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USPS Small Business Study
Prepared for Manning, Selvage, Lee
August 2001
2
Background

• Millward Brown was commissioned by Manning,
  Selvage, Lee to gather information on small
  businesses for the USPS.
• Specifically, information on customer
  acquisition, fulfillment, and retention were
  evaluated.
• Methodology
• Online panel of 250,000 consumers/businesses
• Targeted email invitations sent to panelists
• Incentive to participate monthly drawing for
  cash prizes
• 500 completed interviews
• Sample Definition Small Business Owners
• Own a small business of fewer than 20 employees
• National sample

3
Methodology
Who?
When?

• Small Business Owners

July 20-26, 2001
Where?
National Online Sample
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Summary

• Above all, small business owners (SBOs) say they
  are most concerned with keeping current customers
  satisfied.
• But SBOs spend the least of their time trying to
  keep current customers and spend the most time
  trying to attract new customers.
• Interestingly, they attribute small business
  failures primarily to the inability to attract
  new customers.
• Thus, the importance of attracting new customers
  may be an understated concern.

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Summary - Customer Acquisition

• Attracting new customers is considered to be
  costly and difficult, in that identifying and
  reaching potential customers can be a challenge
  for SBOs.
• Most SBOs use networking and print for customer
  acquisition.
• Networking is considered to be the most effective
  tool for customer acquisition.
• For print mailings, the majority of SBOs design
  and reproduce their own work.

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Summary - Customer Fulfillment

• Accuracy is the key to customer satisfaction.
• The most common delivery services used to fill
  customer orders are rush and delivery
  confirmation.
• Rush delivery clearly is the delivery feature
  deemed most essential to business. It is also
  the feature demanded most by small business
  customers.

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Summary - Customer Retention

• The challenge of customer retention stems from
  both time and budget constraints more so than
  from the lack of proper tools/processes.
• The two critical components to customer retention
  are
• Quality product/service
• Good customer service
• SBOs most prefer using telephone to
  maintain/build relationships with customers.

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Detailed Findings
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Leading concerns as a small business owner

• Keeping customers satisfied is the leading
  concern of small business owners surveyed. In
  fact, 8 in 10 small business owners stated they
  were extremely concerned about this.

Q. As a small business owner, how concerned are
you with the following issues? A/B/C/D -
Significant at the 95 confidence level.
10
Most time consuming activities

• Attracting new customers, while the least
  concerning to small business owners, takes up the
  most time.

BC
Attracting new customers
C
Fulfilling customer orders/requests
Keeping current customers
Base Total (511)
Q. Which one of the following activities is the
most time consuming for you/your business?
A/B/C - Significant at the 95 confidence level.
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Most time consuming activities

• Attracting new customers is more time consuming
  for national business owners than for
  local/regional business owners.
• More local/regional business owners than national
  said keeping current customers is more time
  consuming.
• Less tenured business owners put significant time
  behind attracting new customers. In contrast,
  those who have been in business 21 years put
  more time into fulfilling and keeping customers
  compared to their less tenured counterparts.

Q. Which one of the following activities is the
most time consuming? A/B/C/D - Significant at the
95 confidence level.
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Reasons for Small Business Failures
Inability to attract new customers
Inability to keep current customers
Inability to fulfill customers' orders/requests
in a cost-efficient manner
Inability to fulfill customers' orders/requests
in a timely manner
Base Total (511)
Q. In your opinion, which of the following
contributes most to small business
failures? A/B/C/D - Significant at the 95
confidence level.
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Reasons for Small Business Failures

• The inability to attract new customers is the
  leading cause of small business failures,
  according to small business owners.
• Interestingly, longer term business owners (21
  years) are more likely to attribute failures to
  problems with fulfilling customer orders in
  cost-efficient ways.

Q. Which of the following contributes most to
small business failures? A/B/C/D - Significant at
the 95 confidence level.
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Detailed Findings Customer Acquisition
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• Above all, attracting new customers is considered
  to be costly.
• Small business owners also have difficulty
  reaching and identifying potential targets.

Top Box Strongly Agree
Is costly
Is difficult because it is hard to
reach prospective targets
Is difficult because it is hard to
identify potential targets
Is difficult because you do not have the right
tools/processes
Takes too much of your/staff's time
Base Total (511)
Q. To what extent do you agree that attracting
new customers...? A/B/C/D/E - Significant at the
95 confidence level.
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• Less tenured business owners expressed difficulty
  reaching prospective targets and needing better
  tools/processes compared to more tenured business
  owners.

Q. To what extent do you agree that attracting
new customers...? A/B/C/D - Significant at the
95 confidence level.
17

• The use of networking and print advertising is
  more prevalent in acquiring new customers across
  the small business owners surveyed.

Networking
Print
Direct Mail
Cold Calling
Yellow Pages
Radio
TV
Base Total (511)
Q. Which of the following have you used to
acquire new customers...? A/B/C/D/E/F/G -
Significant at the 95 confidence level.
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• Networking is used more commonly among regional
  businesses than among local or national
  businesses.
• National businesses tend to use more direct mail
  than both local and regional businesses.

Networking
Direct Mail
Local Regional National A
B C (176) (116)
(148)
Local Regional National A
B C (176) (116)
(148)
Base
Q. Which of the following have you used to
acquire new customers? A/B/C - Significant at the
95 confidence level.
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• In terms of effectiveness, networking takes the
  lead on all other methods of customer acquisition.

Top Box Very Effective
Networking
TV
Yellow Pages
Print
Cold Calling
Radio
Direct Mail
Base Total (511)
Q. In your experience, please rate the
following in terms of its effectiveness in
acquiring new customers? A/B/C/D/E/F/G -
Significant at the 95 confidence level.
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• Business owners whose customers are local find
  yellow pages and print advertising particularly
  effective compared to their regional/national
  counterparts.

Q. In your experience, please rate the
following in terms of its effectiveness in
acquiring new customers. A/B/C - Significant at
the 95 confidence level. TV base too low to
show.
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What it takes to prepare customer mailings

• Most small business owners develop and produce
  their customer mailings in-house.

Hire An Agency Or Freelance Designer
6
Do It Myself And Bring It To A Copyshop/Printer
Design And Reproduce It Myself
64 BC
30 C
Base Total (511)
Q. Which of the following most closely
describes how you prepare your mailings? A/B/C -
Significant at the 95 confidence level.
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Detailed Findings Customer Fulfillment
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• Filling customer orders accurately has the
  greatest impact on customer satisfaction,
  followed by reliability. Cost and speed
  associated with filling orders have the lowest
  impact.

Impact On Customer Satisfaction
Accuracy Reliability Cost
Speed A
B C D
Q. Considering your experience in filling
customer orders, please rank the following terms
according to the impact you think it has on your
customers satisfaction A/B/C/D -
Significant at the 95 confidence level.
24

• Rush delivery seems to be the service most widely
  used, most in demand, and most essential to
  running a small business.

Q. What delivery services do you currently
offer? think your customers most want? Consider
essential to your business?
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• Not surprisingly, the broader the customer base,
  the more delivery services offered.

Q. What delivery services do you currently
offer? A/B/C - Significant at the 95 confidence
level.
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• Package tracking, insurance, and international
  mail are particularly essential to national small
  business owners compared to local/regional owners.

Delivery Services Essential to Business
Tracking Packages
Insurance
Local Regional National A
B C (274) (111)
(88)
Local Regional National A
B C (274) (111)
(88)
Base
Q. What delivery feature(s) or service(s) do
you consider essential to your business? A/B/C -
Significant at the 95 confidence level.
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• National small business owners feel their
  customers are looking for package tracking and
  insurance.

Delivery Services Customers Want
Tracking
Insurance
Total Local Regional National
A B C (511) (274) (111)
(88)
Total Local Regional National
A B C (511) (274)
(111) (88)
Base
Q. What delivery feature(s) or service(s) do
you think your customers most want? A/B/C -
Significant at the 95 confidence level.
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Detailed Findings Customer Retention
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• The challenge of customer retention stems from
  both time and budget constraints more so than the
  lack of tools/processes.

Q. When you think about keeping customers, to
what extent do you find yourself challenged
by...? A/B/C - Significant at the 95 confidence
level.
30

• Offering customers quality products and customer
  service are both essential to retaining customers.

Quality of product/service
Good customer service
Competitive prices
Base Total (511)
Q. Which of these is the most effective in
keeping customers? A/B/C - Significant at the 95
confidence level.
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• Overall, the telephone is the preferred method
  for keeping in contact with customers.

Highest Preference
Telephone E-Mail Internet Cards/
Company Newsletters Letters
Updates A B
C D E
F
Q. Please rank in order of preference which
medium/channels your prefer to build
relationships with your customers. A/B/C/D/E/F -
Significant at the 95 confidence level.
32

• The telephone is particularly important to local
  and regional businesses.
• However, the use of both email and Internet are
  more prevalent among national businesses compared
  to local or regional businesses.

Q. Please rank in order of preference which
mediums/channels you prefer to build
relationships with your customers. A/B/C/D -
Significant at the 95 confidence level.
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Corpographics
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Business Details
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Business Classification
Business/Professional Services Retail Construction
/Home Improvement Wholesale/Manufacturing Dot.Com/
E-Commerce Real Estate Publishing/Printing Automot
ive Delivery Services/Courier Services Education R
estaurant Healthcare Day Care Provider All Others
Q. What type of business are you in?
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Corpographics
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Corpographics
Less than 0.5