Arturo Garcia Hernandez / Transformation Manager Wadhwani Foundation
The COVID-19 pandemic has brought about several changes in various areas. SMEs in Mexico are no exception, according to INEGI, 60% of the country’s small and medium-sized businesses have been forced to break into the waters of e-commerce.
Compared to the United States of America, where 50% of sales are concentrated in two retailers (Amazon and Walmart), e-commerce is still a maturing area in Mexico. In the past few months we’ve seen an explosion of delivery applications that have in some ways changed the way users buy. From price orientation to practicality, to a surcharge of over 30% so that you don’t have to leave the house.
The big question that companies in Mexico are faced with is: what’s next in order to be able to digitize my business? The answer has many implications that are often not considered, which leads to companies losing money and creating a sense of frustration in entrepreneurs.
Next, I share the key situations we’ve seen in SMEs benefiting from the Wadhwani Advantage program and how they can be resolved.
Development of a profitable digital business model
One of the main obstacles SMEs face in Mexico is not knowing where to start. It is very common for entrepreneurs to rely on familiar territory. Open multiple social media accounts and an unoptimized website that they leave after a few months if they don’t see any results.
The recommendation I always make is to have a good approach to the business model that doesn’t sacrifice margin, quality, or consumer experience. In order to resolve this situation, it is very important to know in detail who your customer is and to offer them options that best suit their habits.
With this in mind, you can determine the best way to communicate with your customer according to their habits and what type of e-commerce they are interested in (BOPUS, home delivery, physical purchase). There are very sophisticated solutions that we’ve seen with the companies benefiting from the program, from alliances with taxi companies with a fixed freight charge or the introduction of a CRM, to automating communication with prospects to close the sale with a better relationship.
Introduction of technologies that facilitate the operation of the company
Once the business model is clarified, choosing the right tool is critical to ensure it runs flawlessly. This point can be as broad as your business strategy requires. I share some considerations so that you can apply them to your business:
- Online store: There are several ways to develop an online store, which is not an option for all businesses. It is important to know if your customer intends to buy directly from your website and if so, make sure there is no risk of information leakage. The services I recommend for starting your online store are Shopify and WordPress, which you can easily program yourself, have options to optimize and improve your position in search engines, compatibility with Google Analytics and very good free tutorials.
- Customer Relationship Management (CRM) software: A very common situation is not documenting your interactions with your customers. Getting lost in operations can often mean that you don’t pursue business opportunities with your customers and prospects. Jeff Bezos, founder of Amazon, understood this very well. Fortunately, there are tools on the market to suit all budgets and even free trial services. It is important that you evaluate the number of your customers and try to offer the most individual service.
- Marketplace: The possibility of building your shop on an established platform is always attractive, especially when starting your business. What they don’t tell you is that the data generated by all of your interactions is related to the platform and doesn’t allow you to have any level of personalization about your offering. This is a point to consider depending on the nature of your business and the habits of your customers. The advantages are that the logistics problems are solved by the service provider and often also enables your shop to be optimized (of course, taking into account an investment in its platform).
- Bulky Mail (Email Delivery): While this may sound obsolete to new generations, COMSCORE says email campaigns are still very effective, especially for B2B sales. Good practices for this type of service take into account personalization, immediacy, and most importantly, flashy headlines to motivate the email to be opened.
- Automated answers (bots): If you already have experience with digital platforms, you will have noticed that the customer always asks despite visible information and if he does not answer, you are annoying. A very simple solution is to program the automated answers precisely with the most frequently asked questions in mind. This not only allows you to generate a better experience for the prospect, but also usually improves your rating on the platforms.
Structure your presence in digital media
There are a multitude of ways to be present in different digital media, I’ll tell you which ones I think are essential to consider in your business strategy:
- Blogs / Vlogs: Oddly enough, consumption of audiovisual content in Spanish-speaking countries is high and, according to some sources, amounts to 3.5 hours per day. This has positioned YouTube as the second most used search engine and is a key element to consider in your strategy. Using these platforms allows you to confirm your dominance within the category, which allows you to have better positioning on search engines, mainly Google.
- Social Networks: Although social networks have evolved and now you have to pay to reach the audience, they are still relevant to building a communication. It all depends on the characteristics of your business and the habits of your consumers. It is a bad habit to open accounts on corporate networks and not feed them. This is a bad cover letter because you are signaling to your prospect that you are not serious about updating your information. Structuring a good content strategy and being consistent are the key to gaining relevance in this medium.
- Digital sales platforms: In Latin America there is no such pronounced behavior as in the USA and electronic sales are spread across several platforms. Mercado Libre and Amazon are the frontrunners and each has its own specialty. It is important to remember that just opening them up if your strategy involves using these platforms is not enough. Constant optimization, interaction with your potential customers and building a good reputation are the keys to asserting yourself in this.
The digital transformation of your company is feasible
As I mentioned in this article, there are many factors to consider when developing your digital marketing strategy. However, if you understand your customer well and propose a good business model, it will be much easier for you to be profitable and avoid many moments of frustration and loss of capital.