Family butcher Claus Böbel is a digital pioneer in his shop in rural Bavaria, with half his turnover now online.
• The English language and computers were two things Claus Böbel never wanted to grapple with in his professional life. Starting out as a butcher in Franconia, northern Bavaria, in the late 1980s, he thought: “The pigs don’t speak English, and I don’t need a computer to make sausages.” But his business hasn’t quite gone as planned, fortunately for him.
His family have been selling meat and sausages to the 350 or so inhabitants of Rittersbach, a village about 40km south of Nuremberg, for decades. But now Böbel, working with his wife, Monika, and six employees, has a turnover of €700,000 (£620,000) a year. From the main road through Rittersbach his butchers business is impossible to miss: there’s a striking green frontage with a larger than life cut-out of a pig through which customers enter, and no shop window – just the words “www.umdiewurst.de” in large white letters.
This internet address has become as important for business as the bricks-and-mortar shop. Böbel offers almost 900 products online, all prepared in-house, from bratwurst to cow’s udder escalope to suckling pig. Local orders are delivered by the company’s own “sausage taxi”, and those going longer distances are posted in specially insulated boxes with freezer packs. His canned products reach the far corners of the world – for instance, Himeji in Japan and Nelson, New Zealand. “Half my sales turnover is online,” says Böbel. “I could no longer survive in this rural location, so far out of town, without the internet.”
At the turn of the millennium, when marketing experts raved about the advent of social media and the new possibilities of advertising, customer communications and selling online, it was people like 47-year-old Böbel they had in mind. Displaying products and services for sale throughout the world, directly targeting prospective customers, channelling attention specifically to your business and monitoring the effect directly and precisely – it was all going to be possible. Small and medium-sized enterprises (SMEs) in particular could benefit, they said – the very companies that cannot afford to conduct classical advertising campaigns or maintain a wide distribution network.
So what became of these promises? Does the internet drive sales for small retailers and tradespeople? How do these companies use the web? And how does it benefit them?
Presentation, not size
If you ask Dirk Binding, head of digitisation at the Association of German Chambers of Industry and Commerce (DIHK), whether the high hopes about the internet have been fulfilled for SMEs, his response suggests disillusion. “I know very few firms that have achieved sales on Böbel’s scale due to online marketing,” he says. “However, a lot have disappeared because they failed to pursue it.” In many cases, he explains, online sales simply make up for the drop in revenue from physical shops. “The internet has not changed the size of the cake; the cake is simply being divided up differently. And if you don’t rise to the challenge, you may be left with only the crumbs – if that.”
Ralf Kreutzer is a professor of marketing at the Berlin School of Economics and Law and he has also noticed a sense of disenchantment. “Online marketing does not make trees reach the sky,” he says, but he reckons it does offer opportunities, particularly to small companies. “On the internet, I can’t see how big a business is, only whether it is well or poorly presented. Former dwarves like Amazon and Airbnb made the most of that opportunity and redrew entire business models.”
One reason why the internet has not increased overall sales by much is that many SMEs do not invest in targeted online marketing and often make rookie mistakes. Christopher Zerres, professor of marketing at Offenburg University of Applied Sciences, has been looking into how smaller businesses use the opportunities presented by the web and his one-word conclusion is: badly.
“Many entrepreneurs do use the various different digital marketing tools, but they often take a very amateurish approach,” he says – starting with the company website. “Often, it contains little more than basic details like address and phone number. What information is offered often has little or nothing to do with the company itself. And even if the contents are all right, the page designs are often not user-friendly.” A company’s website provides the foundations for successful online marketing, says Zerres. “All additional activities, like email or search-engine advertising, and social media posts, generally have one key aim: to direct users to your website. If that is poorly designed, you might as well not bother.”
Zerres’s research concluded that while almost 90% of the entrepreneurs interviewed rank websites as an important means of communication, 98% of those sites displayed “substantial scope for improvement”. They use unsuitable fonts or type sizes; they lack page titles or descriptions, which is important for getting on to Google’s search list, and many are not adapted for display on different devices, such as computers, tablets or smartphones.
The Offenburg study found SMEs were not even aware of many of the online marketing tools available to them, such as an entry in Google’s directory My Business or rating sites such as Yelp. “Only half of respondents had heard of My Business,” Zerres reports. “That is actually a good, easy way of drawing attention to yourself.” The business enters contact details and opening hours into Google’s database, and is then displayed free of charge on Google Maps or in the search engine results list, provided users enter appropriate terms.
Once the foundations have been laid, other steps can be considered. These will depend what the business wants to achieve, who it hopes to reach, and how much time and money it wants to invest. It may be worth emailing regular updates about new products and special offers to existing customers, or entertaining them with background stories. Or getting involved in social media, to engage in conversations with existing and potential customers and thereby increase your reach and profile. It might be a good idea to place ads on Google’s search lists or Facebook timelines. “This form of marketing, in particular, is one of the most powerful tools because it allows my advertisement to reach a specific target group which I myself have defined,” says Zerres.
A web shop is like a tree
With the online advertising service Google AdWords, advertisers determine their own key words. Users also decide how much they are willing to pay when a potential customer clicks on their ad – because only then is a fee charged. This could be one cent per click, or more. Whether the ad is actually displayed depends, among other things, on how many potential competitors have bid for the same combination of search terms and how well Google thinks the website fits the search request. “Selecting the ideal combination is by no means trivial,” says Zerres. “To do that, I need to get inside the heads of my target group and consider which terms they might use to find an offer like mine.”
Böbel does not bother with advertising through search engines and Facebook. “Our website is near the top of the results lists as it is,” he explains. Despite his earlier aversion to computers, he had his first website designed and launched back in 1997. “I was curious and wanted to see what would happen. Besides, it doesn’t cost that much.” He set up his first online shop in 2004 as an experiment, offering “sausage letters”, vacuum-packed greeting cards with pictures made of real salami, which he invented. He professionalised the internet sales by updating the technology in 2007, but had to wait another three years before “it really took off”. The online business is like an apple tree, he says: “That, too, takes a while before it produces a decent crop.”
Over the years, he has expanded his range and now offers online sausage-making courses for amateurs, and marketing talks for business people, in which he explains his experiences as an internet entrepreneur. These generate 15% of his turnover. He has even had some of his web pages translated into English and Chinese, allowing him to reach out to large parts of the world.
However, Böbel’s website also displays curious requests, such as the pig’s knee joint he supplied to a medical college for teaching purposes, or a ham shaped like a wine bottle, for a hotel in southern Germany. Every few days, he posts updates from his butcher’s shop, such as forthcoming staff absences, so customers know they can expect “executive service” from himself or his wife; or he might share personal news, such as when their daughter returned from working with a butcher in Romania with whom he has a tie-up.
For almost 10 years, Böbel the butcher has also been sharing news on Facebook, usually in a slightly different way than on the company website so it is seen as a separate activity. He tries to publish 25 posts a month, because he knows content has to be constantly updated to be taken seriously on the web. All this takes time: he estimates that he spends half an hour a day writing posts or responding to messages from Facebook “friends”, who now number 1,800.
Facebook, Instagram, YouTube, blogs – the choice of online marketing channels is huge. Kreutzer believes they have become indispensable, even for small companies. But how do entrepreneurs identify the right one? “By asking their customers where they spend their time,” says Kreutzer. “They should also consider which channels are most appropriate for their purposes and whether they will be able to supply a regular stream of up-to-date and interesting content to it.”
Don’t forget to evaluate!
Experts nowadays still cite the cost-benefit effect as one of the key attractions of online marketing. “For just a few hundred euros per month, you can target potential customers very specifically and thereby significantly increase the number of visits to your company website,” says Binding of the DIHK. “That is less than you used to have to pay for one ad in the local newspaper. Back then, though, you were using lead shot, whereas today you are firing bullets.”
How much German SMEs with an annual turnover of up to €1m invest in their digital marketing activities is not known. But according to Dialogmarketing Monitor, a survey conducted by the postal service Deutsche Post, they paid an average of €1,035 to external-service providers for internet advertising in 2016. That is somewhat over 20% of their annual advertising budgets.
“The effort only really pays off, though, if the company also evaluates its online activities,” says Kreutzer. “About 70% of German firms don’t bother, and as a result they miss a huge opportunity.” Every visitor to a company website leaves a trail. Website owners can see where their visitors are logged into the internet, whether they arrived via a search engine or a link on another website, which pages they visited and how long they spent there. This information allows conclusions to be drawn for further marketing activities, but also about the products on offer. Such data is available from free tools such as Piwik or Google Analytics. However, analysing it efficiently requires a certain amount of experience. “You have to take the time to familiarise yourself with the data and define exactly what you want to know or test for, otherwise the variety of analyses and statistics will simply overwhelm you,” says Zerres.
Böbel prefers small talk to big data. “I don’t doubt that analysis like that can make good sense, but I only look at Google Analytics three times a year, at most. I concentrate on the digital conversation with my customers,” he says. Yet even Böbel does not dispense with statistics altogether: he regularly checks the number of visitors to his website and the search terms they use. He is not less interested in finding out which products are popular in his existing range than in which goods people look for in vain – this is how he identifies gaps in the market.
So is the internet useful for SMEs? The Böbels’ unqualified “yes” goes beyond sales to communications. “In the shop, I can talk till I’m blue in the face,” says Monica Böbel. “You spend three minutes writing something for the internet and immediately you reach many times more people.” About 75 customers come into the shop every day – but 75,000 potential customers visit the website every month.
And what of the few locals who have no internet access? For them, Claus Böbel prints out each new Facebook post and pins it up on a board outside his shop: online marketing offline.