Small businesses should get in touch with customers

FOR those small businesses hoping for respite from rising interest rates, the latest Reserve Bank minutes didn't give anyone reason to breathe easy.

FOR those small businesses hoping for respite from rising interest rates, the latest Reserve Bank minutes didn't give anyone reason to breathe easy. Maybe instead of worrying about rate rises, the true entrepreneur should head to Facebook and Twitter.

The "father of management education", Peter Drucker, once described the two basics of business success as marketing and innovation.

So, how does a modern business get to know the modern consumer?

Well, how many of us grab the Yellow Pages before Google to find a business solution? The answer is fewer by the day.

I recently interviewed Sydney-based marketer Peter Applebaum, founder of Tick Yes, on my Sky News Business Channel program. His advice to most small businesses is to venture into online social marketing.

The company helps businesses create stronger relationships with its customers using digital platforms. So if you are in business and feeling the pressure, maybe the solution is to look seriously at Facebook, Twitter and YouTube.

These platforms are the new-age mediums for something that has always worked -- relationship marketing. Networking by showing up to events has always worked but nowadays many customers want to do it digitally.

So, how is the new social marketing relationship different from the old one? It's not simply that it's done online. Applebaum says it's in the way connections are made with consumers.

"Traditional marketing is all about a monologue -- I the marketer talk to you my customer," he explains. "The customer then reacts and says either I am interested or not."

The social marketing way of connecting to customers is exactly the same way we do it with our personal relationships. That is, we talk to our existing and potential customers using Facebook, Twitter and YouTube.

Using these connection points you can get to know your customers, get to know what they like and what interests them and this information can be used to create products and services they might want.

But there is a catch -- you the business owner might have to go outside your comfort zone and get personal with your existing and potential customer base.

"We are relationship-seeking missiles," insists Applebaum. "One of the flaws of traditional marketing is that we weren't able to really build those relationships."

In the past, big firms spent millions on television commercials to pull at customers' heartstrings but you can do this more easily with the online options and it won't cost you an arm and a leg.

The idea is that by using social marketing you can tell interesting stories about yourself and your business that might lead to sales.

And you can also listen to your customers.

Peter Switzer hosts Switzer on Sky News Business Channel Monday to Thursday. You can contact him at www.switzer.com.au/small-business