Despite the rapid growth of Amazon eCommerce, most of the things you buy are face-to-face.
That’s right: 92% of the consumer economy is local. Two-thirds of the local economy is service-based, and if your business falls in that category, we have good news: We think service-based businesses are not going to be disrupted by eCommerce anytime soon.
In the first interview on The Future of Local Business, we interviewed Stu Wall, Founder and CEO of Signpost. Stu talked about why local businesses have a competitive advantage in today’s consumer economy, why many are not taking that advantage, and how Signpost can help.
Here are the highlights from that interview.
How Small Business Owners Can Compete With the Amazons of the World
One of the more interesting consumer trends today is the fact that millennials care more about experiences than stuff.
This gives small local businesses a competitive advantage. They offer experiences that are more authentic and, in Stu’s opinion, higher-quality than bigger businesses.
But a great service may not carry you without a strong online presence.
In today’s environment, all local businesses, even those offering a service out in “the world,” are online and have a way to connect with customers. Almost all consumers now search online for businesses. They also value the number count of reviews and ratings of a business, and this drives their purchasing decisions.
“Almost all consumers now search online for businesses.” – Stu Wall
A lot of consumers prefer to communicate with businesses over chat and text. To be competitive with eCommerce and larger companies, it’s important that you’re keeping track of who your customers and prospects are and that you have a way to stay in touch with them online.
It’s not enough to just send your newsletter a few times a year, either.
Where AI and automation Fit In
We asked Stu: With Signpost being an automated AI platform that manages customer relationships, is this how he sees technology evolving to drive the local economy?
The simple answer? Yes.
Companies like Amazon keep track of everything you’ve ever looked at or clicked on within their site. Then they use that to optimize your experience at the individual consumer level.
“Amazon reminds me when I need a new toothbrush,” Stu said as an example.
One problem for local businesses is that they don’t have the same amount of data on their customers. Even if their relationships with customers have been digitized, they’re not able to keep track of things like phone calls, emails, credit card transactions, appointments, and reviews online.
When they do have data, they struggle to use it to drive value. Again, a lot of people only send a newsletter every quarter, but it’s time-consuming to write and there’s not any call-to-action to the people receiving it.
One of the ways that Signpost tries to solve that problem is by helping the businesses keep track of all that data—to have one list of all their customers. Then it helps businesses accomplish objectives: things like converting people who have called but haven’t come in, or getting reviews on Yelp.
Signpost’s AI, called Mia, once given an objective, writes and sends messages based on the individual consumer’s behavior, with the goal of driving more reviews online, or more revenue for the business.
“Whether we’re involved or not,” Stu said, “keeping track of your customers, converting people who have expressed interest, getting your existing customers to write reviews, refer their friends, and come back are some of the most important things you can do as a business.”
There are many ways to accomplish those things. Signpost uses AI, which Stu thinks is particularly effective and easy to use.
“I encourage businesses to try and solve those problems,” he said, “no matter what path you take.”
There’s a lot of talk out there about artificial intelligence, ranging from self-driving cars to chat bots.
AI is going to be ever more important over the next 10 years. But today, as it stands, there are some areas where AI makes things better and some areas where it makes things worse.
For example, when you reach out to your cell phone company to get support, you want to talk to a person, not chat online with a robot. Eventually, AI may get to the point where you can have a conversation over chat and it’s more personalized and effective than speaking with a person.
But that’s not the case today.
Signpost’s particular AI focuses on helping businesses collect customer data and optimize the marketing that they send. This is a situation where AI can do a better job than people can.
“AI can take something that’s really painful for people to do and make it delightful.” – Stu Wall
There aren’t many small businesses that enjoy manually typing in emails into a customer database or appending data from their transaction processor to know who’s a customer and who’s a prospect. AI can collect that data automatically, cleanse it, cross-reference it, and make sense of it in a way that’s nearly perfect.
For Local Businesses Looking to Get Help
It’s a challenge for small businesses: there’s a lot of do-it-yourself technology out there, such as email or scheduling systems, that you can use at a low price. The problem is, a lot of small businesses don’t have the human capital to manage those tools.
Even AdWords Express on Google (a company known for keeping things simple), is complicated. Most businesses don’t have the time to manage it.
There’s also a really big service economy out there to help small businesses. Many are helping local businesses get online, create a website, and so on.
Some of those firms are better than others, but many charge a very high margin or make the rates that they charge opaque to small businesses, which has resulted in a lack of trust. And some of them are just plain too expensive.
The way Signpost is looking to solve these problems is through automated technology, something that’s much lower-cost than hiring a service provider, but far more automated than the DIY tools out there.
In other words, we’re into delivering results without a big investment.