The State of Small Business Report – Part 1
Network Solutions, LLC and the University of Maryland recently came out with a “State of Small Business Report” to take the pulse of what small business owners thinking. They surveyed 1,000 entrepreneurs and over the coming weeks I’ll be sharing some of the results that came back.
Week 1: Creativity as a strategy for success.
Small businesses perceive themselves at a disadvantage in marketing and innovation. Common marketing methods for reaching potential customers include print advertising (37 percent), email marketing (24 percent), social media marketing (19 percent), telephone sales (18 percent), direct mail (17 percent) and broadcast advertising (14 percent).
“Being creative is a success strategy for differentiation, but where do small businesses get new ideas for how to grow? The most common source is customers (68 percent).”
Small businesses are highly successful in getting referrals from existing customers, but struggle to be creative and differentiate themselves. The major ways that small businesses differentiate themselves from competitors are:
- Superior customer service (78 percent)
- Higher quality products and services (76 percent)
- Creative ideas to address customers’ needs (65 percent)
- Lower prices (44 percent)
Among these four areas of differentiation, superior service and creativity are correlated with competitive success, while quality and low prices make little difference to small business success. Perhaps everyone claims to have high quality, making it a marginal strategy for differentiation, while cutting prices is not sustainable for small enterprises that lack the economies of scale to keep costs low.
“Sources for ideas vary by industry. For example, retailers will rely more on customers while professional services firms will rely more on conferences.”
Being creative is a success strategy for differentiation, but where do small businesses get new ideas for how to grow? The most common source is customers (68 percent). Other popular sources include:
- Newsletters and trade journals (52 percent)
- Competitors (50 percent)
- Employees (45 percent)
- Suppliers (41 percent)
- Conferences (38 percent)
- Books (37 percent)
Sources for ideas vary by industry. For example, retailers will rely more on customers while professional services firms will rely more on conferences.
How do you differentiate yourself from your competitors and where do you get your new ideas for how to grow?
I’ve love to hear your thoughts if you leave a comment below!
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Hi Evan
Looks very interesting and I am sure that we will all be able to pick up some good tips here. Looking forward to more in the series.
MichelleJ
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