The Use of the Internet by Downtown Organizations and Businesses

The Use of the Internet by Downtown Organizations and Businesses

Downtown New Jersey has selected the following story as a guest post in an effort to share a variety of information with our members.


About a week and half ago I went to a workshop put on by Downtown New Jersey that focused on the use of websites and social networking media such as Facebook. While I learned a lot and thought the presenters did a good job — they certainly were enthusiastic — I still came away with my major concerns being unanswered.

Being Able to Afford the Time, Money and Skill Acquisition Needed to Create and Maintain a Website. For many years I have heard several other downtown revitalization and business development experts strongly recommend that downtown organizations and individual downtown businesses have attractive and effective websites. I certainly concur with the potential positive impacts of effective websites. Moreover, I agree that organizations with, say, $300,000+ in annual revenues can have at least a useful website and that it gets easier for them to have a really effective website as their budget increases.

My problem is: Can most small businesses and small-budget downtown organizations really have effective websites? Many small and medium-sized downtowns have numerous businesses that are in the $150,000 annual sales range or perhaps even less. With few, if any, full-time paid employees and modest revenues, these shopkeepers usually work long hours and may not have either:

  • The computer skills needed to create and maintain a website OR
  • The time to acquire them OR
  • The funds and networking skills needed to hire an outsider to build and maintain the website.

These problems can be particularly acute when it comes to a small merchant building an “e-store.” The chores of keeping the online inventory current and packing and transporting the sold merchandise can be daunting.

Of course, what most downtown managers also know is that getting their small merchants to advertise is very often analogous to pulling teeth. So, if they are resistant to shelling out less than, say, $100 for a co-op newspaper ad, you can expect that getting them to even entertain a website they fear might cost in the thousands of dollars is likely to be far more difficult. Moreover, if they cannot have online stores, they may doubt the value of a website that is simply something akin to a fancy directory listing.

Much the same is true for small downtown organizations — small budgets constrain what can be done — but, my online observations strongly suggest they have both better skill sets for the electronic media and a greater willingness to spend a significant portion of their budgets on them than the small merchants. Many of their sites are good at promoting their downtown events and sharing news relevant to the downtown community that the local media might be overlooking. They usually have an online business directory, while some even try to provide a webpage for each business.

But too many fail to take on business development functions by providing essential, easy-to-find and easy-to-use information that would be useful for a business looking for a new location. This can range from demographic data to information about prevailing rents and the town’s permission and approvals process.

While small businesses probably will always lag in the creation and quality of their websites, there are reasons to believe that in the coming years there will be significant improvement among them:

  • The younger business owners are more adept and comfortable with using computers and the internet — and with time the proportion of the internet-capable will rise and be dominant
  • There are website hosting services appearing that make the creation and — most importantly — the maintenance of a website much cheaper and easier to do. They use templates and modules to create a fast, easy and affordable website, but they also limit a site’s creative potential. We are redoing our DANTH, Inc website, under the guidance of our website consultant 180 Interactive, and using one of these services. I’ll report on the experience in a later posting.

When Is Electronic Social Networking the Answer? At the risk of sounding like an electronic Luddite, I am having a difficult time figuring out how something like Facebook or Twitter could provide real added value in the marketing of DANTH. Though I can see their value to some large downtown organizations and consumer products companies, I keep feeling that many small business people are in a similar position to mine:

  • I barely have the time to operate my business and still write a blog, maintain our website and write periodic email blasts. Where will I find the time and energy to also deal with a Facebook presence, which to me seems like another resource-demanding website?
  • My company does not generate enough “news” to keep a constant information flow through any communication channel.
  • Our clients do not usually come to us from the web, but through word of mouth. They then do go to our website to get more information about us and to “confirm” the positive messages they have received from other sources. What added value can Facebook offer that has a sufficient cost/benefit justification?

The times have been economically desperate and in such conditions people often look for “silver bullet” solutions. The faddish popularity of Facebook and Twitter suggest to me an unthinking groping for magical answers to tough problems.

I think that there is a real resource threshold for small businesses to properly utilize websites, blogs and the social networking platforms. To do all of them properly and advantageously demands proper staffing and the resources to pay them. To do just one properly takes skill and effort — and time.

Our firm’s approach to the design of our website and blog is based on a set of marketing objectives we want to achieve. So far, we cannot see any objectives that a Facebook or Twitter presence could help us achieve. Perhaps, if we had DANTH events or if we sold my books directly from our website we would have a different assessment of the electronic social networking opportunities.

My fear is that too many downtown organizations are doing Facebook and Twitter without having any substantial strategic justification, but simply because more and more downtown organizations are doing it. I fear, too, that many small businesses are falling into the same trap.

Are We Taking Our Eyes Off of the Real Prize? A week or two ago our friend and strategic partner Mark Waterhouse of Garnet Consulting Services sent us this link to an article.

It is from a New Haven newspaper and it details how the merchants in downtown Guilford, Connecticut, have prospered right through our nation’s Great Recession. Nowhere does it mention the merchants’ slick use of social networking. But, there are vivid descriptions of merchants who work hard to have the right merchandise for their customers, who provide a deep level of customer service and who avidly recommend other nearby merchants to their customers. All of this is perhaps just a part of “Being A Successful Merchant 101,” but apparently they are actually doing it in Guilford. The part of the story about the merchant referrals had a particularly strong resonance for me because:

  • I have become increasingly convinced that this is one of the most effective and inexpensive ways to do cross-marketing in a downtown.
  • I have also become convinced that most downtown organizations do a lousy job of encouraging cross-marketing.
  • Furthermore, I have not heard of any similarly effective downtown cross-marketing effort that is based on electronic social networking.

The Bottom Line. I am all for e-marketing and using websites, blogs, social networking, web photo galleries, etc., as long as they can fulfill an organization’s strategic objectives and fit within its resource constraints. Most importantly, I fear that downtown business operators and their downtown organization’s leaders are shifting their attention and resources so much to the web that they will forget the importance of mastering the non-electronic ABCs of being a successful merchant. If you have dull merchandise, fail in customer service and have not learned how to work with your fellow downtown merchants to generate and SHARE customer traffic, no amount of adept electronic marketing will save you … or your downtown.

N. David Miller | Founder and President of DANTH, Inc.