Top Marketing Trends for SMBs: Vendor Views

This is the fourth post in a blog series discussing key marketing automation trends for SMBs. This series is excerpted from SMB Group’s December 2014 report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Themwhich provides detailed information and insights to help SMBs capitalize on these trends.

Although the vendors we covered in our report aim their marketing automation solutions at different slices of the SMB market, they agree on many of the top trends. For example, many identified cloud as a major trend. However, cloud deployments are already in the mainstream in this application area. Therefore, we won’t dwell on them—except to say that cloud computing has enabled and will continue to enable more SMBs to adopt technology solutions in general and marketing automation solutions specifically.

Another trend that several vendors identified is automation. As the term “marketing automation” clearly implies, SMBs must automate tasks in order to scale their marketing campaigns and reach more prospects and customers, and to provide them with the right information at the right time in their buying journey.

Moving beyond cloud and automation as fairly obvious trends, vendors also agree about many of the top marketing trends that SMBs must capitalize on, although they describe these trends differently (Figure 1). These trends include:

  • Mobile: Buyers are doing more research, shopping and buying on mobile devices. Therefore, SMBs must optimize the buying journey for their customers on these devices. At a basic level, this means, for instance, that email campaigns and websites need to be automatically rendered and optimized for devices ranging from laptops to smartphones. But SMBs also must address more areas. For instance, should an SMB develop mobile apps and mobile websites or use text messaging to connect with customers—or all of the above?
  • Social: Social media has quickly become the equivalent of digital word of mouth. SMBs need solutions that help them to actively observe, participate in and track the social networks that their prospects and customers use in order to engage and nurture relationships and build customer advocacy.
  • Content: Content feeds all marketing initiatives, and valuable, engaging and educational content is critical to establishing and sustaining customer relationships. But creating good content is often difficult and time-consuming. SMBs must be able to produce, distribute and repackage content more effectively so they can get more value from it.
  • Omnichannel: The buyer journey is evolving rapidly and is likely to include many more digital and traditional touch points. SMBs need to not only create and maintain a consistent look and feel across different channels, but also get an integrated view of customer behavior.

Figure 1: Vendor Views on Top Marketing Trends for SMBs

Slide1

Source: SMB Group, 2014

While these trends are clear, many SMBs struggle to overcome issues that prevent them from taking a more streamlined, integrated approach. Some of the most prominent obstacles that stand in their way include:

  • Scarce marketing expertise and bandwidth: In small companies, employees wear many hats. Part-time marketers may lack confidence in their ability to get full value from a marketing automation solution. Meanwhile, though larger SMBs have a dedicated marketer or team, these resources are usually time-constrained. Carving out time to investigate, evaluate, deploy and become productive with a new solution is difficult.
  • Lack of budget: SMBs want transparent, affordable pricing. Many have been burned in the past with solutions that didn’t provide expected value. As a result, they fear hidden costs and are reluctant to make long-term financial commitments before knowing a solution will work well for them.
  • Poor alignment between sales and marketing on objectives and measurements: Aligning marketing and sales objectives and measurements is critical, but when sales and marketing use disconnected solutions, too much information falls through the cracks and/or gets lost in translation.
  • Lack of digital and technical skills to get full value from the solution: Although cloud-based marketing solutions remove the technical burdens of solution deployment and management, some require HTML expertise and/or integration with CRM, sales, accounting and other applications.

For more information about the full report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Them, please contact Lisa Lincoln, Director, Client Services & Business Development: 508.734.5658 or lisa.lincoln70@smb-gr.com. 

Why Size Matters: How Marketing Automation Vendors Define the SMB Market

This is the third post in a blog series discussing key marketing automation trends for SMBs. This series is excerpted from SMB Group’s December 2014 report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Themwhich provides detailed information and insights to help SMBs capitalize on these trends.

Before small and medium businesses evaluate different marketing solutions, its important to understand how vendors define and target the “SMB market,” which is actually a term that has many definitions, depending upon who you ask.

We at the SMB Group define small businesses as those with fewer than 100 employees, and medium businesses as those with 100-999 employees. Meanwhile, the U.S. Small Business Administration defines a small business as having 500 or fewer employees, and has no standard definition for medium businesses.

Among marketing automation and CRM vendors, several tend to view the SMB size range similarly to the SMB Group definition of up to 1,000 employees. But some rely more on revenues to define their SMB niche. In addition, vendors’ market focus varies significantly. For instance, Infusionsoft concentrates on very small, owner-operated business with less than 25 employees, while IBM focuses on what it defines as midmarket companies, those with 51 to 1,000 employees and at least one dedicated marketing professional.

Figure 1: How Technology Vendors Define and Represent Themselves in the SMB Market

Slide1

Source: SMB Group, 2014

This diversity reflects the very heterogeneous nature and requirements of what is actually a very fragmented SMB market. Small and medium businesses should scrutinize how vendors define and position themselves because different types of SMBs often require very different marketing, sales, solutions and services.

Vendors usually focus on a particular slice of the SMB market because it’s difficult to satisfy the diverse requirements of the broader market. In addition, SMBs should consider how big a footprint a given vendor has in the segment of the market the vendor is targeting—in terms of both the number and the percentage of its customers that are in that segment. Again, this is a good indicator of both vendor commitment to a given SMB segment and its ability to serve those types of SMBs.

For more information about the full report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Them, please contact Lisa Lincoln, Director, Client Services & Business Development: 508.734.5658 or lisa.lincoln70@smb-gr.com. 

 

SMB Adoption and Trends in Marketing Automation

This is the second post in a blog series discussing key marketing automation trends for SMBs. This series is excerpted from SMB Group’s December 2014 report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Themwhich provides detailed information and insights to help SMBs capitalize on these trends.

SMBs consistently cite factors that impact top and bottom line results as their key business challenges. Attracting new customers, growing revenue, improving cash flow, maintaining profitability and retaining customers are critical, ongoing concerns. So it’s no wonder that they are exploring how marketing automation can help them.

But when it comes to marketing solutions, many small and even medium businesses rely on point solutions such as SEO tools, paid search or pay-per-click (PPC) advertising, email newsletters and social media.

Increasingly, however, SMBs are turning to a more integrated marketing approach. SMB Group’s 2014 SMB Routes to Market Study shows that in 2014, 20% of small and 25% of medium businesses purchased/upgraded a marketing automation solution in the past 24 months. Meanwhile, 22% of small and 26% of medium businesses plan to purchase/upgrade a marketing automation solution in the next 12 months (Figure 1). Although some of these plans aren’t likely to result in actual purchases, the use and awareness of marketing automation are clearly growing among SMBs.

Furthermore, cloud already has become SMBs’ preferred deployment option for marketing automation, with the number of planned cloud deployments exceeding that of on-premises deployments.

Figure 1: SMB Marketing Automation Adoption and PlansSlide1

Simultaneously (Figure 2) SMBs are also using social sites to better engage with customers and prospects: 48% of small and 57% of medium businesses use at least two social sites.

Figure 2: SMB Use of Company-Managed Websites and Social Sites

Slide3

Mobile marketing capabilities are also quickly becoming a priority for many SMBs. Mobile marketing is becoming an increasingly important component of SMBs’ overall marketing strategy, with 56% of small and 60% of medium businesses agreeing or strongly agreeing that mobile marketing drives business growth (Figure 3).

Figure 3: Mobile Marketing as a Driver of Business GrowthSlide4

SMBs are incorporating mobile marketing into their businesses by using a two-pronged approach. First, they are increasingly providing employees with mobile-enabled solutions for CRM, marketing and advertising, and social media. Second, they are extending mobile functionality to their customers, partners and other constituents via mobile apps and mobile-friendly websites. Providing access to customer service, the ability to purchase goods and services, and the ability to check delivery status are leading areas (Figure 4). In addition, a substantial percentage of SMBs currently provide or plan to provide capabilities that enable customers to access marketing offers and to join and manage loyalty rewards programs.

Figure 4: Use of/Plans for Customer (External) Mobile Marketing SolutionsSlide6

In subsequent posts in this series, we examine how vendors (Act-On, HubSpot, Infusionsoft, IBM Silverpop, NetSuite, ReachLocal, Salesforce.com Pardot, SugarCRM) view the SMB market, and their strategies and plans to help SMBs integrate marketing across different channels and media.

For more information about the full report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Them, please contact Lisa Lincoln, Director, Client Services & Business Development: 508.734.5658 or lisa.lincoln70@smb-gr.com. 

Sneak Peek: Infusionsoft’s ICON 2015 Conference for Small Business Marketers

icon2015Laurie: Hi, this is Laurie McCabe for SMB Spotlight and today I have the pleasure of speaking with Greg Head. Greg is the CMO, Chief Marketing Officer at Infusionsoft and I’ll be heading out to Infusionsoft’s 2015 ICON conference, which will be in Phoenix from March 31st through April 2nd.

So Greg, I know that Infusionsoft and ICON are very, very focused on helping small businesses market themselves more effectively. So for anyone who is not familiar with Infusionsoft if you can just start with providing us with a quick overview about Infusionsoft?

Greg Head, CMO, InfusionsoftGreg: Great, Laurie, I’ll just start at the top. Infusionsoft is the leading sales and marketing software provider for small businesses around the world. We are based in Chandler, Arizona, we’ve been growing for over 12 years and we now have over 25,000 businesses that use our software–to help them get organized in their digital sales and marketing and revenue generation activities, grow their sales and save time. Infusionsoft is exclusively focused on small businesses, primarily owner owned and operated, generally with ewer than 25 employees.

Infusionsoft now has over 650 employees and thousands of partners, and hundreds of add-on applications. We appeal to small businesses generate a lot of their revenues through their website or social media pages, who are to keep all that together and automated. So a lot of people call us the Salesforce for small businesses. And that’s really our passion, we think small businesses are the lifeblood of economies around the world, where things start and where things grow, and where a lot of jobs are created.

Laurie: Thanks. Now, can you give us a little sneak peak into the ICON 2015 conference?

Greg: Well, it’s just an awesome event, really useful and inspiring for small business owners who of course are really practical. Customers come every year, and you know that small business owners don’t regularly go to conferences in other cities. But this is one they do travel for because it’s very valuable to them. We provide inspiring keynotes from world-class small business speakers and experts, on mindset, marketing, growth, you know, how the world is changing, so they can kind of get connected to what’s happening there.

They can also learn a lot more about Infusionsoft. There are tracks for beginners and advanced Infusionsoft users and team members can fan out and do that. There’s implementation experts onsite they can sit with to work right on their app and get things done and make a huge amount of progress. There are networking opportunities, partner solutions, and many sales and marketing growth tracks. So supply all of the content, energy, experts, community, and the network of these people to help these small businesses grow. You really can’t get it just by reading blog posts.

Laurie: Now what about prospects, do they attend the conference?

Greg: Well, it’s primarily for our customers, but we bring in world name speakers and have three days worth of sessions that focus on marketing, not on Infusionsoft. So every year, more potential Infusionsoft customers or partners come to the event. It’s quite economical, and extremely valuable, everything is in one place. So prospects are becoming a bigger contingent at ICON.

Laurie: So can you tell me who some of the speakers that you are especially looking forward to at the event and why?

fascinateGreg: This year we’re focused on speakers that can bring value and are very focused on small business. For instance, Sally Hogshead is a speaker and author and helps people think differently about how to conceptualize the business and make it stronger. She’s got a new book called Fascinate, and is a great speaker. Small business owners of course they’re really busy and in the passion of their business, getting things done and dealing with all of the machinery. So thinking about things differently can shed new light.

Laurie: Any others at the top of your list?

essentialismGreg: Greg Mckeown, who has written a powerful book that addresses one of the key challenges that small business owners have. There’s just too much going on, they can never keep up, they’re so distracted, and it’s really hard to have the life they want, the business success that they want. His book, called Essentialism, is about creating focus, not just in the business, but also in your life. So, the speakers focus a lot on the mindset of success.

Laurie: Fascination and essentialism, they both sound pretty important! Ok, having attended ICON for a couple of years, I’m wondering if you’re planning any major changes from last year’s ICON?

Greg: Well, we’ve got a few more big sponsors with a strong small business focus, including Google, Facebook and AmEx. We’ll have the MSNBC Street Studio as well. The Phoenix Convention Center is large, so there are more networking events for partners and our customers to get connect. And, we’ve expanded our experts’ room, so customers can sit down with them for free advice right on site. Kind of like going to the Apple Genius bar to work right on their app. there’s also the ICON implementation zone, which is new this year. So, we are providing more practical guidance and support so customers can make things happen in their Infusionsoft application right there. So we can fill their brains with great inspiration and new knowledge and ways of thinking, and help them improve the way their Infusionsoft app works at the conference.

Laurie: Sounds great and I’m really looking forward to the event and seeing you there! I’m sure a lot of other people are as well. And I want to thank you, Greg, for giving us a sneak preview.

Greg: Thanks Laurie. See you in a few weeks.

“Must-Consider” Marketing Trends for SMBs

This is the first post in a blog series discussing key marketing automation trends for SMBs. This series is excerpted from SMB Group’s December 2014 report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Themwhich provides detailed information and insights to help SMBs capitalize on these trends.

Choosing a marketing automation solution may be one of the most important decisions your business makes. As cloud, mobile, social, analytics and other technologies continue to transform the buyer’s journey, this choice is likely to become even more critical.

As the term “marketing automation” implies, small and medium businesses (SMBs) must automate tasks to scale their marketing campaigns in order to reach more prospects and customers, and to provide them with the right information at the right time in their buying journey. Although many small and even medium businesses rely on point solutions, more are turning to an integrated marketing approach. In 2014, 20% of small and 25% of medium businesses had purchased/upgraded to a marketing automation solution in the past 24 months. Meanwhile, 22% of small and 26% of medium businesses plan to purchase/upgrade a marketing automation solution in the next 12 months, as indicated in SMB Group’s 2014 SMB Routes to Market Study.

Figure 1: SMB Marketing Automation Adoption and Plans

Slide1

However, marketing requirements are changing rapidly. Today, buyers conduct much of their research and evaluation online across multiple channels. Because businesses need to be where their customers and prospects are, they must invest to build their digital footprint via websites, social media engagement, search, email marketing and mobile marketing. Simultaneously, they must continue to invest in traditional marketing activities.

SMB Group has identified several key trends that SMBs should consider when selecting a marketing automation solution, including:

  • Cloud computing: The cloud is quickly becoming the preferred deployment method for marketing automation because it relieves SMBs of IT deployment and management issues.
  • Mobile: Buyers are doing more research, shopping and buying on mobile devices, and SMBs must optimize the buying journey on these devices. At a basic level, this means, for instance, that email campaigns and websites need to be automatically rendered and optimized for devices from laptops to smartphones. But many more areas also need to be addressed. For instance, should an SMB develop mobile apps or mobile websites, or use text messaging to connect with customers—or all of the above?
  • Social: Social media has become the equivalent of digital word of mouth, and SMBs need solutions to help them observe, participate in and track the social networks that their prospects and customers use in order to engage and nurture relationships.
  • Content: Content feeds all marketing initiatives and is critical to establishing and sustaining customer relationships. But creating good content is often difficult and time-consuming. SMBs must be able to produce, distribute and repackage content more effectively so they get more value from it.
  • Omnichannel: As the buyer journey evolves to include more touch points, SMBs need to create and maintain a consistent look and feel across different channels as well as gain an integrated view of customer behavior.

Fortunately, many vendors offer solutions to help SMBs capitalize on these trends. But given so many choices, SMBs must carefully evaluate and compare all the options in order to get the best fit for their requirements. Key areas to investigate include:

  • How vendors define “SMB” and position their offerings: Most focus on a particular slice of the SMB market because it’s difficult to satisfy the diverse requirements across the broader SMB market.
  • How many and what percentage of the vendor’s customers are from the SMB segment the vendor targets
  • How well the solution maps to a company’s needs and constraints: Some vendors focus on providing very in-depth marketing automation capabilities, while others combine marketing with CRM in a pre-integrated suite.
  • Internal marketing resources and skills, and whether to take more of a do-it-yourself versus a do-it-for-me approach
  • Pricing, including whether a vendor offers annual, monthly and/or yearly contracts
  • Integration of different marketing and sales activities to gain a unified view of customer and prospects: This is a key driver for marketing automation.
  • CRM tools that need to be integrated: Pure-play marketing automation vendors usually integrate with multiple CRM solutions, while others provide a pre-integrated suite that includes marketing and CRM.
  • How to feed the marketing funnel: Marketing automation without compelling content is like a car without gas. Content nurtures the buyer through the sales funnel. Although you can’t really automate content creation, you can streamline it. Some vendors offer education and even services to help.
  • Tools, services and support programs to help you get the most from the platform, both in the near term and in the future as needs evolve

Vendors have designed their solutions for different types of SMB requirements; there is no one-size-fits-all. In subsequent posts in this series, we examine these requirements and vendor (Act-On, HubSpot, Infusionsoft, IBM Silverpop, NetSuite, ReachLocal, Salesforce.com Pardot, SugarCRM) strategies for SMBs in more detail.

For more information about the full report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Them, please contact Lisa Lincoln, Director, Client Services & Business Development: 508.734.5658 or lisa.lincoln70@smb-gr.com. 

 

Discussing 2015 SMB Tech Trends, Part 5: SMBs Place a Premium on Protection

Recently, I had the pleasure of kicking off the new year as a guest on Act Local Marketing for Small Business with host Kalynn Amadio. Each week, Kalynn shares information and actionable tips to help inspire and motivate small and medium businesses (SMBs) reach their business goals.  On this episode, Kalynn and I discussed SMB Group’s 2015 Top Technology Trends for SMBs and what they mean to the marketing and running of your business. The last of a five-part series, this post summarizes our discussion of “SMBs place a premium on protection”

protectionKalynn: Okay, one more question for you. I really wanted to ask you about this particular trend in your report because of what happened with the Sony hack. We talked about the cloud, we’re talking about technology solutions and yet there’s going to be the other side of the fence where people say yeah but once you put everything in the cloud and once you’re connected there you’re leaving yourself open to hackers and any other kind of malicious things that are going on. How am I going to protect my business from them?

Laurie: Right. Buying security and backup solutions and protection from hackers, whatever kind of thing that comes under that data protection umbrella that you could think of. It’s kind of like insurance, until the disaster strikes we’re kind of like oh, do I really need that? Do I really want to spend x amount on that? Again, this is another area where many smaller companies may have bitten off one part of the problem. They may be using something for antivirus and anti-spyware and things like that, but maybe they’re not backing things up in a way that makes sense that’s going to protect them. Maybe they have a kind of spotty device control situation. Yeah, we’ve got all the right security measures in place for our desktops and our laptops, but we haven’t really thought about it for mobile yet, right?

Kalynn: There’s so many parts to the puzzle now.

Laurie: Yeah, exactly, so there’s way more moving parts, there’s the traditional apps and infrastructure, desktops and servers, there’s the cloud apps, social, mobile, and really the other big thing is that your own data and data you may need that is your own business data may reside in more places since it’s on all these devices. How do you control, manage, and protect that and I think some of these big hacks and data breaches and everything else like at Sony and Home Depot, eBay. I just went and Googled 2014 data breaches and it was crazy. You’re never going to prevent every kind of issue in your company but I think it’s something that I would hope at least that more small businesses are going to say hey, we need to at least do a health check on the basics here, on devices, on data loss prevention, on security which will get into spyware, the hacking and all that, and overall disaster recovery. If you do have your own servers what if your building gets flooded in a hurricane? Do you have that all backed up somewhere? I think with these really high-profile things obviously we’re all learning, there’s huge financial, and legal, and brand ramifications if your data isn’t protected. I think that more small businesses will say hey, I have to do a health check here and a sanity check, and make sure my business isn’t going to go down because something is hacked or data is lost or stolen, or it’s just an act of God.

Kalynn: Right. You know, it surprises me. I talk to a lot of IT people, IT digital marketing are good sources of referral for one another so I end up talking to a lot of IT people. It amazes me when they tell me stories about not just individual business owners, but rather significantly sized small businesses or mid-sized businesses that don’t have any kind of backup. They’ve got their own little server farm in a basement somewhere and they think that that’s good enough, that they have control over their data. You really have to stop and think.

Laurie: You have to. I don’t have the statistics off of the top of my head but if you Google any kind of disaster that’s happened, Hurricane Sandy, or anything really. If you take a look at any of these disasters you find an enormously high percentages of small businesses end up going out of business because of the disaster. A lot of times it’s because IT suffered so much damage in terms of losing records, losing customer information, everything you need, all that information you need to run your business.

Kalynn: And it’s all preventable, that doesn’t have to happen.

Laurie: Much of it is preventable. But it is overwhelming to think about, just like a lot of these technology areas but you don’t need to think of it all and do it all yourself because the important thing would be to engage with a local provider or a bigger company that would probably be online then who can help you kind of run through the basics and make sure you’ve covered at least 80%. It’s like the 80/20 rule, you’re not going to probably be able to account for everything but you can probably pretty easily get the most important stuff covered.

Kalynn: And that is very true, and I agree, the 80/20 rule is terrific. I wrote a blog post on it once. I’m such a big believer and there’s so many ways you can apply it. That’s a good way to look at it, rather than let this whole thing overwhelm you as you’re planning for 2015, even if you’ve already written your plan for 2015 go back and look at it and say did I really take into account protecting my data and protecting my customers, and my employees, and my business in general so that should something catastrophic, whether intentional or not, happen, then I’m prepared for that.

Laurie: Even if you’re a very small business and you’re a solo business and let’s say your revenues were around $80,000 but if you were to lose all the information about your customers, about billing, about whatever it is you have that might mean you don’t have any revenues the next year.

Kalynn: Yeah, could you come back from that? So think in terms of the worst case scenario and what would that do to your business?

Laurie: Right, or if you’re not protecting your customers’ information and that somehow gets compromised, your reputation is down the tubes. So in that case it’s not like you’ve lost it but it’s been hacked into and those customers no longer want to do business and don’t trust you.

You can listen to the complete podcast discussion here

Discussing 2015 SMB Tech Trends, Part 4: KPIs Trump ROI and TCO as the New “Show Me” Metric

Recently, I had the pleasure of kicking off the new year as a guest on Act Local Marketing for Small Business with host Kalynn Amadio. Each week, Kalynn shares information and actionable tips to help inspire and motivate small and medium businesses (SMBs) reach their business goals.  On this episode, Kalynn and I discussed SMB Group’s 2015 Top Technology Trends for SMBs and what they mean to the marketing and running of your business. The fourth of a five-part series, this post summarizes our discussion of “KPIs trump ROI and TCO as the new “show me” metric.”

?????????????????????????????????????????????????????????????????????????????????????????????Kalynn: Now there’s a very interesting trend that I want you to talk about and that has to do with key performance indicator (KPIs), that versus return on investment, ROI, because in digital marketing the thing that small business has been saying all along about social media is, “but what’s the return on my investment? If I pay a company to do this how soon am I going to be on the front page of Google? Or how often is my phone going to ring?” Those are very hard things to determine and they’re very hard things to track quite often because a lot of what goes on in digital is similar to networking. What’s the ROI of networking? I don’t know. So talk to me about these key performance indicators versus return on investment.

Laurie: I think historically, the vendors anyway, in white papers and other kinds of educational collateral, have tended to focus on proving that their solutions can return value via these return on investment type of models and analysis, which honestly are kind of complex and very big picture. You have to factor in everything to an ROI. Likewise there’s another thing called a total cost of ownership calculation where you have to figure out all the money you invested for a solution and how much that solution is going to cost you over let’s say a five-year period. The assessments and metrics, while they can be a bit beneficial, they’re usually kind of vague and they’re very dependent on nuance measurements.Honestly, I’ve yet to run into very many small and medium businesses that every do any kind of ROI or TCO calculation at this big picture level because they’re very complicated to do, and time-consuming.

So what we’ve been seeing is there’s something that most companies have been measuring for years, whether or not they call it KPI, but key performance indicators. These are more discrete metrics. Some of them are general, for instance, what’s the time it takes to close your financial books, right? Probably most companies have that function because hopefully they’re making some money and they have to close the books. Are you doing that with a shoebox full of stuff or are you doing that with Excel, or are you doing that with QuickBooks, how are you doing that, what’s your process, and how much time it’s taking you is a key performance metric.

Then there are also metrics that are also very industry specific. For e-commerce we might want to measure things like conversion rates, what is our rate of visitors to the website that actually convert into paying customers? A nonprofit might want to measure the number and increase in donors and the average contribution per donor. There are a lot of different KPIs, the nice thing about KPIs is that they give small and medium businesses more specific very actionable insights on business performance so they can see where they’re doing well and kind of measure and monitor where they need improvement. What we’re seeing is a lot of vendors starting to kind of cater to this more specific measurement requirement and giving small and medium businesses more information about the kind of metrics and benefits that existing customers are getting for their key workflows and business processes.

I think if you’re contemplating any kind of new business solution it really makes sense to seek these out to really understand okay, what were the specific areas of the business solution impacted, and how, and by how much, how much time did it reduce? If it was a revenue metric how did it affect revenues? If it was a conversion rate what was the number or the percentage of new customers that are converting? How did that change that? Repeat customer sales, whatever it is, but I think this more discreet metric is a good way to go for small business because I think it will give you a lot more actionable information and the solution is going to give you the kind of results that you’re going to need.

Kalynn: They seem much more concrete for small businesses. If it’s the kind of thing that you can put on an Excel spreadsheet every month and track and see a trend line that’s either going up or going down then you feel that you have some sort of control over it. Was it Peter Drucker? Who said that if you’re not measuring it then you can’t do anything about it? One of those business gurus, right?

Laurie: Yeah. I remember that quote.

Kalynn: It was something like if you’re not measuring something then how do you ever expect to be able to change it because you don’t really know what’s happening, anecdotal stuff is not going to help you.

Laurie: As a matter of fact a lot of the vendors we’ve been talking about are using analytics to build in these reporting capabilities to help you see those metrics in your own business, more easily. They are kind of taking that oh I’ve got to be a data scientist out of the equation so the rest of us can understand what’s going on in our business. For instance, Intuit is providing a service where you can benchmark yourself against other companies in your industry on some of these KPIs. For instance if you’re a salon and spa owner in the northeast you can say this is kind of what my customer retention rate looks like, repeat business or up selling, selling product with the service, whatever you want to measure. Then you can also opt in to get aggregate information from people with similar businesses. So you can see am I ahead? Am I behind? Then focus on the areas that you need to improve.

You can listen to the complete podcast discussion here

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