New academic research commissioned by top 20 accountancy firm Kingston Smith LLP reveals that small to medium sized enterprises (SMEs) are aware that they need to improve their networks and connections to develop their businesses and grow, but do not know how to go about it. Last month, a launch event to highlight the findings was held at the Google campus.

The report, which was undertaken by the Business Schools of the Universities of Surrey and Greenwich, analysed data gathered from a survey of over 1,000 successful SME leaders, as well as from focus groups and in-depth discussions with 25 individual owner-managers including Nicky Rudd, MD of Padua Communications.

It reveals that, while 94% of SMEs considered direct referrals important to their continuing success, most regarded social media as ‘a necessary evil’. Meanwhile, although SMEs considered LinkedIn to be of equal importance to traditional networking events, and nearly 90% used networks and social media, over 35% of SMEs did not consider their use of these to be effective.

Professor David Gray of the University of Greenwich, who co-led the research, explains: “Successful SMEs are mindful of both the potential benefits, and dangers, of spending time networking on social media. 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.”

Meanwhile, the findings are clear that social media are not a substitute for face-to-face networking and events. Face-to-face networks are highly valued by SMEs, both to supplement a social media presence and in their own right. But the research shows that it is vital to be selective about these so as not to suffer from ‘event overload’. Having a clear strategy for networking events is just as important as having a marketing strategy.

Indeed, successful SMEs network with a number of different communities, integrating a combination of both offline and online methods. The challenge is how to integrate the two so that one complements the other.

Study co-director, Professor Mark Saunders of the University of Surrey, comments: “Our research shows that SMEs need to be strategic in their use of offline and online activities to maximise their effectiveness and avoid falling into the time-wasting trap. Social capital – the quality of goodwill created through these activities – provides information and influence from which SMEs can yield valuable business development opportunities.”

Key recommendations

The report’s key recommendations are that SMEs should:
  • develop a social capital strategy within their business plan
  • have an effective policy for, and monitor, social capital based activities
  • seek to achieve a realistic return on investment
  • consider the wider benefits of social capital and maximise them.
Nicky Rudd, commented: “We were thrilled we could take part in the research. Businesses need to ensure that when they are using social media, they have a plan for content and that there is a social media policy in place of how to deal with negative comments from customers and ex-employees.”
“Businesses also need to be realistic and consider how to manage and measure their social media efforts on an ongoing basis and how much time this will really take them. Many businesses think social media can be handled by a junior member of staff. We would recommend that businesses think about social media in the same way they do for a new business contact – who would be the best person to handle that situation? Probably someone with more experience to deliver strategy and anecdotal experience.”
For an abbreviated copy of the research report, containing further key findings and recommendations and a case study on Padua Communications, please click here. If you would like a full report, please email smesuccess@ks.co.uk