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.
- 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?