Why Scotland can succeed with Small Business Values

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Thursday 18th September is a monumental day for the people of Scotland – The simple question is “Should Scotland be an Independent Country?” I shall omit political views and focus this article on how Scotland can become a great wee nation by applying the values of a successful small business. I’m an advocate for Small Business and believe smaller companies have advantages over larger ones, such as the ability to connect 1:2:1 with their customer base, long term sustainable growth and specialising in key business functions – after all Small Business is Good Business.

Decentralisation

The centralisation of power in a company and country grants that power to a select few. In business individual departments have less control over their budgets, management have less influence on how to operate with decisions being made by the higher echelons of a company whom have little to no local or specialist knowledge of those departments.

A fairer distribution of powers is surely more conducive in the hands of local authorities. How is it possible for someone in Westminster to know what the people & businesses in schemes of Glasgow & Edinburgh really need? Who hears those voices, listens to their concerns they air on a daily basis? Regardless of the party in power, surely it’s local Councillors and Authorities who should be in control of distributing budgets, setting policies and delivering what everyday voters desire?

Borrowing

Borrowing facilitates growth, but only by assuming increased risks. You may achieve growth quicker, but you’ll pay more. The UK like most of the developed world managed to create a boom & bust situation by excessive borrowing. Smaller nations must control borrowing, by doing so you reduce the interest payments and decrease risk. There’s no requirement for small nations to be the biggest and best, growing sustainably over the long term should always be the solution over short-term rapid growth.

Harness strengths in Key Local Industries

A Small Business has infinitely more knowledge about say women’s fashion that a supermarket has – they’re not generalists, they specialise in knowing the needs & trends of their market segment, materials and styles. Scotland is undeniably a world leader in industries such as Science, Renewables and Oil & Gas. Take Oil as an example, as each day passes that natural resource depletes, this has created an emphasis on renewable energy like wind, solar and tidal energy.  Michael Porter’s Diamond model emphasises the benefits of comparative advantage such as:

  • Enhanced knowledge base & skilled labour
  • Condensed rivalry resulting in innovation & increased investment
  • Increased government investment (such as renewable energy)
  • Growth in related & supporting industries

An independent Scotland doesn’t need to become successful via economies of scale. By simply focusing resources like labour, money & government support into key Industries a competitive advantage can clearly be achieved. Just look at Aberdeen’s Oil & Gas sector (now including renewable energy) or the Bush Estate for Science in Edinburgh, localised specialism’s in flourishing industries can be created – but only through efficient utilisation of resources and enhanced powers for local authorities.

It’s simple Economics, with overall budgets being squeezed due to austerity cuts the laws of opportunity cost dictate that you can only buy A or B, never both.  Being small isn’t a disadvantage, although big companies will tell you otherwise. Instead of biting off more than you can chew, do the small things well and success will follow.

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Marketing Automation vs Personalisation

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The question of automation vs personalisation for a company is all about saving time and money whilst increasing efficiency. Whereas the perspective of the customer is about receiving good customer service and feeling valued.  So the question is “What does your business value more? – Costs or Customers?”

Advantages and Disadvantages

I’d pick personalisation over automation every time, but as a business grows they must consider all options on how to communicate effectively with their customers. Here’s some of the advantages and disadvantages of automation and personalisation:

Automation benefits:

  • Cost reduction
  • Saves time
  • Reaches a high volume of customers

Automation negatives:

  • Error prone
  • No human contact
  • No personalisation
  • Just another number

Personalisation benefits:

  • Customer service
  • Individual attention
  • Deliver bespoke products/services
  • Increases chances of repeat business

Personalisation negatives:

  • Time consuming
  • Costly to scale

Automation vs Personalisation is simply the choice between quantity over quality. I always like to place myself in the shoes of the customer – what type of service do they expect? Customers are individuals and expect to be treated accordingly, how special do you feel knowing you’re just another number receiving generic marketing communications?

Small Business vs Big Business

How can big businesses connect with a vast volume of customers without using automation? – More often than not, they simply can’t. Can you imagine the amount of money, time & employees that would be needed for a company with thousands/millions of customers to connect on a 1:2:1 basis? But that’s acceptable, as long as time and money are being saved – the customer is last on the list of priorities.

Small businesses on the other hand don’t have the resources to connect with a high volume of customers, personalisation is necessary.  Let’s take email software as an example, rather than sending 1,000 generic emails with a 1-2% response rate, try studying 10 customers and sending personalised emails with bespoke offerings relating to those individual/business needs. Guaranteed your ROI improves, your responses will increase and you’ll develop a reputation for being a customer-centric business. If more small businesses take the time to connect with each individual customer, rather than applying a mass-market approach, then this can be used as a distinct competitive advantage.

Achieving economies of scale isn’t the holy grail of business, growth must be accomplished over a longer period of time, growing too big too fast can and will destroy many businesses. Focus on what you have now, your strengths, your weaknesses and most importantly your customers. By being a customer-centric business you can personalise almost all Marketing communications which results in customer retention, recommendations and an increase in overall customer value. Perhaps customers of larger companies wouldn’t be so keen to move to competitors if they feel valued – personalisation over automation every time.  🙂

What do I post on Social Media?

fresh-content

A common problem with small businesses and Social Media newbies is deciding what type of content you should be posting.

How do you find enough fresh material to post on your Social Media sites every single day?
The 1st question you should be asking is: What does my audience want to read?

Ask and Answer Questions

Social Media isn’t about you or your company, it’s a platform to connect and engage with your audience. If you want to know what your followers want to read, ask them.

Conduct some basic market research on Social Media by running a poll which lists a variety of topics, it can be something simple like:

What Social Media platform do you want to know more about?

A. Facebook
B. Twitter
C. LinkedIn
D. Google+

A poll is a quick and easy method for people to respond to, and once you establish the results you can then post content relevant to your audience.

Provide tips and advice relevant to your industry. You’re the expert in your field, not your customers so become a useful source of information and offer your skills and knowledge for free. Once you become a credible and trusted source of information, you can engage with individuals and tailor your products/services to suit their needs.

Share

Share content from sources outside your company that are relevant to your industry and specialist areas. By sharing external content you’re providing a richness and depth to the content you share with your audience.

Some examples of the types of external content you can share on Social Media are:

• Newspaper articles
• Articles & links to industry associations & trade bodies
• Competitors blogs (not your immediate competitors)
• Videos
• Industry Experts
• Academic & Industry Research

When you share content from external sources, you’ll experience an increase in followers and your own content will also be shared. Share and be shared.

Post about your Company

When posting information about your company, their products and services it is essential to create a balance. Too much information on your company and people will very quickly disengage, too little and people will simply be using you as a source of free information.

As a rule of thumb apply the 80:20 rule, posting 80% of content NOT related to your company and 20% about your company. Use this as a guide and alter according to the level of response and feedback you receive.

When posting about your company, consider posting:

• Offers & Discounts
• New product/service launch
• Awards & Achievements
• Client testimonials
• Specialist/niche areas

Be Social

This is THE golden rule of Social Media – BE SOCIAL.

Honestly Social Media isn’t complicated; it’s simply about 2 parties communicating. Respond when people have shared your content and respond promptly to every single comment, like and new follower.

Small businesses have a distinct advantage over larger competitors if you take the time to connect and engage with your audience. Provide a truly customised level of service that larger competitors will struggle to replicate due to the scale of their customer base.

You might not have a big Marketing budget or thousands of employees, but you can offer personalised 1:2:1 customer service earning you a competitive advantage.

What approach do you have to posting content on Social Media?

Always look over your shoulder – The Importance of Competitor Analysis

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It’s easy to get wrapped up in what’s happening inside your own company, after all there’s a lot to juggle – profits, margins, new products, employees, tax, cashflow and so on.

Every so often you need to look over your shoulder to monitor your competitor’s activities.

One question I ask all my clients is – “Who are your main competitors?”

The response is often – “We don’t have any competitors because our product/service is unique”

Wrong answer – You’ve just not done your homework.

Regardless of your industry or company – you always have competitors. Yes your product/service may indeed be unique but you will have competitors, often offering a substitute or alternative.

SWOT

Begin an analysis of your competitors by conducting a SWOT analysis.

Strengths

Identify the main strengths of your competitors, what do they do well?

Weaknesses

Cast a critical eye over your competitors products/services, their website, Marketing and social media activity. You will be able to identify areas you consider to be inferior to what your company offers.

Opportunities

Focus on identifying opportunities from 2 points of view.

1) What opportunities might my competitor pursue?
2) What opportunities can my business capitalise on?

Threats

Use the information gathered from identifying your competitor’s strengths and focus on how these strengths may pose a threat to your own business model. Form a strategy to counteract any threats posed – Do you need to:

• Change your pricing structure?
• Focus on different benefits of your product/service?
• Do you need to delay or accelerate a new product launch?

Differentiation Strategy

By spending time on analysing your competitors you should be able to identify any gaps in the market, particularly from the opportunities section of the SWOT analysis.

Homogenisation blights every single business in the world so you need to be unique in some form or simply do what your competitors do – but better. Sounds easy in theory but having a genuine USP is a problem area for many businesses.

You’ll never know if what you offer is unique, unless you know what your closest competitors are offering. If you want to gain a competitive advantage in your market then you need to have a differentiation strategy, some areas to consider are:

• Product/service uniqueness
• Minimising expenditure to improve margins
• Leveraging your employee strengths and skills
• Price
• How you promote your company – Focus on benefits rather than features

To gain a deeper understanding of how to apply a differentiation strategy I’d highly recommend reading the work of Michael Porter – A true master of business strategy.

Steal

Yes steal!

Steal ideas, mash them up and make them your own. What benefits do your competitors promote? How can you match or improve on these? And one of my favourite areas is Marketing – How are my competitors Marketing their company?

Competitor or Ally?

Your competitors don’t have to be your enemy, consider striking up a relationship with your rivals to embark on a referral programme. Refer clients to each other depending on what speciality areas you both offer.

For small businesses consider collaborating with rivals on larger contracts that you would not have been able to fulfil on your own.

Just remember to always keep an eye on your competitors.

Is stealing ethical? Do you collaborate with your rivals? Tell me your thoughts 