By Frank J. Rich
America is yet to regain its stride after a protracted recession. The economy may not be as bad as some guess, and then again, it may be worse. We hear daily about “The Market” – largely a group of 30 Industrials that measure a “representative” slice of the total economy. Just 30 companies; it seems an inadequate number to judge an entire economic system.
The Standard & Poor’s Market Index may be a better measure of economic health, but it too profiles the financials of only 500 major companies. It would appear that such a small sampling of America’s finest might not be a sufficient barometer of the largest economy in the world.
The above indices may account for roughly 75 percent of the U.S. equity market by capitalization, but against the backdrop of 28 million American companies, how might we measure the contribution to our economy made by so-called small companies?
Non-employer firms make up the bulk of companies in the U.S.; some 22 million. All businesses account for roughly $15 trillion in annual sales, and small businesses account for roughly one-half of all revenues and employment.
Small businesses in America hold 10 times more patents than large companies, have a 50% success rate, and an entrepreneurial spirit that ignites over 14 million businesses – those are non-employer businesses, such as individual medical practitioners, personal trainers, house cleaners, gardeners, handymen, and jewelry repairmen.
Most prefer to work for themselves or in small businesses, but without the assistance of the U.S. government, small businesses will shrink in number and significance with each coming year. Without government assistance in the form of incentives and lower taxes, relaxed regulation, and financial aid through available loans, America faces a crisis in its commercial enterprises, which could cause a fundamental rift in the fabric of its market economy. And while big business has gained over 120 percent in net equity the past 4 years, Main Street America is still suffering.
The cost of living is rising while the income (in real dollars) of most Americans has declined. And unemployment remains at a higher level than reported by the Department of Labor as more Americans leave the workforce unfulfilled or remain underemployed. Small business is the solution. If America depends on small business to pull out of its current malaise, what must it do? The answer is surprisingly simple.
First, small businesses must believe they can compete with bigger companies. And they must see clearly how to do it.
Take a page from every grocery store in America; offer loss leaders to draw people into your store. Then offer your “product of purpose” in distinguishing ways that compel “buyers” to become “customers.”
If you have yet to determine the unique value propositions in your business model and offerings, do so immediately. Get help from a local marketing or media company. If you’re reading this column, you are already touching a media company that can help you do all you need to grow your business: Chase Media Group.
Do you really think the chain burger shack in your community can make money on a $1 hamburger? The cost of a soda or fries is a fraction of the retail price of these items. Get the idea: sell $1 hamburgers; add soda and fries whose profit margins exceed 1600 percent.
A local pizza shop offers two choices of pizza to its customers – regular and brick oven, both good. They do not have a “brick oven.” But the pizza named for it is made of all fresh ingredients, cut and prepared by hand – mushrooms, fresh mozzarella, tomato sauce made from fresh tomatoes daily, fresh peppers, sausage in casings. Both sell well, but the “brick oven” pizza is found nowhere else in town, and the profit in this higher-priced item also is higher.
When you shop Amazon, note the “horizontal and vertical listings” of products beneath and alongside the searched product. Why? Because this kind of shopper “targeting” does the work of impulse buying for the customer. It reminds you what you searched for in the past and what others bought “in addition to” the “product of purpose.”
Every local retailer can do the same thing, and do it better than Amazon. You have inventory; Amazon does not. And they don’t have someone to talk to about their product offerings, no sales force. Get the picture?
Today’s marketplace is a “push” market. Increasingly shop owners must reach out and touch their target audience; an audience that uses media channels of choice to find the products and services they want, need, or are in the habit of buying. To succeed in this market, retail stores must use the same media channels.
- Targeted email and text marketing. America runs on email, not on “Dunkin.” Go beyond your subscriber email list and begin “acquisition” campaigns to get new customers. They’re waiting to hear from you.
- Print to web. More searches are done on mobile phones than computers. Add QR Codes to your print ads; it’s a simple, cost-free, way to drive shoppers to your site. But make sure your website is doing real work. Most don’t!
- Websites. GET ONE! Don’t you agree, since 74 percent of all purchases are preceded by a web search of the product? Roughly half of all retailers in America do not have a website. And endow it with continuous SEO, or your site will fall into disuse.
- Use coupons. America is coupon crazy, and 89.4 percent of these “shoppers nuggets” are delivered in a printed insert. Today, you can target your audience with email coupon campaigns for as little as $50 per month. Join with other retailers to do this, or use email campaigns to targeted audiences uniquely from your business. But do it. America is not waiting on you to decide when to pull the trigger; they are shopping now.
- Everything is measured. Information on how many buyers, dollars spent, and location is readily available. All media channels have measured ROI statistics for your consideration. The paper you’re reading has 100 percent circulation – every home and business – and is read by 80 percent of those receiving it (CVC audit, (Oct 2012).
- Car dealers, take note. Car buyers can be identified “before” they purchase, then verified against the list of email and cell phone records used to deliver your incentives. Auto sales are up, but can do better for those who use easy-to-access tools. It’s the same for home improvement products and services companies.
- Follow your customers. Behavioral targeting can identify a buyer’s interests, and then follow her from website-to-website. Any retailer can use this system to do the same. The technology is not exclusive to Amazon.
Advertise. “Still the leading revenue driver for retailers, print [gains] significantly when integrated with digital media for a typical ‘wrap around’ effect. For local retailers, print works best because geo-blanketing finds local customers wherever the print ad comes to rest. For targeted audience placement, it is increasingly necessary to gather email and cell phone data to drive store purchases. Here too, print is helpful in signing up buyers who like receiving email and text message bargains.” (Forester Research, Sept. 2012)
Small businesses can get America back to work and on its feet again. And it all begins with local retailers. You can do it, you must. And there is help from local marketing and media companies.