SAP Anywhere – Enabling SMBs to market, sell and commerce with an integrated front office solution

The retail sector has a well-earned reputation as one of the most challenging industries for participants to navigate successfully. Retailers – be they traditional brick and mortar companies, online sellers or, often, a combination of the two – must manage complex supplier relationships and inventories while also catering to the sometimes mercurial wants and needs of their end customers. For retailers, “supply and demand” is more than a trite catchphrase. Rather, it encapsulates an ever-shifting and intricate relationship that demands real-time data, accurate forecasting and efficient operations if the retailer is to generate profits in a business characterized by razor-thin margins.

In short, retailers truly need a 360-degree view of their business, encompassing suppliers, consumers and the many processes that connect the two. With little room for error, retailers and etailers must not only track critical operational metrics closely, they must continually strive to make their processes more efficient and effective.

Retailers sit at the nexus between wholesalers and distributors on one side, and end buyers on the other. They must deal with product availability and pricing demands from their suppliers, while keeping their store offerings competitively priced and in line with current customer demands. As friction-free online shopping options proliferate, maintaining customer loyalty as well as profitability is proving increasingly elusive. Among the operational challenges retailers face:

Retail businesses encompass supply-side and demand-side

Supplier-side Challenges:

Product availability and pricing: All but the largest of retailers are at the mercy of their suppliers, who can set prices close to retail selling prices and whose products may not always align with changing customer demands.

Incoming inventory management: Retailers need to maintain inventory levels and mixtures aligned with the current and forecasted consumer preferences, which aren’t always the same as the suppliers’ preferences and product lines.

Buyer-side Challenges:

Outgoing inventory management: Retailers must have good visibility into inventory levels and purchasing trends to ensuring that inventories are stocked to meet both current and future demands, while limiting overstocking and forced discounting.

Customer satisfaction: In addition to ensuring that they have the right product selection and price points, retailers must work to engender customer loyalty while also increasing the number and value of products each customer buys.

Commerce operations: As higher percentages of retailers enter the online selling realm, they must deal with everything from cart abandonment rates to rapid and accurate processing of orders and shipments.

In addition to the above challenges, retail and distribution business today need to think globally. Digital commerce enables them to setup web-shops and transact beyond their geographic borders and becomes players in a global economy. This is where SAP Anywhere will benefit from being part of the larger SAP company. Most global businesses need more accurate multi-currency exchanges. Does the solution calculate financials in local currencies and support local tax compliance? What languages does it support?

Having a reputable cloud provider handle these and other critical business processes – as well as providing the platform for commerce sites in some instances – frees companies from performing these tasks, which are often outside of their areas of core competency.

 Target Market:

SAP Anywhere is targeted at companies with between 10 and 500 workers. Built from the ground up for the SMB market. It leverages SAP HANA to mine the data for real-time analytics and insights.

SAP Anywhere is a cloud-based solution, it will be delivered as SaaS (software as a service) by SAP in a public cloud (Amazon cloud for the US market). While it can be accessed through either mobile devices or desktops, SAP is emphasizing that it will allow SMBs to manage their business from anywhere using their mobile devices.

Perspective and Go-to-Market Channel Implications:

SMB spending on digital commerce solutions is increasing, especially for solutions that are simple and aimed at improving customer experience across mobile, social and web. This new category of front-office solution for small businesses will open new doors for SAP and will necessitate a new channel approach. In North America SAP plans to develop new channels where SAP has not gone before for SAP Anywhere and not restrict it to their existing Business One channel partners. There is also potential for affiliate partners like PayPal, eBay, Facebook, etc. Success with SAP Anywhere will also require partnerships with other type of affiliate solution providers, as part of an expanded ecosystem, that can help specialized SMBs setup sophisticated web-presence instead of the generic out-of-box experience.

 

SMB Group Top 10 SMB Technology Trends For 2014!

Here are SMB Group’s Top 10 SMB Technology Trends for 2014! A more detailed description of each follows below.

1. Progressive SMBs Use Technology as a Game Changer
2. Cloud Adoption Accelerates, But SMBs Steer Clear of Dark Clouds
3. Mobile Management Becomes a Priority as SMB Mobile App Use Soars
4. Social Media Marketing Stalls as SMBs Re-focus Marketing Practices
5. SMBs View Payment Systems in a New Light
6. SMBs Prepare for the Insight Economy
7. SMBs Integrate to Gain Higher Solution Value
8. The Affordable Care Act Puts Workforce Management in the SMB Spotlight
9. It’s Easy for SMBs to Go Green and Save Green
10. Make Way for an SMB Influencer Shake-Up

2014 Top 10 SMB Technology Trends in Detail

1. Progressive SMBs Use Technology as a Game Changer. Technology continues to fuel changes in what, where, and how SMB (small and medium businesses, with 1 to 999 employees) work gets done. Back in 2011, SMB Group identified the “Progressive” SMB segment. Progressive SMBs invest more in technology-based solutions, view technology as a business enabler, and are much more likely to expect revenue growth than other SMBs. This gap continues to widen as we enter 2014, and is further fueled by generational shifts–including the rise of millennials in the workforce and older exiles from the corporate world. Progressive SMBs are blending technology and business savvy to reshape business models, carve out new market niches and invent entirely new businesses. Their adoption of cloud, mobile, social and analytics will soar as they strive for both growth and agility. They will also increasingly turn to technology-fueled services—from Elance and oDesk for staffing, to shared office space and IT infrastructure services—in pursuit of these goals. As they forge ahead, they will not only continue to outpace peers, but reshape what it means to be an SMB.
2. Cloud Adoption Accelerates, But SMBs Steer Clear of Dark Clouds. SMBs have bought into the cloud promise: a faster, easier, cheaper and less risky route to get the IT solutions they need to create and run their businesses. SMB Group research shows SMB use of cloud business and infrastructure applications poised to grow to from 33% to 44% over the coming year. However, some cloud vendors—threatened by Wall Street and high churn rates—have backtracked on their original faster, easier, cheaper cloud pledge. They have replaced monthly subscription pricing with annual contracts, tacked on added fees for all but the most basic support, and created pricing models that are almost as confusing as those of the traditional software behemoths they once berated. As SMBs push further into the cloud, they will favor vendors that stay true to the original cloud promise, and steer clear of dark clouds.
3. Mobile Management Becomes a Priority as SMB Mobile App Use Soars. SMBs have been adopting mobile solutions at a fast and furious pace. SMB Group research indicates 67% of SMBs now view mobile solutions and services as “critical” to their businesses. 83% have already deployed mobile apps to help improve employee productivity; 55% are using mobile apps for specific business functions, such as CRM or order entry. 49% of SMBs are building mobile-friendly websites, and/or deploying mobile apps to engage and transact with customers. However, mobile management has failed to keep pace with this explosion, and with SMBs’ increasing business reliance on mobile solutions. Concerns about security, manageability, provisioning and cost will make mobile management a top priority for more SMBs. They will be looking for easy-to-deploy, cost-effective mobile device and application management platforms and solutions to reduce management headaches and get more value from their mobile investments.
4. Social Media Marketing Stalls as SMBs Re-focus Marketing Practices.  Many SMBs now “get” that they need a social media presence. SMB Group research reveals that more than half of small businesses and more than two-thirds of medium businesses use social media for marketing purposes. Some have invested tremendous amounts of energy to create content to feed the voracious social media beast. But the ever-increasing pressure to create fresh content, keep up with changes in users’ social network preferences, and uncertainty about the return on social investments is taking its toll. In 2014, SMBs will focus more on what networks and content really click for their target audiences, and put more time into figuring out how to convert social connections into customers. Some will integrate social more tightly with sales, marketing and content management applications, and use analytics to develop more actionable social metrics. Marketing innovators will explore new opportunities, such as online mobile advertising powered by geolocation. Others will redirect some of their efforts back to marketing basics–including surveys, competitive analysis, email marketing and attending more conferences and events. 
5. SMBs View Payment Systems in a New Light. SMB Group research shows that although checks and credit cards are still the top forms of payment SMBs accept, there’s no question that new payment methods are growing in use and importance. 27% of small businesses and 43% of medium businesses already equip employees with mobile payment processing solutions, and about one-quarter of SMBs intend to add this capability over the coming year. Meanwhile, mobile wallets and gift cards, PayPal and even Dwolla—a payment network that allows any business or person to send, request and accept money for very low fees—will continue to provide additional payment options for consumers. More SMBs will recognize that having the capability to accept and process a broader range of payment methods can help them attract more customers, gain new business, and even enter new markets. SMBs will also seek ways to cut time and errors out of payment processing with payment solutions that integrate with accounting and ERP, such as those offered by Intuit and Sage. 
6. SMBs Prepare for the Insight Economy.  It’s been hard for many SMBs to relate to the “big data” story that most vendors have been pitching. SMB Group research reveals that only about 18% of small, and about 57% of medium businesses utilize business intelligence and analytics solutions. However, SMBs understand the value of getting the information they need, when they need it—especially as they try to compete with new, nimble born-on-the-Web startups that view data as the new business capital. In 2014, SMB-focused vendors will retool the big data story for the little guy, focusing less on zettabytes, speeds and feeds, and more on how their solutions enable and empower better insights and decision-making. Business solutions vendors will embed better and more accessible analytics and reporting tools within their solutions. Cloud-based, visualization and scenario-driven business intelligence and analytics solutions will also help SMBs take a more data-driven approach to running their businesses. 
7. SMBs Integrate to Gain Higher Solution Value. While the cloud has made it easy for businesses to add a lot of new applications, integration has often been an afterthought. As a result, many SMBs are struggling to make sense of disconnected information silos, and IT is under pressure to integrate cloud-to-on-premises solutions, as well as cloud-to-cloud solutions. In 2013, integration moved up from the #4 to the #1 technology challenge for medium businesses. In 2014, we expect that integration will be a higher priority even among small businesses. After all, it doesn’t take too many disconnected applications to feel the pain of productivity drains, errors, and a lack of solid data to support decision-making. Fortunately, technology vendors of all stripes are emphasizing the importance of a unified, reliable data store as the foundation for solid analytics and reporting. Business solution vendors are increasingly offering SMBs pre-integrated suites, opening up their application programming interfaces (APIs), and creating marketplaces to make it easy to find integrated partner apps. This makes it easier for SMBs to start small, with just one or two applications, and then snap in added functionality as needed. Finally, vendors that specialize in integration solutions, such as Informatica, Scribe and Dell Boomi (just to name a few), are making their solutions more accessible to SMBs. Integration still isn’t sexy, but the improved productivity, time savings, error reduction and decision-making benefits that it enables are. 
8. The Affordable Care Act Puts Workforce Management in the SMB Spotlight. Revenue growth, attracting new customers and increasing profitability are perennial goals for SMBs.  To help achieve these goals, they have been steadily moving ahead to automate and integrate sales, marketing and other customer-facing solutions. Although improving employee productivity has also been a top goal, SMB adoption of automated, integrated workforce management solutions has lagged behind other areas. Many SMBs continue to limp along with a patchwork of disconnected solutions and manual tracking to manage components such as time and attendance, payroll, scheduling, HR and benefits.  But with the Affordable Care Act set to take effect on January 1, 2015 for organizations with more than 50 full-time equivalent (FTE) employees, that situation is about to change. Worried about uncertainty, costs and regulatory risks, SMBs will look for better solutions to calculate employee eligibility and benefits, and to develop proactive strategies to manage ACA compliance and costs. This will drive a significant uptick of interest in, and adoption of automated, integrated workforce management solutions. 
9. It’s Easy for SMBs to Go Green and Save Green. The push for greener IT solutions isn’t new, but in 2014, we’re moving into a perfect green storm. Due to a rash of hurricanes, tornadoes and extreme weather, the sustainability of Mother Earth is taking center stage. According to a recent Harris Poll, over 74% of American adults believe in the global warming theory, and over 73% of U.S. citizens approve of the Kyoto agreement requiring countries to limit carbon monoxide and greenhouse gas emissions. IT vendors are prepared to capitalize on this opportunity with new, energy saving products. From Dell’s Dell PowerEdge VRTX applications and storage server, which runs on standard 100V-240V AC power and doesn’t require any specialized cooling, to IBM’s patent for a “green” button that helps cloud providers “greenify” their businesses and lets customers choose whether or not to tap clean energy to run offsite servers, it’s easier than ever for SMBs to be green and save green. 
10. Make Way for an SMB Influencer Shake-Up. SMB Group research shows that in-house IT still plays a key role in all phases of the technology solution decision-making process. But now, enabled by the cloud and the swipe of a credit card, business decision-makers are much more involved: in small businesses, 69% of owners/presidents help evaluate potential solutions, and 81% help make the final decision. In medium businesses, departmental and line-of-business executives are the most likely personnel to identify the need for new solutions. This is changing the influencer landscape. Business decision-makers aren’t as likely to turn to traditional technology guidance sources as IT decision-makers. And many of us—especially millennials—are growing skeptical of traditional media sources that increasingly push paid “native content” in the guise of news. So who will the new influencers be? Accountants and other professional advisors (for line-of-business or industry) that the SMBs have an established relationship with will become more powerful influencers. Digital word-of-mouth, references, trade associations and non-technical groups and organizations will play an increasingly important role in shaping technology purchase decisions among both business and IT professionals. Finally, technology vendors that provide unbiased education—and can clearly demonstrate how business benefits from their solutions—will have a decided advantage over those that don’t.

About SMB GROUP

SMB Group focuses exclusively on researching and analyzing the highly fragmented “SMB market”—which is comprised of many smaller, more discrete markets. Within the SMB market, SMB Group areas of focus include: Emerging Technologies, Cloud Computing, Managed Services, Business and Marketing Applications, Collaboration and Social Media Solutions, IT Infrastructure Management and Services and Green IT.

Report Card: 2012 Top 10 SMB Technology Market Predictions

–by Laurie McCabe and Sanjeev Aggarwal, SMB Group

Before developing our 2013 predictions, we wanted to assess how we did on our 2012 Top 10 SMB Technology Predictions. Here’s our take–please let us know what grades you would have given us!

And stay tuned for our Top 10 SMB Technology Predictions for 2013, which we will post in a couple of weeks!

Note: On this grading scale, 5 means that we came closest to hitting the mark, and 1 means we missed it entirely.

Prediction	Score	Comments
Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets	4	Year-over-year data from our annual SMB Routes to Market Studies indicated that more small and medium businesses (SMBs)* were forecasting flat or decreased IT spending heading into 2012 compared to 2011. Given SMB budget constraints and the plethora of solutions aimed at SMBs, vendors had to work harder to convince budget-constrained SMBs that their solutions would really help address top SMB business challenges to attract new customers, grow revenues and maintain profitability. More SMBs turned to lower-risk, pay-as-you-go cloud options, and several vendors (IBM, Dell and HP, to name a few) introduced new and/or enhanced financing options to help SMBs overcome financial hurdles.
The SMB Progressive Class Gains Ground	5	We identified a distinct category of SMBs that we termed “Progressive SMBs,” who see technology as integral to achieving business goals and to gaining a competitive edge. Progressive SMBs invest more and purchase more sophisticated solutions than their counterparts. Trending analysis from our 2011 to 2012 Routes to Market Studies show that the percentage of SMBs in the Progressive category is growing. Furthermore, Progressive SMBs continue to gain ground over SMBs that skimp on technology in terms of expected business performance.
The SMB Social Media Divide Grows	5	SMB adoption of social media did indeed jump, from 44% to 53% among small businesses (and from 52% to 63% among medium businesses from 2011 to 2012, based on trending analysis in our SMB Social Business Studies. The divide between social media haves and have-nots is also growing: our research reveals that 65% of SMBs that use social business tools anticipate revenue gains, while only 17% of “non-social” SMBs expect revenues to increase.
Cloud Becomes the New Normal	4	SMBs haven’t swapped out all of their on-premises solutions in favor of the cloud–but the puck is clearly moving to the cloud in all application areas. The evolution is continuing at a steady pace, as evidenced by trending analysis in our annual SMB Routes to Market Studies. In some areas, cloud is poised to overtake on-premises solutions. For instance, over 30% of SMBs that purchased or upgraded collaboration, marketing automation, BI and data backup in the past 24 months chose cloud, and over 40% of SMBs planning to purchase solutions in those areas in the next month plan cloud deployments.
Mobile Application Use Extends Beyond Email to Business Applications	5	SMBs significantly ramped up mobile business application use and plans in 2012, as evidenced by trending analysis from our annual SMB Mobile Solutions Studies. More SMBs are providing mobile business apps to employees in categories ranging from CRM to time management to expense reporting. In addition, adoption of external-facing (for customers, partners and suppliers) mobile apps and websites also rose considerably. For instance, SMB use of a mobile-friendly website is up 10% among small businesses and 23% among medium businesses.
Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate	3	The avalanche of data generated by cloud, social and mobile has certainly created the need for better analytics. However, year-over year trending data from our SMB Routes to Market Studies reveals a mixed bag in terms of adoption. Use of BI solutions among medium businesses spiked 24% in the past year, but adoption rose just 2% among small businesses. While vendors appear to be doing a good job of developing and marketing BI solutions tailored to the needs of medium businesses, they have not yet figured out the right formula for smaller ones.
Managed Services Meet Mobile	5	We forecast that the explosion of mobile devices and apps, “bring your own device” (BYOD) phenomenon and the increasing concerns about security would spark increased demand for and more solutions to manage mobile on the back-end. Our annual SMB Mobile Solutions Studies show that SMB adoption of mobile management services—from simple device management to comprehensive mobile management platforms—has accelerated rapidly. For instance, 16% of SMBs have already deployed an outsourced mobile management platform, and 30% plan to do so within a year.
The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions	5	Small businesses without a payroll make up more than 70% of America’s 27 million companies. We hypothesized that the 2008 recession and subsequent layoffs generated a new and often “accidental” breed of entrepreneurs that would spike demand for—and growth of—applications targeted to meet the needs of these businesses. And they have. New and improved cloud-based and mobile apps from traditional small business powerhouses (Sage, Intuit, Microsoft, Google, etc.), SOHO pioneers (Freshbooks, Nimble, Dropbox, Zoho, etc.), and freelance talent sourcing solutions from companies such as Elance and oDesk are making it easier than ever for SOHOs to get their work done.
Increased Adoption of Collaboration and Communication Services in Integrated Suites	4	Trending from our Routes to Market Study Medium businesses shows that overall, use and plans to deploy collaboration solutions is up year-over-year. Low-cost, low-risk, cloud-based collaboration and communications services have made it easier for SMBs to use integrated collaboration tools, while eliminating the inconvenience of using multiple sign-ons and interfaces. The fact that vendors are integrating more into their offerings—such as Google integrating Google+ hangouts, IBM SmartCloud Engage adding social communities and Citrix adding video capabilities to GoToMeeting—doesn’t hurt either.
The IT Channel Continues to Shape-Shift.	5	Cloud, social and mobile trends continue to reshape how channel partners must deliver value across the board. SMBs are increasingly choosing to purchase directly from software and cloud vendors in most areas. And Managed Service Providers (MSPs) have gained ground as a purchase channel over VARs in several solution areas, including security, BI and collaboration. The need for more specialized business and/or technology expertise has also made some types of channel players more relevant in each specific solution category than others.

*In SMB Group Syndicated Survey studies, we define small businesses as those with 1-99 employees, and medium businesses as having 100-999 employees.

For more information on our most recent SMB Mobile, Social Business and Routes to Market Studies, please visit our website, www.smb-gr.com, or contact Sanjeev Aggarwal, Sanjeev.aggarwal@smb-gr.com, 508-410-3562.

Today’s SMB Social Media Market Creates Opportunities for Tomorrow

SMB businesses are increasing their adoption of social media solutions year over year–rising from 44% to 53% in small business (1-99 employees) and 52% to 63% in medium business (100-999 employees). But what business functions are SMBs using social media for, and what social media tools are they using in different areas?

Just released results from the SMB Group’s 2012 Small and Medium Social Business Study paints a comprehensive picture of the functions that SMBs are using and planning to use social media for in their businesses. The study, which is the second annual survey we’ve completed on this topic, queried 665 U.S. executives in detail on this topic. As we look at trends from 2011 to 2012, we see several data points that reveal interesting opportunities for vendors to better serve this market.

Data Highlights

We found that similarly to our 2011 study results, SMBs in 2012 are adopting social media mainly to help them achieve their sales and marketing goals. Only a small percentage are using social media for non-sales and marketing functions, such as human resources, customer service and product development. However, use of social media in several of these areas is rising. For instance, social media use is up year-over-year:

• From 47.5% in 2011 to 60% in 2012 for “Generate more web site traffic”
• From 45% in 2011 to 59% in 2012 for “Connect with people who aren’t customers”
• From 45% in 2011 to 47.5% in 2012 for “Service/support and customer retention”
• From 23.5% in 2011 to 28% in 2012 for “Input for product development”

SMBs are using different social media tools for particular types of business functions, as indicated in the heat map below (Figure 1), which shows which social media tools SMBs are using to accomplish different business functions. For instance, LinkedIn is a the most widely used social media tool for  “new employee recruitment” while “geo location tools” are least used in this areas. Note that the tools above the blue line on the heat map are most frequently used for each business function, while the tools below the blue line show only marginal use. LinkedIn forums, Facebook, YouTube and Blogs are most frequently used social media tools to accomplish various business functions.

Source: 2012 Small and Medium Social Business Study, SMB Group

LinkedIn has been breaking out of the employee recruitment mold as SMBs extend its use into different areas. Although everyone knows about Facebook (and may have used Facebook for personal collaboration) and some small and medium size businesses have created a business page, many are still challenged by how to utilize Facebook’s potential to increase awareness of company brand, increase leads/traffic of website and drive revenues higher–and are testing out other social media tools.

As shown in Figure 2, although Facebook continues to remain ahead of the pack, adoption is tapering off. Meanwhile, other tools, including Twitter, YouTube, company blogs and Pinterest, have seen the strongest growth over the past year.

Figure 2: Social Media Tool adoption timeline
Q. How long have you been using social media for these functions?

Source: 2012 Small and Medium Social Business Study, SMB Group

To a large extent, SMBs are still experimenting to see how social media can help them, and which tools are best suited to helping them accomplish different business goals. Relative newcomers–such as Pinterest–can have a big effect in a short time if they hit the mark for specific business needs.

Because its relatively easy and low cost to test out different tools, SMBs will remain loyal only as long as they believe that they are getting beneficial business results. Since only 7% of small and 17% of medium businesses currently measure return-on-investment from social media, this is still a decision made by and large on anecdotal evidence and gut instinct.

This means that social media vendors must not only provide tools, but also training, services and metrics to help SMBs maximize and measure the value the get from these tools. For instance, a vendor could provide tools to help SMBs perform A/B testing–similar to what’s available for landing pages today– to hone their social media efforts.

As the market matures, pressure will also increase for SMBs to more accurately measure the results they’re getting across social media platforms. They will need better, easier to use analytics than are available today–ala Google Analytics for social. Vendors that provide these next-generation social media analytics solutions can capitalize on a big and growing market opportunity to bring today’s fuzzy picture into sharper focus. In addition, if they can harness these metrics across a broad base, they have the potential to build some very interesting data aggregation services akin to Nielson ratings for television and radio.

The bottom line is that there is still a lot of play in the nascent social media market–and unbounded opportunities for vendor innovation.

NetSuite SuiteCommerce: Transforming Commerce Solutions and User Experience

 Last week I had the opportunity to attend NetSuite

SuiteWorld 2102 in San Francisco. One of the most notable announcements was the launch of NetSuite’s new SuiteCommerce Commerce-as-a-Service (CaaS) platform for B2B and B2C businesses.

The SuiteCommerce offering is designed for e-tailers, retailers and other companies that sell online and provides these businesses with multi-channel platform which is integrated with NetSuite’s core ERP system. This gives companies a unified front-end to manage their various digital sites and brick-and-mortar stores, connected to their ERP to provide a single system of record for history of customers across channels. According to NetSuite, SuiteCommerce will help businesses to:

• More easily customize web page content and integrate information into back-end financial systems
  
• Tailor eCommerce solutions to the requirements of mobile, machine-to-machine (M2M) and social networking platforms
  
• Enhanced social networking solutions through integrations that augment the platform with social functionality such as social ratings, reviews, personalized product recommendations and conversations
  

NetSuite will offer two SuiteCommerce options:

• The Mid-market version targets businesses with smaller product catalog of products and services. The Mid-market suite starts at $1,999 per month and is available now.
  
• The Enterprise version is aimed at larger companies and is designed to handle a more extensive product catalog of products and services. The Enterprise version at $3,999 per month and will be available in August 2012.
  

The vendor also announced a roster of SuiteCommerce partners, including Square, Stripe, Acquia, Bazaarvoice, MyBuys, Velaro and Shotfarm that have developed apps that integrate with the platform. In addition, it announced partnerships with the creative agencies that can help companies design their sites to optimize SuiteCommerce capabilities. These partners, agencies and VARs can extend the SuiteCommerce platform using NetSuite’s SuiteCloud development platforms and SuiteApps.

Perspective

The timing of this announcement couldn’t be better.

Technology trends are converging to create a perfect storm in the world of commerce—one that empowers customers and raises the bar for companies to meet new, more demanding customer expectations. Social media empowers customers with information from friends and other unfiltered sources. Mobile devices are
facilitating this trend, making it possible to research and shop for products and services anytime and anywhere. Cloud computing and ecommerce are blurring the boundaries between brick-and-mortar and online commerce stores, creating an imperative for merchants to provide consistency and visibility across channels.

This has created an environment where customers expect more from businesses throughout the commerce cycle. They want anywhere, anytime, any-device access to multiple sources for information gathering, product and service evaluation, selection, purchasing and customer service. As a result, merchants need to anticipate what the customer wants, automate and personalize customer interactions, and enable the customer to do business where, when and how he or she wants.

NetSuite’s introduction of SuiteCommerce is designed to help businesses meet these elevated customer expectations. NetSuite has had an integrated eCommerce offering for years, an almost 2,800 of its customers run their web sites and storefronts on NetSuite. However, SuiteCommerce is intended to go beyond the commerce experience to integrate social, mobile and other customer touch points.

As NetSuite’s CEO Zach Nelson noted in his remarks at the event, “Over the past decade, NetSuite has transformed how our customers operate their businesses internally. Over the next decade, NetSuite will transform how businesses operate with other businesses and with their customers through NetSuite Commerce as a Service.”

In addition, SuiteCommerce strengthens NetSuite’s “one system of record” integrated suite story, which is a good one in the mid-market. SMB Group’s research finds that “integrating different applications” is a significant challenge (Figure 1).

Figure 1: Top Technology Challenges in Medium Businesses

Source: SMB Group 2011 SMB Routes to Market Study

The SuiteCommerce offering also aligns with the direction NetSuite announced at last year’s SuiteWorld event, when it unveiled plans to move up from its SMB lineage (that harkens back to its NetLedger days) to pursue the upper end of midsize business, a two-tier strategy in the large enterprise space, and select industry markets.

SMBs increasingly see that customer-facing mobile applications can help them grow revenue, attract and retain customers, and keep up with the competition. SMBs are using both mobile-friendly web sites and mobile apps to offer functionality to foster this interaction, as shown on Figure 2. Regardless of whether SMBs are employing a mobile-friendly web site, mobile apps, or both, what are the top capabilities that they are providing to external audiences? And what do they plan to add in the next 12 months?

Figure 2 Business Functions Available/Planned Via a Mobile-Friendly Web Site/Mobile App.

Source: SMB Group,
2012 Small and Medium Mobile Business Solutions Study

Mid-market businesses are increasingly enabling mobile apps to access line-of-business functions to conduct business with customers, prospects, partners and suppliers. Mobile support in SuiteCommerce will enable significant new revenue opportunities for NetSuite SuiteCommerce VARs and service providers.

Quick Take

The large number of customers and partners in attendance at SuiteWorld 2012 seemed excited about SuiteCommerce and NetSuite’s direction to help transform from the core internally-focused business application into an integrated, commerce-aware business platform. I talked to several NetSuite VARs at the event, most of them were very excited about the comprehensive easy-to-use solution multi-channel commerce solution.

NetSuite’s ability to get both developer and creative partners for the SuiteCommerce launch bodes well, as these are the applications and services that will bridge the last mile for many customers.

SuiteCommerce currently offers good mobile capabilities to mid-market businesses. However, SMBs increasingly see that customer-facing mobile applications can help them grow revenue, attract and retain customers, and keep up with the competition. NetSuite should look at developing some core mobile apps that integrate with SuiteSommerce, these apps can me customized by the VARs and offered to mid-market business providing significant competitive advantage to the SuiteCommerce platform.

There has been a significant rise in demand for social networking capabilities in mid-market businesses. On the social side NetSuite has already enabled the platform for social networking. Several of the social solutions partners help complete the solution to provide a comprehensive social solution.

One question that remains unanswered, however (although asked by analyst Brian Sommer and explored in NetSuite SuiteWorld Part 1: The Big Points | ZDNet), is how NetSuite will help companies crunch through, manage and make sense the massive amounts of new, external and transactional data that they will be bringing in. While big data, HANA, Hadoop and in memory databases are still fuzzy concepts for many, major players (IBM, Oracle, SAP, etc.) will get better at articulating what it means–and their solutions. And as NetSuite turns further upmarket, the pressure will build for it to have a solid and well-crafted big data strategy.

Swimming with the Smarter Customer: The Speedo International Story

—by Laurie McCabe, SMB Group, in partnership with Brent Leary, CRM Essentials

Recently, Brent Leary and I had the opportunity to talk with Gareth Beer, Ecommerce Manager for Speedo International and learn about how Speedo International is applying smarter commerce philosophies and solutions to better serve its customers. We think Beer’s insights about Speedo’s experience in this area illustrate how important it is for a company to start with a strong vision for delivering a great customer experience–and how to execute to make that vision a reality.

Start with the Customer

Anyone that’s ever been near a pool let alone belonged to a swim team knows the iconic Speedo swimwear brand. But, we do need to supply a bit more background to put this post in context for our discussion.

Speedo International is a subsidiary of Pentland Brands with headquarters and about 200 employees based in Nottingham, UK, and operations around the globe and sales in 180 countries. Up until 2008, Speedo International had been a traditional wholesale business, with retailers serving as its sole sales outlet to customers. The company had no desire to compete with its retail partners, but consumers were clamoring for better access to the full range of Speedo products, in all sizes and colors–which they couldn’t always find in their local stores.

Bringing Speedo International online was an obvious solution to providing customers with better access, but Speedo faced a dilemma common to many companies in this position–the threat of potential channel conflict. But as Beer told us, “Speedo understands that many customers will use the site to search, browse and add to the cart and ultimately buy at a local store.” Speedo’s goal is to give customers a place to search, browse and find information–and then purchase the product wherever they choose.

Zero in on Objectives

In line with these goals, Speedo International needed to create a site with detailed photos, images, descriptions, fitting guides, FAQs and videos of all Speedo products; the ability to purchase; and customer feedback mechanisms. Speedo had a jump-start because Pentland, its parent company, was already running IBM WebSphere Commerce for all of its companies, making this platform the natural choice for Speedo.

So Speedo’s ecommerce team got busy figuring out what analytics capabilities they wanted. They were looking for a solution that “would let us go to another level of thinking, beyond looking at visitors and traffic. We wanted to really understand the customer, how they behave, how they think and how they liked to be interacted with, so that we could optimize marketing, retention and recruitment,” according to Beer. The company also wanted the flexibility to gather and analyze new sources of information as requirements evolved.

After investigating different solutions, Speedo International selected IBM’s Coremetrics for several reasons. First, Coremetrics was available as subscription-based cloud service, and pre-integrated with WebSphere Commerce, which meant that Speedo didn’t need to spend time on technical implementation and integration.

More important, Beer advised us, was that “all the data is in one place and we have a common interface across the 12 Coremetrics modules we use. Other vendors have similar tools, but with Coremetrics, we get the different capabilities we need, from measuring the effectiveness of pay-per-click campaigns to creating personalized interactions with top customers.

Create a Virtuous Cycle

Some of the many ways Speedo uses Coremetrics are to:

• Track KPIs for sales, orders, visitors, stock and margins, and its consumer index score, which rates customer experience with Speedo.
• Gauge the effectiveness of pay per click campaigns and retargeting efforts.
• Get a clear view of who the customer is, how they behave, and how they like to be spoken to.
• Set and meet service level agreements to pick, pack and dispatch orders.

As a result, Beer’s team can deliver feedback to business decision makers more rapidly. “We can quickly pick up on trends, what’s working, what’s not, what colors and styles people like or don’t like. Then the business can make better commercial decisions faster,” Beer told us.

Using the Coremetrics Lifecycle module, Speedo also gains a complete view of its top customers, which enables it to do things such as offer more personal attention and rewards, and encourage them to post more ratings and reviews. In turn, this gives Speedo more data to feed back to the business, turn top customers into advocates, and generate more business.

Speedo International has held fast to its pledge not to compete with its retailers on price. However, about 15% of Speedo’s customers pay a premium to buy on the Speedo site. Speedo’s research indicates that these customers buy on direct because of the exceptional customer service experience that Speedo delivers–facilitated to a large extent by WebSphere Commerce and Coremetrics.

A Work in Progress

Speedo International launched a Facebook page about 18 months ago. It uses Coremetrics to make sure that Facebook information jives with information on its estore, and to track how many people go to the estore from Facebook. Speedo can append Facebook images, URLs, etc. with tags which feed into Coremetrics. Using these tags, Speedo can also create special product offers, or have people vote on colors on Facebook, and see how many people come to the estore as a result of these campaigns.

One of the most compelling parts of Speedo’s strategy that Beer discussed with us is to “put any Speedo store on top of WebSphere Commerce, and have one place underneath as a common foundation for all stock and inventory management.” In 2012, Speedo plans to launch a new Facebook store, a new mobile store and create stores in key European countries with localized content, currency and language. The unified WebSphere Commerce foundation will ensure consistency and continuity of the customer shopping experience across these different sites.

Summing Up

Beer summed up his perspective by saying “the business is all about the customer. We need to be in as many channels as customers are in and align them as closely as we can–whether the customer is on smart phone, iPad or in a brick and mortar store. The goal is to have consistency and visibility across these channels and heighten our understanding of the customer.”

We couldn’t have said it better.

This is the fourth of a six-part series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions.

What Can We Learn From This Year’s Holiday Season?

—by Brent Leary, CRM Essentials

In conjunction with IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the fourth post in the series.

Christmas 2011 is a great example of Smarter Commerce in action. It’s a lesson in why businesses need to transform the way they market and sell their products and services. According to the National Retail Federation, retail industry sales for the 2011 holiday season increased 4.1 percent year-over-year to $471.5 billion, beating its expectation of 3.8 percent growth. And while the overall numbers probably made for a pleasant holiday for the industry as a whole, what was happening online was astounding:

• US online holiday shopping season reaches a record $37.2 billion, up 15 Percent vs. 2010 – a rate of increase almost 4X higher than the overall rate for retail.
• A post-holiday 2011 retail study from Kabbage, Inc. focusing on small-to-medium online merchants found 69% of respondents reporting increased sales. On average, study participants experienced a 32% hike in sales compared to the 2010 season.
• As late as one week before Christmas 2011, one-quarter of consumers hadn’t even started holiday shopping. (Consumer Reports)
• 93% of retailers have offered free shipping at some point during the season vs. 85% last year. (USA Today)
• The 2011 US Holiday Season edition of the ForeSee Results E-Retail Satisfaction Index of the top forty Internet retailers increased by a point from 78 to 79 (on a scale of 1-100)
• Almost one in four retail searches online on Christmas Day were made using mobile phones or tablet devices, according to the British Retail Consortium (BRC).
• The number of adults in the United States who own tablets and e-readers nearly doubled from mid-December to early January, according to a new Pew Research study. (New York Times)

Technology’s Impact on Behavior Is Accelerating

The world is changing. While still a fraction of the overall sales figures, ecommerce is growing at a much faster rate than traditional retail. And not just for the big retailers. As the Kabbage study illustrates, small and midsize online retailers enjoyed tremendous growth as well. This in part stems from the effect technology is having on the customer buying process, and the ability of companies to adapt their business processes to support online shopping.

When you think about twenty-five percent of shoppers not starting their Christmas shopping until after December 18^th, it really hits home how the process of shopping has changed. Five to ten years ago most people still were going to multiple stores in search of ideas for things to buy, to find recommendations, compare items, and to look for deals, so they had to start their shopping efforts earlier. Now they can do most of that online – with a lot less time involved. And from the online retailer’s perspective, they leverage the latest technology not only to provide this information to online shoppers, but also to deliver the goods on time as well. Jewelry specialist Blue Nile offered free FedEx shipping guaranteed to arrive by Saturday, December 24, for all orders placed as late as 7 p.m. the day before (Friday, December 23). And other online retailers offered similar shipping capabilities.

This all adds up to shoppers more efficiently finding what they want, knowing the price they want to pay and having the confidence of getting it in time – with the added benefit of not having to wrestle with issues like parking, crowded malls, weather etc.. And as both companies and consumers accelerate their technology adoption, look for ecommerce to steadily increase its portion of the retail pie while customers leverage social and mobile to decrease the time and effort it takes to buy things.

Technology’s Impact on Behavior is Dramatically Affecting Expectations

One of the more interesting developments is how technology is impacting customer expectations as well as their behavior. Now that companies like Amazon can get items to us in two days for free, we expect this kind of service all the time. And while 93% of them did offer free shipping at some point during the holiday season, a study also showed 73% of consumers recently surveyed by MarketLive named “free returns” as a top promotion in determining their online purchasing behavior.

This is a great example of customers understanding what technology can do, and expecting vendors to find ways to leverage it to continuously improve their shopping experience. And improving the experience is crucial to keeping customers satisfied. According to the ForeSee study, satisfaction scores are important because a one-point change in website satisfaction can predict a 14% change in revenues generated on the web. And when they were highly satisfied with a purchase:

• 64% of survey responders said they were more likely to buy from the same company the next time they needed a similar product;
• 67% were more inclined to recommend the company to others; and
• 65% felt a sense of ‘brand commitment’.

This illustrates that investing in improving customers’ web experience is a terrific way to build brand loyalty and capture the benefits of viral marketing (or something like this).

A Christmas Carol…

You really don’t have to look much further than Christmas Day 2011 to see how technology has changed customer behaviors and expectations. Digital content & subscriptions (digital downloads of music, TV, movies, e-books and apps) accounted for more than 20 percent of sales on Christmas Day. On any other day of the holiday season, that number was only 2.8%. And these numbers were driven by the rise of mobile devices, with the iPad leading the way on Christmas Day with a staggering 7% of all online sales coming through just that one device – accounting for 50% of sales that day, according to the IBM Coremetrics Benchmark.

While the numbers tell the story, it really hits home personally when I saw my parents (both octogenarians) sitting at the kitchen table Christmas Day – my father with his iPad, and my mother with her Kindle Fire. And my mother, having received the Fire as a gift, was reading an ebook she purchased Christmas morning… with an Amazon gift card.

This is a totally different story of Christmas than Charles Dickens told in the 19^th century, but it’s a tale of what to expect in the 21^st century when it comes to customer engagement. Because of technology and its empowering effect on customers, they are developing “great expectations” their vendors must live up to. Which means vendors must be smarter in their approach to smarter, more informed customers.

This is the fourth of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll look at key points to consider when planning a smarter commerce strategy. In our next post, we’ll look at IBM’s Smarter Commerce offerings to help illustrate how midsize companies can reshape the way they do business to meet the expectations and needs of smarter customers.

Pervasive Puts Its Galaxy Integration Community Into Orbit

–by Sanjeev Aggarwal and Laurie McCabe, SMB Group

Pervasive announced Pervasive Galaxy at its annual Metamorphosis conference earlier this month. Galaxy merges an online integration marketplace and community into a single, streamlined platform. Pervasive has designed Galaxy to make remove boundaries between buyers and sellers and make it easier for end-user customers to understand options, review vendors, figure out what’s best for their needs, and shop for and purchase integration solutions. Galaxy’s built-in community capabilities help vendors connect with customers to gain input, gather feedback, exchange ideas and help crowdsource new solutions.

As we noted in our SMB Group Top Ten 2011 SMB Predictions, better, faster integration is becoming a critical business solutions differentiator. Cloud computing has made business solutions more accessible and affordable for a wider swath of companies, but integrating them can often break the bank. This is especially the case for SMBs, who usually don’t have the money or appetite for complex or time-consuming integrations.

This reality drove IBM to acquire Cast Iron earlier this year, and Dell’s recent purchase of Boomi. Now Pervasive, a long-time leader in the integration space, has sent Galaxy into orbit on the heels of some very big players making significant acquisitions in the integration space.

Here’s a quick synopsis of the announcement, and our take on what it means for the integration market and the stakeholders in it.

The Integration Challenge

Integration is one of the biggest and costly hurdles for companies that need to adopt new applications. Companies need to integrate applications and data sources to maximize productivity, reduce redundancy and inaccuracies, and streamline workflows. Yet integration between and among cloud and on-premise applications, different data sources and existing business workflows can be costly and complicated. This is especially true for SMBs, who don’t have IT staff that can develop integration between applications, or the budgets for solutions that require time and labor services.

How Galaxy Addresses the Integration Challenge

With Galaxy, Pervasive is creating a place where customers can easily identify and access affordable and capable integration solutions and vendors, and also provide vendors with feedback about their integration requirements. Galaxy will offer data integration products, solutions, connectors, plug-ins and templates, and serve as a community platform for customers, developers, integrators and other relevant vendors. Pervasive’s intent is that this convergence will nurture a strong ecosystem that will facilitate more rapid, innovative and accessible integration solutions.

Vendors on Galaxy will offer customers both integration components and turnkey cloud integration services. For instance, integration components available in Galaxy include engines, workflows, connectors, agents and rich data services that can support a range of needs, such as data loading, data matching, profiling, transformation and business analytics. It will also offer ready to run solutions for point-to-point solution integration in a subscription-based SaaS model.

How Galaxy Works for Customers

Galaxy enables community participants to build, preview and test, buy integration solutions. These might include pre-built data integration solutions, connectors, plug-ins or templates that enable faster integration solution development.

Instead of starting with a Google search, or contacting a VAR or consultant, and trying to figure out if there is an existing integration solution that’s right for their needs, customers can go to Galaxy and see if there’s an existing solution that fits the bill. They can also use Galaxy to locate a partner than can customize an available integration to their individual needs, or build a custom solution from scratch.

Building an integration community is Galaxy’s other primary focal point. End users will not only be able to shop for ready-made solutions on Galaxy, but will also be able to view and provide ratings on the templates, connectors, plug-ins and solutions in it. They can use Galaxy to inform developers and integrators about their needs, request new integrations, and link to others with similar needs to share the costs of getting a new integration developed. End-users who build integrations themselves can, if they want, also sell them to others via the Galaxy platform.

How Galaxy Works for Partners

Pervasive Galaxy offers developer and system integrator (SI) partners an integration marketplace platform, development tools, integration store, community collaboration and revenue sharing–basically everything they need to build and sell their integration solutions. There is no charge to build an integration on Galaxy. Once partners build the solution and start selling it on the platform, they keep 70% of the sale and the other 30% goes to Pervasive. Partners retain the intellectual property of the integration, and can offer documentation and the required technical support (possibly for an additional fee).

Partners should be able to use Galaxy to help get their integrations to market more quickly, and make their offerings more accessible to a broader market. For instance, Galaxy’s try and buy program gives developers a way to demonstrate ROI before they buy–giving skittish and/or cash-strapped SMBs a risk-free way to try the integration and see if it pays off before they have to spend money for it.

In addition, partners can take advantage of Galaxy’s community to tap into the integration requirements across a range of businesses. This should enable them to tune their integration solutions more closely to actual requirements and meet market needs in a more repeatable and profitable manner.

What Does Galaxy Do for Pervasive?

Pervasive has initiated, built and will maintain and manage the Galaxy marketplace platform. Galaxy gives Pervasive a centralized mechanism to market and provide access to its growing array of development and testing tools–including Pervasive Data Integrator, Pervasive DataCloud, Pervasive Data Profiler in a more streamlined way to developers and integrators–and build a new revenue stream based on the sales of the integrations that partners build and sell.

As the community grows, Pervasive should also be able to extract a lot of insight about customer and partner integration requirements and demands across different horizontal, vertical and geographic markets, which it can use in its own product planning efforts.

Pervasive and its community members will jointly deveop and participate in demand generation and building visibility for the Galaxy market, vendors and community.

At some point, Galaxy could serve as a launch pad for integration testing and certification, conducted either by Pervasive or possibly by the community, helping to reinforce Pervasive’s position as a leader in the integration space.

Quick Take

The integration challenge is becoming increasingly more complex because of trends such as cloud computing, mobile solutions, social media and the exponential growth of data. These trends will continue to drive the need for companies to integrate more applications and data from an increasingly dizzying array of sources.

These trends are also driving Pervasive and its integration competitors to tear down some of the barriers that have made integration so difficult in the past (see Dell and Boomi: Doubling Down on Integration, for our view on Dell’s approach to this challenge).

With Galaxy, Pervasive has built a streamlined, in-context ecosystem for customers to search for, identify, evaluate and purchase integration solutions. As important, Galaxy gives users a place where they can voice their integration experiences, concerns and requirements. Meanwhile, Galaxy should help partners market their solutions, and gain insight on integration gaps and requirements from a much broader audience, and amortize the costs of developing their integrations over a larger number of customers. The ecosystem approach puts vendors and customers on the same page and fosters the collaboration that should result in a win-win.

However, while Pervasive has built Galaxy, the question remains, will enough users and partners come to make it a true integration destination point? To fuel customer interest, Galaxy needs a strong cadre of actively engaged developers, SIs, and integrations in its ecosystem. Conversely, to attract partners, it needs a lot of customers that partners can sell their services to. Pervasive will need to double down on its social media, marketing, partner engagement and other related activities to ensure Galaxy reaches its goals–especially as it faces strong competition from the big guys–in our opinion, particularly from Dell-Boomi, which appears to be thriving under the Dell umbrella.

But, Pervasive’s smaller, independent status, can also play in its favor, as noted in Top Takeaways from Pervasive’s 2010 IntegratioNext Conference. It can keep a laser-like focus on the integration needs of customers and the business development needs of partners. And its independent status may appeal to prospective partners that may having differing agendas than, or encounter red-tape challenges when working with Pervasive’s larger rivals. If Pervasive can use this agility and focus to its full advantage, and rev up marketing and social media engagement, Galaxy should succeed in it mission to create a vibrant integration marketplace.

Social Business: Why Having a Plan Matters

Co-authored by: Laurie McCabe and Sanjeev Aggarwal, SMB Group, and Brent Leary, CRM Essentials

 

Good plans shape good decisions. That’s why good planning helps to make elusive dreams come true.
Lester R. Bittel, The Nine Master Keys of Management

This seems to be especially true when it comes to getting business value out of social media. We recently wrapped up fielding for our joint SMB Group-CRM Essentials “2011 Small and Medium Business Social Business Study,” in which we surveyed 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers regarding their use, plans and perceptions about social media.

Although SMB interest and adoption of social media to assist with a variety of business functions—from generating leads to product development—is sky-rocketing, the question remains of how and where SMBs are actually deriving business value remains. Our study took an in-depth look at the specific activities and functions that SMBs are using social media for.

While Sanjeev Aggarwal, partner Brent Leary of CRM Essentials and I are just beginning to immerse ourselves in this very rich gold mine of data, one thing is clear:  SMBs that use social media in a “strategic and structured way” to interact with customers and prospects are much more likely to be deriving benefit from their social media investments than those who are using social media in an “ad hoc, informal” way.

Today, SMBs are most likely to be actively using social media to help with marketing and sales functions–including generating more web site traffic, generating more leads, connecting with people who aren’t yet customers, improving market awareness for their brand, reputation enhancement and creating more/better interaction with customers.

As shown on Figure 1, survey results show that those that have a more formal and structured strategy are more likely to be satisfied or very satisfied with the outcomes than those that are using social media in an informal, ad hoc way. For instance, among small businesses:

• 39% of respondents using social media are very satisfied/satisfied with the results of using social media to “create more/better interaction with customers/prospects,” as opposed 24% of those using it an ad hoc manner.
  
• 37% of structured users are very satisfied/satisfied with using social media to generate more web site traffic, compared to just 14% of ad hoc users.
  
• 37% of structured users are very satisfied/satisfied with using social media to improve market awareness for the company, in contrast to 16% of ad hoc users.

Figure 1: Comparison of Small Business Satisfaction with Social Media for Business Activities: Structured vs. Ad Hoc Users

 

While we have about 30 other questions and a seemingly endless array of cross-tabs to mull over in terms of the study, one thing is already crystal clear: To get the most business value from your social media investment, you need to pause and plan—in addition to playing with—social media activities.

For more information about this study, click here.

Relevance of Marketing Tools/Media in Customer Acquisition

The topic of lead generation and the role of various media solutions in the lead generation process draw significant conversation. From a survey of small businesses done in the summer of 2009 and detailed in my blog, ‘GoToMeeting‘ from CitrixOnline or ‘Intuit Website’ from Intuit. This form of media effectively cultivates and nurtures demand. ‘Small Businesses interest in Social Media Increasing ‘ and with regards to tools used by small businesses to promote their business (not generate sales leads), 77% of small businesses are using or plan to use social media tools. Why has the use of social media seen such a dramatic increase? This is primarily driven by several factors:   

• Change in the personal communication environment and habits of consumers and business workers  
• Low barriers to entry: the cost of participating in the social media communications are very low and some—tools like Twitter, Facebook, WordPress and LinkedIn—are even free 
• Social media solutions are a one-to-many form of real-time communications
• Social media is much more than a digital form of viral marketing – it is an effective and inexpensive way to convert contacts into a referral network  

   

Traditional Media tools. On one end of the spectrum, marketing is responsible for Demand Generation by driving awareness. Traditional media tools such as radio, television, newspapers and business journals (in their print form), provide broadcast opportunities and are good for creating broad awareness to develop interest among consumers and businesses – otherwise known as Outbound Marketing. Successful examples include the TV commercials like ‘GoToMeeting’ from CitrixOnline or ‘Intuit Website’ from Intuit. This form of media effectively cultivates and nurtures demand.

New Media/Digital Media include Social Networking tools (Facebook, Blogs, Twitter, LinkedIn, etc.), Webinars and Podcasts, and Search Engines. Such ‘inbound marketing’ tools enable businesses with product/service increase awareness already developed to a certain level through traditional tools to further draw in consumers and encourage their further investigation of the company’s product or service.  

An SMB survey from Citibank found that some small businesses saw little reason to hop onto the social-network bandwagon. The majority of them found sites like Facebook, Twitter, and LinkedIn to be of little help in finding new business leads. While social media can certainly provide channels to network and help a growing business flourish, many SMBs do not have the manpower or the time required to take advantage of them—that is, use them to look for business advice or information. It is up to the business to bring in the relevant social media conversations related to crowd-sourced recommendations for their company and solutions into their company website or other discussion forums. Techniques that do this are illustrated very well in the “Inbound Marketing” book by founders of HubSpot. 

Personal-touch Media tools like company website, e-mail marketing, live webinars, and professional advisors provide the information to convert exploring consumers and business buyers into potential leads. The new media-based inbound marketing solutions drive the explorers to the company website and/or additional personal touch based media and channels. However, SMBs must work to channel their company relevant social media discussions into their website. These social media conversations are similar to word-of-mouth and personal communication methods. Ultimately, these personal-touch media solutions are directly involved with actual lead generation, ongoing lead nurturing and finally conversion to customers as well as cross-selling and up-selling to existing customers continually deepening prospect relationships    

Some of the new marketing automation and lead nurturing solution companies like Marketo, HubSpot and Demandbase are combining some of the key aspects of New Media/communications and Personal-touch Media/communications solutions that provide great value to the SMB and mid-market companies for both outbound and inbound marketing – and most of these solutions can be implemented for a fraction of the cost of a marketing person.