More on Big vs. small

Stephen Turcotte, my boss and all round SEO guy states, "blogging has leveled the playing field giving smaller companies the stage and leapfrog ahead of their," larger competitors. I agree Stephen that blogs give small companies the same ability to communicate with online customer communities as larger companies.

I do think that blogging has not really phenomenally changed some of the advantages larger companies have in marketing to their customers, by that I mean resources. Larger companies have more resources to let more people to blog, and by having more people blogging. A company can make a bigger impact on their online customer community.

However, I do believe its the strategy that counts rather than the size of the company, and where a larger company uses blogging as a method for communicating with their customers, if the larger company puts more resources into the effort and uses a strategy of blogging outreach, the bigger company will gain more from the effort than a smaller company.

A corollary to the matter of resources is good writing and charisma, an individual can through hard work, style and good writing can do make a big impact through blogs. A smaller company can succeed but they have to work hard to do it, either through the quality of their content or the personality of the blogger. Larger companies can also have their own bloggers with engaging personalities.

I remember when I first started blogging, I searched the internet for marketing bloggers and discovered John Porcaro at Microsoft, and I was more interested in John’s blog because he worked at Microsoft. I was interested in how blogging would change Microsoft.

Stephen suggests that the "key currency of blogging is ideas, a small company is not limited by the size of their budget; they are only limited by the importance of their ideas." I agree with this statement, the importance of ideas was something we discovered in the Backbone Media Corporate blogging survey. Many bloggers stated it was important for them to establish themselves as leaders in their firm and through that positioning they would and do gain sales and other marketing benefits. However, in the case studies we prepared for the study we explored how blogs affected product development, and we reported that both Macromedia and Microsoft experienced even more interaction between their customers and increased customer loyalty where both companies asked for their customers ideas on products.

In the bloging survey we suggested that customer feedback is an important way to build better products, and turn more customers into evangelists. I would suggest a company could succeed even more by getting more ideas from its customers. The term "influentials" was coined by Ed Keller and Jonathan Berry from RoperASW in their book The Influentials in 2003 and refers to the 10% of the U.S. population whose robust engagement with society influences the attitudes and behavior of the other 90%. I believe where a company actively engages the 10% of influential customers in their customer community for their ideas and suggestions a company will succeed in building better products and creating more loyal customers. Therefore the company that wins through will be the company that can get more ideas from customers and translate them into products customers want. This Wired article illustrates that some people are more infectious and than influential. The advantage in customer ideas would I suggest lie with larger companies by having more customers than their smaller competitors. Though I do understand that it’s a free country and smaller companies can talk to a larger company’s customers.

Stephen also suggested "I believe blogging provides a medium for the best ideas to rise to the surface," where blogosphere communities have developed to a stage where it is difficult to review all of the conversations happening across the community, larger companies are starting to develop blog aggregators so that their employees and their customers can access all of the data easily. Macromedia is one such company. The company is using its blog aggregator to aggregate nearly 500 blogs that cover Macromedia products, including all Macromedia blogs. Customers and employees subscribe to category RSS feeds and most daily post RSS feeds to filter through all of the content contained on the blogs. Customers use the aggregator to search the Macromedia community and then post articles about other bloggers or comments on blogs.

I'd also argue that to be able to conduct blogger relations with an online customer community a company needs the resources to afford people to monitor the web constantly, and as tools appear with increasing sophistication, the resources to purchase the tools to get the job done. A larger company dedicated to the strategy would have those resources available more easily than a smaller company. This business week blog article by Stephen Baker illustrates my suggestion that blogging can be tougher for a smaller company with fewer resources.

On the issue of a smaller company having more to gain and less to lose, I think its a matter of strategy if a company, large or small realizes that customers are self publishing online and chatting with one another about products and services they will understand that if they don't get involved in blogging they lose out on the opportunity to connect with customers in the blogging medium. I also think that larger companies have more resources to monitor and advise on the development of their corporate blogs as through careful planning they can take more precautions against failing prey to liabilities.

On return on investment, I think I agree with Stephen, a single blogger can influence a whole industry. Dr. Ray Laskey at Indium corporation is a great example of a scientist who blogs for his company. By blogging about his industry he has further established himself and his company as leaders in his company's industry. Rick Short of Indium tells me that Dr. Laskey was the first scientist in his industry to blog, and has established his blog as a place for discussion and community.

Seth Godin’s discussion about small is the new big is interesting. The craigslist.org example is very compelling, and demonstrates that by harnessing the power of a customer community a small company can succeed against the classified newspaper business and new upstarts (new economy) like eBay.com

American airlines are an $18 billion company with 92,000 employees, and Jet Blue has 7,400 and $1.2 billion in revenue. By the way to be considered to be part of the Fortune 1000, a company has to have revenues over $1.4 billion, so I am not sure if Jet Blue is really a small company. That’s roughly $196,000 per employee for American and $160,000 per employee for Jet Blue. American made a loss in 2004 of $760 million, and Jet Blue made a profit of $47 million (source hoovers.com). The reasons for the large losses at American include higher costs, and an older fleet, as well as the repercussions form 9/11. To me the two companies illustrate a difference in strategies; Jet Blue chooses certain lucrative routes while American provides more services in more markets. The competition from low cost providers has meant a loss of profits for larger carriers in the airline industry. Again its strategy, Southwest Airlines had revenue of $6.5 billion in 2004, with 31,000 employees and $312 million in net income. Southwest can now be considered one of the big carriers.

My real point is that it’s a company’s strategy that counts more than its size. What happens if Southwest becomes the largest carrier in the industry? We will probably all agree that it was their strategy that got them to the top position not their size. I believe a larger company that uses blogs as a strategy will gain even more benefits than a smaller company.

Posted by johncass at August 10, 2005 11:11 AM