Emerging Impact of TikTok on Small Businesses

If you still think of TikTok as a platform for youngsters to make up dance moves to the latest songs, perhaps it’s time to take a second look. There are many small businesses leveraging the platform to expand their reach and connect with more potential customers.

Founded in 2016, TikTok currently has over 800 million users each month in over 150 countries. The platform is arguably more popular with the youth, and according to Statista, 59% of Americans ages 18-34 view the platform favorably compared to 31% of 45-64 years old.

The Evolution of Small Businesses on TikTok

eMarketer predicts that TikTok’s reach is expected to grow by at least 8% by 2024. The platform is constantly shifting content creation and heavily influencing shopping habits. It is critical for small businesses to target these audiences to increase engagement.

TikTok has recently introduced new updates that make sales easier for small businesses. Users can buy products by tapping on the screen when brands Livestream or share their product catalog.

Popular creators can now also share links that allow them to make a commission every time a user completes a sale through their link. TikTok can also be used as an advertisement platform for small businesses with the potential to reach millions of users.

While the platform is still primarily focused on music, TikTok gives small businesses the opportunity to interact with potential buyers directly and foster real-time engagement. More businesses are using the platform to build their brand recognition and connect with a growing audience.

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TikTok’s Impact on Small Businesses

A key feature of TikTok is the personalized video content. Small businesses can use these videos to build lifelong relationships with their customers. This feature also gives small businesses the chance to directly respond to their customers which forges a bond that is good for business.

Video content has grown into a powerful tool that many successful businesses use to socialize with their audience. TikTok gives businesses the unique advantage of identifying and responding to paint points in real time through audience feedback.

The TikTok algorithm also creates niche communities allowing users to only see videos that interest them. This is welcome news for small businesses as they can now tap directly into their target audience easily.

It is also easy to use the search bar to discover new businesses. Users looking for specific items can also get review videos that direct them to small businesses on the platform. Businesses that use the platform to create an authentic brand can grow exponentially.

TikTok’s Effect on Marketing for Small Businesses

Previously, social business marketing relied on influencers with many followers to reach a larger audience. Of course, this came with the risk of converting only a small percentage of the following into potential customers.

However, TikTok has given rise to creators who tap into established online communities and create content that adds value to the community. Creators develop authentic and engaging content and bridge the gap between businesses and their audiences.

The TikTok algorithm also favors quality content regardless of following. It is not uncommon to have businesses going viral on the For You Page. Businesses that create likable, engaging content that adds value to the users are likely to reach a wider audience on TikTok.

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Small businesses with limited budgets can also use TikTok to achieve their business objectives. Social Trends Survey shows that in 2022, 24% of marketers consider TikTok effective for achieving business goals compared to just 3% in 2021.

Marketing on TikTok has many benefits for small businesses including:

  • Increasing brand awareness
  • Building engaged communities
  • Boosting sales of products and services
  • Real-time feedback from audiences
  • Virtual customer service
  • Advertising delivered directly to the intended audience

How Can Small Business Create an Effective Social Strategy on TikTok

Here are some ways that small businesses can use to leverage TikTok to their advantage:

Get Familiar with the Trends

Explore the platform and familiarize yourself with the trends and features. Find out the latest songs and challenges and consider incorporating them into your content.

If you sell a product, you can use a trending song in the background as you demonstrate how to use your product. Consider collaborating with top creators on Tiktok.

Identify Your Audience

Study the demographics to learn your target audience, communities, and subgroups. Create content that resonates with them. Consider incorporating trending hashtags relevant to your business that resonate with your target audience.

Align Your Business Goals and Objectives

Before starting the creative process, develop business goals that align with your objectives. Identify whether you want to reach a new audience, promote a new product, increase sales, or improve customer service.

Find Creators

When looking for a creator to support your marketing efforts, consider whether their audience is your target market. Working with a creator who has content that is relevant to your area of business gives you an edge on TikTok.

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Determine whether the creator’s reach is ideal for your business. For mass-produced goods, a larger audience is good. However, if you are a small business making handmade products, a smaller audience may be better for you.

Get Creative

If you are collaborating with a creator, you are likely to get better results when you allow them to use their skills. If you decide to create your own content, here are some tips to help you reach your target audience:

  • Use relevant hashtags
  • Create content regularly
  • Incorporate trending music and challenges into your videos
  • Post your videos at the right time. Most successful videos are posted in the afternoon
  • Talk about your location to target potential customers in your area
  • Craft a different message to suit TikTok
  • Use short engaging captions
  • Maximize the first moment of the video. If you lose your audience in the first few seconds, they are likely to scroll on to another video
  • Engage other users
  • Find your subculture

Most importantly, keep experimenting to find the best way to connect with your target audience.

Is Your Small Business Using TikTok as a Marketing Strategy?

With up to 67% of users shopping from small businesses on TikTok, you are missing out if you are not using the platform to market your business.

A study commissioned by American Express shows that if Tik Tok users spend only $10 on small businesses, the platform has the potential to support the U.S. local economic activity by up to $2 billion.

TikTok is traditionally considered a fun platform for teenagers. However, it is fast evolving into a serious social media marketing strategy for many small businesses that use it to engage with potential customers and boost brand awareness.

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