When you start a small business you know that this is a venture that comes with risk. One in five small businesses fail in their first year. Thirty per cent of small business fail in their second year, 50% fail after five years, and 70% fail in their tenth year in business.

Why is this happening?

One of the biggest issues in small businesses is access to a range of expertise and talent. SMEs work using a ‘startup mentality’ ─ hire people with a range of skills and get them to plug holes as and when they appear.

But what happens when your business faces a serious problem? Many SMEs turn to professional services and consultants which has led to a thriving consultancy market. Currently there are over 700,000 consulting firms around the world and in the UK, SMEs spend a total of £60 billion a year on professional services.

Unfortunately, much of the spend is wasted.

Small business owners may only need the answers to a few questions, yet are forced to pay a minimum fee/contract length for advice that they may not have the expertise to implement.

Additionally, consultancy firms often dispatch their junior team members, using senior resources to manage and control their teams.

For these reasons, nearly half of SMEs avoid using external consultants because of over-inflated costs, with 36% citing scepticism about their level of expertise as a barrier.

What can small business owners do to get the type of advice they need at an acceptable price and rather than failing, help their businesses succeed?

1. Talk to employees

One of the quickest, cheapest and most effective sources of advice might just be your own staff. Over the course of their careers, people will often have held a variety of roles in a number of variously-sized businesses in different markets. Just because you hired them as a sales director doesn’t mean they won’t know how to fix an IT issue or can’t provide high-level strategy, for example.

Start by bringing your entire team together for a brainstorming session. This way, staff with fragmented skills and experience can support one another in coming up with a solution that is both practical and effective.

PROS: Staff already know your business from the inside-out, so there’s no need to bring them up-to-speed. Besides, asking your staff costs nothing, so it’s always a good place to start.

CONS: Existing staff will be personally invested in projects and work completed to develop their department. As such, they may be too close to the company to recognise the problems or too attached to existing processes to even think of challenging them. If you’ll excuse the cliché, they can’t see the wood for the trees!

2. Contact your network

Everyone has a network whether you’ve deliberately nurtured it or not. People from school or university, friends and family, as well as business contacts you’ve connected with over the years. Any one of them may have a solution to your challenge.

Start by going through your LinkedIn connections and sending a few messages. The professional focus of LinkedIn makes it an ideal platform for reaching out about business challenges.

PROS: You know these people; you know their background and can view their skills and experience. People are much more willing to help out someone they know than someone they don’t, making it potentially much cheaper than a consulting firm. They may also know someone within their own network that can help.

CONS: If you are asking for a favour you have little leverage to make demands. They may not have a lot of time to help, making them slow to reply and little time to focus on the solution. As such, they are pretty unreliable for quick solutions to immediate problems, causing more uncertainty than they solve.

3. If your personal network can’t help…

If you’ve tried your personal networks to no avail, you could always try an expert network. These are companies that connect businesses with relevant experts from around the world. You send your challenge to the expert network company, they find a suitable expert in their books, and then connect you. Think of it as tapping into someone else’s LinkedIn and getting a guaranteed response.

PROS: As there is a strong financial incentive to help, expert networks are very reliable in terms of putting you in contact with someone. You’ll receive a fairly rapid response and can quickly jump on a call to discuss the challenge. Calls may total several hours, but it’s still a lot cheaper than hiring a consultant for two full weeks.

CONS: These calls don’t come cheap. Businesses can sometimes pay expert networks up to $1,300 per hour for advice and they have no idea how long it will take to find a solution. There is also no way to personally vet the expert you are connected with ─ you simply have to trust the network company to connect you to the right person ─ making it a bit of a blind call.

Expert networks have also come under increased scrutiny, particularly in the US, after several cases of insider trading were discovered and prosecuted by the SEC in 2012. In total, more than 36 individuals and firms were charged with a variety of financial and corporate crimes, causing a swath of regulation aimed at clamping down on unscrupulous practices.

4. Employ a consultant

In reaction to the declining popularity of expert networks and in response to the need for quick, cost-effective consultancy, a number of disruptive services have now become available. For example, Consulthon, allows businesses to post their challenge to a network of experienced consultants for free. The consultants then pitch a brief overview of their solution, which the business owner can then discuss or try out without committing to anything. If the business then wants a deep-dive into the solution, they can book a call with the consultant

PROS: Reviewing responses before committing to a consultant means you can find someone who speaks your language. You can assess which of the consultants has the relevant level of experience and offers a solution that you understand, so there is no risk of overcomplicating the solution. You can even test the solutions in principle before the call, giving you live data to feed back to the consultant.

Additionally, since the network is for expert consultants from a variety of fields, you have a one-stop-shop for all your challenges or a multi-faceted challenge requiring more than one consultant.

CONS: Calls can be expensive (e.g. £250/hr) but you do only pay for the amount of work you need, avoiding the cost associated with minimum contracts. Consultants may also have full-time jobs and therefore be unable to visit your premises or commence work immediately, restricting them to calls only.

With any consultancy option, whether in house, a member of your network or an external consultant, it’s still on you to assess the solution and accept the risk. If it doesn’t work then you’ve wasted time and money with no recourse.

Your team will have to implement the solution. As you’ll know, it takes a team to make any business successful. A consultant can only help navigate specific hurdles to help you achieve success.

If you can get excellent advice, at the right point in time, you’ll be able to tackle any challenge that comes your way.  With the solution implemented you can look forward to business growth, without the worry of large debts or unnecessary high overheads.

ABOUT THE AUTHOR

Marieta Bencheva is co-founder of Consulthon, a UK Management Consulting Expert Network. Businesses can raise a Business Challenge and the network’s experts will brainstorm solutions. After selecting the answer they like the most, the business can book a paid one-hour advisory call and deep-dive session with that consultant. All the consultants are vetted by Consulthon and the platform offers businesses access to a wide range of skills, in a variety of sectors and countries.

Web: https://consulthon.com/

LinkedIn: https://www.linkedin.com/company/consulthon/

Facebook: https://www.facebook.com/CONSULTHON.CO.UK/

Twitter:  https://twitter.com/CONSULTHON  @consulthon

Instagram: https://www.instagram.com/consulthon.co.uk/ @consulthon.co.uk

References:

What Percentage of Small Businesses Fail? (And Other Need-to-Know Stats)

https://www.consultancy.uk/news/13415/uk-smes-spend-60-billion-on-professional-services-yet-much-is-wasted

https://www.inc.com/soren-kaplan/the-business-consulting-industry-is-booming-and-it.html

UK SMEs spend £60 billion per year accessing expert consultants

https://www.bloomberg.com/news/articles/2018-02-28/investors-are-paying-1-300-per-hour-for-expert-chats

https://uk.reuters.com/article/us-investors-networks-asia/expert-networks-thriving-in-asia-away-from-u-s-scrutiny-idUSBRE9810N320130904

Platform economy has arrived and is here to stay. Businesses across every industry are investing in platforms realising the importance from a strategic growth perspective. The technology era demands a connected world and connectivity channelized through platform driven business models is the way forward.

The emerging platform strategies are demand-driven, and they promise to provide unprecedented scale, speed, and global reach. These can build the foundation for unleashing new market opportunities from system management, data collection to deeper consumer insights. We have seen platform model underlying the success of many biggest and fast-growing companies like Amazon, Google, Alibaba, Uber, Airbnb, etc. The industry has been fast growing and 80% of the global enterprises are expected to create or partner with industry platforms in the coming few years.[1]

What does it mean for the loyalty marketing industry when consumer loyalty is undergoing a tectonic shift?

Customer experience has become a key differentiator for businesses worldwide. Customers are looking for choices and ease of navigating between those choices for better and quicker decision making. They are more expectant as they experience personalised and real-time services with businesses via simple and affordable digital technologies.

As for the loyalty marketing, this has been a key tool for businesses to gain repeat sales, consumer insights and acquire new customers. However, the industry has transformed rather slowly as compared to, for example, the banking, payments and retail industry. It requires a technological edge to bring the much-needed momentum with $360bn worth points lying unredeemed, globally.[2] Traditional loyalty programs are costing significantly more and delivering less. Loyalty points are not fluid enough. They hold value within single or a small group of brands and it takes too long to earn a meaningful reward.

Businesses require deep consumer insights as mass-segment marketing strategies aren’t reflective of individual’s preferences. Digitally managed platforms can create network effects such that every business can leverage the interconnected network for insights, analyse future prospects and design marketing strategies to drive sustainable growth, faster and economically. Whereas, a standalone or a closed-loop loyalty programme has its limitations. For the loyalty industry to enable true customisation and acquire more loyal customers, it requires rich and relevant data that can be generated by a platform that connects businesses and customers through a unique network.

The concept of loyalty point exchange or programme coalitions are not new. Businesses reward customers with points that are redeemable among a group of brands or transferrable to another programme. However, traditional coalitions have a standardised model of points exchange that doesn’t work for all sizes of businesses. Most of the settlements and reconciliation processes involve manual labour, adding to the time and cost. Eventually, the end consumer pays that as a transaction fee. By the time points are exchanged, consumer loses both, time and points value. The coalition owners tend to own the currency and businesses often lose out on the customer insights.

Redemption drives brand engagement. Then imagine the kind of engagement to be expected by offering diversified redemption. Businesses can potentially reclaim the lost value of their loyalty programmes by joining an exchange that will induce liquidity within the points. An advanced exchange platform can facilitate points earn, burn and exchange within the businesses in the network in a very cost-effective and real-time manner. 70% of customers leave a programme if it takes too long to earn a meaningful reward.[3] Helping customers to reach the redemption threshold is of prime importance to gain their loyalty. LoyalT_® underpinned by blockchain is among such platforms that connects businesses of all sizes and domains. In time, such platforms can emerge as a data hub with global and local businesses joining the network. Consumers can consolidate points to their preferred brand and redeem for a higher value. The network ensures real-time and secure points exchange and provides instant gratification to the consumers. One such platform can support numerous use-cases like multi-currency gift cards, peer-to-peer transfer of loyalty points, donations to charities. Every business is unique and LoyalT_® helps businesses maintain their individuality and generate the brand awareness through their own loyalty programmes. The platform acts as an enabler connecting businesses and consumers to facilitate the exchange.

We are headed towards a connected world with digitally managed platforms of consumer goods and services. Loyalty industry is waiting for such a transformation. Managed loyalty platforms on blockchain can emerge as a single source of trust less and decentralised point of connecting the businesses at a global scale. Business will be able to focus on their core offerings while the network takes care of the engagement rules, manages partnerships, multiple currencies, individual business preferences and more. All enclosed within the digital smart contract that is executed every time a transaction is initiated.

ABOUT THE AUTHOR

Aparajita Roy is the Head of Market Research at KornChain. She started her career with the Central Bank of India. She has extensive work experience in blockchain with her researches on International Money Transfers using Blockchain technology, account aggregators, trade-creating effects of the EMU and more. She brings her knowledge of international trade economics and experience of conducting independent researches to KornChain where she has been involved as a co-founder.

KornChain is a technology company that is building a global blockchain network for the loyalty marketing industry. KornChain have recently launched LoyalT® which seeks to be a global loyalty point exchange network underpinned by Blockchain. Customers can earn, spend, exchange & consolidate points in real-time while businesses benefit from customer acquisition, repeat-sales and deep insights. On-going implementation with large clients.

https://www.kornchain.com/

https://www.linkedin.com/company/kornchain/

[1] https://www.idc.com/getdoc.jsp?containerId=US42843817

[2] https://medium.com/@vjkrish.ram/you-are-not-alone-globally-360-bn-worth-reward-points-go-unredeemed-each-year-3ad3469e094e

[3] https://www.collinsongroup.com/en-meai