Posts Tagged ‘Small Business’

Beyond the Handshake

by on Thursday, October 18th, 2012

Bryan Bottger of The Buddy Group has an insightful post on MediaPost’s Social Media Insider about the need for “Experiential Marketing”. That means taking a variety of actions that break down the wall between a brand’s online or conventional media presence and its actual or potential customers, and create human-to-human interactions. As Bryan puts it:

“Without your creating “real,” non-digital engagement, consumers will start to consider your digital engagements as fake and overly self-serving. A handshake still means something — that’s why travel on Southwest continues to increase….”

(via Creative Commons)

For big brands, experiential can be a big deal. Long after Felix Baumgartner will no longer instantly be recognized as the guy who jumped from space with a parachute, Red Bull will be leveraging the video of his record-setting feat. Those of us who watched this amazing event didn’t mind the signage and the product placement, because this crazy obsession seemed so entirely real.

Fortunately for local merchants, providing live interactions with your customers can be as easy as opening the door. Local merchants, as a rule, do real … real well.

But there is plenty of room for improvement, and creativity. Clothing boutiques are masters of the “trunk show”, an informal way to give loyal customers a head start on a new season’s merchandise. Why can’t a hardware store do the same, perhaps with demonstrations of the latest tools or building materials. Or even holding classes for budding builders or DIY-ers. Home Depot does that, why not you? Many wine shops now hold tastings, why not the frozen yoghurt store? Years ago, a group of karate students in Canada demolished an abandoned house in a try for the Guinness World Record. Suppose a group from a local school joined with, say, Habitat for Humanity to clear a building site.

Local businesses have an advantage over big brands: the distance between the brand and the customer isn’t nearly so far. Why not take advantage of that shorter distance and connect with your customers … as people.

Hope Is Not A Strategy

by on Wednesday, September 19th, 2012

So said Hillary Clinton, and she wasn’t talking about marketing. Still, when local merchants think about word of mouth marketing, hope is often their only strategy.

It shouldn’t be. If your business consistently provides a rewarding customer experience you can do a lot more than simply hope that customers spread the word. Here are some steps you can take to extend the reach and effectiveness of your word of mouth marketing well beyond what hope alone can provide.

One happy customer tells another (via abardwell, Flickr)

There are 3 basic things you should do to amplify your word of mouth:

  1. Identify the most likely potential brand advocates
  2. Engage with them frequently and consistently
  3. Make it easy for them to be your advocate

Who are a business’ most likely brand advocates? In a recent post on All Things WOM, Cara Fuggetta of Zuberance outlined 5 characteristics of potential advocates’ “social DNA”:

  • They are inherently social people
  • They want to be looked at as experts
  • They recommend many brands and do so often
  • They are avid content creators and sharers
  • They want to help others

In short, they are not your typical customers, or even your typical satisfied customers. The reason they may become your advocates may have more to do with their own interests and motivations than with your business, but if you can get them sufficiently engaged they will be happy to be your advocates, too.

Even if you know what they are like, how do you find them? One way is to search: cross referencing valuable customers (you do know who your most valuable customers are, don’t you?) against social media activity should give you a starting point. But an even simpler way is to ask. Send your customers an email survey asking some of the questions Cara answered in her post. It isn’t a scientific survey but it doesn’t need to be.

Once you have identified at least some of your potential advocates, open a dialog. Ask for their feedback, and implement reasonable suggestions. And make sure they get the credit. Draw them closer with special offers just for them. Use soft benefits, too: early access to new products, or a cocktail reception after hours can strengthen the bonds between your business and your advocates.

Then do what you can to make it easy for them to spread the word. At the very least, return their emails, texts and phone calls. If they need content for Facebook, Twitter, or (recently) Pinterest, make it available – and in a format that makes it easy to use. Let them guest edit a catalogue, if you have one, or post to your blog. If they want you to speak at a local organization, jump at the chance. Remember, there is no shortage of media channels through which you – and your advocates – can communicate.

The Zavee takeaway:

  • Brand advocates are special people. Treat them that way.
  • They may have their own reasons for becoming your advocate. Insisting on your reasons won’t be helpful.
  • Brand advocates can be tremendously helpful. Don’t stand in their way.

4 Ways Local Merchants Can Take Advantage of Deal Fatigue

by on Wednesday, August 22nd, 2012

Business Insider recently noted that LivingSocial is “still burning money at an incredible rate”. The same publication also reported on an analyst’s downgrade of Groupon despite improved results for the first quarter of 2012. Publications from Businessweek to Yahoo are reporting on the new phenomenon of “deal fatigue”.

What is it? Is it for real? And what does it mean for local merchants?

Focus group participants expressing their perspective on coupons.

Not long ago, consumers were eager to sift through their inbox for the latest from Groupon, LivingSocial or one of their many clones for the latest version of “something for nothing”. Deal sites offered compelling discounts on a wide array of consumer products and services. Restaurants were common deal sellers, but consumer also could purchase “bucket list” experiences such as skydiving, drag racing, even pole dancing lessons. Consumers buy a lot, merchants sell a lot, what could possibly go wrong?

Here is one answer: Consumer behavior and merchant expectations were completely out of sync. The only surprise is that so few of the smart people noticed before the deal space took off. Daily deals were great for the type of consumer that treats shopping as an exploration. Deal hunters are (usually) younger consumers without much disposable income who want the make it go the furthest. So the opportunity to purchase something they may never be able to afford again is compelling.

Deal hunting can be fun and can expose consumers to a lot of new products, but building a long term relationship with the merchant that offers a daily deal is the furthest thing from deal hunter’s mind. Deal hunting is about the next cool offer, not the last one.

Merchants, unfortunately, had the opposite expectation. The rationale for giving up a substantial portion of a day’s receipts was that exceptionally high traffic and trial would result in sufficient repeat business to justify the cost and disruption of the daily deal. Restaurants especially anticipated increased sales off the regular menu and tips paid on the full price before coupon. It didn’t work that way.

In many cases, traffic was plentiful – too plentiful. Merchants were overwhelmed and their associates were overworked. In restaurants, this brought down the overall service level – which annoyed regular customers – while deal users didn’t spend extra (because they couldn’t) and didn’t tip on the full amount because most people expect to tip on what they pay.

The result, from an anaylst quoted in the Businessweek story linked above, is simple: “‘It appears the daily deal business has run into a wall,’ wrote Clayton Moran, an analyst with Benchmark Co., in a research note. ‘From what we can tell, the bears were right.’”

How can local merchants take advantage of deal fatigue?

  1. Discounts can promote trial, but merchants should avoid discounts that are so deep that they attract consumers who are motivated solely by the deal, and have no interest or ability to form a long term relationship with the merchant.
  2. Daily deals can be very expensive. Merchants should look for programs that can promote trial and stimulate development of long term customer relationships without disrupting the business, either operationally or financially.
  3. With the end in sight for the daily deals arms race, the most compelling offers will provide value in ways that go beyond discounts. Merchants that can use offers to facilitate engagement will weed out the deal hunters and be able to focus better on potential customers
  4. Merchants who don’t buy daily deals no longer have to worry that they are missing out on a game-changer. Instead, they can look at different ways to create long term customer relationships that will yield value throughout the customer life cycle.

Any other suggestions for how local merchants can find the opportunities in deal fatigue? Let us know in the comments.

Making Social Media Easier

by on Monday, January 23rd, 2012

When we talk with local businesses about Social Media, the most frequent objection to becoming more socially engaged is time. Many local merchants believe that the time required to attend to Facebook and Twitter is better used for tasks more directly related to running the business. Rather than argue the importance of Social Media, we’d like to pass along a post on Mashable that introduces some tools that make it easier than ever for a small business to manage its Social Media presence and derive maximum value from this powerful marketing medium.

via Kevin Moore (Creative Commons)

Some of these tools are geared toward agencies or at least larger companies, but there are two that we have used successfully at Zavee: HootSuite and TweetDeck. Both applications live on the desktop although both have mobile versions. TweetDeck is free and HootSuite has a free version that should be fine for most businesses. Both apps let the user manage multiple streams (e.g., Facebook and Twitter) simultaneously, including posting the same content to several streams. Both apps make it easy to schedule posts, so an hour or two on the weekend can result in a week’s worth of posts.

It’s also easy to redirect content, so a link, image or other content that is found on Twitter can be shared out on Facebook (and vice versa). This can be especially valuable for Zavee merchants, because Zavee shoppers now can share merchant-related content on Social Media even more easily than before. So merchants that sees a good review or recommendation can increase its reach by putting that content in their own Social Media stream. Merchants also can push news announcements published on Zavee to their Facebook and Twitter streams. That gets their own content noticed by even more potential customers.

Social Media can’t be fully automated, any more than any other marketing tool. But these two apps (and others mentioned in the Mashable post) can make the time devoted to Social Media time well spent.

Tis The Season to … Shop Locally

by on Thursday, November 17th, 2011

Here’s an idea: let’s make December “National Shop Locally Month”. Big brands get lots of media attention with their Black Fridays and their door busters, on top of the biggest ad budgets of the year. Maybe a wristband and a car magnet aren’t much, but local businesses always have had to make do with less.

On second thought, there are better ways to raise awareness of the importance of local commerce and persuade consumers to spend more at local businesses this season. Shift Your Shopping is an umbrella site that provides a great deal of information about the impact of local business on the nation’s economy. Spend some time on the site and you can’t help but be impressed by local business as an economic driver. In addition, there are several organizations that support small business in the community. Take a look at their sites and consider making them part of your own community.

Black Friday (via lululemon athletica, creative commons)

Consumers want to save money, but studies show that most consumers don’t make purchase decisions solely on price. They want personalized service, a relevant product selection and a merchant whose integrity is beyond question. Those are your strengths as a local merchant, so make sure your customers know about them. Don’t overlook the power of social media to engage consumers about the importance of local businesses in general and value that yours adds in particular.

Best wishes from Zavee for a prosperous holiday season.

Building Loyalty with Customer Reviews

by on Wednesday, February 23rd, 2011

Kevin Stirtz of Amazing Service Guy has an outstanding post in The Social Customer called, “10 Ways to Turn Online Reviews into More Loyal Customers”. Kevin’s advice is not just smart, it’s easy for any merchant to adopt. Things like, respond to every review; when you’re wrong, apologize; stay positive and consistent. Simple points, but they get at what makes a review platform like Zavee so powerful for local merchants.

I have only a few thoughts to add to Kevin’s. First, I absolutely agree with responding to every review, at least with a thank you. Depending on the platform, merchants can respond publicly (on the platform), privately (via direct message or email), or both. For example, I’ve seen public responses to reviews on TripAdvisor but not on Yelp. I’ve received private responses to reviews on Yelp. Zavee supports both public and private responses. Having access to both domains gives merchants a lot of flexibility but requires thought about how to use them. For example, a general statement of apology probably should always be public, but a promise of specific compensation might best be communicated privately.

Kevin doesn’t make the point explicitly, but underlying his comments is the notion that reviews can be shared socially. An inappropriate response can easily make the social rounds and do more damage than the review that the merchant was responding to. A gracious and informative response can be shared as well, but with the opposite effect. In other words, responses to reviews are marketing communications, and should be crafted as carefully as a news release or an ad.


shout! (via Sandra Nahdi - Creative Commons)

Kevin rightly advises against writing fake positive reviews, calling them a distraction from the real work of improving the business. I agree that they are a distraction but I think another reason to avoid them is that they jeopardize the credibility of the review platform as a whole. Think of it as “Gresham’s Law” applied to content.

However, merchants frequently tell us they are more concerned about fake negative reviews, e.g., from a competitor or extremely dissatisfied customer. Merchants can never completely prevent malicious reviews but there are two things they can do to limit their impact: First, merchants should be extra vigilant about not rising to the bait and engaging in an online shouting match with the reviewer. Kevin makes this point about all negative reviews but it the more negative the review, the more important the merchant’s self-restraint. Second, merchants should trust their customers. They are pretty good about spotting outlier reviews, recognizing them for what they are and discounting their impact accordingly.

A more annoying problem for merchants is reviews that are stale. Restaurants that have changed chefs, hotels that have repainted their rooms, and stores that have changed suppliers have all been victimized by dated reviews. No one knows why anyone would wait months to describe a shopping, dining or travel experience they probably barely remember, but it is a common occurrence. Our attempt to limit the impact of both dated and false reviews is to permit shoppers to post a review only after making a purchase and within 30 days of that purchase.

The Zavee takeaway:

  • Respond to every review, if only to say “Thank you” or “I’m sorry”.
  • Treat every review as a marketing opportunity, to both new and existing customers.
  • Treat every response a marketing communication, one that may be shared well beyond merchant and customer.

Is A “Deal of the Day” Right for You?

by on Tuesday, December 7th, 2010

Every year some online concept seems to catch on with users, commentators and venture capitalists alike. This year’s hot concept is the “deal of the day” pioneered by Groupon. The daily deal is a deeply discounted product promotion available for one day only. Groupon features the deal on its web site and blasts emails to users who have opted in. It can provide substantial exposure to a marketer or product, although it doesn’t necessarily pay for itself. Is Groupon (or one of its many imitators) right for your business and its products? As usual, it depends.

The marketing psychology behind Groupon’s deals is simple: an ultra-low price to stimulate interest plus very brief availability to stimulate action. You’ve seen the same thing on direct response infomercials on late night TV. But those infomercials work. And so, at least to some extent, do Groupon’s deals.

The New York Times business blog “You’re The Boss” recently analyzed the math behind a typical Groupon deal. Separately, a team at Rice University studied how satisfied merchants were with their Groupon experience, and how likely they would be to use a Groupon deal again.

via Sofianos Rezk (Creative Commons)

In the Times article the bottom line was whether it cost more to acquire net new customers via the Groupon promotion or through conventional channels. That like a perfectly reasonable metric, although perhaps not the only relevant one. In the Times’ example the hypothetical business spent about the same to acquire net new customers through the promotion as through other channels, which made the promotion a wash, but the author pointed out that even small changes to the many variables could alter the result significantly.

That’s important because the Times example described more than a dozen different variables, from the the percentage of coupons redeemed to the percentage of redeeming customers who were not previously customers of the merchant. Depending on these variables a Groupon program could be anything between a home run and a disaster.

But running the numbers is not the only way to decide whether a deal of the day makes sense. The Rice University study led by Professor Utpal M. Dholakia (full pdf available here) reported a wide range of views from merchants concerning their satisfaction with the Groupon promotion and the likelihood of their using Groupon again. The three key predictors of repeating a Groupon promotion were

  1. Effectiveness in reaching new customers
  2. Percentage of Groupon users buying more than its value during the visit
  3. Employee satisfaction with the Groupon promotion

In other words, the promotion would be considered less than successful if it promoted trial but did not produce net new repeat business; did not result in substantial on-premises upsell of Groupon users; and did not satisfactorily account for reductions in commissions and tips. Merchants reported that unless these factors were present they would not be inclined to repeat a Groupon promotion even if their promotion had been profitable:

There is widespread recognition among many business owners that social promotion users are not the relational customers that they had hoped for or the ones that are necessary for their business’ long-term success. Instead, there is disillusionment with the extreme price sensitive nature and transactional orientation of these consumers among many study respondents.

Is Groupon too much of a good thing? The suggestion in the Rice study that Groupon shoppers are qualitatively different from ordinary shoppers would be troubling if true. This would suggest that consumers who are highly motivated by the brief availability of an extreme price reduction are not willing or able to see beyond the deal and are not particularly open to learning about the merchant or her (non-discounted) products.

Are there any benefits to a tool that brings traffic but maybe not genuine trial? It depends on the business. A retailer that does better when the store is full (e.g., because of a social element to the brand) may be able to leverage the traffic Groupon can bring. A restaurant that cannot adequately service a Groupon-driven wave of first-time customers (who may not be the best tippers) is likely to have an unsatisfactory experience regardless of the numbers. The key is to understand the process, understand the numbers and have realistic expectations.

The Zavee takeaway:

  • Groupon isn’t as much about promoting trial of your product as it is generating buzz about your brand.
  • For the right business, Groupon can result in incremental sales to one-time customers and an acceptable level of new customers, all without upsetting and under-compensating your staff. But it doesn’t seem to happen very often.
  • Brands aren’t built with magic bullets. Surprise and delight your customers, reward their continued loyalty, and make it easy for them to share their experiences.

The Supreme Court Punts on Business Method Patents

by on Tuesday, June 29th, 2010

You may not know it, but the co-founders of Zavee have a background as practicing lawyers. That fact is usually enough to keep us from blogging about legal topics on Zavee Thinking, but one of the end-of-term Supreme Court decisions issued yesterday is both interesting and important to small businesses: a patent case called Bilski v. Kappos.

via Cliff1066 Creative Commons

Thomas Jefferson

The Court doesn’t handle patent cases very often, both because the legal issues rarely become Supreme-worthy and because the underlying facts are often very technical. Bilski is an exception on both counts, as the issue is extremely important and the facts aren’t very difficult.

Bilski filed for what is called a “business method” patent, in this case a procedure for instructing buyers and sellers how to hedge against the risk of price fluctuations in the energy sector. The patent application was originally denied because the Appeals Court held that a “process” was patent-eligible only if it either was tied to a particular machine or apparatus or physically transformed a particular article into a different state or thing (think of a process for cutting a diamond or desalinating seawater). This is called the “machine or transformation” test and it played a central role in the Bilsky decision.

No one can patent natural phenomena, laws of nature or (and this is critical) abstract ideas. In fact, the Supreme Court held that the Bilski patent was properly denied not because it failed the “machine or transformation” test – the Court rejected that as a litmus test for process patents – but because it was an abstract idea. The problem for business people is that the Court explicitly refused to define what kinds of business methods could both fail the “machine or transformation” test and pass the “abstract ideas” test – and thus be patent-eligible.

Why is this a big deal? The purpose of patent law (which was pioneered by Thomas Jefferson) is to encourage innovation by granting inventors who disclose their invention a monopoly over the subject of the patent. Some inventors don’t like that bargain: the formula for Coca-Cola has never been patented because its owners think disclosure is too risky – they worry that flavor chemists could reverse-engineer the formula and come up with something that tastes like almost like Coke but doesn’t violate the patent.

With business method patents the risk is the opposite: that despite disclosure businesses could inadvertently infringe on a patent just by conducting their business. Although the patent described in this famous Onion article would never be upheld, Congress was nervous enough about business method patents that in 1999 it enacted a specific defense against certain infringement claims relating to business methods. Even with this defense, however, businesses will have to choose between investing in resources to effectively monitor both new patents and their own business to prevent infringement or take the risk of possible litigation. Either choice is risky and potentially very expensive.

The fundamental question about business method patents is whether they help or hinder innovation. Another way to ask the question is whether the absence of patent protection would deter inventors from incurring the cost and risk of invention. In science and technology, the benefits of patents are clear: no one would invest in drug discovery if the results of their efforts immediately had to be shared – for free – with drug companies that hadn’t put any time or money into the research. On the other hand, methods of doing business have been competing in the marketplace for centuries without patent protection.

Using a similar analysis, four of the nine Justices concluded that business methods should not be patent-eligible, but they were outvoted (all nine agreed that the Bilski patent was too abstract to be eligible). The Court’s opinion has received critical reviews, since it was so narrowly decided that it leaves the important questions unanswered. Yet it seems inevitable that the Court will have to grapple with the issue of business method patents before too long. The lines are blurring between technology that is clearly patent-eligible and abstractions that clearly are not – a factor, perhaps, in the Court’s non-decision – and the risk to both businesses and inventors is great.

The Zavee takeaway:

  • Whether methods of doing business are patentable is an important question, one the Supreme Court should have answered yesterday.
  • If you are developing a novel way to do business, think twice before investing in a patent. Bilski didn’t kill the business method patent but it didn’t offer a strong endorsement, either.
  • It’s not impossible that someday you will be on the receiving end of an infringement claim. If it happens, find the best patent lawyer you can and don’t give up hope – you may be able to beat the claim or even the patent itself.

Checking Out Checking In

by on Tuesday, May 4th, 2010

Have you checked in yet?

Foursquare @SXSW

Foursquare @SXSW

Location-based social networks such as Foursquare and Gowalla make use of the GPS capabilities of smartphones to let users communicate in real time not just what they are doing, as with Twitter, but where they are. They are growing rapidly, and for businesses they are well worth checking out.

Both networks are about two years old but have entered the mainstream only recently. Users of Foursquare “check in” at different locations to tell their friends where they are and what they are doing. Foursquare also has an element of game play that lets users collect “badges” for certain activities, such as earning a “barista” badge for checking into five Starbucks. Foursquare has a large user base that skews young and lives in cities, and has attracted a certain amount of backlash (note: strong language at link), although it has its defenders. Gowalla doesn’t depend quite as much on its game mechanics, but supports media files, such as photos, and claims to be looking for a broader (and perhaps older) demographic.

Businesses seem to have less of a “wait and see” attitude toward location-based social networks than they did toward Facebook and Twitter. It may be that, having been through this before with other Social Media outlets they simply need less persuading when it comes to location-based networks. It may also be that the business case for location-based networks is more obvious than with, say, Twitter. Another possibility is that the networks themselves have become business-friendly faster. Foursquare already has the ability to serve merchant offers based on location, although it is still refining its analytics dashboard. In any event, marketers are not sitting on the sidelines. Recently, Pepsico announced a “geo-based loyalty program” in partnership with Foursquare that will reward consumers who check in via iPhone at businesses that serve Pepsi products. The History Channel also is using Foursquare to promote its show, “America, The Story of Us.”

Do networks like Foursquare and Gowalla have relevance for small businesses? We think they do. Even basic data on who has visited a business, how frequently, etc. adds to the merchant’s knowledge of the customer base. Serving offers and other content to those customers has obvious benefits, although it still isn’t clear how the merchant can get a full picture of the return on investment from that content (merchants will know how many people used (and, presumably, saw) the offer, but won’t necessarily know how many of those transactions were made by customers who would have purchased anyway). Checking in to a business from a location-based network also can provide extended word of mouth for the merchant. It’s going to take time to figure out how to use these services for business, but that was true with Facebook and Twitter. And, as with Facebook and Twitter, there is a lot of potential and no real downside for businesses that experiment.

At Zavee we are currently exploring the fit with location-based networks, but we fully anticipate using this technology to add value to the Zavee experience for both merchants and shoppers. With both cash back offers by merchants and reviews by shoppers, Zavee provides a great deal of content whose value can only be enhanced by becoming location-aware.

The Zavee takeaway:

  • You heard it about Facebook, you heard it about Twitter. Well, location-based social networks aren’t fads either.
  • Businesses have wised up and caught up, and are right on the heels of consumers in discovering how to make these services useful, relevant and rewarding.
  • If you were sitting on the sidelines while Facebook and Twitter were becoming huge, don’t let it happen again!