Facebook COO Sheryl Sandberg has been leading the social network's courtship of small businesses... [+]
Before
The businesses have a few things in common: They’re all run by women, and they’ve all turned to Facebook to find new customers and achieve a more global reach. While Facebook CEO Mark Zuckerberg has generated buzz around his “50 states tour,” which will ensure he meets people in every U.S. state to better understand how social networks affect their lives, Sandberg has over years, been completing an unofficial tour of her own, focused on meeting small businesses around the world to understand their needs and use of Facebook.
“There is nothing I liked better than meeting with the women and small businesses this morning,” Sandberg said in an interview in New Orleans after her GrowCo keynote speech, on a meeting room couch. “That’s what gets me up in the morning. They’re changing lives and creating jobs.”
Sandberg is famous for her work promoting gender equality through her nonprofit movement and book, “Lean In,” and more recently, for championing resilience in people and organizations through her newest book and initiative, “Option B.” When she describes her work with small business, her intent sounds more like a confluence of her signature missions than a traditional operating plan.
“It’s resilience, supporting each other, ‘Lean In’ and small businesses that create jobs,” Sandberg said. “Men are important to this, but it often comes down to women.”
At a high level, Sandberg says her focus on small business growth is driven by her desire to improve global economic wellbeing by creating new jobs. In the U.S., and “almost everywhere in the world,” Sandberg noted, more than half of job creation is generated by small businesses. Anxiety about access to jobs is at the crux of many people’s fears about future security.
“People are worried about technology, worried about change, worried about globalization, and that worry is really centered on jobs and opportunity for themselves and their children,” Sandberg said. “When I think about what people can do to connect in the world, what we can do to create jobs, the single biggest asset Facebook has are the small businesses using our platform -- from the highest economic level, to the daily level where people make their lives better by buying services.”
Facebook, as the second largest ad seller in the world, only after
Facebook and Sandberg haven’t been shy about communicating they want to connect with every small business around the world and ideally convert them into advertisers. Facebook’s active, in-person approach to courting small businesses around the world has made the social network stand out from competitors, according to Erna Alfred Louisas, an analyst at research firm Forrester.
“Facebook is highlighting what their offering is and helping businesses understand the benefits,” Alfred Louisas said. “I don’t see Google courting small businesses as directly and aggressively.”
Growing Connections
Since Facebook’s early days, regular users and businesses organically overlapped, Sandberg noted. Users posted about products and services they liked, and entrepreneurs found customers on the site. Now, more than 1.4 billion people are connected with a small business on the social network, and more than 1 billion messages are sent between users and businesses every month.
“More that 70% of people on Facebook around the world are connected to a small or local business,” said Facebook’s global VP of SMB Dan Levy said in an interview. “Technology changes, but you could talk to a business 50 years ago, five years ago, or today, and they will consistently tell you the number one issue they have is, ‘Help me find more customers and help me grow my relationship with existing customers,’ whether this is through right side ads on Facebook in 2007, mobile ads today and whatever is going to come next on Messenger and the technology of the future.”
While social media sites are sometimes challenging for marketers to navigate because their features and algorithms can change unpredictably, advertisers are drawn to the scale and consistent engagement across Facebook’s roughly 2-billion person user base.
“Brands use social media to keep up a relationship with the consumer,” said Forrester analyst Alfred Louisas. “There is a lot of upside for a small business to take some time and invest in the Facebook ecosystem.”
From Local To Global
Just as Facebook’s personal sharing tools have helped give regular users reach that was previously only available through traditional media channels, Facebook is giving small businesses avenues for growth, which in the past, were only available to large companies.
“We give small businesses access to tools that previously only large businesses had,” said Sandberg, noting that a third of small businesses in the U.S. don’t have a website. “We can take local businesses and help make them global.”
Facebook aims to make it easy and inexpensive for small businesses, which are often strapped for time and resources, to acquire customers through digital strategies that have long been used by large businesses, for example: Maintaining an active online and increasingly mobile presence, creating compelling visual ads, using sophisticated targeting and supporting personalized customer experiences.
“Building that fan base is something a small business can really focus on,” said Donna Khalife, CEO of Surprise Ride, a subscription box company focused on fostering creativity, and advertises on Facebook. “Anyone can go on Facebook today and launch a business Page.”
For Surprise Ride, Facebook has been critical to expanding its client base beyond its local market of Washington, D.C. Khalife, who cofounded the company with her sister, said Facebook posts that tell the story of her company have been key to driving awareness and interest in their brand.
“Storytelling is the keyword when it comes to Facebook,” Khalife said, who noted that small businesses can use personal narratives to differentiate themselves from larger brands. Like small businesses, Surprise Ride doesn’t have a television ad budget. However, the simplicity and low-production costs associated with running video ads on Facebook has made Khalife one of 4 million businesses that have run a video ad on the social network in the past month. Overall, Khalife says the company sees a return of about $6 to $7 for every dollar spent on Facebook.
”One of the first ways you might hear about us is through a video that introduces you to our brand and provides entertainment and product discovery,” Khalife said. “We have to be creative and scrappy in how we craft campaigns.”
To reach relevant audiences in other parts of the world, small businesses can use highly specific targeting and “lookalike audiences,” which help businesses find users similar to their existing customers in different geographic markets. Now more than 1 billion Facebook users are connected to a business in another country, and 500 million people from outside of the U.S. are connected to a U.S. business on Facebook.
“Our goal is to enable businesses to make the shift to mobile and meet their current and future customers where they are,” Sandberg said.
Democratizing Access
For Sandberg, making digital tools more accessible and inexpensive for entrepreneurs serves a larger mission of improving the world’s access to economic opportunity, particularly for women, who are disproportionately affected by poverty.
Digital tools are contributing to progress: Now in the U.S., women make up 40% of new entrepreneurs, the highest percentage since 1996, according to the Kauffman Index of Startup Activity. And across 51 economies, rates of women’s entrepreneurship increased 10% from 2015 to 2016, compared to 5% for men, according to the Global Entrepreneurship Monitor survey.
“As we give more people access to tools, we help use the full talent of the population and we give women a voice,” Sandberg said.
One of the entrepreneurs Sandberg met in New Orleans, Claire Yanta-O’Mahoney, founder of fitness and lifestyle coaching business called Fleur de Lis, started her company, while her husband was serving in the U.S. Army. Operating online has allowed her to move flexibly while still expanding her business, which she now runs from Virginia.
“Through online, mobile and Facebook, we’re giving entrepreneurs like her [Yanta-O’Mahoney] an opportunity to have a career and affect so many lives,” said Sandberg.
