Marketing and small businesses

It often comes as a a surprise that in a world obsessed by global big business, most UK companies are actually small and almost three quarters have no employees at all.

According to the Department of BIS Business Population Estimates latest (October 2011) figures, 99.9% of the UK's 4.5 million businesses are SMEs employing less than 250 people. SMEs employ 59% of all private sector employees. And most are not even medium size - 99.2% are small businesses with less than 50 employees and 74% have no employees. OK - enough figures but sufficient to demonstrate that in sheer numbers there are far more small and one man businesses out there than big companies. The question is how do they market their businesses? Not it would appear by using social media.

Working out of a small home office I get to meet and talk to quite a few one man businesses and small companies. For example last week we were having some home improvement work done. The typical business model is the  one man business who plans and does the work overall and calls in and manages additional specialist services as required and co-ordinates with local suppliers and negotiates discounts on products. He has a web site, but this is a showcase to which  he refers his prospects to view examples of his work and read testimonials from satisfied customers. His main source of enquiries are from word of mouth recommendations and repeat customers. He has work planned in for months ahead. His connections are by mobile phone. He doesn't have time to tweet or Facebook.Take another example, this time an accountant. When he started in business he was persuaded to have a web site built and several years later he is still waiting for his first enquiry from it.  Meanwhile he has developed a successful business, again through recommendations.

Now look at it from the customer perspective. For a start do I want someone doing work for me who is constantly tweeting, checking friends Facebook status, watching YouTube and being engaged in social media,  or do I  want someone who is actually doing the job I am paying for. Hiring anyone to do work is a matter of trust and that is why recommendation is so important because you can see the work, talk about the price and the whole experience with someone whose opinion you value.

The other day I was sent a user generated video from a marketing company talking about social media in the building industry and how immediate  news publication and reader response was today. One person interviewed offered the idea that during work breaks construction workers would go online and respond to news stories. It seems people are responding to breaking news stories, but not the people I speak to they are too busy to bother, but some clients are undoubtably buying the story and investing resource heavily into social media campaigns. Another video from the same marketing agency had attempted to capture a presentation to an audience being presented somewhere by one of their team who demonstrated the value of Twitter by means of a weird story. When trying to discover if your favourite wine was in stock at the local Tesco in the old world you had to telephone the store and wait while someone went away to check. Really! Now you ask the question on Twitter and within 10 to 15 minutes you apparently get an answer from Tesco Customer Care. Amazing and worrying if its true. My builder knows his suppliers on first name terms, stock levels, pricing and ordering is done in a brief telephone call in minutes.

Meanwhile back in the small business world people carry on working, building reputations and getting recommendations for new work tweet free.

Engineers do marketing

Engineers also work successfully in many other careers ... marketing is one of them.

An online article asks the question, "what makes a large chunk of top engineers take up jobs on Wall Street (sales and trading, quant etc) rather than start ups, or companies like Google, Microsoft etc."  The responses are many, but a common theme is that engineering skills are both appreciated and better rewarded outside the engineering business than in it. The graduate engineer's own quantitative abilities don't take long to figure out where the better rewards can be found. Not all work as quants on Wall Street however,  some have also moved into marketing roles where the analytic and quantitive approach of engineering works so well. Why is this?

Wikipedia describes engineering like this, "Engineering is the application of scientific, economic, social, and practical knowledge in order to design, build, and maintain structures, machines, devices, systems, materials and processes. It may encompass using insights to conceive, model and scale an appropriate solution to a problem or objective. The discipline of engineering is extremely broad, and encompasses a range of more specialized fields of engineering each with a more specific emphasis on particular areas of technology and types of application." 

My own transition from engineering apprentice to a marketing role was informed by practical  experience of engineering on the shop floor and in the laboratory. My employers offered experience in the many departments that a major British electrical manufacturing company then operated, including manufacturing, research, even HR or Personnel as it was then known. It didn't take long to notice that the people who actually set the agenda were the bright young men from head office, the product managers. And they worked in the marketing department. On graduation I worked for just a few weeks more back in the research laboratories before being recruited as an assistant product manager located in the company's head office in London's West End. I exchanged my white lab coat for a suit, enrolled on marketing and management courses and learned the job of new product development under the guidance of experienced, senior product managers. In fact my move from engineering to marketing was similar to most of my colleagues who also had the same grounding in the methods, analysis and planning of engineering . A key role was researching and developing the brief for new products, getting the financial backing and resources allocated by the board and progressing new products through R&D, testing, into manufacture, into stock, training the sales force and a marketing launch. The engineering background proved invaluable and something the new business graduates that had tentatively begun to appear in the department couldn't comprehend or manage. Simply knowing the theory of marketing was insufficient. 

That grounding in engineering philosophy is at the heart of the ethos of our own marketing company today,  embracing not just the initial research and planning but continuing through into implementation and post campaign analysis.  

Is it time for augmented reality advertising to take off?

Remember the sudden interest in QR codes two years ago? Is it now the turn of augmented reality advertising to enjoy a moment of fame?

We blogged in April 2011 about the rapid adoption of QR Codes  which spread like a rash over advertising and catalogues linking the print medium to the web without the bother of typing in a url. it seemed like a great idea at the time, but in reality demonstrated once again that when it comes to the Internet people are lazy and not prepared to wait either. The novelty of switching on an iPhone, opening the app, focus/scan and click and up comes a web page was an interesting experience for a while, but often the link led to content that failed to please. Disappointing content was poor enough return for the effort and locating the QR codes themselves on bus sides or across tube tracks on the London Underground were reason enough to forget the whole idea. Time to move on.

Augmented reality advertising has been debated by marketing people for a couple of years or more and as implented by blippar requires their image recognition app for, "bringing to life real-world newspapers, magazines, products and posters with exciting augmented reality experiences and instantaneous content. There is even an Augmented Reality summit scheduled for London in June promoted with the tag line "Where the physical & digital worlds meet."

So does it work? technically the answer is that I got it going quite quickly - downloaded the app, pointed it at a page of the Metro, tapped the screen and up popped a video clip. Much smoother than QR codes. To try it yourself get the blippar app from the app store, open it and point it at the image on this page and hopefully you will  see the video promo clip. The response could equally be a "web link, video, competition, interactive game, poll, coupon ... anything!"

Marketing to a budget or on a budget?

In these times of economic gloom sound marketing advice, based on research, is to maintain the marketing activity while the financial management tendency, based on prudence, is to cut marketing expenditure.

Research by Harvard Business School has shown that it is essential to maintain marketing spending, even more so in a recession and to emphasise core values. “It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain customers need the reassurance of known brands.”

We have often talked about the importance of a Marketing Plan and closely linked to the plan is the Marketing Budget. As with the marketing plan - a statement of intent, a manifesto and plan of action - time should be spent on carefully building the accompanying marketing budget. Companies without a budget seem to be more easily tempted to buy special advertising offers and buy into all kinds of special deals than companies who have planned ahead and purchased at more advantageous series rates for marketing services that are core to the plan. Not only are the bargains not always appropriate but it is amazing how quickly the costs mount up and without apparent benefit.

We have frequently referred to the engineering philosophy behind technical marketing. Take the case of purchasing a new machine or piece of equipment. It is regarded as an investment that will be justified on the benefits it will bring - lower costs, improved productivity, better quality. We look at marketing as an investment, an investment that should deliver valid returns. Just because there is often a significant creative element does not devalue the investment benefit. Equally there should be benchmarks and goals set that are measurable.

Another more subtle way of cutting the marketing budget is to cut quality. Where marketing is not valued by a company, then purchasing marketing services cheaply can be tempting. The problem with this interpretation of budget is that the downgrade in quality that usually accompanies becomes apparent to customers. They start to perceive the company as a 'budget' brand and lower their expectation of both the quality and value of that company's product accordingly. Interestingly people buying marketing services at a budget price might think otherwise in their day to day lives. They would probably opt for experience rather than trainees or amateurs and recognise that experience may appear more expensive but is actually the safe option. The same people that wouldn't let a student do their hair or fix their teeth will happily let a relative or man they met in a pub have a bash at their web site, design a brochure or photograph products. Although professional marketing advice might come at a higher hourly rate it can prove a wise investment in doing things right and helping the company build credibility.