creating a dramatic shift in power to the customer. No longer does a loyal customer simply represent a repeat purchase or occasional referral business. Customers now have the ability to broadcast sentiment about the businesses they visit and services they use to thousands of people instantly.

This means loyal customers are a small business’s de facto marketing department. Due to the emergence and adoption of social media, customers now have the ability to generate new business, craft a brand image, and inspire loyalty through tweeting, blogging, reviewing, following, and so forth. Given a small business’ limited time and resources, this can be a highly valuable asset if managed appropriately.

Maintaining good relationships with customers has reached a whole new level of importance in the digital age. A small business’ loyal customers will generate “online word of mouth” with positive reviews, mentions, and by broadcasting a visit on Foursquare.

With very little effort and access to the appropriate digital tools, loyal customers can be mobilized to ignite referrals, generate positive air cover, shift opinions, and help soften the impact of bad reviews.

So, what should a small business owner or operator do to manage the complexity of customer loyalty in an online social world? First, take a deep breath, relax, and then start participating.

Here are three suggestions to get the social ball rolling:

1.  Listen To The Conversation

A small business can’t truly understand how to engage customers—especially their best customers—if they don’t know what their customers care about. Review sites, blogs and other social channels are a goldmine of valuable information. Customers now have the platform to tell a business exactly what to do to succeed, but first the business needs to hear and make sense out of all the chatter.

Effectively monitoring the chatter means scouring the online landscape for relevant dialogue and that can be time consuming. However, there are several online products like Marchex Reputation Management, which can aggregate customer conversations across the Internet and make it available all in one place with simple, yet invaluable insights and analysis.

2.  Get Social

Once comfortable observing and understanding what customers are saying online, small businesses should dip their own toes in social media. Like it or not, small businesses need to be on the same social sites their customers use.

Social is not nearly as scary as one might think. In fact, after opening a Twitter account, Facebook page, Foursquare and Groupon memberships, small business owners may in fact discover that social is a lot of fun!

3.  Engage Customers

Lastly, it is important to actively participate and communicate with customers (e.g., respond to a bad review, broadcast or thank a customer for a good one, ask for reviews and more). This is a great opportunity to engage the best customers who are active online by getting them to do more.

This could include things such as rewarding them for referrals or sending them bits of interesting information they can broadcast like new menu items, upcoming sales and holiday discounts.

However, communicating with customers can be challenging given the limited time and resources of a small business. Many will inevitably find that effectively managing social media and the dialogue with customers takes some time and a little trial and error. And, that’s okay!

There are affordable online products and services emerging, both self-serve or managed, that aggregate and simplify the engagement process for small businesses. These products are quickly becoming an essential addition to a small business’ marketing toolkit.

The bottom line: Like it or not, online conversations are happening and continue to increase in volume. The good news is that this trend presents small businesses with a fantastic opportunity to listen to, learn from, and engage with their customers on a scale never before possible. It’s a brand new way to drive customer loyalty.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Other | Small Is Beautiful


About The Author: is the Senior Vice President of Marchex Small Business Marketing Products, where he is responsible for running the day-to-day operations and managing enterprise partner relationships.

Connect with the author via: Email


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  • Mohammad Neyaz hasan

    Nice article sure social networking can boost the marketing strategies.

  • http://www.ubervu.com Dragos ILINCA

    I’d say the first step is to actually gather social data on customers. Most businesses don’t know what their customers’ Twitter handles are, for example, so there’s no way to find them and follow them.

    Also, I think businesses should engage customers even before listening. Most customers that aren’t satisfied won’t say anything in social media, unless there’s something critically wrong or they actually HATE the business.

    Waiting for their negative input in social media is a ticking time bomb. Businesses should ask customers how they feel before they say anything.

  • Michelle Coleman

    I sell baby products mostly conversion crib rails.  These transform a crib into a full size bed.  I’m  still trying to figure out this social media.



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