We all know the importance of social media for SMEs, but is it more important than good ole’ traditional networking? New research commissioned by Kingston Smith LLP, the accountancy firm, suggests they are of equal worth. Its study, Generating Social Capital, which was undertaken by the business schools of the Universities of Surrey and Greenwich, reveals that SMEs are aware that they need to improve their ‘social capital’ through networking to develop their business and grow, but do not know how to go about it.
The report, which analysed data gathered from over 1,000 successful SME leaders, 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 over 90% used networks and social media – a staggering 35% of SMEs did not consider either of these to be effective.
“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,” said Professor Mark Saunders of the University of Surrey. “Social capital – the quality of goodwill created through these activities – provides information and influence from which SMEs can yield valuable business development opportunities.”
The findings clearly suggest that social media is not a substitute for face-to-face networking and events, which are highly valued by SMEs. The research explains 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 no less important than having a marketing strategy. The report recommends that SMEs should develop a social capital strategy; have an effective policy for, and monitor, social capital-based activity and consider the wider benefits of social capital and maximise them.
“In an increasingly connected world where virtual relationships are valued more highly than ever, it is essential that SMEs take a co-ordinated approach which combines traditional face-to-face networking with online tools such as social media,” added Sir Michael Snyder, senior partner of Kingston Smith. “Devising a strategy that incorporates both online and offline activities is central to SMEs’ business development, particularly if they are to compete with their larger counterparts.”