by Claudia Bruemmer

Wholesale businesses and small businesses with limited resources in time and money are beginning to use low-cost marketing tactics on Facebook, Twitter and YouTube to increase sales. A survey by MerchantCircle’s quarterly Merchant Confidence Index recently reported social media marketing has increased by 40 percent over the past 12 months. Some of the key conclusions of the survey are outlined below, as well as a list of social media marketing tips.

Small businesses have little time or money to devote to marketing. The MerchantCircle survey data indicated over half of small business merchants spend less than $2,500 a year on marketing, and 60 percent have no plans to raise their budgets this year. These merchants are also cost-conscious: 26 percent cite high cost for avoiding some marketing tactics. Many merchants struggle to manage existing programs and don’t have time to take advantage of new, unproven marketing tactics. Lack of time and resources are a major online marketing challenge for over one-third of the merchants surveyed (37 percent).

Social media marketing is a top marketing tactic for small businesses. Because of its high degree of consumer adoption, ease-of-use and low entry barrier, Facebook continues to be a popular way for merchants to market their businesses. The survey shows 70 percent of merchants use Facebook for marketing, which was up from 50 percent last year. Facebook actually surpassed Google (66 percent) as the most widely used marketing tactic for small business merchants.

Facebook Places outranks Foursquare in usage because of its high level of adoption. It reached a 32 percent usage rate, and an additional 12 percent of respondents plan to use Facebook Places in the coming months. While Foursquare’s usage is up from a mere 2 percent one year ago, usage remains steady at 9 percent over the past two quarters.

Twitter has also grown in popularity over the past year, with nearly 40 percent of small business merchants using the microblogging site to for branding and building a community around their products and services.

Three top marketing tactics are online. Because small businesses don’t have the time or budget to learn unproven technologies like mobile and group buying (Groupon), they rely on more familiar online tactics to deliver proven results. The three top online marketing tactics for small businesses are search marketing (40%), social networking (36%) and email marketing (36%), which are perceived to be the most effective tactics as well.

Traditional offline marketing tactics are down. Traditional offline marketing tactics are declining in use by small business and among wholesale businesses. In 2010, print advertising went down by 33 percent, the use of print Yellow Pages declined 18 percent, and the use of direct mail decreased 26 percent. While usage was down percentage-wise, offline marketing methods continue to be used by small businesses with coupons sent by direct mail as a top offline tactic, along with Yellow Page ads and print newspaper ads.

Social Media Marketing Tips

• Listen first and get a feel for the audience and environment.
• Have a social media plan with a means for tracking results.
• Post once per day at high volume times (11 a.m., 3 p.m. and 8 p.m. – PST).
• Provide information of value.
• Answer questions in your area of expertise.
• Be sure to include photos and videos on your social media page.
• To increase sales, have a contest and give away prizes.
• Offer incentives such as discounts, percentage off, free shipping, etc.
• Be relevant when you post and have a sense of humor.
• Ask your audience questions and invite them to help make certain decisions.
• Try some Facebook ads to get a jump start.
• Respond to legitimate complaints, righting any wrongs and explaining your position.