The Ugly Truth About Facebook for Business

If any business should be profiting from Facebook, it’s Blank Label. This hip online fashion retailer was started by a group of 20-somethings who practically grew up on Facebook. And one of the first things cofounder Danny Wong did after launching the company, which allows men to make their own dress shirts, was set up a Facebook page to market the Blank Label business: “Designed by you, stitched by us.”

Wong spent almost an hour a day crafting engaging messages to post at the Facebook page. He dreamed up contests and other promotions to build Blank Label’s Facebook fan base and drive sales. The company was approaching 2,000 friends. Then Wong realized something disturbing: Not a single customer had ever come via Facebook.

“Facebook has produced no results for our company,” he says. “There’s far too much hype around it. The reality is that, as a business, you don’t need to be there.”

Wong says Blank Label won’t be quitting Facebook entirely, because he and others have invested too much time in their page. But, he adds, “we’ll be setting it aside for more important things.”

A lot of stories have been written recently about the growing backlash against Facebook. More and more people are getting worried about their privacy at the site – or lack of it. And many are coming to realize that Facebook, which is now approaching 500 million users, tends to dehumanize personal interactions, like any other social network. Various groups and petitions have sprung up urging users to unfriend Facebook.

But here’s the untold story: A small but increasing number of business owners are also quitting. They joined Facebook because social-media gurus warned that any business not on the site would slip into oblivion. But now, after pouring vast amounts of time, effort, and money into their Facebook pages and seeing no return on the investment, many of these small businesses are walking away.

“We just quit Facebook and it feels great,” says Megan R. Smith, founder of public relations firm Brownstone PR in Philadelphia. Her company was on Facebook for more than two years before she decided to pull the plug. The turning point came a few months ago, when Smith tried to measure the success of her social media efforts. One of her employees was spending two hours a day managing and updating the Facebook page but the firm never landed a client through the site.

“It’s been a complete waste of time and money,” Smith says. Most of the people who contacted Brownstone PR via Facebook turned out to be crackpots and frauds who led the firm down blind alleys or tried to get free PR services. What’s more, Brownstone’s Facebook page drew a flood of spam that overwhelmed Smith’s e-mail inbox. “Facebook has proven pointless, particularly for our target audience,” she says.

As a PR professional, Smith is no Luddite. She has long relied on technology – and social media – to grow her business. In fact, she’s very active on Twitter and recently landed several new accounts through that service, thanks to its more interactive nature.

The problem with Facebook, say critics, is that it’s just not conducive to business. “The so-called friends one meets there will gladly share their vacation photos with you but they don’t want your business marketing materials,” says Steve Gallegos, a commercial photographer from Dallas who’s spent hundreds of hours on Facebook trying to generate business for his company. “Facebook is not and was never intended for business use.” That’s why Gallegos has launched a new company called WhoYa, an invitation-only virtual community exclusively for small-business owners.

Jeff Levine, founder of Tamian Associates, a boutique consulting firm that specializes in social media, says business owners who think their Facebook pages will translate into sales should think again. “This is tantamount to trying to get your family to join your Amway business during Thanksgiving dinner,” he says. “Facebook is a great marketing platform but a poor sales platform.”

It is also rife with security holes, says Orit Pennington, owner of TPGTEX Label Solutions in Houston, and that’s one of the reasons why she’s deactivating her Facebook account. Not long ago, her company’s Facebook page was taken over by a hacker who sent out fake messages to all her business contacts saying she was trapped in London and needed $2,000 to get home. “That looked really bad for me and my business,” she says.

Of course, some businesses have seen returns on their Facebook efforts. Kent Krueger, vice president of online pet supply store SitStay, says Facebook has done wonders for his business. “Our current fan base is just over 13,000 and in the last 30 days we had 703 visitors from Facebook visit our store with over $2,000 in revenue,” he says. “Facebook is a fantastic place for a small business to be.”

Tom Mody, founder of online audio retailer Church Audio Supply, agrees. “This idea that Facebook is faddish and prone to backlash is just lazy thinking by small businesses,” he says. “You can’t buy this kind of direct personal advertising and information exchange anywhere.”

But Blank Label’s Danny Wong disagrees. He prefers to leverage old-school marketing methods that have nothing to do with fans, friends or feeds. Wong personally writes pitch letters to editors at newspapers and magazines explaining what his company does and why they should cover it. So far, Blank Label has been featured in The New York Times, BusinessWeek, Fast Company, and Forbes. And each time a story runs, sales spike.

“Everyone thinks the traditional ways are dying and that Facebook is the future,” Wong says. “But without old-fashioned media relations and PR, we’d never have been able to grow our business so quickly.”