Sanjeev Aggarwal's Blog

March 22, 2011

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.


December 31, 2010

SMB Mobile Spending Trends from SMB Group’s 2010 Mobile Solutions Study

Filed under: Blogs - Sanjeev Aggarwal, mid-market, mobile, Small Business, SMB, Survey, website — Tags: — sanjeevaggarwal @ 3:54 pm

As part of the recently completed SMB Group study “2010 Small and Medium Business Mobile Solutions Study,”
we performed a detailed analysis of U.S. small and medium business (SMB) spending on mobile devices, applications, and services. As explained in this study, SMBs (1-999 employees) spent approximately $26.1B on mobile solutions and services in 2010—an amount forecasted to increase annual at a rate of 17 percent for the next few years, with some segments growing much faster than the others.

As indicated on Figure 1, voice and data services gobble up the biggest part of SMBs’ mobile budgets (69%), followed by mobile application (12%) spending, mobile devices (11%), and mobile device/application management (8%). In the U.S., mobile service providers typically subsidize mobile device costs as part of their two-year mobile service contract subscriptions, resulting in the lower spending for mobile devices–which would cost two to three times more if they weren’t subsidized.

Figure 1 – 2010 SMB Mobile Solutions Spending


Other important takeaways from the survey and our analysis include:

  • While SMBs currently spend more on devices than on mobile management, growth in spending for the latter is outpacing spending on the former by roughly 13%. This reflects the reality that as mobile adoption and business dependence on mobile solutions grows, SMBs will need to invest in solutions to more efficiently manage mobile services and solutions.
  • Although SMBs currently spend more on voice and data services than mobile applications, survey results indicate that spending for mobile applications grow about 30% faster than for voice and data services.
  • Very small businesses have the highest average spending per employee for mobile services, solutions and devices. Average mobile spending per employee decreases as company size increases. As companies grow, they have more formal mobile policies that encourage mobile plan sharing, and can take advantage of volume discounts to help cut spending. For example:
  • Very small businesses with 1-19 employees spend about $150 per year per employee on mobile devices, compared to $101 per employee for companies with 50-99 employees.
  • Expenditures for annual mobile voice and data service plans per employee rage from $1,056 for companies with 1-19 employees to $511 for small businesses with 50-99 employees.
  • Annual mobile application spending ranges from $416 per employee for companies with 1-19 employees to $292 per employee for companies with 50-99 employees.
  • The role of the user-management, sales, office manager, information worker, etc.–and the industry are key factors in determining what types of devices are selected.
    For example,
    Information workers in industries like health care, legal, real estate are adopting smartphones and tablets more rapidly than other types of users in other industries.

Mobile spending now accounts for almost 10% of all technology spending for U.S. small and medium businesses and is forecast to grow at a rapid pace for the foreseeable future. This presents very significant opportunities for vendors on several fronts, including:

  • Mobile device companies that develop new devices that tailored to specific user roles and industries.
  • Mobile web and mobile application providers to create innovative new applications that help SMBs perform business functions more easily and flexibly.
  • Service providers that go beyond voice and data service plans to offer higher value solution bundles.

However, the high cost of mobile service plans threatens to stall SMB adoption of smartphones and other devices that enable employees to take advantage of mobile business solutions. This is particularly true in very small businesses (1-19 employees), where 40% cite high voice and data costs as a top barrier to mobile solution adoption. Even when we look at the total small business group (1-99 employees), 37% say these costs are their top obstacle. As a result, 43% of small businesses currently provide voice-text phones and plans only to employees.

Of late, service providers are offering more limited choices for voice-text only phones, which will push some small businesses to invest in data service plans, smartphones and the applications they enable. But, small businesses will need more flexible and affordable data plans to take advantage of the mobile applications that can help their businesses grow. We’ll be watching closely to see what types and which vendors will try to shake up the status quo with new pricing schemes, bundles and incentives to help small businesses take better advantage of the mobile opportunity.

For more information and a Table of Contents is available for this study click here: 2010 Small and Medium Business Mobile Solutions Study.

 


 

September 27, 2009

Interest in Social Media among Small Businesses Correlates to Number of Years they have been in Business

 

Related insight to my recent blog Small Businesses interest in Social Media increasing rapidly , related to the Number of Years a small business has been in existence. See figure below:

photoshop-2

Adoption and use of social media is correlated to ‘Number of years in business’ and indirectly to the age of the owners. As the figure above shows, longer the small businesses have been in existence (indirectly correlated to the age of the small business owner), the usage of social media declines. Small businesses that are in existence for 10 years or less, most likely will have Gen X or Gen Y business owners who have grown-up in the internet age and are well tuned to and more likely to use online communication and collaboration – are much more likely to adopt social media. In their personal lives, they have extensive experience in using web-based tools like MySpace, Facebook, YouTube and real-time communications tools like chat and text-messaging – for one-to-many and one-to-one communications. They are more likely to be influenced by online communities and collective ratings of products.

Small businesses that have been in existence for more than 10 years would have Baby Boomers as their owners. Boomers interact with others in their communities around shared interests and common issues, but they prefer to use more traditional communications tools like e-mail and voice communications. Boomers participate heavily in word-of-mouth and value personal recommendations and expert opinions, but they have not embraced social networking in any significant manner. It is difficult for people to change habits quickly. However, if the owners of these long established businesses find that their customers and prospects are increasingly communicating on the social media sites, then it would be prudent to hire a Gen X/Y person who is very familiar with these social media tools to help you develop a social media strategy to cater to your audience based on the social media tools they use.

Even though small business use of social media tools is increasing, not all small businesses need to invest in social media – this needs to be decided based on the nature of your business, your business location and your audience (customers, prospects and partners). Some small businesses that serve local communities in rural areas may continue to do business in the traditional manner, until their audience is ready to communicate with them using these new tools and their revenues and customer satisfaction is impacted by it.

Small Businesses interest in Social Media increasing rapidly

In a recent very small business (businesses with 10 employees or less), Social Media ranked at the top of the list among the tools used by small businesses to market/promote their business (see Figure 1). The use of all ‘Digital Media’ tools by SMB has seen a dramatic increase in the past 2 years at the at the expense of ‘traditional media’ tools. Many businesses are finding that marketing campaigns using traditional media tools are seeing reduced effectiveness in reaching their target audience. Consumers and businesses are placing less trust on information provided through traditional marketing vehicles, as those are mainly static tools supporting one-way conversations – other than word-of-mouth. The new digital media is changing the rules of marketing and even small businesses need to proactively participate in this change.

Figure 1photoshop-1

Why has social media seen this dramatic increase? This is primarily driven by 3 factors:

  • Change in the consumer and business workers personal communication environment and habits
  • Low barrier to start participating in the social media communications – tools like Twitter, Facebook, WordPress are free. Social media is much more than traditional forms of viral marketing – it is an effective and inexpensive way to convert contacts into a referral network
  • Much more real-time communication support to start conversations with existing customers and prospects

As the data shows, most small businesses are already participating in social media to varying degrees. Most of the social media adoption by small businesses is happening in an adhoc and sporadic manner. Majority of it is being driven by their use of of these social networking sites for personal communications. This use of social media in business today is more experimental, some to get a feel of the type of small businesses that are starting to participate in such communications and others to experiment with the type of conversations that are taking place and the type of communications they could have using this medium. As small businesses get more comfortable with these communications media over time, their importance in the marketing communications mix will increase. However, there are several issues that need to be resolved before they become mainstream communication tools for the small businesses. Some of them are:

  • Efficient and productive ways to monitor and participate in social media – small business do not have the time to individually monitor the various social media sites like Twitter, Facebook, LinkedIn, Blogs, etc. They need tools that can integrate with their existing business solutions to pull-in conversations that could have relevance to them. Some new solutions from vendors like Salesforce.com will help small businesses harness the power of social media through solutions like Service Cloud, Salesforce Answers and Salesforce for Twitter and Ideas. New vendors that provide some solutions in this area include Lithium, Helpstream and Elgg.
  • Finding areas where social media can add value and provide business benefit – potential areas include product marketing and customer service
  • Integrating Social Media solutions with current marketing tools – Now that we know small businesses are interested in social media, it would be a good (for ISVs) to integrate social media interaction with your current marketing solutions like CRM, e-mail marketing, marketing automation, etc.
  • Customer sentiment monitoring – This is area small businesses can monitor conversations that are taking place about their products, brands and competition. Although this area today is primarily leveraged by larger consumer focused companies, over time this information can be leveraged by small businesses also.

To make this communication and collaboration effective and supportive of key business objectives, small businesses need to craft a social media strategy as part of a marketing plan to positively reinforce brand awareness and improve customer relationships.

Key elements to this plan should include:

  • Integrate social media into your current marketing plan, don’t abandon what is working to get on the social media band wagon
  • Find out where your target audience (existing customers and prospects) gathers online and learn how they are engaged. Start by asking your current customers where they are and then join in.
  • Match your audience to the social media tools they use – some people like Twitter other prefer Facebook or LinkedIn. Focus on relationship building.
  • Don’t limit yourself to most immediate “universe” of your target. Find people who touch your universe and engage them too.
  • Listen to what people are saying about you in the social media world
  • Use social media to drive traffic to your website
  • Develop plan to measure the success of your social media efforts (topic for another blog)
     

August 28, 2009

Deciding what survey software to use?

Being a market research, we make extensive use of market surveys, to measure market/customer needs and sentiments. For years I was outsourcing the programming, testing and hosting to outsourced survey houses. However, driven by the current economic conditions and reduced market research budgets, this year I decided to do try the survey programming/testing exercise myself.

My survey software solutions requirements are more complex compared to the standard small consumer type survey. They are usually long (30-40 questions each with several options), with complex and branching, follow-on questions based on previous responses, etc.

Finding the right survey software could be a hard task. There are a large number of vendors to choose from, a cursory look at any of them give an impression that most of them are almost alike. One needs to consideration several factors before picking the right solutions. Some of things you need to know and look for before deciding:

  • Survey tool features (considering the complexity of your survey)
  • Ease-of-programming and hosting
  • Cloud-based or on-premise server based
  • Price (use of software and survey hosting)
  • Reporting functions
  • Performance of solution, especially when reporting
  • Training provided
  • Support (both telephone, web and user forums)

After evaluating numerous survey tools from several vendors (Checkbox, SurveyMonkey, SurveyGizmo, Vovici, Zoomerang, QuestionPro, NoviSystems, SurveyCrafter, etc.), I selected SurveyGizmo solution for my fairly complex survey needs.

SurveyGizmo is very easy to use; value priced and provides the most extensive set of features among all the survey software solutions I evaluated. It has a simple user interface with an extensive list of question types and survey action that makes designing and testing survey very easy. The reporting functions are also very good. Several other vendors that I evaluated had very poor performance, especially when using the reporting and analysis functions. They also provide very flexible pay-as-you-use pricing, without the need to commit a significant amount of capital upfront (as some of the other vendors do) – this is especially important in the current difficult economic climate.

 

Blog at WordPress.com.