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Oct 26, 2000

Ernst & Young's Robert Duboff Talks About Competing in The Small Biz Marketplace

SUMMARY: No summary available.
Robert Duboff, partner and Director of National Marketing for Ernst & Young, is exceptionally knowledgeable about benefits and pitfalls of market research. He’s also a strong believer in segmenting markets. Duboff and Jim Spaeth, president of the Advertising Research Foundation, are authors of “Market Research Matters: Tools and Techniques for Aligning your Business,” published this year. He spoke with us about the challenges of the marketplace and how market research can help.

Q: A company like Bigstep is making the most of using market research to find out about the needs of small business. If a company doesn’t do market research, is it losing out on an opportunity?

Duboff: Market research is even more important if you distinguish roughly that there are small businesses that will never grow and maybe have no aspiration to grow. Any business that doesn’t have aspirations to grow is not a worthwhile target. If we take the small businesses that want to grow, that are growth companies, maybe some of them will make it and some of them won’t. The need for market research insight into them is far greater than the larger businesses. The reason for that is if you are a large business, your senior people are probably pretty similar to the big companies you deal with.

But it’s a different animal from these start ups, particularly with the dot coms if you have younger management. They might have a different set of values and a different way of purchasing so if you don’t do market research, how are you really going to meet their needs when you can’t gut feel it the same way you can for a company more similar to your own? I would make the argument that it’s far more important in that environment.

Q: Do you see a really big battle shaping up with the various portals for small business? Is anybody winning? How will it shake out?

Duboff: I think there’s always an issue with “small business” [with people thinking]that it isn’t any different from big business. The approach that is going to be smarter is the one that Fast Company uses in the offline world. Look for a mindset of entrepreneurial people or people who are interested in change and doing things differently. Take that mindset and say it can apply to someone who is an entrepreneur, an intrapreneur, a small but growth oriented company or senior people in big companies. I think that’s what’s going to happen.

I think the same with portals. You’ll find that very few small businesses define themselves that way first [that is, as a small business]. Typically, in my experience, [people say] it’s a family business or we’re entrepreneurs. There’s not too many that say, “I’m a small business.” Or they affiliate with whatever industry is the substance of their business. So none of these people are going see a small business portal, any more than a small business magazine, being really for them.

Q: Do you think that’s why something like Inc. works pretty well because of the entrepreneurial factor?

Duboff: But even with that I think its day may be past. I think Fast Company may be more attuned to today’s society. But I think Inc. has done a good job. If you read it, you see that it has broadened beyond just gee, we’re a small business. So on the portals, I don’t think any of them have distinguished them particularly where you’d say, “Yeah, this one is going to make it.”

Q: What about offline businesses trying to reach small businesses online? Who’s done a good job and who has blown the opportunity?

Duboff: Are there people who are trying things that aren’t working very well? I don’t have an answer to that. No, is my answer. I can’t think of anybody I would single out for that honor.

Q: You mentioned Fast Company. Is there anyone else you think is doing a really good job?

Duboff: If you take a Business 2.0, it’s doing very well. I think its readers include small business. It’s those [sites] that are taking that approach of speaking to the issues that matter are going to be the winners here.

Q: Are we going to get stuck in a marketing rut? Or is there enough creativity out there?

Duboff: You’ve got to segment things, as I say in the book. If you are looking for the entrepreneurial nature, I don’t think that’s primarily a message or a targeting of small business. Or if you’re thinking of the family, and I think there’s an opportunity, family wealth and inheritance are the real issues there. There may be some, but I don’t know of people who are really targeting family businesses.

The creativity’s going to be getting your message across as a company and allying it. If Staples or are serving the small business market, they could become a channel for people who might want other things and who would be impressed or would find it convenient to have some [things] bundled while they are doing something about their office. I think that’s where there are opportunities.

Q: What about the upcoming trends in the next few months? What will the holiday season bring? Any fallout from last year?

Duboff: You never know what the story is going to be. This year is complicated just a tad by the election which will undoubtedly have a role in what’s going to happen. There will be changes in the messages because the media likes new stories. This may be the year when alliances start to happen. I’m a big believer in alliances. That’s the wave of the future. That may be the road to success. It’s unclear at this point whether we’ll have a good holiday or a bad one. That’s going to be the first headline. That will either be a headache for the new president or kind of a blessing of how they start. Generally, those stories never include small business. They usually focus on retailers, and generally that’s the larger ones. You can imagine that smaller retailers in years when the big guys have trouble, maybe that’s good for the little guy. I don’t know. I’ve never seen that story.

Q: What is occupying your mind at the moment in terms of market research and small businesses?

Duboff: I want to turn it for a second and look at small businesses as users of market research. I think there’s a big opportunity. Yes, small business is a growing target for companies, which means therefore undoubtedly that there’s more market research done of them. But by the same token, particularly a growth oriented small business, one would hope that they will come see the use of market research. Market research can be expensive for them. But if you’re a dot com, online research is very affordable and May have enough quality. If your entire target is an online target, then online research makes a lot of sense. It can be much cheaper. Small businesses have typically thought of market research as something that only the big folks use. Hopefully, reading the book will change some of their minds.

Q: Are people any less coveting of their email addresses? Is opt-in still something everyone needs to abide by?

Duboff: Not only me individually, but me as a market researcher and me as a member of Ernst & Young -- all of those are definitely in favor of the opt-in. Generally, it’s self-defeating [not to use opt-in]. There are a couple of books out now – :Permission Marketing: Turning Strangers into Friends and Friends into Customers” and “Unleashing the Ideavirus” by Seth Godin – which suggest that if I havesomething good and I send it to you, you’ll send it to your friends. I might encourage you to do that. Then you’re not ending unwanted material, you’re giving a reference that everybody wins. I think that’s really the model for how to do this. I think people feel as invaded by an unwanted email as they do by an unwanted phone call. So you only want to communicate with people that have indicated a willingness to communicate with you. That’s a lot easier in our business-to-business world.

“Market Research Matters: Tools and Techniques for Aligning your Business” by Robert Duboff and Jim Spaeth (John Wiley & Sons, Inc., $34.95).
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