The lifeblood of any business is its customers and the ability to sell to them. This is more so for new start-ups and for small to medium businesses who find themselves in a double blind. Firstly, as a new player their business is not known or their products or services maybe new and untested and secondly, they may have limited capacity and / or budget for the marketing and advertising required to reach out to a wider audience. Although some businesses start off in a location which is dependent on local trade, many businesses may also find that they are increasingly dependent on non-local trade, as consumers go further afield to gain wider choice as a result of greater mobility.

The businesses that are constrained by the above factors but who are able to survive are the ones taking advantage of the technological and social environment in various ways.

Online social media remains the most powerful and cost effective tool for small to medium businesses, enabling them to gain a community of users, to reach out instantaneously to many and to share content to promote products and services. It also enables a business to build up its brand identity and strengthen customer relations and trust which is key to the success of the business. Apart from paying for promoted posts, one of the main advantages is that it is generally free and user friendly.

Given that time is a limited resource, the decision of which social media platform to focus on can be important. There are many sites such as Facebook, Twitter, Instagram, Linked in, Pinterest, Flickr, Bebo etc. Which sites to use would to a large extent depend on knowing your customer base and targeting which social website they would most likely habituate. It is important to remember to think about this in the long term, so selecting a handle (name to operate the social media) is important as changing or having to change a name mid way once it is recognised is likely to lose customer confidence. The most effective handles are those that are simple to understand, or are cleverly linked to the brand or name of the business and an effective name can become a very valuable asset in its own right if and when it gets traction, develops a social presence and a loyal customer base. A common mistake some businesses make is a failure to protect their name as they view it as an unnecessary cost. Social media raises your profile but the flip side is that it also alerts opportunists and many businesses have found to their detriment that the name has already been taken as a registered trade mark when they finally decide to apply for protection.

Email marketing is also another great cost effective way to boost your customer base via direct interaction with individual customers. A good and effective email marketing strategy is heavily personalised to each customer, with tailored offers based on their individual needs and purchasing habits, to optimise customer engagement with your products and services. Information about customers and their particulars i.e. the contact list is the single most valuable asset of a business. There are various providers who specialise in collating and selling such data but due to its value, it is imperative that a business complies with legislation in collating, retaining and sharing such information. The Data Protection Act obliges the collector and user of the information to be handled according to data protection rights, ensuring the information is kept secure and safe and there is stronger legal protection in place for more sensitive information, such as religious beliefs and ethnic background. Serious breaches could lead to a fine and damages.

Without doubt, social media has added a new dimension to marketing in reaching out to consumers. The other aspect is of course online retail which has added a new dynamic to businesses in getting customers and it is here to stay. There are many sites that host such sales and some of the sites e.g. eBay in particular now allows interaction between consumers and the suppliers so that not only can a business sell but also to collect a contact list on such sites. Businesses who do not reach out on online sales platforms are missing a trick. In fact some retailers have only online selling platforms, doing away with most of the traditional costs associated with paying rates and office rental. With so many positives, it is easy to see why many businesses have turned to and focused on the online selling platform. Online retail is a fantastic platform and can be very rewarding if certain legalities are kept in mind. There should be a robust list of terms and conditions to govern the relationship between you and the buyers, this would include basic terms such as the cost, delivery modes, which party bears the risks and at what point, return policies, refunds and so on. This should be displayed and visible before a customer accepts or makes an offer online.

There are some watch-outs. As with any aspects of commercial life which evolves, the law is also evolving to keep up. From last year there have been new regulations designed to further protect consumers that are buying at a distance and not having physical contact with the products they are looking to buy. The new Consumer Contracts Regulations, which subsumed the old Distance Selling Regulations, apply to all purchases made at a distance. This includes online or over the phone sales, although for online sales, there are extra additional rules for distance and off premises sales.

A few points from the new Regulations:

  • Businesses must get the consumer’s express prior consent before taking any additional payments (e.g. pre-ticked boxes are not permitted).
  • Businesses must, unless the consumer agrees otherwise, deliver any goods purchased within 30 calendar days.
  • Businesses must not make the consumer use a premium rate telephone line to contact the trader about an existing contract.
  • Businesses must not impose excessive payment surcharges when consumers pay by certain means, such as credit or debit cards. (This change was in fact made and has been in force since April 2013).

For distance and off premises contracts (and there are some differences between these contracts), additional rules apply. Some of the more important ones are:

  • The statutory cancellation period is extended to 14 calendar days.
  • Where a consumer has a right to cancel a contract, the trader is required to provide the consumer with a model cancellation form.
  • Extension of the cancellation period to, broadly, one year if the trader fails to provide certain pre-contract information.
  • Requiring online traders to make it clear where proceeding with the transaction will trigger a payment.  This could be by clearly labelling the payment button.

Utilising social media and online retail maximises rewards but a business needs to be aware of the legal obligations that comes with it.