Small Business Owners Liking Facebook

Apr 5, 2011 by

According to the MerchantCircle Merchant Confidence Index (MCI) survey, the total Q1 2011 MCI score is 5.1% higher than a year earlier. The largest contributor to its growth is respondents’ expectations for sales revenue growth during the next three months.

Merchant Confidence Index
Expectation Average Response on 1-5 Scale % Change vs. Feb 2010
Rate today’s economy compared to past 12 months 3.00 +11.5%
Change in sales revenue over next three months 3.52 + 4.8
Change in marketing/advertising expenditures over next three months 3.07 +2.3
Change in headcount over next three months 3.13 +2.6
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

More than four in 10 small and local business owners expect sales revenues to improve somewhat in the next three months. 13% expect significant improvement, a combined 57% of respondents anticipating some sort of rise in short-term sales revenues.

Expectations for the future (How do you expect your sales revenues to change over the next three months?)
Expectation % of Respondents
Improve significantly 12.9%
Improve  somewhat 44.0
Remain relatively the same 28.9
Decline somewhat 10.3
Decline significantly 3.9
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

The factor with the highest year-over-year growth rate is respondents’ rating of today’s economy compared to 12 months ago, which improved 11.8% to 15%.

State of the U.S. Economy (How would you rate today’s economy compared to the past twelve months?)
Expectation % of Respondents
Significantly improved 3.0%
Somewhat improved 34.6
About the same 32.3
Somewhat weaker 19.6
Much weaker 10.5
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

About six in 10 small and local businesses anticipate their marketing expenditures to remain relatively the same during the next three months. Only 2% expect them to increase significantly, while less than 5% expect them to decline significantly.

Marketing expenditures (How do you expect your marketing/advertising expenditures to change over the next three months?)
Expectation % of Respondents
Increase significantly 2.1%
Increase somewhat 23.2
Remain the same 59.1
Decline somewhat 10.9
Decline significantly 4.7
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

When asked about their usage of a variety of online marketing tools and channels, 70% of respondents said they are currently using Facebook. This makes Facebook the most used of any marketing tool covered by the survey, closely followed by Google. LinkedIn comes in third. Generally speaking, the lower the current usage rate of a tool, the higher its planned usage rate, suggesting small and local businesses are open to a wide variety of online marketing channels.

Adoption of specific online marketing services (Are you promoting your business with the following websites/services? % of Respondents)
Site/Service Promoting Not Promoting Not Yet, But Plan To Not Familiar
Facebook 70.3% 20.1% 8.9% 0.7%
Google 66.2 25.8 7.0 0.9
LinkedIn 58.2 29.2 7.0 5.7
Yahoo! 49.2 41.7 7.8 1.3
Yahoo! Local 45.0 41.3 8.5 5.2
Twitter 39.8 48.8 9.5 2.0
Citysearch 39.7 43.6 7.5 9.2
Yellowbook 39.3 51.4 5.4 3.8
Superpages.com 33.3 51.3 5.8 9.6
Bing 33.2 52.6 10.3 3.8
YouTube 26.8 54.8 16.4 2.1
MySpace 19.2 70.1 7.7 2.9
Groupon 6.6 66.1 13.0 14.3
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

And, with regard to expectations of marketing activity in the next three months, only 15% see a decline.

Marketing expenditures (How do you expect your marketing/advertising expenditures to change over the next three months?)
Expectation % of Respondents
Increase significantly 2.1%
Increase somewhat 23.2
Remain the same 59.1
Decline somewhat 10.9
Decline significantly 4.7
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

The online survey was to a random sample of 1.6 million local business owners, and There were 8,456 total responses from local business owners across the United States. Overall, about three fourths of the respondents’ budgets for marketing are below $5,000.

Annual Ad/Marketing Budget
Budget (x000) % of Respondents
 <$1.0 34.1%
1-2.5 21.7
2.5-5.0 16.4
5.0-7.5 8.0
7.5-10.0 6.8
>10.0 <25.0 7.7
>25.0 <50.0 2.6
>50.0 2.8
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

 

The Top Three Most Effective Marketing Or Advertising Methods The Responding Business Uses Or Has Used
Most Effective Channel % of Respondents
Search engine marketing 40.2%
Profile on social network 36.7
Email marketing 35.8
Other online methods 34.4
Coupons or direct  mail 23.9
Print newspaper 19.7
Online yellow pages 17.6
Blog 17.0
Banner/display ad 9.7
Local radio 7.6
Source: MerchantCircle, (Merchant Confidence Index Survey), March 2011

For additional information, please visit Merchant Circle here.

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