Small Business Saturday

As far as I am concerned, Small Business Saturday is the quintessential example of Marketing as Service, achieving the kind of success that most marketers can only imagine.  The service in this case not only establishes a day that puts the spotlight on small businesses and rivals Black Friday and Cyber Monday, but also enables small businesses to be more competitive throughout the year, with marketing toolkits that highlight their distinct advantages over their larger competitors.

With the third annual Small Business Saturday set for November 24, perhaps the most remarkable part of this program is how it is developing a life of its own, with politicians uniting over its significance and more and more small business owners trying to take advantage of “their” day. To better understand the thinking behind this program, I spent a good hour on the phone with Scott Krugman, Director of Communications at American Express.  Here’s part 1 of my interview with Scott.

Drew: So let’s start with the origin of the idea of Small Business Saturday back in 2010.
Well, like all good ideas, in a way, they originate from our customers. AmEx OPEN’s been around now for twenty-five years, and the reason why we’ve been around so long and been so successful is because we really take the pulse of our customers in a variety of ways, and in this particular case, what we found out through research and talking to our customers, their biggest need coming out of the recession was more customers. So that got us to thinking, what can we do to help small businesses get more customers?

Drew: So after identifying the need, what then?
After a number of conversations with a lot of people, the thought came: what could we do to drive business to small businesses during key times throughout the year?  Naturally, that got folks in the room talking about the holiday season. Obviously big-box merchants have “Black Friday.”  Online merchants, more recently, have Cyber Monday.  So we thought there might be something there for small businesses, and the thought here was, let’s give small businesses their ceremonial kickoff to the holiday season.  Let’s get their holiday shopping season off to a strong start.  Let’s create a day for them.  It wasn’t as quick and as simple as I’m making it out to be, but what that ended up becoming was Small Business Saturday.

Drew:  Looking back now, it seems like a no-brainer, but why back in 2010 did you think it would work?
We thought it was the right message at the right time.  There were a lot of conversations that were happening about the importance of small businesses to the economy.  The “shop local” movement was going strong, so we knew that there would be a lot of support.  We also knew through research that 98 percent of consumers said that they wanted to support small businesses.  So we wanted to create something that would take that support and turn it into sales.  And as we started iterating, it became clear that this was a movement.

Drew: So how long did it take to go from idea to execution?
I should point out in terms of the timing element, this was basically getting the concept of Small Business Saturday to market—it had to happen in a matter of a few weeks.

Drew: Wait, let me make sure I heard you correctly. So in 2010, from green light to execution, it took how long?
A matter of weeks!

Drew: Did you advertise Small Business Saturday in Year 1 (2010)?
There was definitely advertising.  There was also a press conference at city hall involving New York City Mayor Bloomberg and our CEO, Ken Chenault.  There was a lot of earned media around it in terms of announcing the day.  It was a unique enough concept where it got a lot of curiosity and a lot of pickup.

Drew: What role did social media play in the launch of SBS?
There was a lot of social media around it.  In just that first year, we saw 1.2 million people liking the Small Business Saturday Facebook page.  That’s a lot of likes in a very short period of time.  We saw 30,000 tweets using the hashtags #SmallBusinessSaturday and #SmallBizSaturday.  I was told this, and I guess it was determined with Google, that it (“Small Business”) was the fastest-rising Google search term over that time period. So, I mean, there was a lot that went into it, but we knew in order for this thing to take off, it really needed to have a strong foundation in social media for it to become viral.  That certainly worked.

Drew: So why do you think this program took off?
We’re looking at four factors that really helped.  One was there was a lot of inclusiveness.  There was national scope.  The message was clear in terms of individuals being able to boost the economy.  This is really key and really important, because as much as we talk about American Express in this—and we’re not always comfortable doing that because we feel it takes away from the day—it became an agnostic day.  For small businesses to participate, they don’t have to accept the American Express card.  For consumers to participate, they don’t have to use the American Express card.  Is American Express making an offer for consumers on the day?  Yes.  But, they’re not limited to using that card in order to make a difference.

Drew: How did small businesses react?
It created a solution to help spur more business for small businesses, and small business owners really took to it.  I think in Year 1, not as much, because there wasn’t a lot of time to get them to own the day.  So I would say Year 1 was probably more about claiming the day.

Drew: So this feels a bit like cause marketing, another idea AmEx essentially invented.
You know, there are a couple schools of thought on that.  Small businesses definitely needed the help.  But at the same time, this isn’t charity.  Small businesses are the engine that drives the economy.  They’re creating jobs.  If people support small businesses, they’re supporting their local communities.  So they’re not just supporting the businesses, they’re supporting themselves.  They’re helping everyone.  It makes the entire engine work, especially as you’re coming out of recession. But the other piece of it is, it’s the discovery aspect of what makes small businesses so special.  And it’s not the fact that maybe they do need the help, but it goes beyond that.  It’s helping consumers rediscover these businesses that have been there all along in their communities: the amazing customer service, the unique selection and the special experiences.

Drew: So how do small business compete against larger rivals in the face of discounting?
They focus on their core elements.  Large businesses spend millions of dollars a year on customer relationship management tools to understand their customer. Small businesses?  That’s an inherent part of who they are.  So it’s a day for them to really leverage those strengths and allow consumers to kind of rediscover what makes them great.  But at the same time, it’s helping small businesses not just own the day, but give them the tools that they need to thrive during the day.  This might kind of take us a little bit into Year 2, but we can always pivot back and forth.

Drew: It must have been tricking to balance AmEx branding and the SBS idea…
This is one of those campaigns where the message was so compelling, and the reason for doing it was so genuine, that people naturally wanted to take part in it.  Again, this is where it needs to become more than just about American Express, because you’re not going to get the response from public officials if Small Business Saturday is owned by any one corporate entity.  You’re not going to get that kind of response.

So that’s why it’s more than just about us.  We might have been the one to push the idea into the marketplace, but in all honesty, it’s the small business owners that owned the day.  It’s their day.  We might have given it to them, but they have taken it and made it their own.  We will always support it.  We will always do things in the marketplace to support the day and to support small business owners because that’s what we do at OPEN.  But it is their day, and that’s what makes it genuine.  And frankly, that’s what’s made it successful.

Drew: Was it hard to relinquish ownership of this idea?
That’s a fair question.  I think it’s one of the tough things when there’s such a good idea on the table.  I think the natural inclination is to want to own and control it.  But that’s the irony here.  For it to be successful, you couldn’t do either.  And I think there were enough smart people in the room to know that.  Ultimately, we realized, it takes a village to create a day.

Drew: AmEx “$25 offer to shop small” couldn’t have hurt the program.
For us to do this right, AmEx also had to be “skin in the game,” so of course the card member offer was critical.  Otherwise, it’s just lip service.  Like I said, Small Business Saturday is what we created for the entire small business community.  But I think our merchants come to expect us to look out for them in ways that others don’t.

Drew: So, did Small Business Saturday drive small business sales? 
Yes, actually.  I can tell you on the record that transactions of—we can only right now measure folks that use the American Express card, right?  That’s what we have available to us.  So for merchants that accept the card, card transactions were up 23 percent on the day.

Drew: How about the softer measures like favorability among small businesses towards the AmEx brand?
I’m limited in terms of some of the metrics that I can discuss.  But let’s say our philosophy is, if you do the right thing, customers are going to recognize that about you.  And I think that there are not many companies that would have been able to do something like a Small Business Saturday in a genuine way.  I think that has a lot to do with the OPEN brand as it relates to American Express, frankly.

Drew: It must help that this is not the first time you’ve focused on small businesses.
Yes.  We’ve been in the marketplace for small businesses probably longer than anyone else.  I believe we had the first business card devoted to small businesses.  I think because of the history we have in this community, there’s an expectation that we are going to be supportive beyond product offerings.  So I think that it’s one of those situations where all those interests are aligned.  Obviously, we have an interest in doing the right thing to help small businesses: it’s what we’ve been doing.  Our customers expect us to help them with their solutions.  So I think you could say, in a lot of ways, Small Business Saturday was a result of us doing what we have always done, and that’s listening to our customers’ needs and trying to find solutions.  It just so happens that we found something, in this particular case, that was massively innovative.  And is there a halo effect from that?  Absolutely.  That’s why I think you see a lot of other companies wanting to be a part of Small Business Saturday as well.

Drew: So is this about doing well by doing good?
Like I said, I think for a company to do the right thing in a meaningful way, it needs to be genuine.  And I think the marketplace, whether it’s small business owners or consumers, are smart enough to know when it’s not.  So I think it needs to start from the desire of wanting to do good and wanting to do the right thing.  That’s where Small Business Saturday is no different.  That’s where it starts.  I think there’s… if you do the right thing in the right way, good things come with that, yes.

Committing to Small Business Saturday

In truth, there just aren’t that many truly inspiring marketing as service programs out there right now despite all of my drum beating.  Which is one of the reasons I’m absolutely fixated on Small Business Saturday, a program that unites the nation to focus on “shopping small” for at least one big day.  Conceived in 2010 by American Express and their super savvy Open group, the program quickly gathered support from other big companies like FedEx.  That is just one of the reason’s I was delighted to run into Denise Yunkun, FedEx’s Director of Alliance Marketing at the recent CMO Club Innovation Summit in San Francisco.  Denise was able to provide some really interesting insights into why FedEx is involved with Small Business Saturday and the nature of their commitment.  Our Q+A follows. (By the way, Small Business Saturday will be on November 24th this year nestled nicely between Black Friday and Cyber Monday.)

Drew: FedEx has been part of Small Business Saturday from the get go.  Why? 
Supporting small businesses is, very simply, good business.  Small businesses are incredibly important customers for FedEx and they also are the driving force behind a successful and thriving economy.  Small Business Saturday reinforces the importance of independent retailers in building and sustaining vibrant communities everywhere.  The $1 million commitment we’ve made to this effort is intended to go directly back to small businesses.

The importance of small businesses is undeniable.  They employ half of all private sector workers – about 60 million Americans, they have generated 65 percent of net new jobs over the past 17 years, they account for more than 97 percent of all U.S. exporters and more.  Their success is our success.

Drew: What were the lessons learned from year 1 and 2 (in light of the fact that you really increased your commitment in year 3)?
Aligning to support Small Business Saturday makes good business sense for FedEx as small businesses are such important customers.  Distributing gift cards directly to consumers was a very effective way to engage them and drive them to spend at small business so we are doing it again this year.  Also, it’s an excellent opportunity for us to utilize the more than 1,800 locations in our FedEx Office network for small businesses.  We are providing a variety of free and discounted marketing materials such as posters that can be printed at no cost at FedEx Office Print & Ship locations.  Also, these customers will receive additional discounts when they come in to pick up their posters.

Overall, Small Business Saturday has a strong response last year.   More than 2.7 million Facebook users, 230 public and private organizations, 75 corporations and elected officials in all 50 states and Washington D.C. declared their support for SBS last year. More than 500,000 small business owners leveraged an online tool or promotional materials for SBS and 15,000 businesses signed up for free Facebook advertising to promote their products and services in the run up to SBS.

Drew: Last year, FedEx offered 40,000 $25 gift cards in support of SBS making it a $1.0mm commitment.  How do you measure the success of such a large promotional giveaway?
While we measure this in several ways, it’s important to note that above all, this is an effort to show our  support and appreciation for SMB’s with no strings attached. We do measure engagement and dialogue in social media channels, media coverage etc.

Drew: Will you be running that same offer in 2012 and/or doing something new?  Please provide an overview of your 2012 program (I can hold this until you’ve announced itpublicly)
FedEx will distribute 40,000 Shop-Small-branded $25 American Express Gift Cards to consumers, for free, via the FedEx Facebook page.  The give-away ended on Nov. 3 and  the winners will be chosen at random from the pool of entrants.  FedEx will also provide all registrants with a coupon to Save $10 on a $20.00 FedEx Express shipment, valid through December 31, 2012. Terms and Conditions will be included on the coupon.

FedEx Office® is also continuing its work to help small businesses draw in customers on Small Business Saturday and throughout the holiday season with access to a variety of free and discounted marketing materials.  In addition to the Gift Card giveaway, FedEx Office will support Small Business Saturday by helping independent retailers and other small businesses grab attention on Small Business Saturday and throughout the holiday season. Small business owners can visit Facebook.com/SmallBusinessSaturday  or shopsmall.com/fedexoffice  to access Small Business Saturday posters that can be printed for free at local FedEx Office Print & Ship Center locations.  Additionally, small businesses who take advantage of this free poster offer will also receive additional discount printing offers when they come in to pick up their posters.

Drew: Marketing partnerships can be kind of tricky.  Why do you think this particular one works so well?
FedEx has worked closely with American Express for over 10 years.  With our mutual focus on the success of small businesses, our relationship really is a natural fit.

Drew: How does FedEx make sure your connection to SBS doesn’t get lost in all the noise created by other SBS partners?
Our commitment to Small Business Saturday is substantial.  It’s also a natural extension of what we do for small businesses every day.

Just as one example, FedEx recently launched its first-ever, nationwide small business grant competition which will award a total of $50,000 to six deserving U.S. small businesses. The top winner will receive a $25,000 grant and the remaining five winners will receive grants of $5,000 each.  The top six small businesses – including the grand prize winner – will be announced in January.  We also create and participate in programs that give small businesses a head start, access to new opportunities and education to handle the challenges of shipping their goods.

Drew: Do you have any words of wisdom for other companies that are considering marketing partnerships?
While there are several factors, it’s important to ensure that your interests/goals are mutually aligned and the brands and value propositions are complimentary.