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By Nicola Culley | Published Mar 03, 2011

'No one can afford to ignore the value of social media'

Small businesses are not convinced by the usefulness of social media to further their engagement with clients, according to a leading software provider

Only 6 per cent of small businesses are using social media to target customers, according to research by Sage UK.

However the increasing trend of using social media, particularly Facebook and Twitter, for professional purposes has been enough to provide profit for newly-established social media marketing companies.

Trevor Durham, chartered financial planner for West Yorkshire-based LEBC Group, said: "I cannot swear it is generating business for IFAs but it does generate an awareness of you and also of others and more are appearing on there now.

"I think it is still early days for the likes of Twitter but one ignores social media now at one's peril. Ignoring it would be ridiculous."

Despite the hype around social media, Sage UK research of 1200 small and medium-sized enterprises showed only 1 per cent of owner-managers think that chatting with customers on Twitter or Facebook is key to creating good customer experiences.

Mr Durham said he did not feel any reluctance when he started using social media a couple of years ago and he soon realised it was useful for business.

He said: "The key with Twitter, for example, is not to tweet a lot or often but to keep an ongoing media stream on there. Every now and again I just put something of interest on it.

"The fruits from a business perspective are not yet concrete. The hope is at one point there may be expressions of interest for work, but for now it keeps you connected and feeling part of something and feeling like you are at the forefront."

Mr Durham said Twitter is quite new so it is early days but that there is definitely something to be gained from getting into social media at an early stage.

Joel Davis, chief executive and founder of social media marketing company agency:2, said: "If a user does things in the right way then it can be useful. An IFA can use Twitter to share his expertise and developments and also to position them among their competition."

The company has not yet been employed by the IFA community but markets the social media profiles of HBOS, Barclays and KPMG.

Mr Davis said Twitter was relatively small compared to Facebook, which has found a way into everyone's lives while Twitter is more for self-promotion and connections.

He added that he is not convinced of the growth of Twitter and there was a lot of speculation on its future value and possible acquisitions.

Matthew Forrest, head of commercial marketing for the small business division at Sage UK, said: "With social networking dominating the time people spend online, a few negative comments on these sites can really damage a brand.

"No business can simply afford to ignore this channel or their customers' feedback any more."

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