• by Tanya Gazdik , March 23, 2012

Small businesses are increasingly using social media channels to connect with customers and grow their businesses, according to a Citibank survey.

Sixty-five percent of the 749 small business owners surveyed nationwide cited increasing marketing activities as a key step in growing their business. While the overwhelming majority (70%) used their company Web site as a marketing channel, 41% said they have used social media channels, such as LinkedIn, Facebook and Twitter, in the last year.

Notably, 62% have not used email for marketing purposes -- a figure that remains the same from when Citibank first surveyed small business leaders about social media and online marketing in April 2010. However, 38% report planning to use email marketing tactics to drive awareness and sales of products and services.

As small business owners are moving online, and relying more heavily on their company Web site, online channels represent an emerging opportunity to help grow their businesses. In fact, many small businesses plan to use digital and social media tools in the coming year.

Forty percent intend to use social networking sites such as Facebook, LinkedIn or Twitter for marketing or expanding their business -- up 10 points from 2010 – and 60% plan to increase activity on their Web site for marketing purposes.

"Although small business owners have been slower to adopt online marketing channels, they are clearly warming up to using these tools to target customers," said Maria Veltre, managing director, small business marketing & customer experience at Citi, in a release. "They are seeing that social media platforms can be an efficient and cost effective means to increase awareness of their business, engage with customers and, ultimately, to drive growth."

The use of social media tools, such as Facebook, Twitter and LinkedIn, is up six percentage points since 2010. The survey also revealed that nearly three-quarters of small business owners who have a Web site find it very or somewhat effective in generating more business for their company. 

The demographics of the business owner influence their interest in using digital and social media, with small business owners under the age of 45 more likely to use those technologies to address their marketing needs. In the past 12 months, 54% of small business executives under the age of 45 used social networking sites such as Facebook, Twitter or LinkedIn, compared to only 36% of their peers ages 45 and over. 

Younger small business owners were also more likely to use a company Web site (72% versus 68% of older respondents) and search engine optimization (44% versus 33%).  

This Citi poll was conducted by telephone Jan. 17 to 27 among a national random sample of 750 small business owners/operators, age 18 and older throughout the United States with revenue over $100,000 and no more than 100 employees.  The margin of error for the national sample is approximately +/- 3.58 percentage points at 95% confidence.