How can SME’s Leverage Social Media?

Published by MBA Skool Team, Published on January 07, 2013

Understanding SME sector in India

SME stands for Small and Medium Enterprises. Small enterprises are those firms wherein the investment on plant and machinery do not exceed 5 crore INR while medium enterprises are those firms wherein the investment does not exceed 10 crore INR. In total, there are around 13 million SME’s in India. They contribute significantly to the economic development of the country by providing goods and services at an affordable price and by providing employment opportunities to the rural and urban population. Going by stats, they employ around 32 million people and contribute to around 45% of the total manufactured output of the country. They also account for over 40% of the total exports. SME’s are, thus, one of the key drivers of the Indian economy. It is important to nurture them for a sustainable growth and a prosperous economy.

Unfortunately, SME’s in India are plagued by the following problems:

  • Limited financials to plan investment and expansion
  • Poor IT literacy and inadequate adoption of technology
  • Ineffective marketing strategies and limited customer base
  • Little exposure to international environment
  • Narrow vision and lack of professionalism

Given the above problems, it becomes very difficult for any SME to look beyond their own regions. As a result, they are unable to scale up their operations and are unable to reach to a wider customer base. It is, thus, important for SME’s to change with the times and find new ways of doing business.

Understanding the connect between Social Media and SME

In the last decade or so, internet and especially social media has changed the world. It has made the world a small place. People are connected 24x7 through numerous social media platforms. Talking about India, it is one of the fastest growing countries in terms of usage of social media. It is expected that by 2014, 129.3 million people in India will be connected through social media. Given the staggering number of users, there is a huge market which is waiting to be tapped. Can the SME’s latch onto this opportunity? Can the SME’s use social media platforms to reach to a wider audience? Can the SME’s use social media to scale up their size of operations? Yes, they surely can. But how can they maximize their benefits and what approach they should follow is what we will try to analyze here.

A recent survey (below) showed that customers who engage with companies over the social media spend on average 30% more with those companies than other customers who do not.


The way ahead: How SME’s can use social media to drive business advantage?

1 Formulate future strategy and decide on a core message for promotion

The SME’s should not wait for social media to dictate their strategies but they should themselves decide and use social media for fulfillment of that strategy; thus helping them to improve sales and build credibility in the market place. But before formulating the strategy for usage of social media, the SME must decide on a consistent message for the brand they are promoting. They should also decide on the unique selling proposition for the product; decide on how to differentiate their offering from other similar products and which customers to target.

2 Identify the ideal customer

It is important that the SME’s not only identify the ideal market but also go one level down to identify the ideal customers in that market. Ideal customers can be identified by engaging with them through online communities. If the SME’s find that the customers are interested in their product, they can move to one-to-one conversation via email or phone or through face to face interaction. Social media, thus, provides a great opportunity for SME’s to increase their reach and engage with their customers. This is the flexibility which they won’t get in physical selling.

3 Advertise

The aim of advertising is to increase customer traffic and thus increase brand awareness. Though blatant advertising may sometime work, but SME’s need to focus on the advertisements which bring in more customers to their website. They can use a ‘ROI model’ wherein they can estimate how many page views their promotion is receiving and basis that they can dedicate resources in the right direction. With the advancement of social media platforms, measuring tools such as likes/comments/followings can also be used to estimate ROI.

4 Get creative

The SME’s can develop a personalized brand identity online which makes the customer more comfortable as against a company logo brand identity. Apart from that, SME’s can be more agile in their communication as they don’t have to go through time consuming corporate approvals.

5 Ensure total web presence

To start with, the SME’s should have web presence in all forms like facebook, twitter, blogs, youtube, linkedin among others. They should, then, identify which platform is bringing in more customer traffic and then formulate appropriate strategies to attract more and more customers on that platform.  The presence on any social media platform should be guided by the amount of business it is bringing. If any platform is not leading to new engagements, it is better to discontinue and put efforts in those which are leading to new customers.

Given the above facts, we, as Indians are generally slow is adoption of technology. There are also some apprehensions among SME’s about losing out control over some sensitive information.  To overcome that, FICCI (Federation of Indian Chambers of Commerce and Industry) has recently collaborated with facebook to spread awareness among small and medium enterprises about the business benefits through usage of social media platforms. This step is very promising and soon we may see SME’s engaging with their customers over the social media.


Needless to say, social media has evolved. It has changed the way businesses are conducted. Gone are the days when SME’s were constrained by resources and limited global reach. They can think big and make it big. They just need to leverage and capitalize on the power of social media. Social media platform is here for enterprises looking for scalability, growth and efficiency.

This article has been authored by Nishant Shekhar from NITIE.

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