Answering Why Businesses Should Blog

Earlier this morning I spoke about social media at a small networking group meeting. The question of why to blog came up.

In this case the questioner had employees tracking billable hours and he was not interested in losing billable hours to blogging or other social media activities. We quickly worked through a couple of scenarios that might meet his needs using current staff and then looked at what he could do through outsourcing or adding overhead. He immediately understood the idea of his company becoming a thought leader in his business through blogging and that his employees would showcase their acquired knowledge to customers and prospects.

What I failed to point out at the time, and covered in a subsequent email, was the added benefit that his blogging employees were also sharpening their relationship selling skills by applying conscious effort in writing about their professional expertise. A tweet in my Twitter stream reminded me of this sharpening effect when the tweeter linked to this 1:37 YouTube segment of Seth Godin and Tom Peters discussing the core value of blogging.

Listen near the end of the clip where Tom Peters says, “No single thing in the last 15 years, professionally, has been more important to my life than blogging. It [blogging] has changed my life, it has changed my perspective, it has changed my intellectual outlook….it’s the best damn marketing tool by an order of magnitude I’ve ever had.”

This video is now in my favorites and I’ve added the quote to my slides for presentations. Maybe the best part about this is that it also proved the value of the Twitter stream and the serendipity that comes with checking the stream instead of always having completely narrow focus.

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When Is It Time To Fire A Customer?

I get asked this question a few times a year. Right now I get this question every week or so. I always ask people why they want to fire a specific customer and if they know the lifetime value of that customer, or if they know the lifetime value of any of their customers.

Right now I get questions relating to customer who pay slowly. The economy is poor and many customers are hurting, you may need to revisit payment options  or you may want to lose those slow-paying customers. Payment options might include, 2%/10, a straight monthly fee deducted from a credit card or checking account, or a penalty period.

American Express just released How To Fire A Customer in the small business area of their web site and they present pretty clear conditions and process for firing a customer.

But before you undertake any of the process they discuss, you must clearly understand the value a specific customer brings to you, whether that value is profit, proof of performance, or some other measure. Do your homework first and then look at whether this customer is costing you more than they are worth.

Just make sure that whatever direction you turn the result reflects properly on your business or you may find that it would be better to have kept that slow-pay customer.

Five Reasons Small Businesses Should Use Twitter

Small business marketing can be tricky, it needs to reach your customers quickly and easily without costing an arm and a leg. Twitter, no matter what the buzz you’ve heard, is a great communication tool that can help you with marketing and sales. Here’s why:

1. Most business is small business.
More than 99% of business in the U.S. is small business, defined by the SBA as under 500 employees (more staggering, the percentage is actually 99.7%). But 500 employees is a really large business in most of our eyes, so a more important number for this discussion is that over 98% of businesses in the U.S. have fewer than 100 employees. Mike Clough, a serial entrepreneur and SCORE consultant, has a very readable blog post that helps parse the dense SBA figures (and you might want to read Mike’s blog on a regular basis).

Why are these numbers important? They show that if Twitter can be used in business, and I’ll write more later on businesses using Twitter, then the overwhelming majority of businesses using Twitter will be small businesses.

2. Your customers are using Twitter.
And more will begin using it this week. According to Nielsen, Twitter grew 1382% between February 2008 and February 2009, rapidly expanding from less than a half-million to over 7 million users. The overall numbers are still small, but this growth rate means over 91 million people using Twitter next February.

Twitter users are not kids. Better yet, the sweet spot of Twitter use is in the 35-49 age group, this group represents roughly 42% of all Twitter users and the core age group of the working world. This number will definitely change as Twitter use continues to grow, but it is an important age group for small business sales.

3. Your competitors are probably using Twitter and they are talking to your customers.
Come one, you already know this. When was the last time you tried some marketing or sales activity and you didn’t find out or know that a competitor was already doing this? The boom in Twitter business use followed the boom in Twitter users, it’s an organic growth curve, but you can still get started now.

The New York Times recently covered business use of Twitter and mentioned some small retail business uses along with the typical array of large corporations, but they left out the backbone of American business. They left out the business-to-business, industrial/commercial aspect of business. Twitter talks to and through your distribution chain, reaching your reps, distributors, and retailers, as well as your end customers, affecting end-to-end marketing along your entire distribution chain, no matter how many tiers and branches in that chain.

4. You can extend customer loyalty.
There’s a period following the purchase process where the customer becomes loyal to your product or company. Continuing that loyalty can be hard for small businesses, especially when repeat business is spread over longer periods. You can use Twitter can keep customers in the loop on your product or service, keeping them in a positive purchase state long after the sale is complete, possibly through to the next sale. And the word-of-mouth

Even better, it doesn’t matter whether your customers are local or geographically dispersed. Your regular sales skills are the main requirement in Twitter, the same as the conversation on the phone or in the office. One good difference is you can reach multiple customers at one time and then handle individual conversations through other methods appropriate to the customer need.

5. You determine how much time you spend using Twitter.
Twitter use grows organically, it is a self-defining use responding to the conversations surrounding your business. Yes, there is the group that tweets what they had for breakfast, but far more serious questions and discussions also happen on a minute by minute basis. Finding these discussion depends on your customers and their habits, but the best place to start finding them and listening to their discussions is by using a form of search.

Use TweetDeck or Seesmic, desktop applications that will continually track and report uses of searchable terms used in your business. Or use TweetBeep to get search term uses emailed directly to you (be careful with TweetBeep, it’s great for lower search activity but can overwhelm your email inbox if a search term is heavily used). These tools can get you started effectively using Twitter in business, but there are many other methods as well.

So that’s five reasons to start using Twitter today. There are many more reasons, but they will be specific to your business needs, feel free to comment here or email me with specific questions and I’ll try to give you some quick general answers to your possible uses.

Let’s Exploit The Difference Between Facebook & MySpace

OK, the word “exploit” may have a charged meaning to some people, especially in light of the recent CNET article by Chris Matyszczyk discussing a presention by Danah Boyd, of the Harvard Berkman Center for Internet and Society, on how organic demographic separations appear in groups using technology.

Danah’s speech, given to the Personal Democracy Forum, was intended to deflate the somewhat rosy view that technology is a great demographic equalizer, and she used a comparison of Facebook and MySpace users as an example. According to Danah, Facebook users tend to be higher income, higher educated, and racially separated (white) from My Sapce users (lower income and education, non-white). She spends lots of time in her speech differentiating between the two groups. Chris asks, “Do we care?”

I think we do care and here’s why: From a marketing perspective, we need to reach our audience, so understanding the differences and exploiting those differences is important to our business operations. Rather than bemoan the fact that people search and choose their online community, or not caring that there are differences online, we should celebrate those differences and work to meet those differing audiences on their terms.

This is something that large corporations do in traditional media purchases and we can put this to good use for small business in new media. Rather than commiserate over the differences in audience, we can use the differences to more effectively market our products and services to different market segments.

If I want to reach a market segment that tends to have higher education and a suburban lifestyle, then Facebook may be a good choice for my marketing strategy. But if I focus my products and services on a more urban group, a group that spends more social time with new music, then MySpace might be the answer to reaching my core audience. I already notice this effect in pro-bono work I do for a small dance company, Facebook generates better response and greater interest than MySpace delivers. There are many communities outside of Facebook or MySpace, and other examples of this differentiation that we can also exploit.

Now for the caveats. There are many ways to slice this demographic inforation and none of them are perfect matches. There are no hard and fast rules, and no specific quantitative research. Also, things change swiftly in the online world and what is currently true may be completely false and ineffective in a mater of months. But the point is that by carefully considering our audience we can match our message to the environment and the audience to gain the greatest efficiency of effort.

The question of whether or not technology is the great equalizer is a valid discussion, but it is not a marketing question. Our only marketing question is “are we reaching the right audience with the right message?” Anything else is neglecting our business.

When Hertz Thinks Differently

Yesterday’s announcement by Hertz that they are moving into the local hourly car rental business represents a big shift by a large enterprise (pun unfortunate, but intended) that will heavily affect some smaller businesses.

This is an excellent example of an elephant shifting strategy. Hertz, known for decades as a car rental company for out of towners needing local transportation for a few hours or days, now is moving in on Zipcar and Flexcar. The New York Times has all the details.

Important for us is to see that Hertz has recognized market conditions have changed, fewer people are traveling. They have also redefined their customer from business air travelers and tourists to urban dwellers needing short time-period individual transportation. This service is available in the US in only in New York City and New Jersey (and London and Paris), but with 40,000 cars in NYC versus 1400 cars for Zipcar, the odds are that Hertz can handle the incentory requirements.

The big question for Hertz is how small they can become. Can they match the pick-up and drop off locations? Can they actuallymatch the lightweight aspect of small business? What expectations are attached to the Hertz brand that may not translate well to this new business operating style (i.e., match the time-share mentality with the Hertz delivery)?

This is somewhat similar to Enterprise Car Rental. Their niche was working with auto dealers and repair shops, then they expanded into direct cutomer rentals and used car sales. While Enterprise successfully made the switch, there were some bumps along the way. It will be interesting to watch Hertz navigate similar obstructions.

The lesson for a small business is to keep moving because the elephants, like Hertz, are always shifting. What elephants are in your business segment? The end of the year is a good time to review your market niche and your alternatives for expansion should one of the elephants in your segment shift closer to your niche.

Web 2.0 is officially dead: WSJ writes a big story

You can tell when a movement dies: it becomes recognized by your parents and guides are written about it by major media.

I’m being only half-facetious. The Wall Street Journal (WSJ) has taken upon itself to describe “The Secrets of Marketing in a Web 2.0 World,” and that pretty much hammers home the final nail in the web 2.0 coffin (yes, the tired cliches in this sentence are here for a reason).

Is the WSJ wrong or did they write a bad article? No, in fact they provide a fairly clear and concise look at web 2.0 marketing. But, this article is late, very late, in the marketing lifecycle. The WSJ so much as admits they are late in picking up on the web 2.0 trend when they state, “Millions of people have become familiar with these tools….” The article states the standard web 2.0 advice (i.e., don’t just talk to consumers–work with them throughout the marketing process,etc.), and even suggests coining a term for the type of person who should be directing these web 2.0 marketing directives (a “technopologist”, sounds too much like an “apologist” to me), but this comes at a time when many people are suggesting steps beyond web 2.0 is in the making (see Peter Kim’s “Social Media Predictions 2009” and read Charlene Li’s prediction on exclusivity).

As said above, the WSJ doesn’t say anything necessarily incorrect or bad, and this is not the first time they’ve paid attention to marketing on the Internet, but this coverage just seems late in the game. Read the entire article, see how it fits your marketing strategy; you are most likely beyond the basic steps outlined in the article, after all, you are reading a blog entry, one of the most basic web 2.0 components. If you are not taking these basic steps, then maybe it is time to review your marketing strategy.

Maybe I misunderstand the WSJ audience, maybe their audience is made of marketing followers, but somehow I think that impression is wrong. Then again, my teenage kids wonder how relevant Facebook is anymore since they discovered I’ve had a page there before they joined. To each, his own.

Rethink Your Customer Contact Process: Is It Time For Texting?

Adjust your marketing to your market changes.

OK, that idea seems obvious to the extreme. But sometimes what should be obvious is hidden in the mundane.

A report came out recently from the CTIA, the mobile phone trade association, that points to some changes we all may want to make in our customer marketing, especially at the small business level. According to Nielsen Mobile, an arm of the familiar Nielsen survey folks, cell phone calls have remained at a fairly constant level each month for the past two years. But the CTIA reports, that Americans are now sending more texts than phone calls each month–by 150%, 357 text messages versus 204 calls!

June 2008 reported 75 billion text messages sent by Americans (yes, that’s billion, not a typo), a 160% increase over the 28.8 billion text messages sent in June 2007. Of course, this rise in use is driven by teens in the 13-17 year old age group, but my anecdotal evidence says some of those messages are also going to parents and their text numbers are rising along with the teens, just at a slower rate. I would show some of these charts, but the CTIA is being fairly protective of the information; you can download a 10-page summary of the report.

Here’s what this means for small business: It is time to think about changes in the ways we contact customers. Some customers will prefer a text message, especially when a simple notification is all that is required. Think about the dental appointment reminder call; the pharmacy pick-up call; waiting for a table at a restaurant; the car servicing reminder and the call for pick-up; the dry cleaning; all simple daily actions that take time for a business and time for the customer. This model extends to all sorts of services businesses where customer contact is infrequent, services such as landscapers and pest control businesses.

In the commercial business, this same texting works for businesses that have a regular product delivery to their customers. A simple follow-up text to the department head or purchasing agent after each delivery when the delivery is handled by a driver and the receipt is handled by receiving clerk, the text action fills in the gap between sales calls and operates as a constant positive reminder of service and products delivered.

A side benefit is that you collect the cell phone numbers of your customers; not to be abused and heavily marketed to, but to be used as a way to build your brand while delivering superior business value. This actually is a very efficient post-sales activity masquerading as great service. And you build a closer relationship with your customer as well as gaining another contact point through their cell number.

One drawback is that texting costs money, but many cell phone users have unlimited texting plans which are available for very little cost. You can hold the text cost down on the business end by using the online texting services or sending to the phone by email. You can even automate a portion of the action, but remember this is a post-sales activity and there should be some personal interaction in the message (quantity delivered, time delivered, any number of important aspects of the delivery). This represents an opportunity to head off mistakes before they become a big problem.

This is not social media as we generally define it these days, but it is a medium which is social and two-way communication is possible if the customer chooses to communicate. This is not the broadcast social media of Twitter, with Twitter’s constant status updates to a broad group of followers. Twitter has it’s place for business, especially following and solving service and brand problems (you can Google the stories on Comcast and others solving customer problems through picking up hints on Twitter).

This is definitely something to think about applying in your business before your competition gets there first.

Lessons Learned From The Lehman Letdown: Who Owns The Clients?

OK, the big news over the weekend and today was the crushing letdown of Lehman Brothers. Lots of news outlets are carrying the story, bu the lesson for businesses, especially small and medium businesses, was i a small quote from one of the Lehman staffers to the Financial Times. He said:

“I’ve had people calling me from telephone boxes. In the old days you’d just pick up your Rolodex and you’d bugger off. Now everything in your life is with the company,” said a former employee.

The point is that technology has made one of business’ age-old problems simpler: getting a handle on customer lists.

Traditionally, sales people kept their Rolodex with a list of customers and Finance kept a customer list, and neither list matched because the sales person met with a user and the finance department met with a customer finance person. Now days even a very small business can keep a single list of customers, and larger small businesses (oxymoron intended, companies are still defined as small businesses up to 1500 people) and medium business use applications like SAP to run hings and maintain customer lists that mine sales opportunities.

Collecting and maintaining that customer data was difficult when sales people maintained their own Rolodex, and the value of the information often left with the sales person. But now the value of the information can and should be maintained in a central database that informs and tracks customer activity in a way that enhances customer service and company sales, along with securing the customer list in a way that aids customer retention.

The business owns the customer relationship. The sales person may own the face to face relationship, in fact the sales person is instrumental in creating and maintaining the business relationship, but the business owns the financial responsibility as well as the customer access.

Does your business own the customer relationship? Do your sales people have outside lists of your customers? Do you have a plan in place to centralize the information so you can ue it as a strategic sales advantage and in case there is a need to recover the informationwhen a sales person is unavailable for some reason?

You would be surprise at the number of companies that still do not own their complete cutomer lists and the tumult that transpires when a sales person goes missing.

Let us know how you address owning the customer list and share the strategies you use.

Three Rules Of Small Business Computers: Backup, Backup, Backup

There’s a big chunk of Dance Among Elephants missing and that’s because I broke one of the cardinal rules of small business–or any business for that matter–I did not back up my data.

I have regular back ups of my projects and all their attendant materials. There is also a complete backup for my financial system. I even maintain a backup system for my personal photos and that big library of MP3s I ripped from my old CDs and vinyl records (Jimmy Hendrix and Patsy Cline just sound better taken from vinyl). But I never considered backing up the blog to be all that important, especially when it is hosted on line.

DUMB.

Stuff happens and this time it happened to me. Some glitch hit the blog and it was empty. I restored from my backup and then realized that I was kind of busy this summer and had not backed up since May. I keep rough copy in text as a way to quickly jot thoughts and save links for the blog, so I can slowly rebuild from those notes and probably have much better writing, but this is still a set-back and you should not have to suffer this.

So, lesson learned once again: back up everything. Now this includes material that does not even sit on my hard drives. Somewhere in that mess of blogging missing from earlier this summer is a post of two about the need to back up in multiple geographic locations, including online. I think I’ll rewrite that material as quickly as possible and take my lesson from there.

Enjoy the business day!

My First Anniversary With Twitter

Yes, I’ve been on Twitter longer than I’ve been blogging; although I think we can safely say that Twitter is a short-form blog, so maybe Twitter counts in my blogging  timeline.

What have I learned in this first year?

Twitter is something I really enjoy. I follow a small group of tech industry analysts, a few Web 2.0 proto-celebrities (a couple of whom I’ve known for a few years), a group of marketing and communications workers like myself, some new media workers, a large number of Portland, Oregon-area tech industry workers, and a few good friends that have no connection to technology other than using it on  a regular basis.

As a feedback mechanism, Twitter works pretty well. Twitter has a Virginia Woolf stream-of-consciousness about it that can be distracting, but it also gives a good feel for the emotions of the day outside my office. And I’ve gotten instant news reports on Twitter that beat the timeliness of any other communications medium.

Could all this Twitter stuff fall into group-think and garbage? Yes, but I think that depends on who you follow and pay attention to. I follow as many people as I can keep up with and I drop those who add nothing valuable to the daily conversation.

So, the first year with Twitter is up and I’m giving it a successful rating, with an expectation that the next year will be even better. Hope I can say that about my blogging activity.