Like it or not, a powersports retailer is a business, and needs to be run like one. Now that the U.S. is emerging from the worst economic years since the 1930s, we wanted to know what small and mid-sized businesses, especially independent retailers, need to do to position themselves for growth. So we went to American Express OPEN, the big financial services company who has taken a specific interest in the powersports retail community (it exhibits at Dealer Expo), and asked vice president Rob Ciccone what he would advise.
DEALERNEWS: Now that the economy is coming out of recession and consumers are starting to buy again, what should independent retailers be doing to strategically position their businesses for resumed growth?
ROB CICCONE: Regaining your footing can provide difficult for any small business, especially over the past two years. In a recent article on OPEN Forum, one of our authors, Susan L. Reid, Small Business Expert and founder of ALKAMAE, offered a few tips that could help position business owners for success. Her key points included:
• Renew contracts with existing clients and have new clients sign long-term deals when possible.
• Hang on to property, even though it may seem like a good time to sell.
• Don’t cut prices, thinking that it will help attract more clients and customers. Keep prices steady while offering customers incentives.
• Invest in education by attending seminars online and in person, and reading books and trade magazines.
• Resist the urge to splurge on extras you don’t need, and think before you add all the bells and whistles to your business.
• Read the papers or watch the news to be aware of what is happening in the market.
DN: What are small business owners saying on the OPEN Forums? Are they still being conservative, hesitant to take risks?
RC: Every six months we conduct the Small Business Monitor which looks at the issues and trends affecting small business owners across the country. The results of this spring’s Monitor, conducted in April, offer a good indication of what business owners are feeling and saying.
For the first time since 2006, growth has surpassed survival as the No. 1 priority for entrepreneurs. While uncertainty over the economy still presents a challenge to growth, concerns of economic uncertainty are starting to recede (27 percent versus 35 percent last fall).
Many (37 percent) expect to grow and are willing to take a financial risk to do so (56 percent), although most (65 percent) entrepreneurs believe growth will be slow and steady. A minority (16 percent) is planning for aggressive growth, while 18 percent of respondents say they are still in survival mode.
The one cause for concern is in the area of cash flow: Concerns are at an all-time survey high: 66 percent, up from 60 percent last spring and 53 percent last fall.
DN: What business services or applications are retailers so far failing to take advantage of?
RC: Mobile marketing stands out. According to a report by ForeSee, consumers are turning to their smartphones and apps to access websites more than ever. The survey showed that 33 percent of shoppers have used their phone to access a retailer website and an additional 26 percent plan to access retailer websites or mobile apps by phone in the future.
Going mobile will allow retailers to do everything from offering coupons and gift cards to enabling mobile purchases.
DN: As retailers begin planning their 2012 business strategy and begin their budget development processes, what business applications should they consider purchasing or subscribing to?
RC: Forrester Research found out that the amount of time U.S. households spend online is 13 hours per week, which nearly surpasses the amount of time spent watching TV. This move online presents new opportunities for business owners looking to connect with current and new customers “where they are.” And it’s because of this that online marketing techniques such as search and display advertising are proving fruitful.
Forrester’s U.S. Interactive Marketing Forecast showed that search advertising leads the pack among interactive marketing tactics and is expected to grow 15 percent per year for the next four years.
For small and local businesses, display advertising is on the rise. According to Borrell, use of targeted display by advertisers local to the markets where their ads run will more than double.
One of the barriers to entry, however, is the business owner’s lack of search and display knowledge. New tools are being introduced to help simplify the process while providing a worthwhile ROI.
At OPEN, we have developed two solutions — SearchManager and AdManager — that are designed to cut down on the time spent creating and building search and display campaigns while taking out the guesswork.
SearchManager removes the two biggest hurdles business owners face in leveraging the power of search engine advertising: complexity and measurement. The tool eliminates the hassle of multiple logins and interfaces via a centralized dashboard that provides immediate, single-point access to all major ad networks, including Google Adwords and Yahoo! Search Marketing.
AdManager helps business owners create, optimize and target online display ad campaigns, such as those that include banner, rich media and social ads. It bridges the gap between ad creative development and media optimization by offering a start-to-finish platform.
Interestingly, when combined with search, display advertising can provide significant lift in onsite engagement and an increase in online purchasing by consumers. Companies have seen a 22 percent increase in click-through rates when they run search and display campaigns together, according to the Atlas Institute.
DN: What e-commerce applications should retailers now consider?
RC: In the American Express OPEN Small Business Monitor, two-thirds of business owners said cash flow was their biggest cause for concern. This is particularly meaningful in an economy where customers tend to pay slower.
Tools like AcceptPay allow small businesses to extend multiple payment options to their customers. They facilitate the depositing of payments directly into the business’s bank account, so business owners get paid faster. It also allows business owners to create, send and track invoices, all in one easy-to-use online portal.
This story originally appeared in the Dealernews July 2011 issue.