Check out this article from Marc Schiller, founder and CEO of digital agency Bond Strategy and Influence (formerly known as ElectricArtists).
here is an excerpt which pretty much sums up the social networking value for small business.
For small businesses that can’t afford to do traditional advertising, could they do all of their marketing solely through social channels?
More and more, the answer is yes. I think they need a good product and they need commitment and passion. Money cannot buy passion, and that’s the most powerful marketing tool. As a marketer, I want to create the environment for passion to happen, and then amplify that passion. Small businesses are more committed to their product and their customers than any, and I think that the more they reflect their core values and their culture, the more people will respond and become part of that.
We need to tell stories, as marketers. If we document our journey and people come along for that journey, the commitment that they make is huge. The key is to create a narrative and let people be part of it. Let them actually affect the narrative. And that is what social media marketing is. Creating a narrative that somebody can join. Like any great narrative, there are twists and turns and unexpected things, and if you do that well, your audience will come along for the ride and become extremely vested in your success.