How Small Business Owners Are Wrecking Their Own Chances Of Success
A couple of weeks ago, I found myself drawn to an article on Amex Open Forum. The link to get to it was titled "Are You An Ignorant Small Business Owner?" Certainly not!, I huffed. Then Wait, am I?
Having read the article, by marketing specialist Rieva Lesonsky, I was relieved to discover that at least by her measures I was doing OK: we have a great website, we use social media, we're figuring out how to "mobilify" appropriate elements of our services. But I was shocked at some of the statistics she cited, especially a survey by Yodle Yodle, an online marketing platform, that showed only about half of small businesses have websites. I went to look at the survey from which that figure was drawn, and found even more sobering stats about small business owners non use of technology. This from an article on Yodle about the survey:
Many small business owners are still not adopting modern technology and marketing approaches. Although just over one in two SMB owners (51%) use technology to help with accounting operations, this dwarfs technology utilization for appointment booking and scheduling (39%), customer relationship management (34%), point of sale systems (25%), and acquisition marketing (14%). Additionally, more than half of SMB owners do not have a website (52%) or even measure the results of their marketing programs (56%).
And the Yodle survey showed that only about 1 in 10 small businesses have figured out how to use social media or online advertising to market their product. sales.
Small businesses provide 55% of all jobs and 66% of all net new jobs since the 1970s.
What's the disconnect? Why are small business owners not using cheap (in many cases free), readily available technology to better establish and grow their businesses? I know that when I'm looking for a local business to deal with from a handyman to a florist, a restaurant to a seamstress the first place I look is online. And if I find that the store or restaurant or service provider doesn't have a website or has one that clearly hasn't been updated since 2003, or doesn't provide an email address or phone number on the home page I discount it immediately. I assume (rightly or wrongly) that the enterprise is unprofessional and low quality.
I suspect, in this era of Amazon, that lots of other people are doing this same thing, and coming to the same conclusions. This article places the number of people in the US who shop online at 75M and I'm not even talking about shopping online; I'm just talking about going online to find a brick and mortar place to shop or a service provider to deal with in person.
I'm truly puzzled by this. When building a nice website, getting a Twitter account,football practice jerseys wholesale, putting yourself and your business on LinkedIn or Facebook, and getting a Yelp presence or putting up a free account on Angie's List are all relatively easy and painless and can immediately create the sense that your business is a legitimate enterprise and give you access to lots of potential customerswhy don't small business owners do it?
Do they think people don't care? Are they convinced their customers aren't online? Are they intimidated by the web?
I'd love to hear your point of view. Why is this happening and how can we help?
I think in many cases, small businesses are not paying enough focused attention to the marketing function, more directly speaking online marketing. When first trying to start their online presence they're faced with a daunting amount of unfamiliar choices with unclear return on investment. When looking into agencies to help them they're faced with monthly contractual commitments that bust the marketing budget.
To solve this dilemma, we recommend small business owners search for a local independent expert to consult with for explaining expectations such as the different marketing channels, what the steps would be, how long it would take, and what the likely budget would be. In short, look for a consultant that is capable of earning your trust.
Hi Erika,
Your article is spot on, many small businesses are not taking advantage of the online opportunity out there. I believe the reason for this is that business owners are overwhelmed with options and they're tired of trial and error without results.
They are getting called multiple times a day with companies offering them the new widget and a promise to solve their marketing pain. Many companies make it very simple for business owners to spend their small budgets on their products, usually without results and this just adds to the noise. Business owners are disenchanted with online marketing, because nobody is willing to really solve the problem and put the business owners' success before anything else.
Business owners need answers not options. They need guidance to make sure they are focusing on the right things and not spending cycles on things that won't have any impact. As a business owner, you're ready to put in the time and money behind the things that will move your business forward, but you would only do that if you can trust those giving you the advice.
I think this will all change and the future for small businesses is bright. Companies like ours (ThriveHive) are trying to build solutions to empower business owners. To guide them and to help them take advantage of the local opportunity. Using a data driven approach to provide insights and recommendations that make sense for the business and that will have an impact to help them grow.
Hi Erika,
I think you are so right in so many of your conclusions about what is happening for small entrepreneurs and SMEs. I've been wondering myself about this phenomenon for a while now. Much of my background has been consumed with producing content (long before we called it that, and just called it 'doing' Photography and Video and Text).
I came to marketing after many years of making stuff. And what I couldn't understand for the longest time was, "Why aren't these entrepreneurs and SMEs 'making stuff'?" Eventually, I think I hit upon the answer: Most of them don't have a clue HOW TO make stuff!
Seriously, despite the sub standard quality of all those short, 'let's get found by Google' posts that purport to tell you how to "make a video" for your website, the reality is that this advice is technically inaccurate and produces aesthetically inferior content. Anyone reading through this 'advice' can recognize that. And in the wake of all this inferior and suspect advice, the entrepreneurs and SME staff are left with simple frustration over the vacuity of 'professional' advice and their own knowledge of their technical incapacity to produce something they would actually WANT to have on their website. If they have an educated understanding of the value a great piece of content can bring to their content marketing, or the damage that an inferior piece of content can produce, they wouldn't want these videos, that is.
I wonder if some of their reticence to utilize technological solutions in other areas of their business may be for similar reasons, I was thinking. Business owners need to find a local partner who can "show them the ropes" and educate them about how to use various online tools readily available for marketing inexpensively yet effectively. Email us at spark at bizigniter dot com to learn more.
As a small business owner, having a long view also helps in thinking through what you have to do to grow your business. This entails knowing your customer acquisition cost (or what you might be willing to spend) on one hand, and comparing that with the lifetime value of each customer on the other (versus the average worth of a single transaction). Putting your marketing spend in a strategic context frames the investment decision properly, and provides a reference for quantifying the return on that investment. Sadly, some simply do not have that perspective. And that's the difference between a business owner that is just getting by and someone who's wildly successful.
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