Facebook has become a vital source of information and networking for many businesses, but a new study shows that the social network has created a powerful tool for entrepreneurs and small businesses alike.
Social networks, the study by New York-based consulting firm McKinsey & Company said, are one of the few sources of valuable information that business owners, employees and investors can trust.
McKinsey found that social media platforms provide an important way for small and medium-sized businesses to keep in touch with potential customers, connect with employees and their communities, build relationships and get relevant business news.
The McKinsey study looked at the social media channels that businesses use and how much information they’re collecting, how often they use them, and how many of their users are “crowdfunded,” meaning they’re paying for the content.
It found that for every dollar a small business spends on marketing on Facebook, it’s likely to receive an additional $1.51 in sales revenue.
For small businesses, it could be a lot of money.
For instance, a small company could generate $150,000 to $250,000 in marketing dollars on Facebook if it spent the same amount on its own ads.
McKeen’s survey found that the average Facebook user spends between six and seven hours a day on the social networking site, and that about 70 percent of people who log in regularly post photos of themselves or photos of friends.
And the number of posts that a Facebook user makes per day on their social network is nearly three times that of the average American.
McGill University’s Michael J. Schulman, who conducted the study, said it’s important for small businesses to know how to effectively engage with the social networks and for them to learn to build and monetize their own communities on their own platforms.
McMullen and McKinsey’s study found that a typical business has at least four social media pages that they can use to connect with potential buyers.
Some of the pages are targeted to specific segments of the market, while others are aimed at broader audiences, such as health care, technology, sports and other businesses that can draw on their existing networks.
McNeen said the companies that use Facebook most often are companies that are in the food, energy, automotive, apparel, manufacturing and retail industries.
McElroy, which is part of McKinsey, said the social channels are a great way to build community and build brand awareness for the companies and employees who use them.
McMcKinley said its study also found that businesses that are using Facebook for business marketing have higher rates of engagement with their customers and more engagement with other business owners on their platforms.
“These findings suggest that businesses who are using social media are better able to reach and engage with their clients and employees, and they are also more likely to maintain high levels of engagement and retention,” McKinsey said in a statement.
McConnell, who co-authored the study with McKinsey chief research officer Rob McAllister, said he was pleased with McKinley’s findings and hopes that other companies follow McKinsey in their pursuit of building more sustainable, social-media-friendly businesses.
McAllister said he is confident that companies will soon begin to build their own social networks.
“I am sure that Facebook will see a shift in how it uses its platform, so I think we will see that in the next couple of years,” he said.