Game-Changing Technology Companies to Take Main Stage at Capital Connection

26 Growth Companies Selected to Present Success Stories to Attendees

McLean, Virginia (May 10, 2012) – Capital Connection’12, a nationally recognized technology industry conference, commends the 26 early, expansion and growth stage companies that have been competitively selected to present on the Main Stage on May 24 in Washington, D.C. These technology companies emerged following a comprehensive screening process of hundreds of applications with an invitation to present their business model and growth strategy to an audience of business and industry leaders and investors.

The 2012 Capital Connection line-up of presenting companies represent diverse technology fields, including cyber security, social media and marketing, information technology, cloud-based solutions, mobile apps, business, education, health IT, software and automation:

“This year, we have a tremendous group of presenting companies that span a range of industries and company lifecycles. The line-up includes both consumer-facing and business technology companies that showcase the diversity and vibrancy of the region’s deep technology community,” said Pascal Luck, Managing Director, Core Capital Partners.  Mr. Luck is Co-chair of this year’s Selection Committee and is joined by Co-chairs Joe Harar, Principal, TDF and Grant Allen, Vice President, ABB Technology Ventures. “The selection committee had a tough choice to make among the field of applicants vying for access to the main stage. The entrepreneurial ventures advancing to the show presented compelling reasons that ultimately earned them one of the spots. Many of these companies have already distinguished themselves within their respective industries.”

These main stage companies will present throughout the day on May 24. Each company will have five minutes to present their business to the audience of investors and advisors during the conference, in addition to the opportunity to exhibit their product or service.  Additionally, this year’s presenting companies will be offering more detailed company information, in tape-recorded presentations made available post-conference for interested investors.

To be selected as a main stage presenter, companies submitted detailed applications that received extensive review for quality of product or service offering, scalability of the enterprise, potential market, experience and relevant capabilities of the management team and the technical and domain expertise.

Key features in this year’s Capital Connection and TechBUZZ conference:

• Keynote Speakers:  Chairman and CEO of Revolution, Co-Founder of America Online and ultimate entrepreneur, Steve Case; Gilt Groupe CEO and Co-Founder, Kevin Ryan; and CEO and Founder of Opower, Dan Yates.
• Who’s Hot:  A who’s who of hot companies and recognizable market leaders.
• What’s the BUZZ?  The high energy, fast-pitch TechBUZZ program showcasing what’s new and fresh from Seed Stage startups. This year featuring the Best of the BUZZ with real-time feedback from audience participants.
• Easy Access: A new rate structure to make the conference accessible to a broad range of entrepreneurs, angel investors, incubators and companies across all stages of growth.
• Opportunity to Tell the Company Story:  An unparalleled opportunity for early, growth and late stage firms to present business models for investment or showcase their success.

Capital Connection^TM, one of the nation’s most respected industry conferences, will be held this year on May 23-24 at the Omni Shoreham Hotel in Washington, D.C. Registration for Capital Connection’12 with its featured innovative TechBUZZ event is now open on the conference website located at www.capitalconnection.org.

NOTE TO EDITORS AND REPORTERS: Media interested in attending this year’s Capital Connection and TechBUZZ, must submit an online request for press credentials at http://www.capitalconnection.org/about/media. The conference media policy is also available for review on the above web page.

About Capital Connection^TM

In its 25^th year, Capital Connection brings together the broad community of entrepreneurial companies and potential partners to help enhance business and economic growth. Opinion leaders from business and government share their knowledge and expertise, along with leading technology companies at all growth stages who showcase their capabilities to a nationwide audience of investors, advisors, partners and entrepreneurs at the annual signature event. Launched in 2011, TechBUZZ provides start-ups and seed-stage companies center stage in spotlighting the “next big thing.” For more information and to register, go to www.capitalconnection.org.

About TechBUZZ

TechBUZZ was first piloted in 2010 and launched in May 2011 as a half-day conference preceding Capital Connection in response to the growing impact start-ups and seed-stage companies are having in recent years on the investment ecosystem overall.  MAVA is dedicated to continuing to foster and celebrate this vital area of our membership by bringing together investors and entrepreneurs in a dynamic and meaningful format. TechBUZZ shines a well-deserved light on the visionary innovators and company-builders in our region who are actively developing their concepts, testing their beta or prototype products and services and pursuing a path toward market entry.

About the Mid-Atlantic Venture Association

The Mid-Atlantic Venture Association (MAVA) represents the full spectrum of private equity and venture capital firms with investment interests in the mid-Atlantic and beyond, entrepreneurs and their strategic partners. MAVA provides a wide range of programs, information and forums designed to stimulate revenue and company growth, facilitate quality deal flow, encourage collaboration and foster relationships among entrepreneurs, investors, strategic partners and customers.  To learn more about MAVA and the extensive services the association provides, go to www.mava.org.

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Mid-Atlantic Venture Association
1600 Tysons Boulevard, Suite 575
McLean, Virginia  22102

“My father always said to me, ‘If the same 40 or 50 families didn’t come here time and again, there’s no way our restaurant would survive,” recalls Masri. “Customers would drive up, and he’d begin making their order before they even got inside.”

Now 41, Masri had emigrated with his parents and three siblings from civil war-torn Lebanon in 1977 and settled in the tiny town of Pearisburg, outside of Blacksburg. He recalls that for particularly frequent patrons, his father sometimes refused payment for the entire meal.

“He’d smile and say, ‘Your money’s no good today,’” says Masri.

Three decades and a law degree later, those memories of such special treatment and customer loyalty helped Masri launch what’s poised to be a global customer loyalty appreciation business based right here in Charlottesville.

The key to Cardagin’s success, says Masri, is the rise of smart phones coupled with the popularity of “customer loyalty cards,” which include grocery store swipe cards and the freebie-offering punch cards popular at sandwich shops.

Masri recalls the day in 2008 that he sat in the basement of his Charlottesville home sorting stacks of such cards he’d collected from coffee shops, restaurants, and other businesses as he traveled the country in his job as the chief development officer for UVA Law School.

He’d taken that position at his alma mater in 2004 after working as an attorney both in private practice and as in-house counsel for a dot-com-boom-era company in Northern Virginia, but his childhood interest in customer service never waned. Today, he makes big plans from a light-filled office that was formerly a dance space above Hamiltons’ restaurant on the Downtown Mall.

“I thought, there’s got to be a better way to do this,” he recalls of the day when the then-just-released iPhone sparked a modern twist on his father’s lesson.

So does Cardagin mean we can finally toss out those grocery and other loyalty cards that turn our key chain into a ball-and-chain?

Not exactly, says Masri, who notes that the big national chains already have their own electronic loyalty programs in place. Cardagin, he says, is primarily aimed at the smaller businesses without sufficient size to implement and support their own.

Mom-and-pop businesses seem to be embracing the concept. In the past year, 1,500 firms have signed up for Cardagin, paying as little as $59 a month for the service, which includes an iPod Touch used to scan a code on customer phones. Meanwhile, 250,000 people have downloaded the free app, which enables them to receive “shout outs,” specials just for loyal customers.

“I love it,” says Corbin Snow, president of Snow’s Garden Center, which signed with Cardagin two months ago and praises it as “simple, easy for the customer, and easy to train my sales people how to use it.”

Unlike group deal sites Groupon and LivingSocial, Cardagin rewards the existing customers without completely destroying margins or taking a massive loss, something particularly tough on small businesses.

“They,” says Masri, speaking of the businesses, “don’t have to give the discount or reward until a certain amount of money has already been spent.”

Snow says the garden center recently ran a deal on CvilleSaver, a locally-owned group deal site, and he says he sees the benefit in both services.

“That’s a great way to draw new traffic,” he says of the group deals. “Cardagin is an excellent way to retain customers and keep them coming back.”

With sales offices starting to dot the East Coast and having recently contracted with a Dutch company to bring the Cardagin service to Holland, Cardagin is only poised to grow, Masri says. Similar partnerships are in the works in Ukraine and Mexico, so Masri figures it won’t be long before Cardagin is helping businesses reward loyal customers on nearly every continent.

The boss, however, is happy staying put.

“I always wanted to retire to Charlottesville,” laughs Masri. “I just never thought I’d be able to run a business from here.”

Mobile is the future of marketing because it provides brands opportunities to engage audiences wherever they are. As 91 percent of Americans keep their mobile phones within reach 24/7, the opportunities to create conversations and develop personal relationships with consumers are significant. Marketers are quickly discovering mobile’s unique personal power and reach compared to other media. By turning messages pushed out through traditional channels into engaging dialogues on the communication device consumers prefer most, marketers are integrating mobile as a horizontal conduit across their marketing mixes to establish and strengthen customer relationships.

To accomplish this, marketers must employ savvy strategies to capture consumers’ attention and entice them to communicate with their brand. By leveraging the process of mobile relationship management, or MRM, and integrating mobile touchpoints, they can lead consumers through the customer journey toward loyalty.

MRM allows marketers to connect brands with customers at just the right time and at just the right place. It does not cast a wide net; instead it focuses on an intimate group of consumers hungry to learn more. While only 11 percent of marketers have made some strides toward mobile loyalty, mobile is the best channel for improving customer satisfaction and profitability.

So how do you successfully execute MRM and achieve your marketing goal of creating personal, engaging conversations with consumers? Following are four steps along the customer journey that are essential to completing the cycle. Like stepping stones, these levels build on each other by using mobile with customers who have raised their hands to say they are willing to opt in to your databases and hear more from you.

1. Awareness. Before starting conversations via mobile, you must first develop awareness. To begin, you will need to activate mobile at the heart of the marketing mix. Most marketers are learning that mobile devices are consumers’ most personal devices and the preferred method of communications. A great way to create awareness is by adding a simple mobile call to action across multiple advertising channels. For example, this can be as easy as printing on receipts “Text SAVE to 67890” to allow consumers to sign up to receive discounts directly on their mobile devices. Important to keep in mind are the many ways through which marketers can use mobile to reach consumers—text, QR codes and mobile applications are a few examples. None of these channels can be successful in a silo, and therefore, must be deployed as a part of the overall marketing strategy.

2. Engagement. Now that you have established awareness, you must next transition it to engagement. You always want to engage and never interrupt. Mobile campaigns must be unique and make recipients feel special. If they do not engage, they run the risk of interrupting and alienating consumers. Do not send the same offer you just sent by email via text. It is not special. People have an insatiable demand for engagement and want that personal, engaging experience.

3. Transaction. Building off engagement, marketers must give their customers something—after all, conversations flow both ways and should start with some sort of incentive such as discounts or information. You need to provide something that prompts a response, and if they like what you send them, they will take action. Specifically, this step is driving consumers to the store to redeem a coupon and/or make a purchase and is about getting them to buy more once they are inside.

4. Loyalty. When awareness, engagement and transaction come together, the end result is loyalty. To make relationships successful, you need to establish trust and loyalty. Those two qualities ignite powerful connections. For example, text message open rates are more than 90 percent and are typically read within four minutes. This is a stark comparison to typical response rates from email and banner ads, which may have a wider reach. Just as important as the channels through which you reach consumers (e.g., text or apps) is the experience they have when interacting with those channels. Richer experiences such as using HTML5 apps or gamification techniques to enhance a consumer’s interaction lead to more loyal users.

Completing the customer journey ultimately improves customer service and better leverages marketing budgets toward goals that drive the business. If you achieve all levels of the customer journey, you can tap into the personal power of mobile and forge long-lasting and immediate relationships with your customers. As marketers, who wouldn’t want that?

Jack Philbin is co-founder and president of Vibes, a Chicago-based mobile marketing and technology company.

Read more: http://www.mediapost.com/publications/article/172113/mobile-relationship-management-advancing-consumer.html#ixzz1sUiQTFpQ

A lot of consumers, especially in the Chicago area, have a new daily routine. It’s going online and checking out the local group deals and discounts for the best offers on restaurants, spas and entertainment. In many instances, social plans are sparked by the now familiar phrase, “Let’s go there: I have a coupon.”

For a lot of small businesses, daily deals offer the promise of new customers. Yet what happens more often than they’d like is these new customers don’t return, regardless of having received exemplary service. Or worse, the consumer’s purchase doesn’t make up for the cost of the marketing campaign.

While the concept of daily deals maximized through social-media awareness is brilliant, its execution is flawed. One of the biggest obstacles daily deals create for small business owners in and around Chicago is an inability to engage new customers and foster longer term customer relationships. Without access and permission to contact the customer, there’s very little opportunity to follow up and continue the dialog unless you rethink the way the campaigns are run.

Here are five ways small business owners can make daily deals work in their favor while continuing to grow their customer base.

Reach out to existing customers. If you’re regularly engaging with your customers using Facebook or email marketing, create a deal that’s delivered in one of these mediums to thank them for their loyalty and entice them to return to your business.

Encourage sharing

In your email or Facebook campaign, offer greater rewards to those existing customers who bring in new customers via one of your daily deals.

Customize the offers

Since you’re already engaging your customers regularly, you have the ability to segment your lists based on interests, previous purchases and email open rates. Based on this information, you can identify the customers most likely to respond to a certain offer. By creating different deals tied to specific customer interests, you grow closer to your audience, boost response rates and improve the likelihood of them sharing your offer with their friends.

Create exclusive deals for new customers

Create compelling offers for new customers and build in an incentive for them to return to your business and share the offer.

Follow up

For existing customers that you’re regularly engaging, you have the ability to reconnect with them via email or Facebook to gauge their responses to your latest deal. For new customers that come in through a daily deal, ask permission to contact them. In both of these scenarios, you’re earning the right to continue the dialog for feedback, improvement of your deals and building closer connections to your customers.

Steve is Constant Contact’s small business expert in Illinois and Wisconsin. A knowledgeable marketing expert with 30 years of experience, Steve has helped thousands of small businesses, associations, and nonprofits develop and implement effective email marketing, social media and online survey strategies. A popular speaker and educator, Steve gives small businesses and nonprofits the tools, techniques, and strategies they need to grow and expand their business and to maximize the power of relationship marketing. Steve’s experience in small business ownership, business development, sales, and fundraising help associations, small businesses and nonprofits achieve success.

Source: http://www.nbcchicago.com/blogs/inc-well/How-to-Improve-the-Return-on-Your-Daily-Deals-144356465.html#ixzz1sUhpC0NO

According to a recent survey of marketing executives by Loyalty 360, although marketers know they need to focus better on customer retention, they aren’t doing it.

To get a clearer picture of where marketers are and where they need to be going, Acxiom/Loyalty 360 took a closer look at the customer retention strategies companies are using, singling out the role that data and analytics play in these customer retention initiatives. Executives in both B2B and B2C companies from a cross section of industries take a deeper dive into these strategies and gauge how brands are using customer data.

Customer retention has become a major focus for businesses, yet, loyalty as a concept, is vague, says the report. The study pursues a number of channels and verticals within the market to define what “customer retention” means. Does it mean that a customer repurchases? Does it mean that a customer interacts with your brand on social media? Where does advocacy fit into the picture?

The days when marketers directed the one-way delivery of information (what’s referred to as a traditional “push” marketing strategy) are long gone, says the report. Given the explosion of social media and the immediate availability of information, customers are now in the driver’s seat. Consumers, not brands, choose when, where, how and if they engage with a brand. As a result, virtually all metrics, including esteem and loyalty, are in serious decline.

Issues highlighted in the study completed in February 2012, along with key findings, include:

• 84.5% of respondents)use customer retention marketing strategies; 48.8%)believe their strategies are working
• 49.6% know their best, most loyal customers.
• 70% admit less than 20% of their employees focus on retention while 60% spend less than 20% of their marketing budget on retention
• 57.4% will increase retention marketing spend over the next two years
• 63.0% evaluate their customer retention efforts on a monthly basis; 51.1% evaluate quarterly and 45.7% annually. 5.4% do not evaluate their customer retention efforts at all
• Rewards programs (65.2%), social media (65.2%), and 1:1 marketing strategies (64.1%) are most often used for customer retention
• RFM (recency, frequency, monetary value) and customer lifetime value are used most often to measure customer retention, with 64.1% and 51.1% respectively
• 40.2% of companies access data individually through different lines of business, while just 34.8% report their data is centrally located with universal access
• 80.4% of respondents collect data to evaluate program performance. Other reasons include campaign segmentation, and triggering one-to-one communications
• Marketers would like their analytics models to understand and improve customer attitudes/behavior (58.7%), brand affinity (45.7%), propensities (41.3%) and channel preferences (41.3%)
• Respondents claim the most important outcomes of data insight are better understanding of customers’ attitudes and behavior (31.5%) and improving the customer experience (25.0%)

Bain Consulting found the average company loses 20-40% of its customers every year. Reducing customer attrition by a mere 5% can improve a business’s bottom line profits by 25-85%. Similarly, increasing customer loyalty by 1% is equivalent to reducing costs by 10%. The Center for Retail Management at Northwestern University concluded that 12-15% of a business’s most loyal customers contribute 55-70% of the company’s total sales.

Given these statistics, it’s not surprising that the vast majority of respondents use retention marketing strategies, but what is eye-opening, says the report, is that only less than half (48.8%) believe their strategies are working; 11.6% don’t believe they work at all, while 39.5% aren’t sure.

The Accenture 2011 Global Consumer Research Study found that just one in four consumers feels ‘very loyal’ to their regular brands, while just as many profess no loyalty at all. This is not a surprise since most loyalty strategies are ineffectively designed and consumer participation in a brand’s loyalty program  does not necessarily guarantee retention.

While customer retention is a top concern for most organizations, the percentage of overall marketing budgets the respondents devote to customer  retention doesn’t mirror these priorities. 84.4% devote less than half of their overall marketing budget to customer retention, while 39.5% devote less than 10% of their marketing dollars to customer retention.

Given the commonly held belief, says the report, in the 80/20 rule that the top 20% of customers drive 80% of a brand’s sales and profits, learning that 60% of respondents dedicate less than 20% of their marketing budget to customer retention is alarming. However, nearly 6 in 10 respondents plan to increase their marketing retention budget over the next two years.

There are a number of key questions companies need to answer in order to create and implement effective customer retention strategies, opines the report.

Only 49.6% of respondents agreed with the statement “I know who my most loyal customers are, and I know the best way to reach out to them and get them to engage with my brand.” Only 10.1% strongly agreed.

• Stronglydisagree   8%
• Disagree   11%
• Neutral   32%
• Agree   39%
• Strongly agree   10%

When asked to name which metrics they use, survey respondents revealed they are based mostly on transactions, spending and tenure, and less on attitude, satisfaction and referral. 64.1% of the respondents report using RFM (recency, frequency, and monetary value)—extending the legacy of push-based marketing.

Digging deeper into the types of customer retention initiatives companies currently use, some interesting findings surfaced:

• Rewards programs are the most often used customer retention initiatives, with 65.2% of respondents currently using them and another 8.7% planning to launch a rewards program
• With social media being used by 65.2% of respondents and an additional 23.9% of companies planning to add it to their retention initiatives, it will quickly surpass rewards schemes as the most often used program. 27% of businesses included in a recent Loyalty 360 poll said that social media marketing has been the most effective channel for customer retention
• 1:1 Marketing is also one of the most widely used customer retention initiatives, with 64.1% of respondents currently implementing these programs. An additional 21.7% plan to launch 1:1 campaigns, catapulting this category ahead of rewards programs; 14.1% of respondents neither use 1:1 marketing programs now nor plan to do so

According to Forrester Research, notes the report, call center satisfaction correlates with three loyalty metrics: (1) consumers’ willingness to repurchase, (2) reluctance to switch, and (3) likelihood to recommend.

Given this strong relationship, the study found that 33.7% of respondents don’t nor plan to collect call center interaction data.In fact, only 40.2% of responding companies currently capture this information at all.

Customer data is one of a company’s greatest assets. But, it’s what businesses do with the data they collect that helps them grow. Delving into the findings, says the report, reveals what marketers believe is the most important outcome that data insight provides to improve retention marketing:

• Understanding customer’s attitude and behavior (31.5%)
• Improving the customer experience (25.0%)
• Enhancing/creating more relevant marketing messages (20.7%)
• Anticipating customer needs (13.0%)
• Personalizing retention program rewards and offers (8.7%)

The report concludes by suggesting that marketers need to view this process as a marathon rather than a sprint, and the best place to start is to focus on learning the most you can about your best, most loyal and profitable customers. The explosion of new digital tools and technologies has fundamentally shifted power from brands to consumers. Consumers have access to ever-growing volumes of information about products, prices, customer satisfaction, and availability. As a result, virtually all metrics, including loyalty, are in serious decline.

Harvesting data and gleaning it for true customer intelligence is the secret for driving the effectiveness of your customer retention strategies. As the top 20% of your customers drive 80% of sales, learning how best to understand and engage top tier customers is today’s most important competitive advantage.

The report quotes Peter Drucker as saying, “What’s measured, improves,” and Walt Disney suggesting to “Do what you do so well they want to come back and bring their friends.”

Following is a snapshot of respondents in the Acxiom/Loyalty study:

Read more: http://www.mediapost.com/publications/article/171497/keep-em-comin-back.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+research-brief+%28MediaPost+%7C+Research+Brief%29#ixzz1sUh2HCsR

By Peter Krasilovsky

ILM East 2012 took place last week in Boston and is now one for the history books. It was definitely a fun show that really showcased the fast moving local innovations that BIA/Kelsey focuses on.

There are many learnings we can focus on as takeaways, but in the interest of good reading, how about a top 10 list?

1- The new currencies are time, attention and clickstreams. Payments can be in pixels, Facebook mentions or points and rewards (Ted Leonsis, vice chair, Groupon).

2- Email is for e-commerce push; phones are for texting (Ted Leonsis, vice chair, Groupon).

3- Local is all about scale. And the only way to achieve scale in local is by aggregation (Jay Herratti, outgoing CEO, CityGrid Media).

4- Creating a closed loop is the path to a seamless user experience. American Express is … the acquirer, the issuer and the network (Leslie Berland, SVP, American Express).

5- Daily deals are fun, but Big Data that combines different databases is critical for targeting users and winning loyalty (various).

6- Focus on engagement, not new customer acquisition. Loyal customers are worth 24 times more than new customers (Charlie Kim, CEO, NextJump).

7- Email fatigue is probably out there, but social media complements email, rather than kills it. They are both forms of permission marketing (Mark Schmulen, GM, Constant Contact).

8- Video is a great local medium, but offers limited inventory opportunities, and really can’t compete as a standalone with a major metro newspaper for advertising (Lisa DeSisto, VP, advertising, The Boston Globe).

9- National brands can’t go local without a platform. Otherwise, you can’t get engagement and you’ll see high churn (Pete Gombert, founder and CEO, Ballihoo).

10- You can’t herd 6,000 cats and come up with a digital strategy (Adam Epstein, president, Ad Marketplace).

By Mike Boland

Today at BIA/Kelsey’s ILM East conference, a panel of leaders in the local deals space batted around how things are playing out in the space’s Sophmore year.

Bill Bice, President and CEO, BoomTime
Jere Doyle, Founder, President and CEO, Prospectiv and Eversave.com
Perry Evans, Founder and CEO, Closely
Christopher Tippie, Acting CEO, Find n Save

One challenge�repeatedly mentioned was avoiding the classic “one night stand” problem. That of course refers to deal seekers who don’t return for the intended repeat business. Eversave’s Jere Doyle says the answer lies in helping SMBs gather data, email lists and CRM tools.

This is meant to go beyond the customer acquisition that has driven interest in deals, and move more towards retention. And the key there is having the best data to capture customer information and retarget them in ways that are simple — an imperative�for SMBs.

“They don’t know what to do with the assets they’re sitting on,” said Doyle. “If they’re giving a 50% discount, they better make sure [the customer] comes back. The way to do that is to make sure you know more about them and use that to get them back in the door.”

A lot of these loyalties are what has driven Closely’s business from the beginning, such as features that reward top customers and empower them to share exclusive deals with friends. This is changing even more with the growth of mobile and social, asserted CEO Perry Evans.

“The reinvention of direct marketing for the real time social web is developing around us,” he said. “This gets to the most�interesting�opportunity I’ve seen in 15 years in this space, to fundamentally shift the profitability of SMBs by directly affecting their yield management.”

You have to fundamentally engage differently with merchants, added Evans, an industry veteran. And the point is to engage them with better information and context about what is going on around them — a source of local competetive intel of sorts.

Along these lines, Evans unveiled a new merchant facing mobile tool that lets them see live streams of local activity. This includes things happening about their business, active promotions, sentiment analysis and the activity around local competitors.

This gives businesses more control, he asserts, which is a top engagement paradigm for SMBs. It also gives them an immediate ROI to discern value. Back to the panel’s top theme, and the larger industry move towards “big data”, the idea is to empower SMBs in a�tangible�way.

“If you can build loyalty, you can run daily deals all day long,” said Doyle. “If you can’t build loyalty, you won’t be �successful.”

By Alex Salkever

An old sawhorse of the punditocracy is that one of the reasons hyperlocal is taking off so slowly in terms of advertising revenues is due to the digital noobieness of local merchants. Journalists (myself included) love to trot out stories reminding the world that X-percent of mom-and-pop shops still don’t even have a Web site, for crying out loud. Yes, you hear stories that lots of small businesses are active on Twitter and Facebook and check their Yelp profiles. Some even pay marketing agencies to run their social side. But for the most part, these peeps are trapped in the dark ages. Or are they?

BIA/Kelsey released the latest installment of its Local Commerce Monitor research. This is a unique longitudinal 15-year tracking study of how SMBs spend money on advertising and their attitudes towards local advertising and media. The analysts found that SMBs in the survey planned to spend a surprising 26% of their advertising and marketing budgets on digital campaigns. Marketing and advertising consultancy eMarketer forecasted recently that total online ad media spend for 2012 would be roughly 23% of the total media spend across all mediums. Surveys can be wrong. But this would imply that the mom-and-pops are actually ahead of the rest of the advertising world in embracing digital. Go figure!

It gets better. Nearly half of respondents (49 percent) said they buy online advertising (including SEM) themselves, debunking the myth that only a handful of brainiac small shop owners had cracked the admittedly complicated SEM buying scenario. More than half (52 percent) are using social media to try to generate business. The quality and commitment of those campaigns surely varies widely but the implication is clear. The small businesses who “get” social are no longer a small minority. Nearly a quarter said they plan to have a video on YouTube in upcoming months (which might be good news for Patch.com and its efforts to sell video sponsorships and video-driven directory listings).

Not all surveys have found that mom-and-pops are hip to local online ads. In a survey of 51 local merchants with revenues ranging from less than $100,000 to over $5 millionconducted by Street Fight Insights, less than 10% said they had spent significant dollars on a hyperlocal campaign. Street Fight also found that small merchants were more interested in daily deal sites than traditional online advertising. I look forward to Street Fight coming out with a broader sample but these seemingly contradictory results could be chalked up to the relative infancy and volatility of the sector.

Flawed as they may be, the BIA/Kelsey findings actually conform closely to conversations I have had with many small business owners. Unlike the bigger companies, where ad budgets have plenty of wiggle room and specialists carve up media buying, analytics and creative duties, for mom-and-pops stuff has to give them a decent return the very day after they execute their campaign. And because they are in small communities, their feedback loop is very tight. So for many of the technology driven startups that have had difficult times cracking the hyperlocal market, these results may deliver a relevant data point. Namely, your product may not be easy enough to use or popular enough to merit attention from these smaller shops. Because it has to work the first time for them to stay interested.

Not that this should be discouraging. In the early days of the Internet, websites were atrociously hard to use and navigate. Diddling with search engines to get decent results pre-Google was a nightmare. Things are always sharper and harder on the bleeding edge. The mom-and-pops feel that edge more acutely than most and will not accept inferior UI or product design. Because, unlike the big guys, they don’t have an office job and are always one step away from having no business at all. Clearly they are willing to try new things and embrace new tools, at least as aggressively as the rest of the market (call it the SMBification of IT). But they will ditch those tools just as fast. So make it stick. You only get one chance.

Marketers are at a very critical juncture.  According to Loyalty 360 – The Loyalty Marketer’s Association, customer loyalty, versus acquisition, is critical for driving sustainable growth.  Yet,  businesses report that retaining and engaging customers remains one of their greatest challenges.

To help marketers develop more effective loyalty strategies, Loyalty 360 suggests they take a deeper dive into the following customer loyalty trends:

1.    Customer engagement is the journey, loyalty is the destination.  Loyalty is a much bigger, broader, richer and growing ever more complex idea than it has been in the past. Loyalty is no longer about points,  discounts, miles, rewards; it is about the way the processes,  technologies, ideas, interactions engage an individual with the brand.  The only way to achieve loyalty is through deeper engagement.

2.    There will be a renewed (and well-needed) focus on customer retention and loyalty vs. customer acquisition. Customer loyalty has been identified as the top non-financial business challenge facing companies in 2012 (Protiviti). While daily deals like Groupon,  LivingSocial are generating lots of buzz, marketers are realizing that these price-based technologies have taken their focus away from the real prize:  customer loyalty.

3.    Brands need to recognize customers at all touchpoints,  especially the call center, to deliver a quality customer experience.  A recent poll by Loyalty 360 found that 78% of respondents believe that having a great customer experience makes them loyal. Creating this type of customer experience involves delivering quality customer service across all touchpoints, and marketers are realizing that this means integrating the call center into the overall customer experience.

4.    Marketers will work to glean intelligence from social media feedback.  The vast majority of real-time data created today is unstructured data.  Study after study is showing that marketers are struggling with mining this data and analyzing it in order to derive valuable insights and actionable intelligence from it.  In fact, a just-released report by EMC found that only 38% of business intelligence analysts and data scientists strongly agree that their company uses data to learn more about customers.

5.    Loyalty program is seen as critical element of “life cycle management.” Engagement with customers over a lifecycle is the new model for success. The only way to earn loyalty is through deeper customer engagement and data gathered from loyalty programs can be used effectively to drive a quality experience across all touch points and at all stages of the customer lifecycle.

6.    Marketers will look at a mix of location-based behavioral data and attitudinal and preference data.  This trend will have an especially important impact on the daily deal space. Brands will want to have this data and control the message rather than offering such huge discounts to anonymous individuals.

7.    Mobile coupons will go mainstream. Juniper Research forecasts that the total redemption value of mobile coupons worldwide will be more than $43 billion by 2016, representing an eightfold increase from $5.4 billion this year. Cost effective mobile coupon campaigns provide merchants with an easy way to build customer loyalty.

8.    We will see a focus on social media ROI.  While marketers believe that social media is worthwhile, most don’t know how worthwhile it is. As marketers become more sophisticated and skilled at navigating the social media channel, they will be more demanding of tools that track and improve ROI.  In fact, the 2011 IBM Global CMO Study found that 63% of CMOs believe ROI on marketing spend will be the most important measure of their success by 2015. However, only 44% feel fully prepared to be held accountable for marketing ROI.

9.    Brands will increasingly use the rich information about customer buying patterns generated via loyalty programs to create more targeted marketing/messaging.  Gathering and tracking data amassed in the loyalty program will be used to help marketers with segmentation,  messaging, for acquisition and retention. The information on customer transactions, likes, dislikes and preferences gives brands the deep level of customer intelligence needed to deliver the most relevant,  highest quality customer experience and drive long-term loyalty.

10.    Social personalization will increase. Marketers will harness the power of recommendations and referrals to persuade customers and prospects to follow their friends’ leads.  They will become more proactive in encouraging reviews, implementing refer-a-friend programs,  etc.

11.    Mobile digital wallets will mark a big shift in retail payments. With the value of transactions made over mobile devices estimated to be $240 billion this year (Juniper Research) and predicted to triple that size over the next five years, it’s not surprising that the battle over mobile wallets will continue to intensify. And with analysts at Forrester predicting that by 2016 consumers may be able to leave their traditional leather wallet at home and pay for most of their shopping over their handset, retailers need to think about the impact of mobile wallets as they build out their loyalty programs.

12.    Worthy causes will continue to influence consumer brand loyalty.  A study from Cone Communications found that consumers are more likely to pick a brand based on charities or causes it supports. A full 94% of responding consumers said they would abandon their typical brand for one of approximately equal quality and price if it backed a social issue.

About Loyalty 360 
An unbiased, market driven, voice-of-the-customer focused clearinghouse and think-tank, Loyalty 360 is committed to bringing customer loyalty to the forefront as a critical marketing strategy.  A trusted source for cutting-edge research, best practices, and networking opportunities, Loyalty 360 gives members the expert insights and guidance they need to better understand loyalty and develop programs that effectively engage their customers and employees and build stronger relationships with them. http://www.loyalty360.org