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The new rules for entrepreneurs

Rick Newman
Senior Columnist
Daily Ticker

Technology seems to be changing everything these days, including the rules for people who dream of starting and running their own business.

Most of recorded history was the “age of the seller,” radio host Jim Blasingame explains in the video above. We’ve now entered the “age of the customer,” he notes. There’s been a ton of attention focused on ways the Internet and other marvels of modern technology have tilted the business-consumer relationship in favor of consumers. Overlooked, however, have been the ways businesses—especially small businesses—must change in order to stay relevant.

In his new book, The Age of the Customer, Blasingame highlights what businesses must do to compete and thrive in today’s fast-changing and often confusing economy.

“The biggest mistake they’re making is assuming, ‘if I know a customer and they’ve done business with me, they’re going to keep coming back,’” Blasingame says.

But shoppers have so many choices these days that loyalty is almost obsolete. “You have to follow them home,” Blasingame says. “Stay connected to the customer.”

That’s a challenge all companies face, but small businesses might have an advantage—for once—when it comes to maintaining relationships with consumers. Trust in big companies has declined sharply in recent years, on account of the 2008 Wall Street meltdown, government bailouts, inflated CEO salaries and the movement of many big-company jobs overseas. That’s an opportunity for small businesses to differentiate themselves.

“Small businesses are human,” says Blasingame. “They’re real human beings, planted in the ground on Main Street.”

Small businesses also struggle, however, with a problem more typically associated with big, hidebound bureaucracies. “The problem comes when you have people who have a lot of the old baggage from the age of the seller,” says Blasingame. “Major corporations, small businesses, nonprofits even. So much of that is no longer valid, especially with regard to what the customer expects from you.”

For small businesses, of course, it ought to be easier to change the company mindset and modernize business practices, since that often requires energizing just a few people. In a big company, by contrast, it can take months of committee meetings just to draft a memo. Small has its advantages.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.