“I’m very busy” seems to be a badge of honour amongst small and medium sized business owners. Adrian Misiano, Partner of Matthews Steer (a northwestern Melbourne Chartered Accounting practice) notes that he is frequently reminding his SMB clients that being busy isn’t necessarily a good sign about how well the business is doing: they may be busy because they are disorganised and thus spending their time and resources doing things that aren’t making them any money.
Innovation is essential for value creation”Innovation and Marketing are the only two activities which create value today and in the future. – Eben Pagan, Get Altitude LLC
Pagan’s observation neatly sums up the key elements for surviving and thriving in the Internet era; or more accurately, the Web 2.0 era. Are you busy with these two activities?
The internet has wrought seismic changes in how we live, work and play. Technology has trashed the barriers to entry in virtually all industries. Competition in any given industry is intensifying. Small business can – and does – compete with big business on the same playing field today. New “disruptive” business models based on new technologies are emerging almost constantly.
Social media – which is essentially word of mouth on steroids – has shifted the balance of power from large corporations (and even governments as events in the Middle East have shown) to individuals.
This brave new world of rapid change presents fantastic opportunities for those who are busy with innovation and marketing, and risks of extinction for those who are too busy to pay attention to these two vital value creating activities.
Innovation: Beyond The R&D Lab
The word innovation is often associated with the creation of whizz-bang game changing inventions that are so “revolutionary” as to be protectable by patents. It’s the stuff that attracts research & development grants, venture capital or angel investment funding to turn it into a financially viable business, and generates much froth and bubble in the investment community.
However, in today’s digital era, innovation isn’t just about inventing ground breaking world shattering products. It is equally about harnessing new technologies or new ways of doing things so as to be able to deliver your products or services more effectively to your customers than your competitors. Technology is now cheap (and getting cheaper) and very affordable to even small business. What could you do with it to keep your business at the leading edge in your market/industry and drive business growth and profitability?
Some examples of ‘adaptive business’ innovation include:
- Use of crowd-sourcing for product development or improvement so that your products and services actually meet the “needs” – and more critically the “wants” – of your customers.
- Use of technology to create a personalised customer service model. An example of the small online retailer Shoes of Prey which allows customers can design their own pair of shoes online which are then handmade and then delivered to the customer’s door. The giant book retailer Amazon is able to personalise every customer’s shopping experience with recommendations of possible products that appeal to that customer, based what that person has previously bought.
- Improving supply chain efficiencies and flexibility so as to be able to handle changing economic and business conditions. Li & Fung and the Spanish apparel group Zara are outstanding examples of supply chain innovation.
- Turning your product into a service: “anything-as-a-service” is one of the key business trends emerging in the Web 2.0 era. Jet engine manufacturers have been able to transform their business model from sale of jet engines to a usage model (“power by the hour”). What are the possibilities for your business?
The “we’ve always done it this way” mindset is guaranteed to send a business the way of the dodo sooner or later. (Note: Whilst I am focusing here on the potential of new technologies, innovation isn’t about more techy ways of doing things. One can think about it as continuous improvements in all of your business processes, with or without technology. Everyone in your business right down to the factory floor should be thinking about better ways of doing things.)
How To Get The Creative Juices Going In Your Business
- Encourage everyone in your business to think creatively. Be prepared to listen to new ideas and test them out. Not all will necessarily work. Remember what Edison said: “I have not failed. I’ve just found 10,000 ways that won’t work.” You don’t have to invest thousands of dollars trying everything but refusing to entertain any new ideas is to kill innovation before you’ve even started.
- Brainstorm with other business people, whether in Mastermind groups or in online business forums. To find online communities appropriate for your business, just Google the phrase “(your industry/business topic) forums”.
Marketing: Invest & Innovate OR Perish
Marketing is the one aspect of business where technology has had the greatest impact. As discussed in Marketing: Get Found On The Internet, the marketing function dominates the sales function in the socially connected era. Brand reputation management is more critical than ever.
The fundamental principles of marketing (and branding) haven’t changed. What’s changed in this socially connected age is HOW businesses go about their marketing activities, whether they are online or local offline businesses.
Social media is not a fad. To say that it’s not something that’s relevant to your business is to put your head in the sand.
It is very much main stream and relevant for every type of business, whether you are an online business or physical local services business. If you don’t play, your competitors will and you will languish by the wayside.
Does your business have a presence in Facebook, Twitter, blogs and other social channels?
Are you making the most of the new marketing channels/technologies such as:
- Video: have you adopted video in your marketing activities? If a single picture speaks a thousand words, imagine the impact of a screen story. Video Online video is the strongest growing form of advertising. Technology has put high quality video production well within the smallest budgets.
- Google Places: This is basically free advertising courtesy of Google and a real boon for local physical businesses. Have you optimised your business’ profile on Google Places?
- QR Codes: QR stands for “Quick Response” and QR Codes are little barcode like images which you can stick anywhere and everywhere – on your business cards, on an invoice or bill, on the back of your truck – to do just about anything from generating foot traffic via discount vouchers, conducting customer satisfaction surveys, providing product information etc. Respected internet marketing and social media expert Don Crowther has a great blog about QR Codes – 21 Ways to Use Them To Build Your Business.
- Mobile applications: As the use of smart phones explode, mCommerce offers tremendous opportunities for reaching people who are in the “ready to buy” mode. Is your website mobile friendly?
There is no question that managing social media marketing effectively requires a fair bit of work. Small and medium sized businesses are often already highly stretched in terms of resources. However, this is a function that can be outsourced. Contact me to find out how more about outsourced social media marketing.
Quality Customer Experience Is Not Negotiable
“Word of mouth” has always been the most effective marketing tool. Social media has amplified the power of “word of mouth”. Today, people can – and do – tell the whole world about their customer experience with your business.
Ensuring that your customers are happy at every touch point with your business – from the time of enquiry, order fulfilment through to responsiveness to any issues – is absolutely paramount. If you do nothing else, ensure that your customer service process is absolutely shipshape. [Obviously, it helps to get your product right in the first place!]
Happy customers become your brand advocates which can make for very powerful (and free!) marketing. On the other hand, no amount of advertising will save your business from a public reputation trouncing if your business doesn’t deliver customer satisfaction on its products or services. Look at what happened with Vodaphone: they failed to deliver on their promises: the brand was severely trashed by enraged customers across all the social channels. Negative reviews made in blogs and other places will also hang around like a bad smell in your Google Places listing and you can’t remove them.
All the major corporations recognise the brand reputation risk that social media presents. It has been ranked the highest risk concern for 4 years running. They keep tabs on mentions of their brands across all channels. Are you keeping tabs on your brand reputation?
Innovation + Marketing = Growth
You don’t need to look further than the Australian retail industry to see the importance of innovation and marketing to survive and thrive. Whilst many of the major retailers are crying poor and bitching about the competitive threat of internet, there are many new small retail businesses which have harnessed the power of technology to create innovative business models.
Kogan (consumer electronics) and the aforementioned Shoes of Prey are just two young innovative retailers who are thriving (amongst the many listed in BRW magazine; 2011 May 19 – 25 issue). Customer service excellence is a common theme amongst all these businesses.
Consider the book retailing industry. The REDGroup, owner of Borders and Angust & Robertson book store chains in Australia, went into administration in February 2011. Price competition from the internet and the protectionist policy that forced local retailers to buy from Australian publishers were blamed for the demise of the chains.
The administrators have been unable to find any buyers for Borders stores since and these stores will have to be closed. Why would anyone buy into a business model that has no competitive advantage? But that doesn’t mean that all high street book retailers in Australia cannot survive. Small independent book stores have been able to survive because they offer their customers something extra beyond just books: knowledgeable staff who genuinely engage with the customers. The “soul-less” large chains didn’t provide that to compensate for the higher prices.
- What activities are keeping you busy in your business?
- Are you spinning wheels and standing still?
- Would business coaching help you get on track with creating value in your business?
I have personally found business coaching invaluable and participation in mastermind groups very helpful in getting and staying focused. However, it only works if you are prepared to take action and to be accountable.
If you are ready and committed to taking action to keep your business moving forward in these rapidly changing times, contact me for an obligation free discussion about whether business coaching could help power up your efforts.