Small Businesses Earn Big Returns Online
The fast paced environment of the internet is replacing 'Main Street' for many businesses. I'm not suggesting this will change the nature of small businesses or drive them into e-commerce solutions. Far from it. But people are using the internet the way families used to use 'main street USA.' They would stand outside the hardware store to see I Love Lucy on the new Philco television or daydream about a new washer/dryer combo. Today, they look through the internet, finding their local Maytag dealer or the closest store selling a wall-mounted, flat panel plasma TV. People love to window-shop.
Numbers (usually) don't lie.
Gallup did a survey that showed most small businesses go online just for the exposure. And while there are many good reasons to advertise and promote a smaller business, even if you have no plans for e-commerce solutions, the internet is proving to be a boon for smaller shops in another way.
Small businesses grew 123 percent when they established an advertising presence on the internet. Most of the increase was not traced to direct purchases, but rather more traffic from customers who had seen web-based advertising or the store's website. Patrick Marshall, a group vice president of marketing for Verizon, which commissioned the study, said "...(consumers) buy from local merchants ... (while) e-commerce may not be right for all small businesses, even the most local business can benefit from establishing a website to promote their products and services."
The numbers keep adding up.
Another study of internet marketing conducted for SuperPages showed that fully 21 percent of people who shop online, choose to do their buying locally. The internet is merely a research tool to find the right product at the right price.
For local businesses with a website, the process was usually less stressful and more rewarding that they had anticipated. Most small businesses tracked their costs and surveyed customers to get a better idea of how their internet investment was working. Not surprisingly, 55% said they knew their site made back costs or paid for iteself in increased business. And 48% responded that their web pages met or exceeded expectations (that number was 33% in 1999).
The SuperPages study also concluded that small business owners taking part in the survey believed in the future of the internet and what it will mean for them. 65% ranked their internet investment a 7 out of 10 as being important to the future of their business.
The Technology Gap is a Divide.
Many smaller businesses have minimal if any investment in the web. Those that are online, however, appear to hold the upper hand. The gap is growing between the haves (those that maintain an active small business website) and the have-nots (small businesses that either have not created a site, or built one years ago only to have it site idle.) The 'haves' understand their customer's habits, reach a broader geographic area and know more about their competition because of the internet. That information is power.
Approximately 48 percent of small business web sites attract customers from outside a 50-mile radius. Small business owners without a site tell researchers that 20% of sales come from that distance to make a purchase.
Companies operating a business site rate themselves 8 out of 10 for a general understanding of the Internet, compared to those without who give themselves 6.
Companies with a website rated themselves 7 out of 10 for their understanding of how their customers and competitors are using the Internet, compared to those without an Internet presence, who rated themselves less than 5.
"Small businesses without a website may be at a disadvantage compared to their competitors who are online," said Marshall.
It was estimated that business will spend $7.3 billion on email marketing during this year - up 4000% from 2002. 1,600 marketing email messages per year, per consumer. Business Wire said, "The Internet marketer's challenge in the face of this email explosion will be to break through the clutter with the right message at the right time to the right person." I agree.
Get the right message
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