Category Archives: Small Merchants

Helping Independent Downtown Merchants Engage Effectively In E-Marketing: Part 2

Posted on by

Introduction

This is the second of a two part article. Part 1 can be found at http://tinyurl.com/bxhdx8a

Over the past year, DANTH Inc. has experimented with such social media as Facebook, LinkedIn, Twitter and Pinterest and revamped our website, blog  and email program. To support this effort we did a lot of research on what the various e-marketing tools do best and the challenges small firms like ours have in using them. In this two-part article I would like to share with the downtown revitalization community what we learned from our e-marketing overhaul, so that more independent downtown merchants (e.g., retailers and restaurateurs) might make an effective transition to e-commerce.

What we learned was the importance of an analytical process able to identify the e-marketing tools that will most effectively use an organization’s scarce resources to achieve critical marketing objectives. This process:

  • Starts off by looking at and prioritizing the organization’s marketing objectives
  • Then matches them with the e-marketing tools (e.g., website, emails, Twitter, Facebook, blog, etc.) that can best achieve each of those objectives. These two topics were covered in Part 1
  • And next selects those objective-matching tools that  can be implemented, because the organization has the required financial resources and either has or can acquire the needed skilled employees. This topic will be covered here in Part 2.

Selecting the objective-matching tools that  can be implemented, because the organization has or can hire the required resources

The types of resources required to use a particular e-marketing tool will vary by the package of objectives it is targeted to achieve and the amount and complexity of the usages that are required to achieve them. In my field observations, this is the second area where small merchants are likely to encounter problems — or have them made by consultants who just focus on the mechanics of using the e-marketing tools with which they are enthralled.

In Part 1, I argued that “being found” online is probably the e-marketing objective most independent downtown merchants should focus on first. The initial inclination of these merchants – or their formal or informal “consultants” – might be to create a complex website with many pages, a full catalog of its merchandise, a matching e-store purchasing capability and to fill the site with lots of short marketing movies. Nonetheless, many small firms plainly lack the resources for such a robust effort and, more importantly, they probably do not need it to accomplish their e-marketing objectives.

Here are three brief case studies DANTH encountered over the past few years to demonstrate this point

The High Effort E-Store For A Fast Food Shop. Last year, in a NYC neighborhood that had sustained impressive economic growth through the Great Recession, I interviewed a fast food operator in the 6-10 employees category, who was very interested in penetrating the rapidly growing nearby office worker and high rise residential markets. Though both market segments were strongly represented within a 5-minute walk of the eatery, neither accounted for many of the pedestrians passing by or entering its doors. The owner was interested in creating a website where office workers and residents could find and learn about the eatery and its menu, order from the menu and daily specials, have their orders charged to their credit cards, and have their food delivered to their workplaces or homes.

This small merchant was unaware of the intricacy and full costs of such an operation. He was expecting to pay consultants to set-up his website, merchandise basket and credit card charging. However, he did not foresee that he would also need:

  • Someone to update the “specials” daily on the website and to periodically keep the overall menu up to date. Updating and maintaining a website can easily eat up far more resources than creating it
  • Additional part-time employees to process the lunchtime orders
  • Additional part-time employees to deliver the ordered food
  • Someone to provide the copy for his website pages
  • Someone to provide the photos and other graphics for the website pages
  • To spend a lot more of his time and money  putting together the needed new team and then managing a complex new operation.

A year later, this small operator has no website, but has affiliated with a telephone-based service that takes orders and delivers food if customers know about the delivery service and call them. The eatery also does have a simple “name, rank and serial number” page on its BID’s website, a Facebook page with one like and no postings and is listed on a few special websites such as Foursquare. Right now, not much info is to be found on the web about this eatery. It still needs a much stronger “being found” on the web capability.

This could be accomplished by a modest website, without the e-store. It would successfully provide name and contact information as well as information about the menu and reasons to patronize this eatery. Such a website would provide an affordable and acceptably better, if not optimal, penetration of the office worker market. Website visitors, for example, could see the full menu and be invited to visit or phone the eatery to learn about and order the daily specials. An even simpler solution would be a substantial improvement of the information provided on the eatery’s BID web site page, combined with a campaign to get it listed on more special web pages.

The prime take aways from this case study are that:

  • Small merchants should be wary of complex uses of e-marketing tools that are beyond their resources
  • More modest deployments of these tools are often more viable and ultimately more effective
  • BID/SID web pages can be very useful for a small merchant if they do more than just provide the store’s name, contact information and business category. They need to also provide space for information about the shop’s merchandise and to tell the merchant’s story. This is the prime way that BIDs can help their merchant members gain a viable e-commerce presence.

The Low Effort Ice Cream Parlor. In Part 1 of this article, I mentioned a very popular ice cream parlor in a New York City neighborhood. It is a unique and highly regarded operation that has been around for over 50 years and, for decades before that, it was an ice cream parlor under a different owner and name. Today, it is “a functioning antique,” with an old soda fountain, tin ceiling and marble small tile floor. It makes its own ice cream and is famous for its fresh home-made whipped cream.

When I spoke to the owner about his e-marketing activities, he smiled, reporting that he knew nothing about such things, but his workers, most of whom are high school or college students, had created a Facebook page that gathered 8,000+ likes. He felt Facebook definitely had helped generate some additional sales. The shop occasionally offers special flavors only to its Facebook page visitors, with the young workers doing the postings, and they are always quickly sold out. The owner said, with another smile and shrug of his shoulders, that he would like to do more with Facebook, but…. My guess is that the shop was doing well enough that there was no great need now to do more online marketing.

Googling the shop’s name showed that this ice cream parlor had a lot more going for it than just its Facebook page.. The search showed that its authentic, old time story and favorable customer reviews and contact information were available on a whole slew of specialty web sites such as: google.com, plus.google.com, www.yelp.com, www.facebook.com, patch.com, newyork.seriouseats.com, www.zagat.com, www.urbanspoon.com, newyork.citysearch.com, untappedcities.com, www.tripadvisor.com, www.delivery.com, www.menupages.com, www.bridgeandtunnelclub.com, events.nydailynews.com, newyork.grubstreet.com, www.scooponcones.com, chowhound.chow.com, www.flickr.com. That these positive reviews were coming from customers and not the parlor’s ownership enhances their credibility and power.  Aside from the Facebook page, all the other listings, came about organically without any effort by the ice cream parlor owners or employees.

The net result is that this ice cream parlor, with little effort on its part, can be very easily found on the Internet and its story is certainly being told. The very nature of its limited menu means that people do not really need to know much about all the flavors to be convinced they should visit the shop. Consequently, it probably can do fairly well without its own website. On the other hand, given its ability to easily attract a significant number of Facebook likes, it also might easily garner many Twitter followers and  also use Tweets to inform followers of special flavors or coupons. It might then also use its Facebook and Twitter capabilities to further cultivate its existing store apostles –frequent customers who advocate a shop within their social networks– and garner new ones.

This ice cream parlor had very substantial name recognition and a bevy of store apostles well before or separate from any of its e-marketing activities. The strength of this non-electronic customer network substantially eased the challenge and costs of collecting 8,000 Facebook likes. A new ice cream parlor would need to expend a lot of resources to get enough Facebook likes to make its use worthwhile. The same is true of using Twitter. Indeed, one might ask if the use of these social media is cost effective for small merchants with say 30 transactions or less a day. Might they achieve the relationship building and customer service functions much more effectively and efficiently by focusing on face-to-face interactions? However, they still would need to be found online.

One thing the ice cream parlor owner probably should do is to have his young, Internet capable,  employees check their listings on the special web pages to make sure they are accurate and up to date. Research has shown that this is where most small businesses are apt to  fall down (1). Another thing he certainly needs to do is to keep hiring young employees who know how to use Facebook.

The prime take aways from this case study are that:

  • Strong small businesses that have been around for a while probably will have strong assets that can make their entry into e-marketing a lot easier than start-ups  or weaker operations
  • A robust easy-to-be –found on the Internet capability does not always require a complex website if the merchant has sufficient positive listings and reviews on the special website pages and a narrow range of products are offered
  • These special website pages are too often overlooked, especially by the food related operations that they so frequently cover and that account for such a high proportion of downtown businesses
  • Young, internet savvy, employees can often be a source of the internet related skills a small merchant lacks, but needs.

A Well-Calibrated Retail Website. A toy retailer has two brick and mortar stores in the Chicago suburbs and a very interesting website. The retailer quickly appears at the top of searches for toy stores in its two towns. Its website does not present a catalog of all of its toys, but has a page that shows all the toymaker brands it sells with their logos. It does not have an e-store that sells scads of different toy products online. Its e-store is limited to selling just one new toy a week. Customers can sign up to get the “new toy” newsletter each week via email. The website has short movies, one to two minutes long, for each of the new toys. The website shows that the “new toys” are sold out every week. That they are sold out so often strongly suggests that the retailer is building up a core of repeat purchasers. Repeat customers are the makings of a band of store apostles, a solid revenue stream and a strong word of mouth network.

The website reportedly was put together and is maintained by a relative of the store’s owner who is skilled in developing websites.

It also has a Facebook page that has garnered 604 likes. People in the 35-44 year old age group are its most frequent visitors and they are most likely parents.

I do not know what this merchant’s e-marketing objectives are, but I hope to connect with him in April, when I am again in the Chicago area. I am particularly eager to find out about their website’s impact on their brick and mortar store’s customer traffic and sales.

The important take aways from this case study are:

  • The one new toy a week strategy is a great example of how calibrating a small firm’s deployment of an e-marketing tool to its level of available resources can help assure its successful use
  • The site appears to be meeting all of the “being found” challenges, while also building a core of store apostles and making significant online sales
  • Family members can often be a source of the internet related skills a small merchant lacks, but needs.

How Can Downtown Organizations Help?

The transition to e-marketing calls upon small merchants to innovate, something most of them feel very uncomfortable doing. DANTH’s experience with trying to get them to improve their facades suggests that many more – but not most – would innovate, if innovating can be made easier for them  to do (4). This means providing them with needed information in easy to digest terminology and helping to bring the costs of their innovation down to affordable levels.

Some questions to which they may need answers are:

  • What can they do and accomplish with e-marketing, what are the benefits and how much will it cost?
  • Are there local merchants who have made this transition who they can talk to?
  • Which types of skilled people will they need help from to get into e-marketing? Where can they find them? Or who can do a whole package for them?
  • How can they afford to create and maintain the e-marketing effort?

Here are some actions downtown organizations and other EDOs might take:

  • Post a 20-minute webinar or podcast on the organization’s website — that the merchants can access at their discretion, when they have sufficient time —  focused on what small merchants can do with e-marketing, its benefits and costs
  • A tie-in to SCORE or other free or low cost consulting assistance to help clarify the connections between the e-marketing tools and the frm’s overall marketing objectives
  • A mentoring program that connects e-marketing “newbies” to local merchants who have successfully made the transition
  • Provide a vetted list of technical assistance providers
  • Most importantly, offer each merchant who lacks a website a web page on the organization’s website that can provide name, contact information, information about products or services sold and the firm’s story.
  • Perhaps the downtown organization can charge a fee for an “enhanced page”, i.e., updating, writing copy, supplying graphics, creating movies, etc., that would be meaningfully lower than what the merchants would have to pay if they did it by themselves
  • Provide website consultants to merchants at a lower than market rate cost, because the downtown organization can aggregate member demand and “buy in in bulk”
  • Provide an expert, on a reduced fee basis, who can help merchants get listed on special web pages. This is something different than search engine optimization
  • Use a downtown organization’s strong Facebook and Twitter presences to help the merchants get sufficient likes and followers to be able to effectively use them. It is getting followers, not setting up and using the Facebook or Twitter page that now impedes most small merchants from effectively using these e-marketing tools
  • Set up an “e-department store” where merchants, like the toy store described above, would only sell a few items. A dedicated and limited e-department store may be a good way to strengthen a downtown niche.

N. David Milder

Acknowledgement: Thanks to Mark Waterhouse of Garnet Consulting Services for his input and editorial assistance.

Endnotes

  1. MarketingCharts staff, “1 in 2 Small Businesses Fail to Update Their Online Listings, Find Inaccuracies”  February 6, 2013,  http://tinyurl.com/atexhky
  2. Mitch Lipka, “These Big Companies Are Abandoning Twitter And Facebook For Customer Service” Business Insider 1/18/13   http://read.bi/11EbziS
  3. Findings of a survey of small businesses conducted for the Center for the New West as summarized in an email by the center’s former CEO, Phil Burgess
  4. N David Milder, “BEING A DOWNTOWN CHANGE AGENT: Facilitating Change for Downtown Business Operators” June 3, 2007, https://www.ndavidmilder.com/category/formats-facades-signs

Invitation: Please join me at Session S681: Integrated Small Town Planning at  APA’s 2013 National Planning Conference in Chicago, April 17, 2013, at 10:30 a.m. I will be presenting along with Andrew Dane of SEH.

CLOSE, BUT NO CIGAR: DOWNTOWN MERCHANTS AND CAPTIVE/DAYTIME MARKETS

Posted on by

The Problem. Downtown economic development 101 long has taught that one of the strongest competitive advantages of downtowns is their multi-functionality, which leads to a number of “captive” daytime market segments, and stimulates multi-purpose and multi-destination downtown trips. These market segments –e.g., workers, students, hotel guests, etc., — are coming to the downtown continually, so merchants do not have to do anything to attract them to their commercial district. It also has long been thought that the merchants could then just concentrate on getting them into their stores and selling to them. Yet, in almost every community DANTH, Inc. has worked in or pitched a proposal to, local retailers were not capturing the sales dollars they should from nearby office workers, hospital workers and visitors, students, hotel guests, etc. Based on my conversations with other consultants and many district managers this problem is fairly widespread…and possibly, even probably the norm.

Lack of Market Segment Awareness and Knowledge.  Many of downtown merchants simply lack an awareness of these captive consumer markets or know very much that is useful about them. For example, one eye opening presentation at the recent conference of the Wisconsin Downtown Action Council reported on research by Bill Ryan and Jangik Jin at the University of Wisconsin Extension that indicates important captive daytime markets are not limited to large cities, as often supposed, but can be found in communities with populations as small as 2,500:

“Overall, approximately one in five Wisconsin jobs are affiliated with businesses that are located downtown.  A very small city with a population of 2,500 will, on the average, have close to 1,000 employees within a half-mile (a 10 minute walk) of the middle of downtown.  A larger city with a population of 50,000 will, on the average, have over 5,000 employees.  These figures indicate that there is a high density of employment in these small geographic downtown areas.  Clearly not all are employed in the shops that line Main Street.  Instead, they are employed is a diverse mix of businesses and organizations within and around the retail core.”[i]

While the Ryan-Jin study just focused on towns in Wisconsin, the picture it paints seems to fit the other states I have lived and/or worked in. Consequently, I bet that if similar studies were done in other states, they would reveal some variation, but substantially comparable results.

The audience’s reaction indicated that they were certainly learning something new and I doubt if nationally many downtown merchants in small (or large) communities know how many people are employed nearby. The Ryan-Jin study is also unique because its focus is on “employment” and not just office workers, white-collar workers, knowledge workers or creative types. They include the blue collar and uniformed workers that I have seldom seen targeted by downtown revitalization plans, but who account for most employees in a whole host of small and medium-sized downtowns.

In many other downtowns we have worked in, neither the downtown organization or their local merchants knew how many office workers were nearby and how they were clustered. Nor did they know much about office worker consumer behaviors, e.g., how often and when they shop, what they shop for. Much the same is true for the student and hotel guest market segments and certainly true for blue collar workers.

Poor merchant awareness and knowledge constrains their ability to target these potential shoppers, to merchandise for them and then market effectively to them.

The Weak Magnetism of Many Retail and Food-Related Destinations. Unsurprisingly, the ICSC’s studies of downtown office workers have shown that office workers will spend more in districts that have strong retail offerings than in districts having fewer shops and less desirable merchandise. These findings also speak to a more general principle, the stronger the magnetism of the retail destination and eateries, the more likely they are to get shoppers to:

  • Go out of their offices, hotels, schools, etc.
  • Walk longer distances.
  • Shop at inconvenient times.
  • Frequent their establishments.

Retailers are clearly unlikely to have much magnetism  if they:

  • Provide customesr with an unappealing in-store experience.
  • Have lackluster product assortments and/or unattractive store environments.
  • Offer poor customer service.

Unfortunately, a lot of downtown retailers fall into the low magnetism category. Great proximity and consumer desperation may produce sales, but for them meaningful penetration of these captive market segments is unlikely unless they significantly improve their merchandise, store appearance and operating procedures. In my experience some non-magnetic merchants may be capable of making such improvements, most are not.

It’s Often Tough to Access These Market Segments: Just because these potential customers are downtown does not mean that they are within easy walking distances of retailers. For example, retailers that are farther than a 5-minute walk from office workers and 10- minutes from hotel guests are unlikely to gain a lot of their patronage. This is a very likely problem in dispersed downtowns, especially those that are composed of several nodes, not just a central core. One downtown that we recently looked at had four of these nodes, another had three.

Commuting students, who often have jobs or heavy household responsibilities, are typically difficult for merchants to capture. Their time pressures, frequent after 5:00 p.m. class hours and campus locations distant from the downtown core makes it very hard to grab their attention and dollars. The retailer must be very close and really have what the student needs.

Today, many companies try to keep their workers from leaving their office buildings during the workday. As inducements, they provide cafeterias, subsidized meals and concierge services to do their shopping and errands for them. Some just keep the workload pressures so heavy that going out seems impractical.

As Ryan and Jin noted, blue collar workers typically are not on the primary downtown streets, but in more secondary and peripheral locations. Their lunch hours may be brief and they tend toward not leaving their workplaces. Many will brown bag or be serviced by a “food truck” or “ordered in” food.

Downtown retailers must be open when hotel guests are prone to shop in their stores and these opportunity windows can vary with the downtown:

  • In Morristown, NJ a huge number of hotel guests are attending conferences that normally “set them free” after 5:00 p.m. By 5:15 or 5:30 they may be outside looking for things to do, including shopping. That does not give them much time to get to and shop in the stores that close at 6:00 p.m.
  • The skiers staying in hotels near downtown in Rutland, VT will be on the slopes all day and available for dining and shopping late in the day and early evening. But, if the shops are not open….
  • In Long Island City, NY, the guests at the new cluster of hotels are primarily tourists who will spend much of the day and substantial portions of the evening in Manhattan. As a result, the best time for local merchants to capture their dollars may be in the morning.

The Retailers’ Expectation That Customers Come to Them. The problems of accessing these market segments potentially can be overcome, but that will require merchants to implement targeted operating procedures such as altering store hours or, most importantly, reaching out and interacting in some way with these potential shoppers in their offices, schools, hotels, factories, etc.

Unfortunately, many of today’s merchants have been acculturated to expect that their customers will come to them.

Overcoming This Impasse. Merchants can have vastly greater success with these captive daytime downtown market segments if they adopt the multichannel techniques that are detailed in my recent DANTH Research Paper which is available at no cost at:http://danth.com/storage/pdf/Multichannel.pdf .

I do not want to again go over here the ideas presented in that paper, save for this: the key change is that a real multichannel strategy guides and enables downtown merchants to interact with customers away from the brick and mortar stores. If they are to win more sales dollars from their district’s captive markets, that is precisely what they have to do.

 

[i] Bill Ryan and Jangik Jin,  “Employment in Small City Downtowns,” Downtown Economics, Issue 174, October 2011  http://bit.ly/y1bkc2

 

 

Downtown Multichannel Retailing

Posted on by

DANTH, Inc. has just released a research paper I wrote on downtown multichannel retailing.  I prefer to think of it as backdoor retailing, with electronic and non-electronic variations. In any case, the topic is important because downtown retailing is undergoing an enormous change — one that will not be reversed even when the economy recovers from our Great Recession — towards multichannel/backdoor retailing. Downtown merchants and leaders who do not adapt to this new paradigm will be left behind, more dross produced by capitalism’s creative destruction.


You can download a free copy of the research paper at: 
http://danth.com/storage/pdf/Multichannel.pdf

N. David Milder

Some Interesting Research About E-Commerce

Posted on by

The Online Articles

A May 5, 2011 posting on ClickZ,  “Is Facebook Marketing Behind Macy’s Online Sales Jump,” suggests that that Macy’s efforts to pick up Facebook “likes”, which in 2011 grew to 800,000 was responsible for the 50.3% rise in the Macys.com and Bloomingdales.com monthly sales. The article also mentions that Foursquare and Twitter were used in this campaign.


A May 10, 2011 posting to the Business Insider by Pascal-Emmanuel Gobry, “Turns Out Social Media Marketing Doesn’t Work” reports on recent research done by Applied Predictive Technologies. The research tested “how much location-based services like Foursquare and Facebook Places can help local businesses.” It found an impact that is just “close to 2%.” (There is no clarity as to what the 2% refers to in the article, e.g., sales, visits, etc.”

Gobry advises Foursquare investors not to panic because the used social media may not have had enough time in the test to work and “Right now, social media marketing and advertising is in the experimental phase. We don’t really know what works and what doesn’t, fumbling in the dark.”


I consider customer service as a critical marketing tool, so another online article that recently caught my eye was by Joe Light and posted on April 25, 2011 to the Wall Street Journal’s website. Titled “With Customer Service, Real Person Trumps Text,”  the article reports on a large national survey conducted by American Express to find out how consumers want corporations to provide customer service. The survey found:
  • 90% of the respondents wanted customer service handled by live representatives over the telephone
  • About 50% like customer service delivered by online chat
  • Just a little more than 20% would use social networking sites
  • 20% said they would use auto-response phone systems
  • 70% said they would spend more with a company that provides good customer service , an increase from the 58% that felt that way last year.
My Take-Aways

I think Gobry hit the nail on its head, but that his remarks apply not just to social media marketing, but substantially to internet marketing in general. What is obvious is that large, savvy corporations with ample resources and large technical staffs  such as Macy’s and American Express are still trying to discover what really works and what doesn’t and many of them are still “fumbling in the dark.” 

The small merchants that populate so many of our downtowns lack the resources and skilled staffs of the large corporations and the results for them of a failed online marketing campaign are probably more dangerous. Advocating their involvement in unproven and for them complicated and expensive internet ventures is irresponsible. Yet, an internet presence is fast becoming an existential imperative for all merchants, be they large or small! Downtown organizations that want to foster merchant presence on the internet in most cases need to focus on programs that have some real proof of effectiveness and that make merchant involvement less complicated and more affordable.  I have always been fond of the Keep It Simple, Stupid (KISS) approach to program development and to my mind it applies here. For most small downtown merchants small, affordable, simple to do and easy to maintain steps may be the most viable.

Of course, there are always the exceptions, those marvelous exceptions among the small business operators. At the extreme they are the true innovators that may start in garages, small offices and small shops and create firms like Apple, Microsoft, and Limited Brands. While small business innovators of this high caliber are relatively rare, my experience suggests that there are 5% to 20% of a downtown’s merchants who may be open to some innovation and willing to take some risk. Should downtown organizations focus their efforts on this group or do they need to develop two-tier programs, one level for the more innovative-prone merchants, the other for the average merchant?

N. David Milder

The Use of the Internet by Downtown Organizations and Businesses

Posted on by

About a week and half ago I went to a workshop put on by Downtown New Jersey that focused on the use of web sites and social networking media such as Facebook. While I learned a lot and thought the presenters did a good job — they certainly were enthusiastic — I still came away with my major concerns being unanswered.

 
Being Able to Afford the Time, Money and Skill Acquisition Needed to Create and Maintain a Website. For many years I have heard several other downtown revitalization and business development experts strongly recommend that downtown organizations and individual downtown businesses have attractive and effective websites. I certainly concur with the potential positive impacts of effective websites. Moreover, I agree that organizations, with say $300,000+ in annual revenues, can have at least a useful website and that it gets easier for them to have a really effective website as their budget increases.


My problem is: Can most small businesses and small-budget downtown organizations really have effective websites? Many small and medium sized downtowns have numerous businesses that are in the $150,000 annual sales range or perhaps even less. With few, if any, full-time paid employees and modest revenues, these shopkeepers usually work long hours and may not have either:
  • The computer skills needed to create and maintain a website
  • Or the time to acquire them
  • Or the funds and networking skills needed to hire an outsider to build and maintain the website.
These problems can be particularly acute when it comes to a small merchant  building an “e-store.” The chores of keeping the online inventory current and packing and transporting the sold merchandise can be daunting.  
 
Of course, what most downtown managers also know is that getting their small merchants to advertise is very often analogous to pulling teeth. So, if they are resistant to shelling out less than say $100 for a co-op newspaper ad, you can expect that getting them to even entertain a website they fear might cost in the thousands of dollars is likely to be far more difficult. Moreover, if they cannot have online stores, they may doubt the value of a website that is simply something akin to a fancy directory listing.
 
Much the same is true for small downtown organizations — small budgets constrain what can be done — but, my online observations strongly suggest they have both better skill sets for the  electronic media and a greater willingness to spend a significant portion of their budgets on them than the small merchants. Many of their sites are good at promoting their downtown events and sharing news relevant to the downtown community that the local media might be overlooking. They  usually have an online business directory, while some even try to provide a webpage for each business. 


But, too many fail to take on business development functions by providing essential, easy to find and easy to use information that would be useful for a business looking for a new location. This can range from demographic data to information about prevailing rents and the town’s permission and approvals process. 


While small businesses probably will always lag in the creation and quality of their websites, there are reasons to believe that in the coming years there will be significant improvement among them:
  • The younger among them are more adept and comfortable with using computers and the internet — and with time the proportion of the internet capable will rise and be dominant
  • There are website hosting services appearing that make the creation and — most importantly — the maintenance of a website much cheaper and easer to do. They use templates and modules to achieve the fast, easy and affordable website, but they also bound a site’s creative potential.  We are redoing our DANTH, Inc website, under the guidance of our website consultant 180 Interactive,  and using one of these services. I’ll report on the experience in a later posting.

When Is Electronic Social Networking the Answer? At the risk of sounding like an electronic Luddite, I am having a difficult time figuring out how something like Facebook or Twitter could provide real added value in the marketing of DANTH. Though I can see their value to some large downtown organizations and consumer products companies, I keep feeling that many small business people are in a similar position to mine:

  • I barely have the time to operate my business and still write a blog, maintain our website and write periodic email blasts. Where will I find the time and energy to also deal with a Facebook presence, which to me seems like another resource demanding website? 
  • My company does not generate enough “news” to keep a constant information flow through any communication channel  
  • Our clients do not usually come to us from the web, but through word of mouth. They then do go to our website to get more information about us and to “confirm” the positive messages  they have received from other sources. What added value can Facebook offer that has a sufficient cost/benefit justification?
  • The times have been economically desperate and in such conditions people often look for “silver bullet” solutions. The faddish popularity of Facebook and Twitter suggest to me an unthinking groping for magical answers to tough problems. 
I think that there is a real resource threshold for small businesses to properly utilize websites, blogs and the social networking platforms. To do all of them properly and advantageously demands proper staffing and the resources to pay them. To do just one properly takes skill and effort — and time.
 
Our firm’s approach to the design of our website and this blog is based on a set of marketing objectives we want to achieve. So far, we cannot see any objectives that a Facebook or Twitter presence could help us achieve. Perhaps, if we had DANTH events or if we sold my books directly from our website we would have a different assessment of the electronic social networking opportunities.  
 
My fear is that too many downtown organizations are doing Facebook and Twitter without having any substantial strategic justification, but simply because more and more downtown organizations are doing it. I fear, too, that many small businesses are falling into the same trap.
 
 
Are We Taking Our Eyes Off of the Real Prize?  A week or two ago our friend and strategic partner Mark Waterhouse of Garnet Consulting Services sent us this link to an article.
 
It is from a New Haven newspaper and it details how the merchants in downtown Guilford, CT have prospered right through our nation’s Great Recession. No where does it mention the merchants’ slick use of the social networking media. But, there are vivid descriptions of merchants who work hard to have the right merchandise for their customers, who provide a deep level of customer service and who avidly recommend other nearby merchants to their customers. All of this is perhaps just a part of “Being A Successful Merchant 101,” but apparently they are actually doing it in Guilford. The part of the story about the merchant referrals had a particularly strong resonance for me because:
  • I have become increasingly convinced that this is one of the most effective and inexpensive ways to do cross marketing in a downtown
  • I have also become convinced that most downtown organizations do a lousy job of encouraging cross marketing.

Furthermore, I have not heard of any similarly effective downtown cross marketing effort that is based on electronic social networking. 

 
The Bottom Line. I am all for e-marketing and using websites, blogs, social networking platforms, web photo galleries, etc., as long as they can fulfill an organization’s strategic objectives and fit within its resource constraints. Most importantly, I fear that downtown business operators and their downtown organization’s leaders are shifting their attention and resources so much to the web that they will forget the importance of mastering the non-electronic ABC’s of being a successful merchant. If you have dull merchandise, fail in customer service and have not learned how to work with your fellow downtown merchants to generate and SHARE customer traffic, no amount of adept electronic marketing will save you…or your downtown.