28/03/2019 by Jillian Als 0 Comments
The DIWM Opportunity
By 2020, over half the workforce population will be either Millennials or Gen Z (or as they like to be called, Founders) and by 2025 it’s estimated this group will make up an astounding 75%. This generational shift has an enormous impact on the small business economy as Millenials are starting new businesses at twice the rate of their predecessors. To continue to succeed, digital service providers to small businesses need to understand the implications of this shift and ensure their product and service models can evolve with the new customer base.
In the fall 2018, Mono commissioned a survey and research report with The Local Search Association (LSA) to understand evolving behaviors when it comes to service delivery preferences amongst small businesses. Analyzing the results across nearly 500 SMBs, it was clear that the new SMB buyer is impatient, intelligent and independent when it comes to buying services or products across the marketing stack. These three words have a lot of nuance around them but essentially means this: Business owners or decision makers are doing plenty of research in advance, they are looking for more immediate satisfaction and they want some level of control afterwards.
THE DEMAND FOR DIY IS GROWING
When we looked at the survey results more specifically across the younger decision makers or business owners, the findings are the same but amplified. In fact, Do-it-yourself (DIY) is a growing preference amongst younger business owners.
Let’s take a specific example and consider the business website. Today, 36% of business owners DIY their websites – meaning they use a typical DIY site builder to build their site. When you look this for just younger decision makers/business owners aged 18-34, that number jumps to 40%. When asked in a different way, 44% of this cohort had DIY’ed a website at some point.
More broadly, the survey found that 74% of all business owners have DIY’ed something across the digital marketing stack and that figure jumps to 82% for the younger business owners. Bottom line is that there is a demand, especially amongst younger business owners for DIY solutions – more so than when we’ve looked at similar research in the past.
SERVICE STILL HAS (A LOT OF) VALUE
BUT! Service still has (a lot of) value. Consider the website model example just given - despite the growing trend towards DIY, over half of SMBs still prefer someone to create their website for or with them.
And why’s that? Time. Time is the most precious resource an SMB has and that doesn’t differ by age of the business owner. Sure, young business owners might be more savvy and efficient with technology, but there is still a significant admin burden of running a business. Intuit research shows that business owners spend only just over a third of their time on their actual craft. At some point, a business owner’s time becomes more valuable than their money.
In the aforementioned survey, we also asked what would prompt SMBs to buy fulfilled services for their digital marketing needs, meaning a Do-it-for-me (DIFM) or Do-it-with-me model (DIWM). Business owners will move into service-based models when there is a high need for customization and/or it’s mission critical to their business. Service is not going anywhere, but there is a big gap in delivering the best user experience for providing business owners with the ability to provision things on their own and give them the control they desire, yet assist them with service when needed.
DIWM - THE BEST OF BOTH WORLDS
One obvious way to gain traction with younger business owners is to offer DIY products and solutions. Without trying to compete with the major DIY platforms of the world, the differentiator digital service providers have is the option of service. They have the infrastructure in place to lend a hand to help and upsell when the SMB ultimately gets stuck, frustrated, or wants more.
At Mono we truly believe the biggest opportunity lies in the DIWM approach. The DIWM delivery model means you can offer business owners the control and transparency they require but also lend a hand as soon as they need it. And it’s not an either or – it’s an all of the above kind of solution. DIWM bridges the gap between DIY and DIFM and back again meaning the customer can move across models as their demands change.
DIWM & ENGAGEMENT REDUCES CHURN
What’s perhaps most compelling about the DIWM model is how it drives more engagement. Engagement from the small business with the platform and/or service is critical for reducing churn. There are some interesting numbers out there to back this up, as well.
Vendasta, a white label local marketing solutions company, put together compelling research looking at 200,000 SMBs on their platform over three years. They found that business owners who engaged with the platform daily had a 78% retention rate after three years – that is crazy impressive in the world of SMB marketing services. They also found that SMBs with 3 or more marketing services fulfilled had an 80% increased retention over 3 years than those with less or without fulfilled services.
THE 2019 TRUSTED DIGITAL ADVISOR
The ultimate DIWM model requires digital service providers to laser-focus on the customer experience. Yes, it’s 2019 and I’m going to say the words TRUSTED DIGITAL ADVISOR. As worn out and cliche as these words are, it’s never been more important. In a world where both DIY tools and marketing services are a commodity – digital service providers need to differentiate on service - driven by engagement.
Engagement can be defined and driven in a number of ways. For non-DIY type engagements, think of ways to educate your SMB clients and guide them – more than sell to them. Continue by practicing regular direct engagement and be ready to react when there is an obvious need for more dedicated service. Have those service packages well defined and transparent so the expectations are correctly set for the potential value and ROI for their business.
IS SERVICE AT SCALE STILL THE ELUSIVE UNICORN?
At first glance, DIWM may appear more complex than offering one model vs the other. Scaling service is hard but it doesn’t need to be done all by humans. These are the glory days of data-driven automation and AI. For example, chatbots are perhaps the best friends of Millennials. Given Millennial’s “on demand 24/7 mentality” and the fact that chatbots have gotten increasingly smarter over the years, they can lend a great hand in providing service and engagement on top of SaaS tools.
At Mono we look forward to helping our digital service provider partners crack the code. Our new interface provides a the best user experience for the small business owner to encourage daily engagement while still offering our partners the ability to offer customized digital marketing solutions at scale.