At our BG Networkers meeting earlier this week I quoted on a report mentioned in an interesting article by Steven Fisher. His article appeared on March 8th at Grow Smart Business. The article focused on innovation and why small businesses scored only a C- in one of the six scored categories in a recent small business health survey.
The article was entitled: “Innovate or Perish. Small Businesses are Having a Tough Time Innovating.” It was a result of survey released in February from Network Solutions and the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business. Fisher stated in his article: “Slightly less than half of small businesses are successful in innovation. This is around the areas business process innovation, which includes coming up with new ideas before competitors and finding ideas to increase revenue.”
Six common categories as used by small businesses to attract new customers through marketing and innovation were detailed. Social media (used by 20% of the surveyed business) came in third after traditional print advertising and e-mail marketing. Half of all businesses surveyed used no marketing other than word of mouth referrals, which, in my opinion, is the strongest type of referral.
I read parts of the published report and found the other categories used to attract new customers included traditional outbound marketing techniques such as telephone sales, direct mail and broadcast advertising. What was truly intriguing to me was the discussion about small business trying to be creative and differentiate themselves from their competitors. I have always professed to sell what makes you different, not what makes you the same to my students and those I mentor and coach.
Small businesses use four general ‘pitch’ areas in attempting to separate them from the crowd:
· “Superior customer service (78 percent)
· “Higher quality products and services (76 percent)
· “Creative ideas to address customers’ needs (65 percent)
· “Lower prices (44 percent)”
The study goes on to claim: “Among these four areas of differentiation, superior service and creativity are correlated with competitive success, while quality and low prices make little difference to small business success. Perhaps everyone claims to have high quality, making it a marginal strategy for differentiation, while cutting prices is not sustainable for small enterprises that lack the economies of scale to keep costs low.”
Take the information for what it is worth to you, but I tend to agree on this formula for success. I’ll continue discussing other interesting findings in future articles. If you do not want to wait for me, click on these links to read the entire article or the report.