SMBs Need to Study, Not Mimic, Successful Digital Strategies


Doesn't it seem like every small and midsized business must be online to have a shot at being profitable? When you look at the recent business lore, from Dell's profitability selling refurbished computers through Twitter to Gap's experimentation with social media to increase foot traffic and sales, the logic seems to dictate following the actions of big corporations online. Do what they're doing and what they have done.

So now every small business is seeking profits with every digital marketing tool introduced. Does adding the latest and greatest social media tool bring a profit?

Not automatically.

Yet many small-business managers believe implementing many of the newest tools and applications is the strategy for their businesses. Users understand features, but they confuse using the features with solving the business pain. This makes the value of social media and digital marketing more slippery than wet soap.

Moreover, recent business successes feed the misperception. Blogs and SaaS-based startups, from the Huffington Post to Klout, have scaled large numbers of followers and users through social media. Many businesses blindly try to emulate such scale, even using shortcuts in many cases. I have seen one or two companies offer the chance to purchase Facebook fans, in the same spirit as purchasing links. I can't imagine clean engagement data if the seed is a highly biased large group.

SMB managers and owners may learn a lot about what to do and what not to do studying how large businesses use social media. But how a business derives true strategic value from any tool, social media or otherwise, is based on the alignment of its business model with customer access to its offerings. Analytics can remind the business how well it is maintaining that alignment.

Understanding where customers are online dictates the choices for leveraging digital strengths, whether they're assets, resources, or employees. Food trucks have used Twitter to tell regular customers where in the neighborhood they'll be located. Twitter makes sense for a mobile business that wants to share location information and galvanize customers.

A small business also has to be willing to think beyond scaling traffic and consider how it can serve nonconverting traffic. This does take a diagnostic effort -- reviewing Web analytics results, running an A/B test, or conducting an online survey. The review can help you decide which additional actions can attract customers and which cannot.

Knowledge of your capabilities can guide measurement efforts, as well. As Tom Davenport and Jeanne Harris noted in their book, Competing on Analytics: The New Science of Winning:

Having a distinctive capability means that the organization views this aspect of its business as what sets it apart from competitors and as what makes it successful in the marketplace... Without a distinctive capability, you can't be an analytical competitor, because there is no clear process or activity for analytics to support.

Examining nonconverting traffic can require considerable effort and dedicated time, a scarce resource for SMBs and corporations alike. But it can be beneficial in revealing new ideas that, when refined, can help a business excel.

Understanding strategy for an SMB also is essential given the fragmented attention of today's Internet user. The Internet has become a hub for people to discover businesses and services. But with so many methods for that discovery, it is clear that small businesses must refine their use of social media in ways that best work for their strengths.

That's why small businesses should be cautious about emulating another company's social media use outright. It is an expression of strategy, not necessarily the strategy itself.

Pierre DeBois, Founder, Zimana

Pierre DeBois is the founder of Zimana, a small business analytics consultancy that reviews data from Web analytics and social media dashboard solutions, then provides recommendations and Web development action that improves marketing strategy and business profitability. He has conducted analysis for various small businesses and has also provided his business and engineering acumen at various corporations such as Ford Motor Co. He writes analytics articles for AllBusiness.com and Pitney Bowes Smart Essentials and contributes business book reviews for Small Business Trends. Pierre looks forward to providing All Analytics readers tips and insights tailored to small businesses as well as new insights from Web analytics practitioners around the world.

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Re: Reply to Shawn
  • 12/27/2011 5:11:58 AM
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Broadway - The biggest challenge for SMBs and any experimentation they may want to do is indeed the funds. They can't quite afford that extra employee, and those that are there need to be used as much as possible on the profit generating projects. Experimentation is therefore mostly a sacrifice of limited resources, born out of looking far in the future.

Re: Reply to Shawn
  • 12/27/2011 5:05:35 AM
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One of the easy things about small businesses is that they are less bureaucratic. Decisions can be made simply and this allows for more experiments, as well as stopping at any point, of those experiments that prove not to be bearing fruit.

Re: Reply to Shawn
  • 12/18/2011 3:40:03 PM
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Pierre, for such offline experimentation, then the SMB will need a willing and able employee or two, who won't mind the extra work on top of their probably already overfilled plate.

Re: Reply to Shawn
  • 12/18/2011 3:17:46 PM
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Broadway,

aaphil notes the point that experimentation is possible, but only on a limited basis. You are right that SMBs can have a limited capacity, but if the experiement is done offline from business operations and in a small scale, some testing is possible.  A mild test of a website redesign can be done outside of a live website - with an editor and browser preview a site can be refined before being unleashed online. 

The same can be extended to an app. Digital experimentation can be done with a small lean investment of resource and time.  The key is lean.

 

Re: Reply to Shawn
  • 11/21/2011 10:39:32 AM
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Going back full circle in our discussion, this is where some kind of analytics will come in handy. Obviously, the technology used will depend on budget, but being able to track results (what works and what doesn't) can be very valuable in the beginning of a venture. See our post on Steve Chou's experience with using Web analytics to create online store for more on this. 

Re: Reply to Shawn
  • 11/21/2011 1:08:49 AM
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Broadway,

Yes there's that but I meant a more birds-eye view of the process from beginning to end. It's good to have reference points to where failure or unproductive actions can be avoided. If you have the steps down somewhere, this process is alot easier. This is why I try to write down (type) somewhere everything I do.

Re: Reply to Shawn
  • 11/20/2011 8:55:27 PM
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@aaphil, when you say sometimes a lot can be lost in the process if "tracking" is not done, what sort of tracking are you talking about? Simply tracking of customer feedback?

 

Re: Reply to Shawn
  • 11/20/2011 4:10:55 PM
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Broadway,

I have learned alot of things by trial & error. That process works most of the time but sometimes alot is lost in the process if there is no real tracking. So in the Lean Startup, he outlines the 3 step process to minimize time to market. I tried it & it takes alot of the fluff out of the process. I realized a few time that some of the 'steps' I thought were necessary are insignificant. It's just a matter of using the feedback from consumers to make your offering more valuable.

Re: Reply to Shawn
  • 11/5/2011 12:50:52 PM
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Aaphil, care to share your story, or two?

Re: Reply to Shawn
  • 10/29/2011 5:10:59 PM
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Pierre,

You are absolutely right. It sounds like the excellent process outlined in The Lean Startup. I've tried it, and it works. Good to also have the data to back you up.

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