Last week I cancelled my Bell internet service. Believe it or not, doing so was some of the most fun I’d had in weeks. The retention rep who got my call really wanted me to stick with Bell. This man was well informed and passionate our conversation lasted a full half hour and ran the gamut from the morality of UBB (which he believed in and I did not) to basic economic principles. The most interesting thing he said to me was that this move by the big telecom companies was a completely natural, understandable and even admirable action of self-defence, and that if any of those wee little independent isp’s ever got to where Bell is, you’d better believe they’d do the same thing.
Well that got me thinking.
Would they? Something says to me: no, they wouldn’t. That’s my first instinct to trust small business over big business. Well why not? I’m an entrepreneur myself and we like to trust our own. Whenever possible, I like to do business with people I can actually talk to and who don’t have an army of ravening, soulless shareholders keeping tabs on excessive human decency, aided and abetted by the toadying corporate lickspittles we call a government.
I think I might be biased.
So in the interests of journalistic integrity, I decided to get some second and third opinions on this. I got in touch with Danny Iny and Peter Vogopoulous, the co-founders of Firepole Marketing. They kindly shared with me their feelings on big vs. little business, what marketing means, and the upcoming election.
Firepole Marketing is “the definitive training program for small business owners, entrepreneurs and non-marketers.” Based out of Montreal and only a few months past its official launch date, Firepole Marketing blogs, coaches and tweets about how a small business can have top notch marketing, and hopefully, through that, grow into a medium sized business.
Danny Iny is a business and marketing strategist, MBA, university guest speaker and author, while Peter Vogopoulus is a lecturer at the John Molson School of Business, Guerrilla Marketing strategist and business coach. It is safe, and I think fair to say that these gentlemen understand both sides of the coin.
Megan: Should a consumer choose an independent business over a corporate (read: Corporate Canada/America, not merely incorporated) one? Why? What if they have to pay a premium?
Peter: It’s a very loaded question as well as a very individual decision. Yes, small and medium businesses are the drivers of the economy (over 85% of businesses are by definition small or medium businesses) and they certainly deserve our support. But I’d loathe to suggest we should always work with small businesses for this reason alone, or because, for instance, we have an intense dislike for corporate Canada.
Generally, a consumer acting out their own self-interest will always choose the “best” solution for their needs. But what makes up a “best” solution varies from consumer to consumer. “Best” includes not just tangible aspects (e.g. a quality product and good customer service), but also intangibles (e.g. this company shares my values and I love being their customer). As a consumer, you will choose the best, erm, “best” for you. Some people will place a high importance on certain dimensions of value (e.g. customer service) and be willing to pay for them. Others will switch providers to save $5.
By virtue of their size and flexibility, small businesses have the edge in that they are better able to meet the specific needs of their consumers, which in turn could justify any premium it needs to apply to deliver this value. But be aware that while some consumers will pay for this value, others won’t — their needs might only be served by some other bundle of value (a fancy way of saying different strokes for different folks.) And that’s okay. A small business owner can’t, and shouldn’t, be all things to all customers. They should clear about who they serve and we as consumers should be clear about why we patronize one company over another.
Danny: Well, sort of. I definitely think that you should avoid businesses who don’t share your values, whatever those may be… so for example, if your values are very supportive of the environment, then you shouldn’t give your money to companies that are damaging the environment. I don’t think that applies to size of business, though – ultimately, you want the best configuration of value – sounds fancy, but just means best solution to your problem for the lowest price. I don’t think small or independent businesses should get a pass on lower quality just because they’re small. There are areas in which small players can’t compete, because they don’t have economies of scale, or the same access to resources. Rather than subsidize them to continue competing in that space (which is what we’d really be doing if we buy their stuff even though it’s not the best option for us), we’d just encourage them to produce stuff that isn’t as good but costs more – that isn’t a sustainable arrangement. The bright side is that there are areas where they can provide better value; small and independent businesses are often more in-touch with their markets, can adapt a lot faster, and can charge a lot less on some things, because their overheads are a lot less. These are the areas where we should avoid big corporations – because they don’t offer us as good a solution.
Megan: Many of our readers (*cough*editor-in-chief*cough*) hate big business, have problems with capitalism in general and consider marketing as next door to evil. How would you respond to this?
Peter: I think that the negative feelings about capitalism and marketing are misdirected. They are not the problem, nor are they evil. Its bad applications of capitalism and marketing that are the problem. In its purest form, I can think of no greater “give the power to the people” system than capitalism, believe it or not. As a business, you survive on your merits and merits alone and as a consumer you exercise your democratic right every day by voting with your wallet. Furthermore, I consider marketing to be nothing more than telling people who want what you’ve got and are willing to pay for it to come and get it. Furthermore, I consider marketing the great equalizer, allowing the smallest companies to compete with the big boys with the right mix of chutzpah and creativity.
So where does it go wrong?
With capitalism, it’s when we try to “correct” it with protectionism, intervention, quotas, tariffs, etc. These are opportunities for entities with sway and special interests to game the system in their favour. That’s what we get upset about, usually. With marketing, it’s when we feel we are being coerced into our decision (i.e. from tactics that come on strong, to those that persuade us “under the radar” using a deep understanding of consumer psychology). I’d argue that this isn’t always marketing, it’s manipulation.
Danny: Hmmm… Should I be afraid to respond here? I understand where your readers are coming from, but I don’t agree. I think that capitalism is ultimately democratic, but that people betray their true loyalties with their purchasing decisions. All of the people, who care about conserving the environment, but buy American cars with poor gas mileage (or who drive when they could use public transportation, for that matter – I’ve made a conscious choice not to own a vehicle) – their concern about the environment is all talk. The car companies will stop making environment-destroying products the second that people stop buying them. The real problem, then, isn’t the corporations who are making the products, but rather the consumers who are buying them. The efforts that need to be made to fix these situations aren’t to hate on corporations, but rather to educate and empower consumers. And how do you educate consumers? What skill-set will allow you to communicate ideas in a way that makes people want to take action? Hmmm… sounds like marketing! 😉
Megan: Which party, if any, is the most encouraging to small business owners? If small business was going to be an election issue, what would you see changed?
Peter: I’d love to see taxes scaled back to help small businesses become medium businesses. At this point in their stage of growth, small businesses need that shot in the arm. As for which party, none of them have an adequate program for this in my opinion, but by all means ask the MP in your riding how he or she personally stands on the issue and what they would do once in government. Pay close attention to what they say and then snap out of it and remember that it’ll probably never happen because no one is pushing that agenda strongly enough. Small businesses need a champion. And there is no one on the horizon.
Danny: I think the key issues for small business as being lowering taxes on lower income brackets, having special tax breaks for small businesses (really small businesses, as in $150,000 in annual revenues or less… not the government definition of small, which is under 100 employees, and can often mean several million dollars in annual revenues), as well as subsidies for starting a business that include money, and other resources (coaching, infrastructure, training, etc.). I think all parties should be campaigning on these issues, because small businesses are what really drive the economy. That being said, I’m not going to pass judgment on one party or the other – if readers are interested, they should call up party headquarters on all sides and ask them where they stand on these issues.
So there you have it. Second and third opinions. Unfortunately, space was too short for me to include answers to all of the questions I had for Danny and Peter, but I have a feeling their goodwill might just extend to having a discussion or two in the comments.
Check out their blog over at Firepole Marketing, they’ve got great articles, videos, resources and a really engaged community.
What are your thoughts? Do we have a potential champion for small business on the horizon? Anyone want to go to marketing school? Are you voting with your dollars, and if so, how?
Great blog this week Megan. So proud of you. Now I got to free myslef from the Bell shackles!
@cherry I seriously recommend it!
Thanks for the post, Megan.
It’s interesting you bring up Bell, as it was one of the companies and situations that I was thinking of when composing my answers. I’d like to stir up the pot a bit by offering up this little nugget:
If we don’t like Bell’s, or any big business’ customer service, I’ll submit to you that it’s our own damn fault. If many, many customers switch providers to save $5, they are essentially sending a message to big business that they prefer “price” over “service”. If two or three big corps are battling it out for the customer on the basis that even a few dollars matter, their margins (what is left over for them after all their expenses) are razor-thin — how can you deliver good service under these circumstances and remain profitable? Volume, certainly, but with volume comes increased costs to deliver the service. It’s tough.