1. Connect with the microbusiness owner
The “grit” of the American economy
An Experian white paper
2.
3. Connect with the microbusiness owner
An Experian white paper | Page 1
There are approximately 27.5 million businesses in the United States. The latest
available census data shows that there were 5.9 million firms with employees and
21.4 million without employees. These statistics align with Experian’s data and
research that affirms that most businesses are “microbusinesses” and that there
are millions of them out there.
Although microbusinesses are the smallest types of businesses (typically five
or fewer employees), they continue to be a vital part of the American economic
landscape.1
In fact, The Association of Enterprise Opportunities (AEO) maintains:
“In the United States, a microenterprise is usually defined as a business with five
or fewer employees, with more than 24 million microenterprises in the U.S. One
out of six U.S. private-sector employees works for a microenterprise. Historically,
microenterprises have been considered the backbone of the U.S.”
2008 census statistics, small business
6,145,500
23,131,300 Non employer firms
Employer firms
Source: U.S. Small Business Administration Office of Advocacy
The Office of Advocacy funded data and research showing that small businesses
represent 99.7 percent of all firms,2
they create more than half of the private
nonfarm gross domestic product, and they generate 60 percent to 80 percent of
the net new jobs.
These microbusiness owners are the grit of the American economy
Microbusiness owners are driving the American economy, and marketers are
realizing that this segment has become the most valuable and sought-after group
in the American market.
The findings affirm the necessity to wholly discern the “microbusiness owner”
from both a professional and a personal assessment.
This white paper aims to explore the vital views that are necessary to capture
the attention of these revered microbusiness owners and the proven business-
to-business behavioral approach when marketing to this highly sought-after and
regarded segment.
1
The Association of Enterprise Opportunities (AEO), http://www.aeoworks.org/index.php
2
Office of Advocacy estimates based on data from the U.S. Dept. of Commerce, Census Bureau, and trends from
the U.S. Dept. of Labor, Bureau of Labor Statistics, Business Employment Dynamics
4. Connect with the microbusiness owner
Page 2 | Connect with the microbusiness owner: the “grit” of the American economy
Unprecedented transformations
Microbusiness owners have endured the same challenges and trends as all
Americans have over the past five years, yet this time period has had an austere
impact on this revered group’s professional and personal lives. The combination
of drastically changing economic times, enhanced technology usage, a housing
market crash and a digital revolution has changed how consumers behave, share
and relate on every level. That stated, understanding these microbusiness owners
in this evolving environment is a crucial task for marketers.
Merely knowing the rudimentary firmographics of this group is no longer
sufficient. In today’s ever-changing environment, it is imperative to have an
all-encompassing understanding of not only the microbusiness, but also the
business owner making decisions for that business.
Simply put, it is critical to have a complete view of that microbusiness owner’s
decisioning process, personal life stage, household composition and mindset.
Marketers are challenged not only to acquire new microbusinesses, but also
to retain and maximize current relationships. To be successful, they must
know how to reach and influence microbusiness owners in today’s radically
changing environment.
This compels marketers to be able to communicate effectively, making sure they
are soliciting the right type of offer, through the right channel and at the right time.
Deep dive into the microbusiness owners
To gain this type of knowledge requires a true business-to-business
behavioral offering. Though many in the industry try a “Scotch tape”
approach, only Experian® has the data assets and proprietary tools to
truly provide the motivations and triggers of a consumer and link them to
that microbusiness owner.
5. Connect with the microbusiness owner
An Experian white paper | Page 3
For this exercise, Experian’s first observations were to systematically review
the microbusiness as a whole. What was discerned was that en masse, these
businesses had fewer than six employees and a sales volume of $500,000
to $1,000,000. The industries extend from professional services to general
contractors. When examining them from a personal standpoint, again, when
appraised as a group, the following broad group profiles were discovered:
• Wealthiest households, prosperous, family-focused, global travelers, socially
active, financial investments, influential, brand-conscious, sports activities,
digitally savvy
• Baby boomers, upscale, experienced travelers, sports enthusiasts,
physical fitness, financially responsible, accountable, brand-aware, loyal,
diverse households
• Upper middle-class, baby boomers, cultured, stable, smart shoppers, fitness-
minded, comfortable lifestyles, price-aware, Internet utilitarian’s, social activities
When communicating with these broad groups within the microbusiness
owner segment, it is important to focus on quality and service aspects. They
value customer service relationships, and trust is a key characteristic. They are
committed to quality relationships.
Additionally, when viewed as a group, these microbusiness owners prefer
traditional direct mail as a way for marketers to reach them.
Microbusiness owners are as assorted as the industries in which they work. The
second phase of the project was to extend the research to a more refined level,
examining these microbusiness owners by industry.
This next level of analysis illustrated that even in the same industry, the results
confirmed significant variations in the distribution of types of consumers who
owned them.
6. Connect with the microbusiness owner
Page 4 | Connect with the microbusiness owner: the “grit” of the American economy
For the purpose of illustration, let’s examine Legal Services Standard Industry
Code (SIC) 8111. When viewing these microbusinesses from the traditional
firmographic perspective, the majority, 91 percent of these small businesses, from
Experian’s Business Owner Link file, fall within the same employment size of fewer
than two employees and have a sales volume of around $500,000 per year. Yet that
is where the similarities end.
Within this one industry code, Legal Services, there are seven distinct, different
segments confirmed from this analysis. Let’s take a deeper dive into two of these
distinct segments.
Segment 1
This is a segment of upscale boomer-aged couples living in a city and in close-
in suburbs. These microbusiness owners are the vanguard of the baby-boom
generation. These consumers are now empty-nesting couples between 50 and 65
years old who are finally enjoying the kick-back-and-relax stage of their lives. They
are mostly married couples, and more than 80 percent of them have no children at
home. Virtually all own older single-family homes in established neighborhoods.
Scattered throughout the nation, they are found in both large metros and midsize
cities. One sign of their stability is the high percentages that have lived at the same
address for more than 15 years.
They enjoy active leisure lives. They like to exercise at fitness clubs and do
nonaerobic sports such as golf, yoga and sailing. They have a cultured streak and
enjoy going to plays, museums and antique shows. They also have enough time
and money to travel frequently, both domestically and internationally. With their
parenting years behind them, these couples relish the opportunity to take cruises,
go to casinos and frequent gourmet restaurants.
As shoppers, they are both brand- and bargain-sensitive. They patronize all kinds
of brick-and-mortar stores, from high-end retailers to discount clubs, and also
buy products through catalogs, direct mail and the Internet. Although they buy
luxury cars, they’re not known as early adopters when it comes to consumer
electronics, nor are they fashion-forward. Now approaching retirement age, they’re
increasingly health-conscious and look for high-fiber foods while avoiding the fast
food their kids grew up on. When they shop, they take along coupons clipped from
newspapers or downloaded from the Internet.
They tend to have eclectic media tastes. They’re print fans who read daily
newspapers from cover to cover and subscribe to magazines that specialize in
business, news and travel. They go online often to track down news, book travel
and research medical subjects.
7. Connect with the microbusiness owner
An Experian white paper | Page 5
Although they dislike commercials, they like watching television news, medical
dramas, crime procedurals and sitcoms. They still maintain their love of music,
though these one-time rock ‘n’ rollers now listen to jazz, classical and easy-
listening music.
No longer the radicals of their youth, they appear to have become their
conformist parents. They describe their politics as conservative and align
themselves with the Republican Party. They’re more liberal regarding
environmental issues, however, and worry about pollution. Green products
and hybrid cars are popular in this segment.
The evolution of the countercultural generation evident in them reflects an
economic system that has rewarded these members handsomely. Thanks to their
high incomes, they’ve accumulated large portfolios of investments to fund their
retirement. With homes they’ve owned for many years, they’re creditworthy risks
for home-equity loans, insurance and lines of credit. They carry multiple credit
cards and pay off their balances each month — charge card-carrying members of
the system they once railed against.
It is imperative to communicate in a way that will resonate with this segment. To
do this, make sure to communicate the strength, pride and quality of your brand.
Relationships and customer service are important, and face-to-face contact is a
real plus. Promote quality and service aspects and reward them with a trial offer to
help establish confidence in your products and services.
Remember these consumers are level-headed, elite financial consumers who
remain well-informed and easily identify providers for their financial needs. They
are also keen rate shoppers and understand that sound judgment and informed
risk-taking will secure them the good life.
Their preferred channels of communication are direct mail and email.
8. Connect with the microbusiness owner
Page 6 | Connect with the microbusiness owner: the “grit” of the American economy
Segment 2
This younger segment is considered up-and-coming singles living big-city
lifestyles within the top Core Based Statistical Area. This segment is a collection
of unmarried singles living in the funky neighborhoods of the nation’s big cities.
Found in iconic neighborhoods like Greenwich Village in New York City and
Haight-Ashbury in San Francisco, these city dwellers thrive in settings known for
their cafés, nightclubs and arts. Most are college-educated, in their 20s and 30s,
and living in rental apartments filled with other young transients. They care less
about their residences’ location “status” and more that their locations are near to
great ethnic restaurants, chi-chi boutiques, hot music clubs and other unattached
singles attracted to this urban meet market.
They like to be on the cutting edge of culture and enjoy the energy that only city
life can bring. They head out to plays, movies and concerts. They like to read books
and take continuing education courses. To keep looking their best, they devote
hours each week to keeping fit. They’re not just denizens of local health clubs;
they also like to escape the stress of their jobs by challenging themselves to rock
climbing and scuba diving. During the week, they’ll show up for drinks or dinner
toting a gym bag and a briefcase.
They are liberal in their outlook. They vote Democratic and proudly support a
left-wing agenda. Many do not attend church services every week. Despite their
decent incomes and liberal tendencies, they don’t appear to be fashion-forward
shoppers. True, they prefer local boutiques to the national chains, and they’re not
likely to drive an hour to an outlet mall, but that’s because most don’t own a car
and instead take public transportation. Those who do own cars tend to drive small
sedans and sports cars not suitable for hauling palettes of goods from warehouse
clubs. Despite living in some of the nation’s most expensive cities, they still like
to keep within a budget. Many are financially savvy and have set aside cash for
their IRAs and 401(k)s. These young households have already acquired a variety of
investments in stocks, bonds, mutual funds and CDs.
Living in typically cramped apartments, these urban hipsters like to go out, and
that makes for a relatively weak media audience. They’re not big television fans,
except for a favorite sitcom, an old movie or an inflammatory documentary. Many
are into the music scene, and have an affinity towards modern rock and jazz radio
stations. While they read a lot of books, they rarely subscribe to newspapers or
most magazines.
Most have adopted the Internet as their main source for news and entertainment.
Today, the Internet is often the first media channel they visit in the morning and the
last one they use at night. They go online to watch videos, shop, telecommute and
visit dating sites. One of their favorite pastimes is finding new Websites.
When communicating with this segment, it is important to highlight if your offer is
new or cutting-edge. Launching new products and services catches their attention.
9. Connect with the microbusiness owner
An Experian white paper | Page 7
Reward them and compliment early adopters for being the first to take advantage.
This will help your communications pique their interest. Showcase cutting-edge
technology and premium high-value offers. Progressive, financially savvy and
energetic risk takers, these consumers respond to your best financial offers.
Highly informed and confident in their reasoning and opinions, these proactive
researchers move quickly in their financial decisions.
The channels they feel are most effective to extend
communications are direct mail and then email.
Implement a winning strategy
Prepared with categorical, effective insight, marketers can positively influence
these priceless microbusiness owners with the right offer in the right channel,
and with communications that will resonate with them. These offers can be
sent to their places of business or to their homes, providing the opportunity for
a multichannel marketing strategy. This approach will enable marketers to
reach these decision makers in multiple locations, where they can truly capture
their attention.
10. Connect with the microbusiness owner
Page 8 | Connect with the microbusiness owner: the “grit” of the American economy
Conclusion
More than ever within today’s challenging environment, it is imperative to
effectively reach profitable prospects. Yet perhaps even more crucial is to retain
existing valuable microbusiness owners, who are the grit of the American
economy. To positively affect the bottom line, marketers must be able to
make their offers stand out from the rest. The only way to truly motivate these
microbusiness owners is to understand what they value and the triggers that will
influence their decisioning process.
To define what the Microbusiness owner’s trigger and behaviors are
necessitates the need for a true behavioral solution. To gain that precise
intelligence, and be able to accurately link these microbusiness owners to their
consumer information requires an expertise that only Experian is able to offer,
from inception to implementation.
Find out more
To learn more about this business-to-business behavioral solution, contact your
Experian Marketing sales executive or call 1 888 776 2895 to request
more information
About the author
Kelly Jo Crantas is a Solutions Expert for Experian Marketing Services. With
more than 30 years’ experience in direct marketing and data management, she
is responsible for helping clients understand Experian’s unique data assets and
proprietary solutions, as well as how to successfully implement them into clients’
direct-marketing strategies.
Business Owner Link
Business Owner Link from Experian links small-business owners to their home
addresses. Only Experian can provide this powerful marketing link between small
businesses and their owners through our proprietary linkage technology.
Business Owner Link — Corporate File uses the same linkage technology
as Business Owner Link, but it links the small businesses that are set up as
corporations, limited liability companies and limited liability partnerships to the
principals’ home addresses.
Business Owner Link — Corporate File can be used to identify small-
business owners whom business-to-business marketers already may have
as consumer customers.
11. Connect with the microbusiness owner
An Experian white paper | Page 9
Mosaic®
Mosaic®
USA is a household-based consumer lifestyle segmentation system
that classifies all U.S. households and neighborhoods into 71 unique segments
and 19 overarching groups, providing a 360-degree view of consumers’ choices,
preferences and habits.
The new Mosaic®
system is the first segmentation tool built in the U.S. market
in the past five to 10 years and reflects critical new data presented in the 2010
census. This groundbreaking classification system paints a rich picture of U.S.
consumers and their sociodemographics, lifestyles, behaviors and culture,
providing marketers with the most accurate and comprehensive view of their
customers, prospects and markets.
Mosaic®
offers a common customer language to define, describe and engage
target audiences through accurate segment definitions that enable more strategic
and sophisticated conversations with consumers. Using Mosaic USA lifestyle
segmentation, marketers can anticipate the behavior, attitudes and preferences of
their best customers and reach them in the most effective traditional and digital
channels with the best messages.
TrueTouchSM
Touch-points
Touch-points are customer-centric behavioral message themes that stimulate
transactions. These themes help marketers comprehend how to communicate
and motivate consumer response through messages that resonate, optimizing
consumers’ attention.
TrueTouchSM
channel optimization
Through channel optimization, marketers are able to identify where consumers are
most receptive to receiving an offer — what channel(s) to communicate through
to these customers. These indicators assist with strategic or tactical channel
management. They were designed and constructed from research on consumers’
level of receptiveness to being contacted by direct- and mass-advertising
channels. Consumers are scored on all channel types.
