Shame on Chase and Living Social! Why ‘Mission: Small Business’ is hurting small businesses more than helping them
In Social Media, there is a lot of debate over the value of a “Like”. As pointed out in The Social Skinny, it’s comparable to determining CPC or CPA. Imbue’s latest research even put a number on it, $8. For small businesses, “Likes” and fans are even more important to their long-term success. Early fans, customers, and company advocates are their foundation.
So, why are Chase and Living Social asking small businesses to sacrifice these valuable small business customers? It’s a simple case of greed and PR. Small businesses don’t have access to social media and PR experts to advise them on business strategies, but obviously Chase and Living Social do. In this contest, they are the winners.
We know fans are earned. A ‘like’ is seen as vote of support. But, in a world of noisy social media where loyalty is scarce, a fan should not be asked to do anything. People ‘like’ pages to show support, but they are not committing to anything more. Already most businesses with fan pages are seeing only 5-20% of their fans reached when they post due to Facebook’s new settings. The goal is to keep fans engaged and rewarded. So, what happens when a company starts asking fans for favors rather than providing them with resources, providing perks and offering entertainment in exchange for their loyalty? They leave. They unsubscribe, hide or unlike a page all together.
According to Beverly Kennedy, general manager for Chase Ink, the Mission: Small Business contest was designed to help small businesses. In an article on Forbes.com, she states “As part of an ongoing commitment to small businesses, Chase has partnered with LivingSocial to launch Mission: Small Business, a new grant competition offering up to $3 million to small businesses nationwide. The program aims to find the most inspiring small businesses and provide them with capital, innovative marketing resources and financial advice to help grow their business and make a positive impact within their communities.” She further explains how it works, “Small business owners are encouraged to rally their customers and fans to vote for their business. Businesses must receive 250 votes to be eligible for a grant.”
On this last day of the contest, Let’s take a closer look at that process.
- Businesses register, providing their contact information through an online application. (Small businesses, get ready for the follow-up marketing about addressing your banking needs and participating in Living Social deals – it’s right in the “AGREEMENT TO PROGRAM WEBSITE PRIVACY POLICY AND TERMS OF USE”).
- The small businesses start trying to “rally their customers and fans to vote”. (How? They ask and beg through email, Facebook, Linkedin, Twitter and ever other method they can find – also known as spamming customers).
- If a fan or customer decides to support a business, the FAN must use their Facebook account to vote, allowing permission (and access) to Chase and Living Social. (So, what’s in it for me for supporting you? More spam.)
- If the small business gets 250 or more votes, then they are ELIGIBLE. (No guarantees!)
Although it is difficult to get an exact count of the small businesses partcipting, looking at the pages for Alaska, California, Florida, Georgia, Indiana, Illinois, New Jersey, New York, Massachusetts and Texas, I can see over 37,000 small business entries. That means at least 50,000 small businesses across the US have signed up. That also explains why my Facebook wall has looked like this for weeks:
The small businesses aren’t accessing the social media experts, but Chase does. So far, they’ve scored big:
- At least 50,000 new contacts for their marketing database I’ve seen estimates of 65,000
- With each of the small companies rallying for votes, they are receiving an avalanche of impressions. Note at the top of the graphic, Chase and Living Social are shared, not the logo of the small businesses. Even if every contestant only shared with the 250 people required to vote for them , that’s 12.5 million impressions!
- If the businesses average 250 votes each (some have 0, others have way over the amount needed), that’s 12.5 million Facebook accounts they have accessed.
- Press GALORE! Forbes and Wall Street Journal and local publishers seeking stories about small business have jumped all over this. Who looks like a hero here?
Even if Chase and Living Social paid $1M to run this campaign, they received all that publicity for less than $4M. You can’t buy marketing like that. Oh, wait, they just did.
So, Chase and Living Social did great, how about the businesses? Those with the 250 votes are eligible for one of 12 $250k grants. That’s a fantastic pay-off for the winners. But 12/50,000 means a 1 in 4167 chance of winning. I’ve seen entrepreneurs spending a huge amount of effort on this and I’ve heard consumers complain about the constant requests for votes. Time has been their main investment. But, ultimately, it’s the asking fans and customers for favors that will prove to be the real cost.
Ironically, Chase and Living Social are getting the pats on the back for supporting small business. But, I just don’t see how this contest has provided support, except to the 12 who ulitamtely win. What about the other 49,988?
Just yesterday, one of my favorite authors, Seth Godin wrote, “The road to the bottom is paved with good intentions, or at the very least, clever rationalizations.” Perhaps Chase and LivingSocial thought they were helping; but, my guess is that the big company won by hiring the pricey media consultants to show them how to maximize the contest deliverables: impressions, clicks, PR, shares, permissions, etc.
Likewise, the small businesses made rationalizations too. They figured it was worth the risk for that chance at big success. Many will do it again. This wasn’t the first contest of the sort. More than 4,000 business owners recently vied for one spot on a Walmart shelf. Prior to that, we were all bombarded by requests to vote for Mom Business Owners in a Startup Nation contest where there wasn’t even a real prize.
It’s time for large companies to stop preying on small businesses and individuals with these so-called contests that destroy valuable relationships between small businesses and their fans. Instead, they should be creating meaningful resources for them. What happened to providing loans to small businesses? If a business can get 250 votes, shouldn’t they at least be able to get a loan?
You nailed Shelly! Big sibling taking advantage of little sibling. Nice data mining technique beguiled. You did the math. Now, all those folks need to quickly disallow Chase into their profile information. While also remembering, not only should you be a frugal savvy shopper, but now you must be a well informed game player of social media.
The one web site that comes to mind where small business are raising cash for their projects is on Kickstarter.com and does NOT “appear” backed by big business disguised, it is run by Fans contributing. I see one project raising 115k already. That’s worth the effort for posting your project. 250k is a mouth watering temptation, but now new small business might be more aware of what “lies” beneath the offer. Good Luck and Best Wishes to All.
Good article and thank you.
That’s a really great point!!! I’ve noticed my page have million of those on it as well…I hadn’t even thought about those points though till you mentioned them!
I absolutely hate it when i’m constantly bombarded with requests to “vote” for them. Likewise I hate seeing contests where I have to rally votes for myself. Really, it’s the fastest way to alienate those who are supportive of you! I don’t do them, and I won’t participate in the “vote for me” scam. My fans are more important to me than anything I could gain from winning a CHANCE at a prize.
I applied for the grant and it would have been a godsend if my business was to be a recipient, as I have been unsuccessful in trying to get funding the traditional way for over 3 years. Meanwhile, I have gone forward with a Kickstarter Campaign, but it will only bring in a small portion of what we really need even if it is successful, which is also looking doubtful.
And since I was recently a finalist in the Southern Oregon Angels Business Plan Competition and already have a plan for the grant amount which would create a multitude of jobs in the local community, I thought there might be a decent chance.
But with only a few more hours for votes on Mission:Small Business, we are sorely lacking to make the 250 goal. It’s extremely hard to get votes when you;re not in retail and you never meet your customers. With products going through channels like Williams-Sonoma, Amazon.com, Whole Foods and the like, our customers are pretty far removed. Sad, not even being able to be judged due to lack of “popularity”. Meanwhile, I have totally alienated my internet clients and any local fans I once had by repeatedly asking them to vote for this, and very few ever did. Now I feel terrible….C`est La Vie
Lori, This contest was a long shot for most businesses. Perhaps you can come up and pitch in the Portland area? I just looked at your site and the meringues are fabulous! I’ve bookmarked the site for future and will keep you in mind for future events and promotions. Can you post a link to the Kickstarter campaign? I’d be happy to circulate it.
Thanks Shelley! Your article was such an eyeopener, I sent a link to the local business editor.
He must have had the good sense not to write up the Mission:Small Business competition when I first sent him a press release about it which he ignored.
My thinking was that if the media would educate the community about it, they would support their favorites and eliminate the need to bother your customers.
Here is the link to my Kickstarter campaign which now is my priority: http://kck.st/La1Zfz
I wish I had put all my energy into promoting it rather than wasting time on Mission Small Business!
I totally agree. I did one of the “beg for votes” contests ONCE. Quite frankly, it was humiliating and I felt *so* guilty every time I asked for a vote. Never again.
PHISHING Scheme! For the cost of 12- $250K small business loans, Chase and Living Social have managed to mine the email addresses and passwords of millions of hapless voters who are mostly unaaware they are giving away their personal information, and if you read to fine print, agreeing that by voting, they give away every imaginable permission to all aspects of private information.
What is Chase and Living Social going to do with my Facebook log in information? They are going to mine every bit of salable information possible, and share it with anybody and everybody that will pay for such specific personal information. I was amazed at the Privacy Terms that appears after you vote: especially where they say something like ‘you can ask to be removed from the list, and we may charge you a fee, to be determined, for such removal!!
Such Hubris, I feel as though this borders on fraud, and they should be prosecuted. Yeah, thats going to happen!
I hope we can at least make people aware of what the true purpose of the contest is. The permissions on t his one were some of the most invasive I’ve seen. It’s not over yet. The next stage will be Living Social convincing small companies that offering steep discounts is good for their brands/business. Sad.
I have come to believe you didn’t do your research before writing this article. I am not saying that i know every/anything, but the points you seem to be really pushing, are inaccurate. I think you telling small businesses not to try, could be as damaging or moreso, than anything you’ve cited as your facts.
I so appreciate all you do for small business moms, Shelley, but I think the main takeaway from your article should be “Weigh the cost/benefit and your chance of winning before participating”, not how sleazy Chase and Living Social are. If you were Chase/Living social and really wanted to altruistically support small businesses that give back to their community and have a chance of exploding in 2 years, what would a better way be to find those businesses? I can’t think of a better medium than facebook for tallying community support. If your business really gives back to your community as their rules state, the community shouldn’t mind so much. We sent emails to the Child Life profession we donate money to, and the people with needle phobia who sent us testimonials about Buzzy, and the nurses I’ve been donating time to lecturing about preventing pain in children. I think the main frustration comes from feeling that it is a lottery to win the 1/4167 chance at big bucks and everyone should have an equal chance, and it’s not. It’s a two tiered vetting process, and passing the 250 point takes the odds to roughly 1/400. Besides, through looking at other companies on the list I found several that may be good partners, and several that I supported because they seem cool. I think we may have benefited by some of the same publicity. Participating may have hurt some small businesses, but that was a voluntary choice on the part of the owners. Don’t vilify the companies putting $3M into small businesses; I believe more people benefited from the process than were hurt. (I’m totally with you on the Start-Up Nation thing, though. Bet that doesn’t fly next year.) Thanks for all the time and expertise you give to small businesses!
Amy, if anyone deserves to win, you are at the top of the list. You’ve created a product with a purpose and executed your PR and marketing wonderfully. But, if Chase’s intent was purely good, they could have required letters of reference. The votes are meaningless, except to Chase and Living Social who are mining the data. I’ve seen FB groups of small businesses where they swap votes. That’s not an endorsement of a company. I’d recommend that people, and especially small businesses, think twice about these contests. I’d rather see the big companies offer loans and resources based on good business plans.
Vote swappers violate the contest rules, so you make another moot point. And actual votes AREN’T meaningless, they could mean…”this company already has a reach”. This wasn’t a START YOUR BUSINESS contest, it was a GROW YOUR EXISTING BUSINESS contest. A show of 250 votes demonstrates ‘something’ to the contest sponsors. If a business who has to have been an actual business for at least two years to be eligible (another contest requirement) to become eligible can’t get 250 people to say “I support this business” then they would probably (“probably” = my opinion) mis-spend the winnings anyway. And you keep on about “letters of reference”… What’s that all about? You’re re-writing what you think the rules of someone else’s contest should be… Letters of recommendation are about as valid as the references put on an application to work at the Gap: No one would submit one saying anything other than glowing reviews. Not worth the paper they’re written on. So instead of having small businesses beg and plead and make promises to those willing to submit a letter of recommendation, they went a route requiring a minimum number of people willing to put their mark of approval on a business. Somehow I weight 250 votes from a general population more valuable than one letter of recommendation from someone’s mom.
We were a part of the contest and we saw that also. We had people sending us private messages saying” We voted for you and would you vote for us” We refused to do so as we felt like it was a form or coercion. We received over 551 votes the honest way and hope that the judges will see that when they judge. We were also disapointed in what was going on. We received all our votes honestly and through hard work. We can only hope for the best.
Brilliant, brilliant article Shelley. Exactly why I won’t enter these kinds of contests anymore.
I think you over-simplify, and essentially say that small businesses that aren’t smart enough or savvy enough misunderstand the contest and it’s the contest’s fault. You also seem to think that getting an offer from a business after making some form contact is appalling and unique to this contest. Have you seen your inbox lately…? How much of the crap that shows up every day uninvited do you even know of it’s origin? Probably very little. If you so much as respond to an E-vite, your automatically expanding the number of businesses that have access to your info. And they sell it to two friends and they sell it to two friends and so on and so on and so on.There is NO mis-representation of the contest in its policies and guidelines, and they also have extremely strict rules regarding how to get votes…actually DISCOURAGING SPAMMING. Let’s just think about this rationally…. if a business has already signed up to support me by “LIKING” my page, then by definition, I can’t spam them. If they “UNLIKE” my page, because I’ve asked them to further their show of support by doing ANYTHING i ask of them, it is their prerogative….And they might not have really been a supporter to begin with.
I do not work for Chase or Living Social. I support big and small business alike. And if you’re (not you, but anyone) one of your described “Small businesses [who] don’t have access to social media and PR experts to advise them on business strategies…” then people like you (yes you, theiqmom) should do more to make those small businesses realize that there are pages and pages and pages and countless on-line videos telling small business how to put social media to work for them. Where are they? Right on facebook.
P.S. I find if EXTREMELY CURIOUS that i was unallowed to post this comment without giving up my information… OR, of course, your own website will allow me to use my FACEBOOK log-in to do the same. How long until I am suddenly being solicited by offers for moms supporting moms in business? I promise I’ll let you know.
You are so right Shelley, I get tired of the large companies pretending to help the smaller companies when in fact they are just trolling for new people to bug with more junk mail.