I had the opportunity to spend a few days at the BIA Kelsey small and medium sized business (SMB) digital marketing conference this week in Chicago. It is very exciting to see so many smart people and interesting companies looking for ways to better help local businesses market their services and products.
In addition to lots of evidence of major trends continuing (e.g. marketing is continuing to shift online from offline sources; consumers are increasingly using mobile devices to research and interact with businesses; etc.), lots of interesting ideas were discussed. Here are some key take away thoughts from the conference:
In the BIA Kelsey’s most recent Local Commerce Monitor survey, local businesses are spending more (30% growth) on their web sites and their web presence (e.g. Facebook, Customer Lobby, website video production, etc.). Consumers are now clicking into over 4 sites on average that display information about a particular business before making a decision to choose that business.
That means that a good web site is just not enough today in any competitive industry. Local businesses now need to build and maintain multiple places on the web for consumers to check out before they will buy. Examples include: Google+ and Google+Local, Facebook, Customer Lobby, Twitter, Yelp, Citysearch, blog, Pinterest, etc.
Online to offline (O2O) commerce has long been thought of as a huge opportunity. In certain industries, these businesses are highly disruptive and often very welcome …at first….
Years ago, I remember talking to restaurant owners about how happy they were with the new clients coming in from Open Table. The same owners now complain about the fees they pay to Open Table and how they feel totally at the mercy of any fee changes that Open Table might want to pass on. The lesson is: be warned! O2O might be coming to your industry so defend yourself by enabling online reservations/appointments and purchase options. In fact, don’t just enable it, incentivize it because those customers will cost you less to capture.
On average, local businesses generate 40% of their revenue from new customers each year. That number is shocking to me. However, a local business’ focus on new customer acquisition is totally understandable in this context. However, a huge opportunity is being missed.
Because it is 4-10x more expensive to acquire a new customer than to keep an existing one, businesses that retain 5% more customers increase their profit by over 25%. How to do this? Start by capturing your customer list and communicating regular offers and incentives to them including regularly asking for referrals.
At no point in the history of the world has local business been changing faster than it is today. The basis of competition is now includes your digital presence and digital customer interaction. Not all companies want to or can adapt to the changing environment. Those that do will take customers from those that don’t. It will happen quickly. It has already started.
I wonder if this is how the dinosaurs felt?