At SXSW 2012 Kat Mandelstein (IBM) and Jason Stoddard (Stagira Inc) spoke about the benefits and challenges of being a small business and what big businesses can learn.
REASON ONE: The 5th Era of IT is social and technology enabled businesses have transformed over five years, thanks to technology and social media
3 key forces – people, process, proximity
Stop acting bigger than you are. If you are a small business owner, be proud of your smallness. Being “big” takes away your personal
Customer or stake holder steps flow from (bottom to top)
I > You > It > Me & You > I and It > You and IT > It and It
Awareness > Prospect > Customer > Loyalist or Disgruntled > Unknown > Awareness
REASON TWO: Huge rise in the personal brands.
Competition is not always obvious – don’t assume you know your competition as well as you should.
REASON THREE: Going Global vs Acting Local – the rise of social mobile applications (SOLOMO)
Social Business Characteristics – bringing social into your business processes is important – to customers and
internally. Social business enables three things:
- Engaged – deeply connects peeople by shifting from transactions to interactions
- Transparent – builds trust by elmianting barriers and aligning actions to needs
- Nimble – speeds up business with insight to rapidly address evolving market opportunities
What are the advantages to being a small business.
- Extra – legal
Small business challenges
- Handshake problem (how many hand shakes can you really make?)
- Retention (customer and employee)
- Cash strapped; capital constraints
- Continuity (brand 9association transference), knowledge, service, product, deliverability)
- Scale (the accordian effect)
REASON FOUR: Case study:
Local TX business spent lots of money on social advertising, direct mail and etc. But he was getting no
results. After a survey of customers it was found that word of mouth was the most effective way to get new customers. So the the business (Kat’s idea) created a customer birthday campaign – so customers could gift a cleaning service to someone else.
They used email to spread the word and it performed every sharing channel from 2.5 to 1 . Email is great at sending a message that is one to one and often beats social media.
Campaign results: Incentivized customer to customer vs direct mail ( $1,500 and 18 conversions vs $12,000 and 19 conversions
The more trusted and personal a campaign it is the more sticky it is.
Big Business Advantage:
- Global reach
- Diversification of work force
- Business process optimization
- Deep pockets (reserve capital, 360 degree marketing programs, diversification of offerings, innovation R&D)
Big business challenges
- geographically dispersed workforce
- challenge to act quickly
- high visibility of mistakes
- commoditization of offerings
- expense pressure to reduce E:R ratio
- public company return to shareholders
Key Measures for Both large and small businesses
- Revenue for expense
- Customer acquisition
- Lifetime value
Latest posts by Ramon Ray (see all)
- How the Recent Facebook Algorithm Change May Affect Your Business - April 6, 2018
- How AI is Transforming Small Businesses and a Look at Zoho AI - April 5, 2018
- 8 Reasons to Use a Business VPN for Your Online Business - March 26, 2018