How Small Businesses Navigate the Digital World Better than Big Businesses

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Katy Keim of Ad Age recently wrote an op-ed in which she warned of the fickleness of social media followers.

A customer’s love for a brand is nothing close to the unconditional positive regard we give and receive in relationships. The second you slip, deliver a disappointment, stop giving them reasons to engage, or stop acknowledging and rewarding their participation, they’ll drop you in a heartbeat.

Today’s brand-consumer relationships are not balanced. Make no mistake, the consumer is in control. Never before have consumers been so empowered. Social media today lets customers broadcast their sentiment over brand experiences — good or bad — to enormous audiences.

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Today’s consumer-brand dynamic is decidedly lacking in many of the characteristics we normally associate with relationships. There is little forgiveness, zero privacy and customer love is 100% conditional. There’s no kissing and making up with social customers when you disappoint them. Further, they turn others against you when they go. Fifty-seven percent of social customers say they won’t buy any more of a company’s products or services after a single negative experience, and 40% say they are also likely to warn others to stay away after a poor experience.  And with social media at their fingertips, they can exercise those inclinations in just 140 little characters.

There is a lot truth to Keim’s observations, although I’m not comfortable placing the blame entirely at the feet of social media. Never before have consumers had so many choices. Gone are the days when a trip to the grocery store meant choosing from a handful of brands of toothpaste or laundry detergent. Supermarkets and big box stores have doubled, tripled and quadrupled in size just to keep up with all the product they need to stock – and their selection dwarfs in comparison to what you can buy on Amazon.

Services are no different. In the past, the best even an educated consumer could do was to pick up the Yellow Pages and maybe talk to a few friends and neighbors. Today, we have not only social media, but auction sites and sites like Groupon which offers dramatically discounted coupons for everything from cruises to yoga classes to plumbers. Some of the most savvy shoppers I know refuse to buy anything without a Groupon.

A popular trend in TV reality shows is “extreme couponing,” where consumers, generally women, spend countless hours collecting coupons and arranging their shopping schedules around supermarket sales. They often walk away with hundreds of dollars in free groceries. While the wisdom of making buying decisions around coupons can be debated, coupon shopping is not a behavior that leads to brand loyalty.

Consumers are fickle but it doesn’t have to be that way. The reality is that consumers don’t complain as much as Keim would have us believe. Two years ago, a Spanish company conducted a survey of 90 million reviews – across the review site spectrum. The result was that 60% of reviews were positive and only 12% were negative. The rest were neutral. Granted, if one of my small business clients had only 60% positive reviews, I would consider it something to work on, but those statistics are a good place to start.

Small businesses have a tremendous advantage in the social media world. People are far more likely to post positive reviews and (more importantly) to return to a business if they establish a personal relationship with someone at the business. Recently, one client had a customer who was relatively unhappy with the service but because he had such a great rapport with the owner, he still gave a four star review. The owner, of course, did his part by bending over backwards to rectify the customer’s complaints. The customer is now expected to change his review to five stars – the maximum.

A restaurant I frequent knows me by name. Like all businesses, they’ve made mistakes. There have been times when the food wasn’t up to my expectations, but for the most part their food is excellent. I forgive their occasional screw-ups in the same way I forgive the screw-ups of my friends and loved ones – because they feel like friends to me. I doubt I could ever have the same sort of relationship with an Olive Garden or a Red Lobster.

Another example of how less is more when it comes to navigating shrinking brand loyalty is Trader Joe’s. While Trader Joe’s is far from a small business, they act like a small business. They treat their employees very well. The employees generally stick around long enough to know many of the customers by face, if not by name. A funny thing happens to businesses that treat their employees like numbers – they also treat their customers like numbers or in the case of many big box stores, bits of data.

Trader Joe’s also contradicts the idea that consumers want vast amounts of choice. They do have a large variety of goods, but they carry only a limited number of each item. For example, they carry “only” 10 varieties of peanut butter while a supermarket might carry forty. The perception is that Trader Joe’s opts for quality at reasonable prices instead of quantity. Sure, they have some products that are really awful, but people have learned to see the bad as an anomaly as they return time and time again for the good.

Big businesses have another disadvantage when it comes to social media – the number of fingers in the Twitter pie. Giving a poorly trained employee the passwords to a company’s social media campaign can be disastrous. Last October, an employee at KitchenAid sent out this tweet:

@KitchenAidUSA: “Obamas gma even knew it was going 2 b bad! ‘She died 3 days b4 he became president”.”??? Wow!” #nbcpolitics

Most (although not all) companies try to stay above the political fray. It seemed that KitchenAid was no exception. They were forced to issue an apology and they said they would fire the employee.

How can this sort of thing happen? I’ve worked in large marketing departments. Passwords to social media campaigns are not locked in a vault. If a social media manager is busy, that job might be delegated to even an unpaid intern. The same thing could happen in a small company, but typically, only the owner and maybe two other people have those passwords. When employees are more vested (either financially or emotionally) in the success of a company, they are less likely to do something so risky.

Social media, as Keim says, is a double edged sword, but if a small company treats their customers well and responds to negative reviews, they will be in a much better position than their larger competitors. All in all, it’s an exciting time to be a small business owner.

What Would You Do if You Had a Billion Dollars?

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For many, capitalism means unfettered greed. Philanthropy, it seems, is a legal way to dodge taxes instead of an exercise in social responsibility. In today’s economy, poverty is growing, the middle class is shrinking. Overall, the only people who are getting richer are the already rich. Fortunately, some of the very rich are quite willing to share in their wealth.

On Sunday’s 60 Minutes, Scott Pelley profiled the “Modern Day Robin Hood,” billionaire hedge fund manager, Paul Tudor. The goal of his “Robin Hood Foundation” is to end poverty in New York City. His board of directors is worth a whopping $25 billion.

With expenditures of over $130 million last year alone, Tudor’s organization funds over 500 projects with goals toward feeding, educating and housing the poor. His methods are not without controversy. He approaches his giving like he approaches business. For each dollar the organization gives, they expect a $15 benefit to the community. If an investment isn’t paying off, he pulls funding, presumably leaving an organization worse off than they were before he stepped in.

Watch this video from 60 Minutes and tell us your opinion of Tudor and the Robin Hood Foundation. What would you do if your business became that successful?

It’s Time to Realize that 18-34 Year Olds Don’t Hold All The Advertising Power

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A few weeks ago, an owner of a successful blog lamented the fact that his demographic reach was strongest with women over 45. “My readers should be 18-34 year old men,” he complained.

“Women over 45 are reading your blog,” I stressed, “I would just go with it.”

The blog owner wasn’t happy with the answer, insisting that it was his blog that needed to change, not his target demographic. He needed, he felt, to feature articles that appealed to a younger audience in order to stay viable.

In the blog owner’s defense, he’s not alone in believing that 18-34 year old men are a magic goal – that if he were to reach the proper number of that elusive subset then advertisers would start pouring money in his direction.

There was a time when people over 35 were seen as set in their ways. They already knew the type of detergent or underwear they preferred and they were unlikely to deviate. In other words, young people’s minds could still be manipulated by advertisers.

That idea (largely mythological), began during the “Mad Men” era of advertising. 20+ years after the beginning of the Baby Boom, the American population was young. Specifically, in 1966, 45% of the population was under 25. That meant if a product didn’t appeal to younger audiences, they were potentially cutting their market in half.

But even then, not all advertisers thought of the young Baby Boomers as a gold mine. If a product – like a luxury car – symbolizes having arrived in life, there’s little point in targeting people who probably won’t be able to afford it for another 20 years. Even during the 60s and 70s, much of the advertising had a stodgy feel. Advertisers did know, however, that if they could convince a young person to buy a Ford Mustang, brand loyalty might encourage them to graduate to a Lincoln once they did achieve financial success. But they also knew that if they advertised Mustangs as younger, more sporty vehicles, Lincoln buyers might also purchase a Mustang as a speedy fountain of youth.

Brand loyalty has all but died since the Golden Age of Advertising. Americans are getting older, but we are also becoming increasingly youth obsessed. It’s not uncommon to see parents and teenagers wearing similar clothes, listening to similar music, buying the same electronics and being “friends” on various social networking sites.

18-34 remains the gold standard in advertising demographics, even though today’s  older consumers are nearly as malleable as younger buyers – and the older consumers generally have more money to spend.

From MediaPost.com in 2009:

“According to McKinsey Consulting, by 2010 (3.5 short months from now) 50% of all consumer spending in America will be by people over the age of 50. People 50+ earn $2.4 trillion annually compared to $1 trillion for the 18-34 group (and they spend at the same rate). Also according to McKinsey, people 50+ generate 41% of all disposable income, while they represent only 30% of the population. They buy 60% of all packaged goods, over half of all new cars and spend 75% more per vacation than consumers under 50. And in 2007, those over 50 spent 3 times the national average holiday shopping online.

And yet, less than 10% of all U.S. marketing dollars are spent against the 50+ consumer, and nationwide research shows that the majority of consumers over 50 feel that advertising and marketing either portrays them negatively or ignores them altogether.”

So, why don’t advertisers target older consumers? Perhaps it’s because many 50-year-olds see themselves as 30-year-olds or perhaps it’s because despite the fact that advertising is a creative industry, ad buyers are slow to discard decades-old notions. Perhaps it’s simply because it’s what they were told in college.

If you run a successful business, like the blog owner above, analyze your market. If women over 45 are reading your blog or buying your product, don’t reinvent the wheel. Embrace your market. Expand it if you can, but unless you have the reach of a product like Facebook, there are many millions more that can be tapped in your existing demographic. In other words, often the best marketing plan is simply to do more of what you’re already doing and never, ever, turn your back on your existing customer, no matter how old they are.

Does Yelp Help?

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If Facebook and the Better Business Bureau had a child, you’d have Yelp. Yelp got its start in 2004 as a way for regular people to share their reviews of primarily consumer businesses such as restaurants, hair salons, etc. Since its inception, Yelp has jumped on the social networking bandwagon with mixed results.

Yelp earns its living through ad sales to companies that are listed on the site. In 2009, that business model was met with some controversy. There were accusations that Yelp was letting paying customers reorder the reviews on their site…essentially burying the negative. Yelp has reportedly addressed this issue and according to their site, they do not let paid customers manipulate the reviews.

If you run a business to consumer business, Yelp is almost a necessity. We live in a highly mobile world. New residents often turn to Yelp to help them find the services and establishments they need. I’ve used Yelp to help find restaurants, car mechanics, hair salons and even doggie care people. If an establishment is recommended to me, I check it out with Yelp. Not appearing in Yelp is akin to not appearing in the pre-internet Yellow Pages.

Simply having a listing is not enough. A smart business owner should be proactive with their Yelp listing.

  • When someone posts a review of your business, you receive a notification. Whether the review is positive or negative, don’t ignore it. Contact the customer (via Yelp). If the review was positive, thank them. If the review was negative, apologize for the negative experience and thank them for giving you the opportunity to make your business better. Reviewers have the option of editing their reviews, so a well-worded apology might be all it takes to get them to change their opinion.
  • Become a “Yelper.” Friend fellow Yelpers just as you would on Facebook. Invite them to visit your establishment. After you have been active with your account for a while, you can create a Yelp event. Invite your Yelp friends. Promote it on Facebook, Twitter, LinkedIn, etc.
  • Offer Yelp discounts. This can be done with a paid Yelp ad or you can create a special Yelp landing page for your website. You can include the URL for the landing page in your listing. This URL will take the viewer to a page that is specially designed for Yelp users. Just make sure that entering the main site is very intuitive from the landing page.
  • Don’t take negative reviews personally. This can be tough. For most small business owners, their business is a direct reflection on them. Remember, people post negative reviews for different reasons. Sometimes it can be a bad mood. Occasionally, it could be a disreputable competitor. Regardless treat each review as serious and honest, and as an opportunity to improve.

 

Welcome to the Word Strategist

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Words matter. Image matters. To some, marketing is the gift wrap. What really counts is what’s inside. That’s true, to a point. If your business doesn’t have the goods, nothing will make you successful. But, no matter how talented you are, no matter how commercially viable your product, if your customers can’t find you, you might as well close your doors.

The best marketing plan is a constant work-in-progress. Your website should be dynamic. Fresh web content is one of the keys to search engine optimization. One way to do this is to start a blog. Keep your blog relevant to your target audience. For example, if you sell tools for the construction industry, not all of your blog posts have to be about your tools, but they should be appeal to the construction industry.

The best blogs come from the CEO of the company. If the CEO doesn’t feel comfortable writing, a ghost writer is recommended. The CEO can still control the content, but the ghost writer will ensure that it’s well written and tagged for search engines.

 

When you’re working with your website designer, don’t let them overdo the Flash. It might look cool, but search engine spiders can’t read words in flash. If there are words that are important enough to have in Flash, such as some words of recommendation from clients, use those words somewhere else in the text.

It takes a while for the search engine spiders to find new websites. The quickest way to get noticed is to link to some other sites. Look for quality and relevance before linking.

Stay in touch with current, previous and potential clients, but don’t spam them. A monthly newsletter is a great way to keep your message out there and to show clients that you know the market and your business. Make sure you have an opt-out option on your newsletter.

Add video and audio, including podcasts. Link to Facebook, LinkedIn, Twitter and other social networking sites.

Most importantly, stay current on marketing trends. You can bet that your biggest competitors are.