This post was co-authored by HubSpot's Peter Caputa and David Criswell. David is a sales professional, former business owner and social media addict currently employed as a corporate sales trainer. When not on Twitter, Linked In, Facebook or reading the HubSpot Blog he is busy training for the 2009 Ironman Lake Placid.
The idea is not new that small companies are more nimble and can move quicker than big companies in just about every operational area: bringing new products or services to market, recruiting and hiring, and of course, marketing.
But, Fortune 500 companies have more money!
Who cares?
Besides bigger budgets, Fortune 500 companies don't have any capabilities that small businesses don't have. On the web, companies of all sizes have access to the same low-cost marketing tools.
For a small fixed cost of a few hundred dollars per month and a few hours per week, a small business can do everything they need to do in order to acquire new customers:
It is reasonable to say that the relative cost of acquiring a customer leveraging these activities compared to "old" marketing (print advertising, direct mail, tv advertising, cold calling, etc) is low. While Fortune 500 Marketers continue to spend ridiculous amounts of money on both online advertising and traditional marketing methods (eg $1.5+ billion of television advertising that will happen this year), it's not hard to see that online customer acquisition through inbound marketing methods is a lot less costly to leverage.
But, big business is getting into Social Media!
So what?
It's reasonable to apply the principle of the long tail to the idea of big business getting into social media marketing. There may be a few big companies that dominate the spending on "new" marketing, but this will only bring more consumers - theirs and yours - into the social media circle. However, it's the 25 million small businesses that can then more effectively use this "new" marketing to capture enough customers to have a healthy growing business.
Another reason not to be too concerned about big businesses entering into social media marketing is how they do it. Seth Godin described it best - "Big-thinking companies lose customers all the time because big-thinking companies isolate the decision makers from the outside world." When big business attempts to use social media marketing, will they really listen?
Mark Kvamme made an interesting comment on the marketing challenges big businesses face in an interview with Larry Weber in the Market Edge podcast. Part of the message from their discussion - big companies don't realize that they no longer control the message. The "new" marketing person needs to be a steward of the conversation. First they need to be invited to the party instead of interrupting it. Once invited, they can start a conversation, but they must understand that after the conversation is started, marketing doesn't control the message.
But big business has so many more customer relationships to leverage.
Who has real relationships, though?
Many small business owners believe intuitively that they are able to have a deeper relationship with their customer. Social media is in perfect alignment with this competitive advantage that small businesses have over bigger ones. The type of "information-sharing conversation" between salesperson and prospect that social media and inbound marketing initiates encourages future customers to buy-in to the solution by educating themselves at their own pace. Self-selected prospects are much easier to engage than prospects who are interrupted.
Small businesses can leverage the higher quality relationship that this inbound permission lead brings. Big businesses are still using interruption-based lead generation methods. They then typically use a convince and persuade sales strategy rather than a consultative strategy that is more likely to develop from permission-based inbound leads.
Small businesses live and die by their ability to solve customers' true challenges. As bigger businesses build big marketing and sales organizations, they lose track of customer focus and their ability to connect to a customer's true challenges. Small businesses have the skills and mindset to adapt to a world where buyers have much more ability to find the right solution on their own through search engines, blogs and social media.
Don't take anything for granted!
We certainly can't expect Fortune 500 companies or big business to do nothing. Evidence of this can already be seen and according to eMarketer, $1.9 Billion will be spent on social media advertising in 2009 (compared to about $20 billion in overall web advertising this year).
Maybe the game of marketing has changed to a point where, as David Meerman Scott suggested at the Inbound Marketing Summit, we need a new way to measure marketing ROI. His position - the ways we measure success today aren't necessarily the right ways to measure success of new marketing. For example, measure how many people were exposed to your ideas, downloaded something for free, shared that material, how many people are talking about your company - positively and negatively.
As a small business, you can decide at any time how to measure the effectiveness or success of your "new" marketing efforts. You intuitively know that building a strong reputation and a following online has much more lasting effects than a short term sale.
You also know that measuring inbound marketing and social media based on its ROI, is an obvious and necessary thing to do. Most big businesses, believe it or not, don't know how they're going to measure their social media success, yet plan to spend significantly more money on it next year:
- 87% are not measuring their ROI on social media marketing efforts.
- Yet, 67% report they will be increasing their social media advertising budget
At HubSpot, we'd wager that at some point, big businesses will figure out that it's not about throwing money, might and muscle at the web. And that it's about getting back to the very basics of business: helping your customers succeed and your industry progress.
Until then, small businesses have a big advantage. Don't wait to take advantage of it!
