June 05, 2018

How Automation Will Trigger A Small-Business Renaissance (Forbes) »

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POST WRITTEN BY

Cory Capoccia

Cory Capoccia is president at Womply, a SaaS company that partners with the payments industry to empower small businesses with tech and data

 

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When you hear the word “automation,” what comes to mind? Do you think about jobs being gobbled up by hyper-intelligent software systems? Friendly robots making pizzacoffee and burgers? Or perhaps something ominous, like a thermonuclear war triggered by artificial intelligence a la Terminator 2: Judgment Day?

These examples make great headlines (and marginally good 90s cinema), but, in most cases, the true impact of automation is simple, subtle and often surprising when compared to the narratives that get the most attention. Case in point: automation may actually be the key to triggering a renaissance on Main Street as opposed to accelerating its decline, as some have assumed.

A small business’s biggest advantage is providing a unique customer experience that larger competitors can’t replicate, but business owners and operators wear many hats and have limited time to deliver on that potential. Software automation promises to give small-business owners more time for the inherently human aspects of running their businesses, which magnifies and multiplies their advantage.

When you consider that there are almost 30 million small businesses in the U.S., the compounding effect of automation could be truly profound. In fact, one of the software-as-a-service (SaaS) movement’s most iconic — and, maybe, ironic — outcomes could be unlocking the latent potential of American mom-and-pop shops and helping them thrive as never before.

The Experience Economy Goes Small

For context, let’s dig into the economic and social trends that are working in favor of American small businesses.

Two decades ago, Jim Gilmore and Joe Pine coined the term “experience economy” in a seminal article for Harvard Business Review. To summarize, they argued that as products or services become commoditized, consumers incrementally raise their expectations until they demand “staged experiences.”

Today, the experience economy is in full swing, driven by bucket lists, the millennial mentality and the insatiable desire to fill social media feeds with cool, original content. Buying a set of golf clubs isn’t enough — heck, golfing isn’t even enough. More and more, a panacea is snapping a selfie as you tee off at Pebble Beach for all your Instagram followers to see.

At their core, small businesses are proprietors of unique experiences. You go to Walmart, Applebee’s or Jiffy Lube because you want something predictable. You go to a boutique retailer, hole-in-the-wall diner or family-owned auto shop because you want something you can’t get anywhere else.

Whereas big businesses use automation to standardize experiences, small businesses can use automation to personalize them. There’s no substitute for a human touch in human interactions, but many day-to-day business tasks can simply be handed over to technology systems. Time saved on automatable tasks equals more time available to enhance the “staged experience” at a small business.

Trust Is Big For Small Businesses

Another untapped advantage for small businesses is their high standing among American consumers. According to data from Gallup, small businesses are among the most trusted institutions in the U.S., ranking just below the military at the top of the list. Big businesses, on the other hand, rank just above Congress at the rock bottom.

In other words, people implicitly trust small businesses, which is no small thing in an era when public scandals in government and industry grab headlines nearly daily. Consumers want small businesses to succeed and don’t need to be convinced to spend money with them — on the contrary, they just need to eliminate any reasons not to spend money with them.

Trust erodes when businesses can’t deliver on expectations, and the internet has made it easier than ever for consumers to assess a local business’s reputation. The most important thing a small business owner can do is take control of the company’s online reputation.

As I’ve written before, small businesses should see online reviews as an opportunity, since local search has made it easier to find local businesses. But a more transparent climate means business owners simply must ensure that every customer interaction is memorable in all the right ways. That requires time, which is something that many busy entrepreneurs simply don’t have enough of.

Time Is Money

Over the past two decades or so, the Fortune 500 companies have amassed record profits while new business creation has bottomed out. These competing trends roughly mirror the mainstreaming of enterprise SaaS, with major benefits accruing to big businesses at the expense of small ones that have been underserved by technology.

Small businesses can’t compete with larger ones on scale, efficiency or sophistication, but they can reap the rewards of a widening search for unique experiences among American consumers. The key is to spend more time on things that directly influence how the customer feels about the business and its offerings.

Small-business owners understand this implicitly, but they also can’t afford to hire large teams to handle all the other important work that must be done each day. Finally, after years of lag, the SaaS community is building an ecosystem to deal with this problem, and the response has been remarkable. Since 2011, SaaS adoption at small businesses has skyrocketed from 27% to roughly 94%, according to TechAisle. Clearly, there’s pent-up demand.

We’re in the early stages, but soon automation will characterize every aspect of small businesses, from email marketing to customer relationship management to streamlining inventory management and the in-store experience. All of these changes will benefit consumers and the U.S. economy, which relies on small businesses for roughly half of GDP and domestic employment.

Above all, the next wave of automation will ensure that the best days are still ahead for American mom-and-pop shops. That’s a future worth rooting for.

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