More business management tools than ever … yet many small businesses stick with spreadsheets and other “outdated” processes.

csbr

It seems like there’s never been more information – and technologically based solutions — available concerning marketing, sales and other business operations support than there is today.

Just go online, type in a few keywords, and watch how many hundreds – in some cases thousands – of web links pop up. And there’s a lot that’s really quite beneficial and instructive.

But even with such a smorgasbord of information – much of it available free of charge – it can actually be overwhelming for owners and managers of small businesses.

Maybe it’s “analysis paralysis.”  Or perhaps something more fundamental.

Typically, small business owners wear many hats inside their companies — a jack of all trades and master of maybe just one or two.

The same dynamics are at work in the field of customer information management as well. Last year, the Harris Poll surveyed a group of small business owners on their practices in this realm, and the results were published this past December by SalesForce Research in its 2016 Connected Small Business Report.

The results showed that small business owners continue to rely on outdated processes such as spreadsheets (or even paper-based systems) to store and track their customer information.

As for more modern (digital) tools like CRM and analytics, it isn’t happening much at all.

For starters, more than 80% of the companies surveyed by Harris reported that they do not have any dedicated IT staff – so it comes as no surprise that nearly three-fourths of company owners are the ones responsible for making their companies’ technology buying decisions.

Here’s what the survey found:

  • Small business owner typically makes technology buying decisions: ~72% of respondents
  • A co-owner or business partner: ~28%
  • Chief technology officer, chief information officer or head of IT: ~4%
  • An outside vendor: ~3%
  • Chief financial officer: ~2%

Note: Tally above exceeds 100% due to multiple mentions.

Where is the technology spend going? Hardware expenses are the most significant, with financial software second in importance:

  • Hardware: ~46% of respondents cite as the majority of their annual technology spend
  • Financial software (e.g., accounting/bookkeeping and bill payment): ~33%
  • Productivity software (e.g., Microsoft Office): ~26%
  • Internet hosting/ISP services: ~22%
  • POS/POP software: ~20%
  • Telecommunications/VoIP: ~15%

E-mail and spreadsheet tools continue to dominate in terms of customer information management, and quite a few of the companies surveyed are still working with paper-based systems:

  • E-mail tools (Outlook, Apple, Gmail contact, etc.): ~44%
  • Spreadsheets (Excel, etc.): ~41%
  • Written customer ledger: ~34%
  • Basic database (e.g., Access, Quickbase): ~29%
  • CRM system or app (housed within the business): ~20%
  • Other paper-based practices: ~15%
  • CRM system or app (cloud-based): ~12%

And when it comes to customer service, small businesses rely on three major practices:

  • Direct phone contacts with customers: ~51%
  • Direct e-mail communication with customers: ~47%
  • Social media interaction: ~32%

So on balance, it looks as though most small business aren’t really tapping into many of the “new tools” that could help them manage their businesses and their sales, marketing and customer retention programs better.

It may be a similar dynamic to what we see with small investors. Today there’s more investment information available than ever before – and it’s right at people’s fingertips, too.  Even so, often the result is … to do nothing.  Whatever the choices are, so many investors make no changes at all to their investment portfolio.

And just like there are financial planners to assist the timid investor, there are plenty of business consultants ready and willing to guide small business owners in ramping up their operations.

But that’s another entire discussion, of course.

To access a copy of the 2016 Connected Small Business Report, click here.

Third-Party e-Mail Lists: Clicks to Nowhere?

Clickthrough fraudOf the various issues that are on every marketing manager’s plate, concern about the quality of third-party e-mail lists is surely one of them. It’s a common view that the effectiveness of a purchased e-mail data file is worse than a carefully crafted in-house list based on input from the sales team plus opt-in requests from customers.

Part of the reason is that there’s less likelihood for recipients to be interested in the products and services of the company, which only makes intuitive sense. But there may be other, more nefarious reasons at work as well.

Ever heard of a click-o-meter? It’s the way some e-mail lists are made to look more effective than they actually are. In its basic form, this is nothing more than people paid to open e-mails with no other interest or intention of further engagement. The more technical way is to have an automated click setting, usually done through a rotation of IP addresses.

To the casual observer, this gives the impression of recipients who are interested in a company’s offer, but the final analysis will show something quite different: near-zero purchases or other relevant actions. The problem is that for many campaigns, ROI will be slow at first, so the grim reality that the company has been punked comes later.

The growth of the autobot click-o-meter phenomenon tracks with the growing interest in purchasing third-party lists based on cost-per-click (CPC) performance rather than on the traditional cost-per-thousand (CPM) basis. Not surprisingly, when list vendors started being asked to sell lists based on a CPC versus CPM basis, for some of them the temptation to “juice the numbers” was too great. And since many of the databases come from other sources and are private-labeled, the problem is perpetrated throughout the system.

Many purchasers have wised up to this issue by settling on one or two list brokers that they know and trust, by asking about the data source, and by asking for client references for the lists in question. If an e-mail database has suddenly changed in pricing from a CPM to a CPC basis, that may be another cause for concern.

Another option is to hire a third-party traffic monitoring service to assist with back-end analyses of e-mail campaigns to see what’s working or not working in specific campaigns and nip any problems in the bud before they do too much damage to a marketing effort.

But like anything else, self-education is critical. Most companies who are victims of fraudulent e-mail practices become so because their staff members are unaware of the potential problems. But the information is out there for the asking, and that knowledge will soon become “intuition” – usually the best predictor of ROI!