The year 2016 has seen the greatest increase in consumer spending in six years. Rising home prices and personal incomes are driving up disposable income, resulting in more frequent and larger consumer purchases. Meanwhile, thousands of baby boomers are retiring daily, opening the door for a new cohort of earners to jump in and step up.
This represents a tremendous opportunity for capitalizing entrepreneurs. While the major news channels send conflicting messages about global stagnation, national unemployment, and volatile stock prices, small business owners are observing something more concrete, something more telling – customers, competitors, and landscape.
As a business consultant with the University of Georgia SBDC, I enjoy helping business owners conduct this critical aspect of market development. While large companies have the resources to employ entire divisions or hire national consultancies to assist with research, small businesses must be more creative and resourceful. Here are some tools and tips available to small business owners that cost little to nothing, yet can make a positive impact on revenue and profit. They’re easy to remember – the 3 S’s – Survey, Scout, and Scan.
Survey your Customers
Preferences change. Yesterday it was frozen yogurt, today it’s vegetable smoothies. Last month it was Apple Pay, this month it’s Venmo™. Last year it was drive-thru, next year it’ll be pedicab delivery. From what your customers want, to how they pay for it, to how it’s delivered, preferences evolve. A great way to stay ahead of shifting tastes is to regularly survey your customers. This can be as simple as an informal question at the register, such as “How could we have made your purchase/experience even better today?” Or the approach could be more formal with a text survey from Trumpia™ or email from Survey Monkey™. The most important consideration of any survey design is to ensure it is properly worded and structured. Brevity and keyword selection can generate higher response rates, as can incentives if appropriate. Pre-publish, third-party feedback and test distributions are essential. SBDC Business Consultants can provide assistance with these considerations, from brainstorming questions to actually designing and distributing surveys via the nationally utilized Qualtrics™ Insight Platform.
Scout your Competitors
Athletes go to sporting events, musicians attend concerts, and actors and actresses go to the movies. Small business owners and their management must also stay apprised of what the “other guys” are doing. The most convenient way to do this is to regularly visit the competition’s websites and social media pages. Information that just ten years ago would have been very difficult to obtain is now readily available online. Product and service offering, pricing, and pickup or delivery options are often spelled out in great detail. Business Facebook Pages are a goldmine for discovering new product concepts, relocation announcements, sales promotions, vendor relationships, and even customer names. Another great technique is to visit the competition, both over the phone and in person if possible. Observing their work flow and customer service processes will shed great light on potential competitive advantages. I recently called an established business on its main telephone number. Not only did I not receive an answer, but I also never got to voicemail. Imagine how the competition might be exploiting this. It’s an extreme example of service negligence, but it happens more often than you might expect. More common are the cases of nonexistent or unfriendly first impressions and greetings. What about call back and email reply policies? Does your company have a rule for how quickly these are handled, by whom, and with what messaging? This is just one example of what a simple phone call or visit to your competition can uncover. For a more formal approach to scouting the competition, Georgia business owners can utilize the UGA Small Business Development Center’s subscription to ReferenceUSA™, an internet based reference service containing detailed information on more than 44 million U.S. Businesses.
Scan your Landscape
When mountaineers, whitewater kayakers, and downhill skiers prepare for a new route or descent, the first thing they do is study the terrain. They have to know the variables involved. An unforeseen element can ruin their success, or worse, take their lives. Business is no different. Surprises can severely disrupt an operation, or worse, put it out of business. Fortunately, there are landscape analysis tools available to small businesses today that just ten years ago were only affordable to the largest of companies. Two of these tools are available through your local UGA Small Business Development Center. The first is an industry analysis and benchmark database called IBISWorld™. This database takes expert industry analysis of economic, demographic, and government data to give insights into the conditions and forecasts of over 700 unique industries. Revenue figures, market share, segmentation, growth rates, financial benchmarks, supply chain, and success factors are just some of the valuable insights that IBISWorld™ can provide. The second analytical tool available to small business owners is ESRI™, a geographic information system that combines maps, data, and apps to generate valuable market insights – local, regional, and national population charts and maps segmented by age, gender, race, income, and many other variables; household expenditures by category; traffic counts; and tapestry maps are just some of the many reports available to its users.
Business is the art of meeting someone else’s need in a profitable way. Companies that stay in tune with customers’ evolving needs, that closely monitor the actions of competitors, and that track their shifting landscape will be most successful. Remember the three S’s, and you’ll be on your way to capturing more of that growing disposable income – Survey, Scout, and Scan.
Ballard Betz is a Business Consultant with the University of Georgia Small Business Development Center advising business owners and entrepreneurs of northwest Georgia in the areas of strategic planning, marketing, finance, and operations. Ballard began his business consulting career in the year 2000 with Markowitz & McNaughton Inc. of Reston, Virginia, where he conducted market research and competitive intelligence for Fortune 1000 U.S. companies in a variety of B2B and B2C industries.