Friday, June 12, 2015

The Quiet Giant - Small Businesses & Local Merchants

A survey of small and medium sized businesses by Borrell Associates shows that their use of traditional advertising declined by $58 billion since 2005.

Not counting micro businesses, the “S” in SMBs which rarely ever advertise, or SMBs whose out-of-town parent handles advertising, nearly three-quarters of this segment, which is a bellwether for economic development, has switched to online as its advertising of choice, if any at all.

This downward spiral for traditional advertising began in the late 1980s, long before the Internet, due in part to greed and over-utilization to where by 2010 researchers found it to have a negative return on investment overall.

This, according to analysts at Borrell, is clearly the end of an era.  Consumers have simply tuned out.

Some channels such as outdoor advertising, even when used on buses and kiosks and when added with billboards, is now used by only 17% of SMBs including 3% of truly small businesses, making this way of reaching consumers all but obsolete.

Now appealing to less than a fifth of one percent of consumers, billboard companies have turned instead to campaign contributions and donations as a way to ensure survival, desperately hoping to lay waste to public roadsides as a result.

Meanwhile, consumers have shifted in mass to smartphones and navigation systems as less damage-prone alternatives.

The decline in advertising doesn’t mean a decline in the need for marketing overall.  Another new survey of small businesses as part of Small Business Week shows that 66% named finding new customers as their top concern, followed by 40% who are concerned about retaining existing customers.

Nearly all now rely on a website.  A survey by Adobe shows that by the end of this year, nearly 60% of all organizations will have a website with responsive design, meaning it will reconfigure depending on the device you are using to view it.

In fact, half already generate 30% or more of their digital traffic via mobile devices but, less than a third in North America have a strategic plan for using it.

When it comes to small businesses including local merchants, only 22% are using mobile marketing although nearly half allocate a quarter or more of their ad budget to it.

According to a survey by Street Fight, more than half of local merchants cite new customer acquisition as their primary objective.

Unfortunately, many local chambers of commerce, a type of business advocacy, have now turned their backs on small businesses as too needy compared to the fees they will pay.

It makes these organizations vulnerable instead to becoming hostage to interests who pay people to attend meetings and gradually less relevant and increasingly estranged from local business climates.

Small businesses are vastly under-represented in communities because they don’t have time for meetings, committees or public hearings, even though they are the key to economic vitality.

Even though 4-in-10 rely on community destination marketing organizations to fuel visitor-customers, barely 43% even have time to take vacations themselves.

Over half worked for a large or mid-sized organization before running their own business according to the study.  Nearly 70% cite “more freedom” as the reason for going small, and half sought less bureaucracy and politics.

The things you hear politicians claim they are doing on behalf of small businesses such as the economy, taxes and healthcare, are top concerns for only 25%, 22% and 18% of small business owners.

Most small businesses are not whiners as special interests would have you believe.  Unfortunately, politicians spend far too much time listening to these special interests and become hyper-reactive to complaints or so desensitized they dismiss them.

Like the vast number of voters, small businesses can often be heard by the silence they make, not the fuss.

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