The rise of mobile hasn’t just meant that small businesses create advertisements for the small screen and run campaigns from their smartphones – It also means more small-and-medium sized businesses are turning to each other to figure out how to adapt to changing technologies and grow.
This is one central finding from Facebook’s March Future of Business Survey, an ongoing study the social network completes with the Organization for Economic Cooperation and Development (OECD) and World Bank. The survey, which officially launched in January, determined that 42% of small businesses said they learn from each other, second only to online searches (64%).
The survey has expanded to include 200,000 small-and-medium-sized enterprises in more than 40 countries. The public results are intended to help businesses and policymakers better understand the mobile economy.
“The whole idea of the survey was a responsibility we felt having one of, if not the largest, communities of small businesses, to figure out how to help,” Facebook VP of global SMB Dan Levy said in an interview at Facebook’s Menlo Park headquarters.
Businesses that said they learn from each other were also more likely to be optimistic about the economy, interested in international trade and were more likely to have hired in the past six months or to have plans to hire in the near future.
Two of the main ways Facebook tries to support business-to-business learning, Levy said, is through hundreds of offline events per year and Facebook Groups, which have thousands of small business members. Groups are a place where businesses can share what’s working for them, express frustration or ask for support or general advice.
Branding is one topic businesses tend to appreciate learning about from each other, Levy said, noting the example of a plumbing company in Kansas City, that shared how it found branding success by profiling its community service work and employees instead of broadcasting its actual services. Other businesses across industries were able to replicate the tip.
“Businesses come to us because they want to grow, find new customers and deepen relationships with existing customers, and Facebook is only going to succeed if businesses are growing,” Levy said. “We don’t sign long-term contracts with clients, and there’s no upfront commitment. The minute our ads stop working, they will just turn us off.”
Learning From People
In his past five years at Facebook, Levy has helped boost the number of advertisers on the social network by 10x, to 5 million, growth which fueled the company’s approximately $27 billion in revenue last year. One of Levy’s guiding principles during his tenure, has been the importance of infusing empathy into contact with businesses (online or offline), and second, the importance of making sure Facebook’s sales and service teams for its business clients have a human touch.
When it comes to introducing businesses to new advertising-related products and potential strategies, human narratives are key, according to Levy. Case studies about entrepreneurs with similar businesses and challenges tend to resonate with small business owners. As a result, Facebook’s marketing materials rely heavily on showing stories about how different products were used, instead of focusing solely on the details of features.
Beyond its marketing materials, Facebook has also been working to make the tools it uses for communicating with businesses feel more like in-person interactions. Because Levy’s team doesn’t have the bandwidth to meet all of Facebook’s 5 million advertisers in person, Facebook has over time worked to make its digital support tools, such as messaging, more personal by adding details like Facebook employees’ names and photos.
Years ago, Levy recalled that business owners would approach him at events, put a hand on his shoulder and say, “I just want to make sure you’re a real person from Facebook.”
“People didn’t see us as human, they saw us as an app, as an algorithm,” Levy said. “We started looking for ways to bring humanity through in our products – If you want to talk to someone from Facebook, here is someone you can call. We were thinking about scale too soon.”
Interactions with small businesses also offer critical insights that inform how Facebook builds its advertising products.
“Most of our time with businesses is spent observing and then creating a hypothesis to test it,” Levy said. “What creative, what targeting are they using, how are they using messaging, where are they getting stuck?”
The “handcrafted” solution Facebook might help one business come up with, such as a Facebook video that acts a mini-commercial, can become the template for a product that could later be offered to millions of other marketers.
The March results also highlighted findings on business confidence, job growth, international trade and gender management. In general, the survey found small businesses were confident about the future of their businesses and the economy more broadly. 41% of small businesses said they were confident about the future of the economy, and 61% said they were confident about the future of their own business. By extension, more than 40% of small businesses said they want to add employees over the next six months.
“I was really pleased to see the confidence numbers and the hiring numbers,” Levy said. “There’s a lot of anxiety in the world these days, so when we get down to the individual business and talk to them, that’s really reassuring.”
While globally, there are more barriers for women to enter business than men, the survey found that women-run businesses are as likely, and sometimes more likely, to use digital tools to grow their business compared to male-run firms.
Facebook research manager Molly Jackman noted that about 20% of small businesses trade internationally, which is higher than previous stats around cross-border trade.
“Businesses using digital tools and trading internationally are more confident and growing faster and increasing jobs,” Jackman said in an interview at Facebook headquarters. “It’s exciting to think about a five-person firm reaching across borders to customers around the work, but I think it’s still lower than it should be.”
The study found a correlation between small businesses that engage in international trade and stronger rates of hiring, business confidence and use of digital tools. Nearly 50% of small businesses involved in international trade are likely to add employees in the next six months, compared to 39% of non-traders. Businesses that trade internationally also had a higher-than-average number of business-related educational interests.
“Businesses can pick up a smartphone and have a video studio, cash register, CRM platform, communication platform, all in their pocket,” Levy said. “Customers don’t know that it’s you in your garage, shipping internationally. It’s a huge democratization.”
The survey results have been of particular interest to policymakers in countries such as India, where the percentage of women-run firms is lower than the global average, and governments are making a push for women to start businesses, Jackman said. It has been reassuring to many policymakers that small businesses are in general, confident and increasing jobs, she added.
To help small businesses, researchers, academics and policymakers navigate the Future of Business Survey data, Facebook launched a new online course. Jackman said Facebook went directly to small businesses to find out what they wanted to learn, noting that Facebook’s ongoing communication with businesses part of the survey makes it easy to adjust questions and gather feedback at scale.
Down the line, Facebook may consider surveying businesses on how they perceive their policy environments, more topics around gender management, or on how social networks impact trust between businesses and consumers.
“We wanted to create an e-learning course so small businesses could leverage the survey data to help themselves grow,” Jackman said. “There’s an appetite among businesses to engage more closely with the digital economy.”