Institute for the Study of Business Markets

Here’s a guest blog from ISBM Member Peter Auditore of SAP on our March Members meeting in Dallas.  Peter shares his insights on customer behavior and SME trends, as well as his usual fish story from his days as a marine biologist.  You can follow Peter’s blog at: http://marketinginfluence.typepad.com/ or contact him at: peter.auditore@sap.com

I attended this year’s Penn State University’s Institute for Study of Business Markets’ (ISBM) meeting in Irving Texas March 1, 2011 and at the beginning of the meeting Gallup presented the following insights from their polls and research:

• The new normal is likely to continue for 3-5 years or more.
• The current underemployment rate is really 19.6 -19.9 (1 out of five people are unemployed in the US.)
• US consumer spending down 45%
• 2/3 of consumers spending less (saying this is the new normal.)
• SMEs are spending less (around 43% less.)
• SMEs are using less credit (40% less.)

Deliotte Consulting also presented some research findings that supported the Gallup findings and focused on B2B manufacturing companies. Although they had a small sample size, their recommendations were to focus on only those services that some customers value and know who those customers are, and what services they value. Sell solutions not services. Business velocity will get faster and faster over the next five years as the global economic restructuring continues to march ahead, other Insights related to manufacturing companies included:

• Reduced Loyalty.
• Increased Trade-Offs.
• Relaxed Product Specifications.
• Customer engagement key moving forward along with brand ambassadors.

My Top Ten Predictions for Small Business in 2011

• Social media sites such as Yelp, TripAdvisor will play a larger role in brand management as customers are now evaluating all types of businesses and services.
• Small business will spend less and get less credit.
• Social media will provide a competitive advantage to SMEs that leverage it.
• Mobile devices will become the window into your business.
• Maintaining customer loyalty will be a major challenge.
• Employers will hire less than they need and drive more productivity from existing staff.
• Successful small business will leverage social media for competitive advantage by:
  • Using Facebook for promotions and selling.
  • Closely watching reviews of their products and services on Yelp, etc.
  • Knowing who their social customers are.
  • Making sure they are correctly represented on AroundMe and other apps, like showing up in searches.
  • Technology is now a powerful weapon for small business and thanks to the cloud technologies previously unaffordable for small business are here such as analytics.
  • Managing and finding passionate employees won’t be easy.
  • Many more small businesses will succumb to the economic storm.

Net/Net

What this means for small business is that you need to  know your customers now better than ever especially your most loyal customers, and enhance their loyalty by delivering value during the course of the customer experience with you. Deliver value that they want and need, not what you think they need. More importantly look closely at how you differentiate your products and services in the market you compete in, and how you might enhance your brand through product innovation and/or partnership.

For example if you are running a sun tanning salon, you can enhance your customer’s experience by providing great creams and lotions for tanning and offer insights into their origins on your Facebook page. What you don’t want to do in the new economy is increase prices around specific holidays and take advantage of customers. We have a flower shop here where I live that sold roses for as low as $5 during the recession, now they are up to $8 and when Valentine’s Day hit they went to $10. Want my business, respect me. And if you are not a social business you are out of business.

Marine Parasites

Welcome to the “Personality of Fish” section of my blog, last year we covered everything from sharks, to marine micro fauna and hurricanes.  For those of you who are new to this blog I spent ten years as a marine scientist and I share experiences at sea. I thought I would start out this year with a discussion on parasites, which is actually a form of symbiosis, not all symbiosis is good. I had the pleasure of participating on a twenty two day parasitology cruise back in the 1980’s along the eastern seaboard of the US. Our objective, drag Yankee otter trawls and catch everything and examine all species of fish, crabs, lobsters, snails etc, for parasites of all types.

All I can remember about this cruise was the unbelievable diversity of parasites, worms, lice, and everything imaginable living everywhere. They were everywhere, on the skin, in the liver, in the gills of fish, in the mouth, it was just incredible. It seemed like every where we looked we found some kind of parasite sharing the hosts body. Most parasites don’t kill the host and some like the famous Remora that live on the outside of large predators like the shark above. We found more parasites in some of the larger fishes such as whale cod which are very rare now and the Cobia found off of the southeastern states was often full of seething masses of worms.

The good news for us sushi eaters is that most marine parasites and their eggs (ova) can’t live in a human body and usually quickly die. There is one parasite that is not often found in sushi, called the hick up worm, it can live in the throat for a day but you eventually spit it out. The good news is that sushi has higher inspection standards than any food in the world. This was a long hot cruise that entered the Gulf Stream’s steamy 80 degree water and at night I would often sleep on a hammock slung because it was just too hot below decks. I hope you have enjoyed another tale of the marine biologist at sea and I wish you great selling and marketing in the millennium.