At CEB’s Marketing to Small Business Summit last month in Miami, we introduced a framework for marketers to use when setting their priorities amongst digital marketing channels. New CEB findings show that marketers are falling victim to the “shiny penny problem” when it comes to mobile technology and social media, and are seriously “under-gunning” their corporate websites – still the most important digital channel for an enterprise selling to small business owners.

Since returning from the beach, we began to wonder how this framework could be applied to traditional marketing channels as well. What’s the state of that “other” big marketing channel, direct mail?

Marketers direct more effort towards direct mail than any other channel.

On the surface, direct mail looks like a healthy part of a marketer’s toolkit. Marketers invest more effort into direct mail than any other channel, and are rewarded with good results in terms of overall effectiveness with owners for recall and follow-up. This, despite the fact that many owners claim to hate seeing messages in this way!

Now, we don’t want to be bearers of bad news, but despite the attention it seemingly receives, direct mail is at risk of becoming “under-gunned” right alongside corporate websites. Our 2013 Members’ Budget Tracker shows that direct mail is the most likely channel to see a decrease in marketer effort this year.

Direct mail is the channel most likely to see a decrease in effort.

This shrinkage has been trending for a number of years, and could prove dangerous because owner responsiveness to direct mail has remained consistent during that time. Direct mail might finally be starting to lose steam with marketers, but it still gets the job done in terms of reaching owners done. While we can’t say that direct mail is “under-gunned” just yet, we can say that marketer’s rushing to abandon it do so at their own risk!

CEB’s 2012 Small Business Marketer of the Year award goes to American Airlines for their Flights Camera Action video contest.  The AA contest, in its second year, launched in July 2012 and encouraged small business owners to submit 1-minute videos that communicate how travel enables them to make connections that impact the future of their businesses.  In addition to great creative execution, the American Airlines campaign was recognized for addressing two key pain points among small business owners: promoting their own businesses and networking with others.

Specifically, the contest allowed many small businesses to reach potential customers through the campaign publicity and to earn reward points that would allow them to travel and take advantage of new networking opportunities.  In total, American Airlines gave away the equivalent of more than 300 round-trip domestic Economy Class tickets, as well as several annual Admirals Club memberships.  Additionally, the winner (a non-profit business called Convoy of Hope) received the equivalent of 50 domestic round-trip Economy Class tickets, as well as a full-page ad in American Airlines in-flight magazine, banners on AA.com, and an in-flight TV testimonial.

AA’s campaign representative notes:

“Knowing that the right connections can make all the difference for a small company.  We endeavored to create a contest that would facilitate connections for many deserving SMBs, and enable them to take that extra flight to visit that next prospective customer or supplier.  We also built this contest to provide additional visibility for the participants to get their message out to a larger audience during the voting phase.”

CEB Small Business Marketer of the Year award accepted by Jerry Challender, Marketing Manager, SMB Loyalty, American Airlines (second from right).  Other finalists include Leigh Tynan, Director Small Business Marketing, TELUS (left) and Sarah Richards, Business Banking Marketing Manager, PNC Bank (second from left).  The award was presented by Haniel Lynn, General Manager CEB Sales, Marketing, and Communications Practice (right). 

This year, CEB’s research found that video testimonials are an important (and growing) resource in the online research process for owners and a leading contributor to making online information easier to understand.  For those enterprises interested in pursuing online video strategies, we found that video testimonials win out over product videos in terms of effectiveness because testimonials tend to provide experiential feedback as well as hard facts, and they make it easy for owners to visualize their own use case.  Conversely, product videos can be viewed as fluffy or promotional, often contain too little information for the time required to watch them, and tend not to provide different information than what’s already written in web copy.

But, creating a video contest and gathering video testimonials can be challenging for marketers.  To promote their campaign, AA emailed its customer base and ran promotions through its national network of incubators and accelerators, including Startup America.  They complemented these efforts with social media messaging on Facebook, Twitter, LinkedIn, and Google+.  In doing so, the company exceeded its previous year’s submission total by more than 75%, and increased campaign-triggered enrollment in its rewards program by a similar percentage.  The contest also succeeded in raising awareness of AA’s offering for small businesses via both online media and viral spread.  The company saw traffic to the contest voting site increase to 175,000 visits during the 3-week voting period, resulting in more than 93,000 votes (or more than 4,000 votes per day).

Later this summer, CEB will publish a report for members outlining the campaign details and best practices learned from the top-5 finalists of the 2012 CEB Small Business Marketer of the Year.  To learn more about the CEB Small Business Marketer of the Year award or to submit a campaign for the 2013 award, please contact Ava McDonald.

Thanks to everyone who joined us in Miami for CEB’s 2013 Marketing to Small Business Summit. For those that were not able to attend (and for those who spent a little too much time in the sun post-conference), we’ll recap some of the key findings here on the blog as well as in a webinar on May 24^th.

One key finding from this year’s Summit was that marketers’ digital investments misalign with small business owners’ channel usage. Specifically, we’re “under-gunned,” or underinvested, in web relative to owners’ current utilization:

When researching a supplier, web is used four times more often than any other channel, and when seeking service, web is a close follower to phone. Yet, despite owners’ high utilization, we as marketers are deprioritizing web as a marketing channel.

We may be under-gunned on web for a number of reasons:

1. We went through a web 2.0 redesign a few years ago, and checked it off our to-do list
2. We feel that our website is currently adequately doing its job
3. We’re distracted by other new channels, like mobile and social media.

Whatever the reason, our websites are suffering from lack of investment. As part of this year’s Summit research process, we hosted a virtual community of business owners and had them evaluate some small business supplier websites. Here are some examples of what they had to say:

Ultimately, the problem is that owners aren’t able to get what they need to make a purchase or handle service issues online from our websites. For example, 76% of owners said they couldn’t compare products and pricing online, and about half of owners seeking web service end up calling because they can’t find relevant information. This is a problem that deserves your immediate attention. As owners getting more comfortable with web-based self-service, their expectations for your website are only going to increase.

For recommendations on exactly where to invest in your website, join our webinar on May 24^th. The “director’s cut” of the Summit presentations will be published online later this month.

The CEB Marketing to Small Business program is recognizing campaigns that have shown excellence in targeting the small business segment with the 5^th annual CEB Small Business Marketer of the Year Award.  This year’s finalists with the top small business campaigns from the past year, include (in alphabetical order):  American Airlines, PNC Bank, and TELUS West!  Honorable mentions go out to ATB Financial and The UPS Store for rounding out the top-five leading companies.  Congratulations to you all!

This year, to keep with our digital channel research theme, we accepted entries from individuals and organizations who have achieved success from their digital (e.g. web, mobile, social media, etc.) marketing efforts.  Campaigns were evaluated by our judges for their use of small business market insights, value proposition for owners, uniqueness, creative support, channel use, and overall results.  Of the many submissions, three finalists were chosen to participate in the annual showcase taking place at the CEB Marketing to Small Business Summit (April 23^rd – 24^th in Miami).  The Best-of-the-Best Marketing to Small Business Showcase provides marketers with an opportunity to explore great case studies and hear from small business marketers that are at the top of their game.  The winner of the award will be announced at the conclusion of the showcase.

In addition to congratulating our finalists, we would also like to extend a big thank you to this year’s judges: Melinda Emerson (aka “The Small Biz Lady”), Author, New York Times columnist, and host of #Smallbizchat; Michael Hensley, EVP Client Service at Gyro; Haniel Lynn, General Manager of CEB’s Sales, Marketing & Communications research division; and Michael Simmons, Co-Founder and Partner at Empact – Entrepreneurial Impact.  We look forward to seeing you all at the Summit in Miami!

If you are interested in submitting a campaign for next year’s 6^th annual Small Business Marketer of the Year Award, please contact Ava McDonald.

CEB’s Marketing to Small Business Spend Tracker has been published each year since 2006 to provide benchmarks for marketers targeting this segment. In recent years, we’ve added extra value by assessing how our members’ planned spending and effort aligns with the media consumption habits of small business owners. This year’s report is no different as we sought owner perspectives on where they want to see you allocate your marketing effort.

What’s interesting about this data is that small business owners are asking for channels that allow them to research products and services on their own terms. Perhaps it’s no surprise then that “word of mouth” tops the list of where owners want you to be present. As information becomes increasingly available (and more time-consuming to sift through), the opinions of peers become more and more valuable. Luckily, CEB already has a report about how to drive active advocates. We advise that owners are willing to advocate for suppliers that they have good experiences with, but it’s up to us as Marketers to ask them for those recommendations, and to ideally do so within a month of their purchase.

Inside the Spend Tracker report you’ll find more tips for dealing with the top-5 channels that owners want, as well as a picture of how those marketing to small business are doing to effectively reach their audience. Not only will you see spending, effort, and channel trends, you will also see a dedicated section for social media that tracks our members’ experience with ROI in this rapidly-evolving channel. We hope that you’ll join us and take a look!

As an ECSB member, you and your teams are probably familiar with how your Enterprise Council on Small Business membership can help you and your company excel at Small Business marketing. However, you may be less familiar with the fact that ECSB is part of a larger parent company, CEB, which helps thousands of senior leaders make better, faster business decisions through insights, best practices, data and analytics.

To make it easier for members to identify and take advantage of other CEB offerings that help you achieve your business goals, we are simplifying our membership names. Coming soon, all of our CEB programs will be named Leadership Councils, and as such, ECSB will become The CEB Marketing to Small Business Leadership Council (CAN members click here).

We are really excited about this change that will make it easier for you, members, to distinguish CEB services in the marketplace, and take advantage of the unique combination of best practices, peer networking with senior leaders, and advisory services to support your business decisions.

Though your membership name is changing, you will continue to receive the same great insights and access to events you’ve come to rely on. And as we know all too well as marketers, any kind of change takes a little getting used to – please don’t hesitate to contact us on the research team or your account manager with any questions or suggestions!

Micro businesses, or small businesses with 0-4 full time employees, make up 91% of small businesses in the United States and 80% in Canada. So, why are they often last on a marketer’s priority list? At ECSB we hear that micro businesses are a challenging market because they don’t spend enough to warrant the high-touch service so many small businesses demand. Yet, when you consider their collective purchasing power and greater loyalty to suppliers, ignoring them entirely doesn’t make sense.

The first thing to know is that targeting micro-businesses is not the same as targeting startups.  If you’re waiting for these little guys to grow up, hire more employees, and become the new Facebook, you’ll be waiting forever. Most micro business owners are not motivated by growth; rather, they’re just happy to own a business that allows them to do what they want.

But, here’s the good news:  if the size of the micro business market alone hasn’t sold you, consider also that they are some of your most loyal customers. Supplier switching behavior among micro businesses is lower than their larger counterparts.

As micro businesses almost never switch suppliers, you can focus on acquisition rather than retention. Luckily, targeting micro owners doesn’t have to be expensive. In fact, for this segment, face-to-face marketing channels that are so effective for larger businesses are outshined by inexpensive, scalable channels such as email, web, and search.

For more detail on the micro business segment, and tactics to target these business owners, see ECSB’s report on Targeting Micro Businesses.

Since its launch in 2009, Foursquare has seen over 3 billion “check-ins” by nearly 30 million worldwide users. For the public, Foursquare is a mobile app that allows users to check-in at a location and share this information with friends, earn badges and rewards, and compete for mayorship of their favorite taco joints. For businesses, it’s a data goldmine.

January’s launch of the Foursquare for Business app literally puts the power of big data in the hands of small business owners. In addition to push marketing capabilities, like updating restaurant specials, it allows businesses to gain insight into the behavior of their top customers. This enables businesses to target their best customers with marketing campaigns, like sending exclusive deals to loyal customers, or offering a free sandwich on your 10^th check in at your favorite lunch spot (hint hint). As a bonus, these social-savvy customers can share their VIP experiences at the tap of a screen, meaning greater advocacy and word-of-mouth.

Replacing paper loyalty punch cards with mobile and social loyalty programs stands to benefit business owners in a big way, but will they get on board? As of last January, 7% of small businesses in B2C-focused industries were using mobile as part of their marketing strategy. However, 15% indicated intent to begin using mobile marketing, and Foursquare reports over one million businesses using their Merchant Platform.

While overall utilization is small, 90% of those owners already using mobile marketing plan to maintain or increase their mobile marketing efforts, so something must be working. With new tools like the Foursquare for Business app, we hope to see more businesses taking advantage of readily available customer data. For more information on what small business owners are doing to market their businesses, see ECSB’s report on How Small Businesses Market Themselves.

Over the past few years, ECSB has been tracking the use of tablet devices among small business owners.  From being non-existent just three short years ago to becoming a bona fide business tool, tablets are rapidly changing the way owners browse, shop, and conduct various tasks online.  Tablet adoption is also a leading indicator, as growth in tablet device usage signals a trend towards more mobile, cloud-based computing, as well as a demand for more business-related apps and security add-ons.

Today, more than 40% of small business owners use a tablet for business purposes; a quarter of whom report owning multiple such devices, again, for their business.  This is a significant jump from the just 7% that used tablets for their business in January 2011.

When tablet devices were first introduced, we saw Gen X owners taking the lead with adoption.  And, while those owners born between 1965 and 1980 are still most likely to own a tablet device for business (47%), tablets have become much more widespread among owners of all ages.  In the January 2013 survey, ECSB found greater than 35% penetration among Gen Y, Baby Boomers, and even Silent Gen owners (i.e. those born before 1945). 

So, everyone and their mother has a tablet.  What’s the big deal?  They’re probably just using them to play Angry Birds, watch Gagnam Style on YouTube, and babysit their toddlers, right?  I mean, sure I “own” a tablet, but it’s pretty much been commandeered by my four-year-old son.  Well, it turns out business owners are actually using tablets for business-related activities as well.  Specifically, we find that owners are using tablets to interact with supplier resources in a number of ways, including researching products, checking and updating information, shopping for and upgrading business services online, and getting support. 

Still, don’t expect desktops and laptops to disappear just yet, especially not among business owners.  Despite widespread tablet ownership, the vast majority of day-to-day computer work is still being done on traditional computers.  Only 14% of tablet using owners currently report conducting 25% or more of their daily computing work on one of their tablet devices (although we do expect that number to rise considerably in the years to come).

If small business technology trends and implications are what float your boat, be sure to register for the 2013 CEB Marketing to Small Business Summit!  This year’s theme is centered on how small business owners are using technology—particularly web and mobile—to interact with suppliers.

Did your company support Small Business Saturdays this year?  Have you reduced your carbon footprint?  More than just fodder for New Year’s resolutions, ECSB’s recent research finds that enterprise companies can boost revenues by using value-based messaging that promotes social, ethical, and moral values.

It turns out, small business owners care quite a bit about social values such as fair and equitable labor practices, supporting local businesses, and environmental stewardship.  In fact, fully 58% of owners use corporate values as part of their decision criteria when selecting an enterprise supplier and 42% of owners would pay a premium (approximately 5%) to buy from a supplier that supports ethical/moral and social values. 

Somewhat surprisingly, the most important value for small business owners is “fair and equitable labor practices”—a value that ranked dead last as something that marketers are actively promoting.  More often, marketers tend to promote such values as supporting local businesses and giving back to the community, which also rank amongst the top values cited by owners.  That said, what’s the deal with fair and equitable labor practices?  Small business owners care for two reasons:

1. Perceived threats from companies that employ cheap overseas labor.  We know that competition from larger businesses is a major source of pain for owners in certain industries.  What really tends to irk owners is a perception that large multinational companies have an unfair advantage because they can get around local labor laws that enforce fair wages and equality by exploiting cheaper workers in other markets.  Promoting fair and equitable labor practices shows that your company is playing on the same field as small businesses.
2. Small business owners treat their own employees like family.  ECSB recently found that 39% of owners feel as if their employees are their second family.  Owners prioritize the needs of their employees because the success of their businesses are dependent on small groups of core people.  Promoting fair and equitable labor practices shows that your company cares about its employees in the same way a small business owner cares about their employees.

For more insight on which values are important to owners and best practice examples of companies that have used value-based messaging to their advantage, read ECSB’s report “Vending on Values: Using value-based messaging to increase sales and customer advocacy among small business owners.”