On Internet Business

SMEs and the Internet

Posted by Michael under Business Growth, Online Retail, Social Media

Many smaller businesses wonder why they should bother about the internet. There are three main reasons that getting to grips with internet technology and communication will help any business to thrive, and they are the same three reasons that can send a business under. The internet now:

1. challenges how business is done
2. extends customer expectations of a company
3. reveals new opportunities for growth

Concrete examples of each of these from the real world of business show just why even the smallest SME can’t afford to ignore the explosion in internet based communication.

Challenged and failed

Neal’s Yard were challenged, and failed, when they were given a chance to engage with bloggers via the Guardian’s online ‘pages’. Guardian Deputy Editor Adam Vaughan opened the ‘You Ask, They Answer’ blog so that the luxury toiletry and healthcare retailer could answer queries. Hit with dozens of questions from intelligent and sceptical consumers, asking about everything from the way Neal’s Yard homeopathy products could be said to ‘help fight malaria’ to their pricing policy, they failed to produce the responses they’d promised. Then Max Clifford weighed in with a trenchant soundbite on where, when, why and how they’d got it wrong – exactly the kind of publicity no company needs. You can read Clifford’s excellent explanation of why you can’t ignore questions here

Neal’s Yard still haven’t stepped up to the mark to engage with literate, intelligent, highly communicative questioners – but their failure to do so will remain on the internet for decades to come …

Expectations not met = fail, expectations exceeded = business growth

Customer expectations may range from understanding a company’s carbon footprint through to being able to contact the company and ask detailed questions about the product at any time of the day or night.

eBay is the perfect example of how customer expectations have changed the way business operates, and it could even be said that eBay is why Woolworths went out of business in the UK. Both were businesses (or systems) that allowed people to browse a range of similar goods and choose what they wanted, buying in small quantities and often providing low cost items that were needed in a hurry.

But eBay offered thousands of times more choice, and allowed customers to have their goods delivered to their door. Above all, it allowed each customer to ask questions of each vendor such as: how do I wash this? Can you confirm that this is microwave safe? Have you tried to use this underwater … all questions asked of a sandwich box vendor. In Woolworths, the staff would have answered with a shrug, but the sandwich box seller went on to create a short video, on Youtube, that described both the cleaning of the boxes and showed some ways of packing lunches including making radish roses and cartoon character cakes. His business took off exponentially because he’d exceeded customer expectations and they bought into his aspirational funky lunches, not just his cheap lunch boxes.

New opportunities for growth

In late July there was a heavy rainstorm on the South Coast of the UK – road drains were clogged with summer rubbish, streets ran with water and many an unhappy householder discovered that their gutters or drainpipes were blocked too.  On Twitter, a tiny decorating/handyman company seized the day. Their cheeky 140 character advert:  Recession Busting Prices – Front gutters cleaned and checked – £15.00 Front and rear £25.00. Worthing & surrounding areas – was retweeted around the planet. Although it didn’t generate a single customer, TandSWorthing think it was worth it because a lot of potential customers will have got to hear about them and will subconsciously remember the name when they want handyman type work carried out.

The basic rules to mastering the internet business model are to be:

• Integrated – don’t leave the internet to your tech team, make sure everybody understands what the internet business model means for your company
• Fast moving – respond to market opportunities or threats, to customer queries or to events that could change your business behaviour, like a local storm!
• Aware of development – a website that is static and hasn’t been updated for two years is like not opening your mail for a month, it implies you don’t care about those customers. You don’t have to use Youtube or Tweetdeck or Facebook but you do need to know what they are and why you aren’t using them.

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