Sustainability for small businesses...a cost too far?

It all starts at home

Attitudes in the UK have changed over recent years. Smoking in public is more and more reviled, fat in the diet now has to be unsaturated, the numbers of people taking regular exercise has increased, and the sales of Fairtrade products in the UK rose by 12% in 2011 alone. We are also changing our approach to throwing things away, too. More and more of us actively recycle our household waste, use bottle banks and battery bins, and are generally more conscious of our impact on the environment. 

Larger businesses are reflecting public attitudes

In business, the greatest impact of these changes has been on big ‘household name’ businesses. At first, they all scrambled to generate Corporate Social Responsibility statements on their websites to try to persuade us of their green credentials, but now, as a result of the interactive nature of the internet and sites like Facebook and Twitter, these businesses have to ‘walk the walk’ as well. It doesn’t take much for the public to create a Twitter Storm about a product or service that isn’t seen to be ‘playing fair’. And these businesses are now quick to respond to such criticism and improve the product or service, fearful of the impact of negative publicity on their financial performance.

Becoming environmentally and socially responsible is easier for large businesses with deep pockets. They have huge reputational risk as well as the significant bottom line impact to consider. But what about smaller businesses; what are they doing to reflect these changes in public attitudes; can they afford to be sustainable?

Do small businesses need to follow suit? 

For many small businesses the thought of ‘going green’ can be very daunting. They don’t have the time or the money to spend changing their modus operandi. They often see reducing their environmental impact as having a real cost, which at a time of economic downturn is a simply one cost too many. It would seem that what is becoming standard business practice for large corporates might still seem like pie in the sky for some small businesses.

It doesn’t have to be that way though. After all, many of us have changed our attitudes to our personal carbon and environmental footprint and started switching off electrical appliances, washing our clothes at lower temperatures, using less water by showering more and bathing less, changing to energy efficient light bulbs and recycling not only our waste but also our clothes and mobile phones. It may not on its own save the planet but it can make us feel that we are contributing to a greener environment and saving a few quid into the bargain.   

The reality is that similar savings from reduced energy consumption are available to businesses, too. The Carbon Trust Advice Line’s free guide (see link below) is a good place to find out how to start.

The Triple Bottom Line

But in today’s changing world it isn’t enough just to think about the financial impact of business activity. The key for small businesses is to start to think about the Triple Bottom Line, that is the performance of the business against Social and Environmental as well as Economic factors. Think of it as how the business operation directly affects the 3 P’s: People, Planet and Profit.

But given that some small businesses are struggling to engage with relatively simple ‘green’ concepts why should they consider these other impacts? Well, in addition to the fact that going green can actually save the business money, there are two other key reasons for doing this. 

Reasons why small businesses must become sustainable

Firstly, as the customers and potential customers of these businesses change their attitudes to social and environmental issues in their personal lives, so they will start to expect similar attitudes from the businesses they buy from. As mentioned earlier, this has already started with large corporate organisations that are liable to lose customers if they aren’t able to demonstrate their Corporate Responsibilities. Customers will start to apply these conditions to smaller businesses, too. 

Secondly, more and more businesses are selling their products and services through supply chains and in partnership with other organisations. The reputational risk to the partner organisation, the next buyer up the supply chain or the end customer in sectors as diverse as the Public Sector, Retail, Construction or Professional Services will mean that businesses who don’t think about People and Planet as well as Profit will not be asked to tender for the business. In effect, such businesses will be left out in the cold.   

The truth of the matter is that becoming sustainable isn’t an option anymore for smaller businesses. It is now an essential part of future success. The question isn’t ‘can small businesses afford to be sustainable’; rather it is ‘can small businesses afford not to be sustainable’?

Further reading

Carbon Trust Advice Line free guide: http://www.carbontrust.co.uk/cut-carbon-reduce-costs/products-services/technology-advice/energy-saving/pages/energy-saving.aspx

The Triple Bottom Line: How Today's Best-Run Companies Are Achieving Economic, Social and Environmental Success -- and How You Can Too by Andrew W. Savitz and Karl Weber

Branding and innovation – the keys to unlocking long term future success

Marketing cowboys?

When I was a boy I wanted to be a cowboy, riding my horse across the Great Plains, driving a large herd of longhorns to the distant rail-head; all that beef on the hoof, all marked with my own brand to show they were mine. Like many a small boy’s fantasy, nothing of that dream ever became reality apart from the fact that I did end up working with brands, although in the marketing rather than the ranching sense.

They may have been developed for use on cattle but really brands are all about being human. They are about ownership, recognition, identity and even personality. They have become the standard way in which 21^st Century mankind recognises the product of human endeavour; a fundamental part of life from Tynemouth to Timbuktu. They identify all sorts of products from those around me right now such as Toshiba and Tetley, to the most far-flung of human objects such as NASA’s Voyager spacecraft. They are so familiar to us that we don’t even think of them as brands, they are just part of our everyday lives.

Hoovers aren’t all Hoovers

For the marketing executive, the ability to get the brand name into our everyday lives is a constant quest. I remember at business school learning that the ultimate in branding was to get the brand name to become the generic object, with Hoover being the example cited at the time.

But Hoover also serves as a great example of how a brand can be impacted by negative publicity. Their free flights promotion from 1992 saw the business overwhelmed by demand for the flights and resulted in a lengthy court case, directors losing their jobs, Hoover in the UK being sold and the brand being seriously damaged.

Having a great brand isn’t a guarantee of lasting success

More recently, there is the example of Eastman Kodak. For a century or more Kodak was the world leader in photographic film but is now struggling to compete in the world of digital photography. This shows that a great brand in a great business without great innovation can eventually lead to great problems. 

And then again, a great company with a great brand can try to innovate unnecessarily. Remember when Coca-Cola tried to introduce New Coke in 1985 in response to the growth of Pepsi.  Innovation, for a while, actually damaged both the brand and the business.

Look to technology giants to show the way forward

The trick is to get the brand right within a business that both protects and nurtures what it has, while having the culture to create and encourage new ideas. Such an approach lies at the heart of technology companies today. Because companies like Microsoft and Apple were set up and operated by young people with little regard for the old school working arrangements, they adopted a culture from the start that actively encouraged the development of the brand in parallel with true innovation. The commercial results have been startling in both cases. 

Today, technology giants like Google are forcing further ahead with its 20% Time rule, compelling their employees to spend one day per week working on new concepts and ideas. These businesses are fully aware that ‘game changing’ ideas often come from outside established businesses where focus on developing and commercialising existing ideas is fundamental to stakeholders. They are determined to buck that trend.

Application to smaller businesses

Finding small businesses that have the focus on brand building and commercialisation as well as having the space to support innovation isn’t easy. But these will be the key businesses of tomorrow. The key is to learn from the technology companies and embed these concepts into the business from the start. If you build in time to innovate from day one then it can become a fundamental part of what you do. It is surely much easier to create such a culture from scratch than to introduce one into an existing business.

But even if your business is up and running, it is never too late to validate whether you have that balance right. Invest a proportion of your time on a regular basis being creative, researching your competition, gaining a better knowledge of your market and its future direction, and generating new ideas to serve it better. But remember, whatever you do should always serve your brand.

I wonder if I was a child of the 21^st Century whether I would still dream of being a cowboy. Given the technological world we all now live in, I might dream of building a successful and innovative business instead. But I am sure it would still bear my brand.

Are small businesses being failed by traditional marketing methods?

Essential marketing?

When I set up my own small business, I remember all the focus at first being on creating the business itself – finding a name and a web address, getting advisors in place and getting the business registered. Of course, money was tight and I wanted to buy in only the bare essential services while I built up the business.

One of those essentials seemed to be some form of promotional marketing. As a new business offering professional services it was no good relying solely on existing contacts and networking opportunities. These had to be aligned with a decent website and some targeted marketing to let the world know about my existence. And all this had to be augmented by the considered use of social media outlets such as Facebook, You Tube, Twitter and LinkedIn, and even sites like Pinterest. 

The ‘push’ marketing model is broken

However, it didn’t take long for me to feel that something was wrong. The system wasn’t working for me. I was becoming just another consultancy service showering prospective clients with sales messages they didn’t really want. Instead of winning new customers, I was in danger of seriously putting them off completely.  At first, the only way I could see to get over the problem was to spend more time and money on marketing communications to make my content different, be smarter about how I focused on the market and be even more targeted on potential clients.

Then it struck me. It wasn’t that my messages were wrong; it was that the model of marketing communications itself was wrong. And it wasn’t just wrong for a services business like mine. It was wrong for many businesses and small businesses in particular. As a small business owner, I just couldn’t afford to spend the time and incur the cost pushing out my messages to potential clients in the vain hope that they would happen to land in their inboxes and doormats at just the right time. Traditional marketing communications lore deemed it a success if there was a 2% positive response to flyers and if 35% of emails were opened. Well that just wasn’t good enough for me. It wasn’t generating what counted – new clients.

The marketplace alternative

What was needed was a way for me to gain access to businesses and individuals who had an actual need for my services, in the right location and with a valid budget. If I could focus on real unmet demand then my success rate would be much higher. And if I could pay for that promotion on a commission basis only when I concluded a deal then I would have greater control over my spend and increase my margins.

If only a Marketplace model had been there for me back then. The ability for my prospective clients to easily discover my services when they had a real need for them and for my business to attract these real prospects through one on-line marketplace would have been ideal.  I certainly wouldn’t have spent as much time and money on ineffective marketing.  

Isn’t it about time we moved away from the traditional ‘push’ marketing method and embraced a Marketplace model that really attracts customers and favours small businesses?

Passwords bloody passwords....

Privacy Protection vs. Identity Theft

Now that Google has actually changed its privacy policy, the internet is alive with speculation that Californian giant may already be in breach of data protection codes in Europe at least. The French data protection authority has written to Google saying: "Our preliminary analysis shows that Google's new policy does not meet the requirements of the [1995] European directive on data protection."

Now I know that privacy of information and how companies like Google use what they have access to is very important but frankly I am still more concerned about the security of my identity online.

Can the war against Identity Theft be won?

In the wake of several articles over the recent years describing how businesses have lost user password details in hacking raids, I noticed in an archive article on the Chicago Tribune website that President Obama had last year urged the private sector in the US to come up with alternatives to passwords for user security.  

It appears the war against identity theft isn’t going too well and the cost to individuals averages around £450 and takes 130 hours to recover from. The bad guys are winning too often. Time for the cavalry to arrive!

Apparently, some of the biggest names in the US software industry are now looking seriously into the possibility of developing methods that consumers can use instead of passwords to identify themselves online.

Beyond passwords?

Now I don’t know about you but I hate internet passwords. I know you aren’t supposed to write them down and I know they are supposed to be difficult to guess but my problem is that there are so many applications requiring passwords that if you keep them all unique there are just too many to remember. 

And the websites themselves don’t help matters. There are no standards in the format of passwords; some insist on 8 characters, some insist on alphanumerics, some are case sensitive and some even prevent the use of certain characters. No wonder the most popular passwords used today include: 123456, password and iloveyou!

So now I am waiting expectantly for the likes of Microsoft and Google to make things a lot easier for me. No more passwords (or user names, for that matter) to remember and some new, sexy technology to solve my memory problem and keep my data secure.  

Is Big Brother watching you?

But maybe I will have to wait a good while yet. Maybe it isn’t as simple as that. One of the alternatives being suggested by the Obama administration would be to provide all users with some physical credential to generate a one-time digital password. Hardly a new idea but one that is already being met in the US with a chorus of public concern about their government promoting Identity Cards in a different guise. And you thought we were sensitive to having ID cards in the UK!

So the ball is now well and truly in the well-funded techies’ court. The Holy Grail is to come up with a solution that is completely secure, easy to implement and use, is acceptable to fair minded people and which is very difficult to hack. Simples!

My brain hurts...
So here’s to the new generation of password-less authentication and biometric fingerprinting. It all can’t come soon enough for me even though I get the feeling I could be waiting for several years. In the meantime, I guess I will just have to dust off my brain trainer and remember those bloody passwords.

Exactly what is Crowd Funding?

The Power of the Crowd

Does anyone remember Marillion? They are rock band from Aylesbury who had a number of hits in the mid 1980’s and who still have a loyal and not insubstantial army of determined fans. Now, most bands have fanatical support but few bands can muster that support as Marillion have done in the past. Way back in 1997 they needed money to tour the US. But way back then they weren’t as successful as they had been 10 years earlier and access to the money was harder to find. Then someone in the fan base struck upon the brilliant idea of asking the fans to help. Fortunately, there was the internet and email and before long the $60,000 required to underwrite the tour was raised. This mechanism was then used to raise more funds to allow the band to record several albums over the coming years. Fan power, indeed.

Linking the Crowd to Business

This early example of crowd funding is an interesting one. It shows that ordinary people, who can see a reasonable return from their money - seeing the band live or accessing a new album in Marillion’s case -, will put their hands on their mice and invest. The key is the ease with which this can be done, the small amount of investment required from each participant and the interest in a possible return that can be gained in the future.

It has taken crowd funding many years to become more than a flash in the musicians’ pan. It has taken a global financial crisis combined with the stellar growth of businesses such as Google, Facebook and Twitter to make the business community aware that there are alternative ways for small businesses in particular to raise the finances they need to become established and successful. 

Government Backing

Now crowd funding is moving into the mainstream, particularly here in the UK where such investments in return for share capital is permitted and schemes such as EIS actively encourage angel investors to support small business growth. Even recent noises from government seem to be encouraging crowd funding as a legitimate alternative to hard-to-find and expensive bank lending. And as its popularity starts to increase, people who would not have thought of themselves as traditional business investors are interested in getting into potential high growth companies at an early stage hoping they become significant game changers. With investment levels starting at £10 the new investment community could become massive with everyone becoming a potential 'armchair dragon' and supporting small business growth in the UK.

First North East Business now on Crowdcube

UK businesses such as uBrands are ideally placed to benefit from such financing. Not only does the business have a strong base build on extensive IPR and trademarks but it has found a niche opportunity that will change the way small businesses across the globe attract their customers. It just needs the funds to make it happen. Sites such as crowdcube.com are the perfect place to bring together this new investor community with the small business with great thinking that need access to finance. Welcome to the brave new world of crowd funding. Or as Marillion might say, ‘A penny for your thoughts’.

Smart Marketing 2.0 - The revolution is on its way......

The internet shook up the world of information and business in the 1990s. Just as radio had revolutionised mass market communication in the 1920s, 1930s and 1940s, and television in the 1950s and 1960s, now businesses and their customers had access to new electronic means of providing and consuming information. A new revolution was dawning and it was one that was going to change fundamentally the way commerce worked. Back then at the end of the 20th century, so much was happening so quickly. Too quickly for some, as it turned out. Fortunes were rapidly made and then lost as the dot com bubble burst.

Some companies did survive into the new century, businesses that got the focus right and were in the right place at the right time. A few identified an opportunity and had the guts to go for it at all costs. Many of those survivors are now household names around the world

Keeping it simple

The best businesses keep things simple. They take the good elements of traditional business and do them smarter. They use new technology as an enabler of growth. Their view is: get your sales message and price right, get it out to your target market in the right way, provide a great product or service - and your customers will come. And come back for more.

Such businesses were now using the web as the latest means of pushing marketing communications to prospective customers in the same way as radio and television had been used in the past.

Then Facebook came along and changed the game. Social networking had, in fact, been with us for at least 100 years as a study of how individuals can be linked together in social groups with similar goals and beliefs. What Facebook did was to use the technology of the internet to enable people to interact with each other on-line and share what they were in to. It was new, fun and had immediate appeal.

Interestingly enough, Sir Tim Berners-Lee, the inventor of the World Wide Web always intended the web to be about collaboration and contribution. However, it took businesses such as Facebook to give ordinary people the confidence and means to use the web to express themselves. And once unleashed, these ordinary people would never be silenced again. The rise of what is now called Web 2.0 i.e. websites that allow people to create their own content and interact with others, has been rapid and extensive, and now affects many parts of our daily lives. Even the law is being reviewed in light of the power of Twitter.

Serving newly-empowered customers

Amid all these changes, businesses have been forced to look for fresh ways to serve their newly-empowered customers. They now actively encourage on-line feedback for their products and services and use the new Social Media to interact more fully with prospective customers. Marketing has embraced the likes of Twitter, Facebook, YouTube and LinkedIn to ensure that businesses are best placed to engage with the new generation of active consumers.

But some principles have remained the same. Marketing communications is still essentially one way. It is still about defining what you have to sell and pushing that message to prospective customers. Even with the recent rise of daily deal sites, such as Groupon, the principles are the same. It is all about pushing products and services from businesses to consumers; about spending money on marketing communications campaigns that may not be effective; about relying on the consumer to research and negotiate the best deal using search engines, websites and the telephone.

Although the Web has moved from passive consumption of information to fully interactive consumer engagement, marketing has not. Marketing, despite the efforts of marketing companies to push a different message, is still stuck at version 1.0.

Meeting the unmet needs of consumers

That is all about to change. What has been missing from the marketing equation is access to the unmet needs of consumers. Without that information, companies use the scattergun approach, blasting out their product information in the hope that they will hit a consumer who needs the product. After a while many of those prospective customers begin to resent being assaulted with information that is irrelevant to them and are actively turned off by it. This actually reduces the chances of them buying from the company concerned.

The opposite of the traditional Push Marketing is Pull Marketing. This is all about satisfying customer demand and is often linked into creating a product only when a demand for that product is actually identified. That may be appropriate for the manufacturing of a new model of car but does not work for the design of a new pair of spectacles or for the hire of a van. Something much smarter is required.

Smarting set to revolutionise marketing practices

Smart Marketing 2.0, or Smarting for short, is a revolution in marketing equivalent to the impact of Web 2.0 on the internet. For the first time, consumers who have been empowered by the ability to create content and interact with the web, can now define their actual needs. And they can be specific about them too. They can record not only what they want, but where they want it, when they want it and how much they are prepared to spend. And businesses can have access to that unmet need and respond either generally to that type of need or specifically to that need in particular with offers that meet all the required criteria. And they don’t have to pay for the privilege of making the offer either. They only pay when the actual sale is completed. Think of it as marketing on a commission basis.

This new Smarting paradigm is being driven by a British company called uBrands. Their technology platform, backed by extensive brand trademarks and IPR, not only enables consumers to register their various needs in one account but also allows businesses to register their product and services and be advised in real time of the unmet needs in the areas that they serve. It also allows businesses to present assets, product or services they may have that are available at a specific time to consumers looking to use them. An example would be a skip hire company who have spare un-hired skips available on a Tuesday. They will be able to present them in a way so that consumers can see when they are available and at what special offer price, and enable them to make the sale immediately. And they will only pay for this service when the deal is done.

Create a Need Portfolio for life

As consumers gain trust in the model they will have the confidence to create needs for all sorts of things in their lives; getting a job, opening a bank account, moving home, getting married, going on holiday etc. Each need has a subset of individual needs each with their own specific requirements and budgets. For example, getting married often involves clothes purchase or hire, venues, florists, photographers, cars, holidays etc. each of which has a budget and all of which have a specific date. And since individual consumers are also consumers within larger groups, such as societies and clubs and even at work, the opportunities are endless. And none of this would be possible without the rise of Web 2.0 and the change it has had on consumer engagement. Smart Marketing 2.0 is here at last.