Donagh Kiernan asked a very interesting question in the comments of one of my previous posts – he asked

i see the point of blogging for business with relevance for employee relations, customer relations and market development if you’re selling to an international niche. But does it really apply to a small business with a local and small customer base?

This is a very good question and one which couldn’t be answered adequately in a comment so I promised Donagh I would address his question in a post, so here we are!

Several examples of small companies blogging are mentioned in Naked Conversations, for instance a Savile Row tailor:

Thomas Mahon was a tailor. Not just a tailor, but a Savile Row tailor. Some say these artisans with the prestigious address make the world’s finest suits. But in Europe, like the U.S., the demand for custom suits costing as much as $4,000 was at a global nadir. Worse, rent on the fabled London street was steadily rising through the well-maintained roof…

Mahon, wisely, didn’t try to sell suits on the new blog. Instead, he showed his knowledge and love of the craft. He explained the labor, and why the cost was justified.� Hugh assured him that the people who cared would find the site. Mahon entered his first post in his new blog, English Cut in January. By April, hundreds of bloggers had written about and linked to English Cut.

In the world, there are perhaps 10,000 people with both budget and desire for Savile Row suits. They reside in some of the world’s most fashionable geographies, yet Mahon faces the economics of a local merchant. His ad budget might cover a phone book insertion, but little more. His business was mostly built by word-of-mouth, and he has long been traveling to New York City a few times annually, in part because he likes Manhattan, and in part to serve a smattering of American clients. If he sells two suits each time, it pays for the trip. If he sells three, he eats and gets to pay rent. A five-suit trip is a bonanza. When Mahon was in New York, in December 2004, he sold only two. When he returned 10 weeks after starting a blog, he sold 20 suits and eight sport coats, better than he had ever done in an entire year.

The media loved the story. The result is an exclusive article in one of the world’s most prestigious publications and television coverage on a global TV network. This media coverage will extend Mahon’s position as the world’s most famous Savile Row tailor, but the blog had already achieved that its first few months. For Mahon, his blog opened doors where previously there had only been walls. Measuring from one New York trip to the next, English Cut had increased Mahon’s business by at least 300 percent in less than 10 weeks. In Manhattan it had increased by nearly 15-fold.

Mahon is an example of a local merchant gaining global reach through blogging. He speculated he could now go to any major city in the world, and be known well enough to sell a fair quantity of elite threads. All he has to do is post that he will be in a certain city at a particular time, and the customers will find him. It’s still a word-of-mouth business, but blogging scaled it to global levels.

There are lessons for a great many local merchants in Mahon’s story. Being first was essential to Mahon’s success. Being the second blogging tailor may not be nearly as remarkable. Showing passion rather than salesmanship was essential for this story to have happened. There is another aspect: blogs such as Mahon’s, like some ad campaigns, may have limited time in the spotlight. We are already seeing evidence that the excitement and novelty of it are on the wane.

It doesn’t matter. Thanks to blogging and a resourceful drinking companion, Thomas Mahon today is the world’s best-know Savile Row tailor. And thanks to the increasing number of inbound links, the site continues getting better rankings on search engines.

Another example is a Japanese dental clinic (!):

Isshin Dental Clinic in Yokohama Japan has improved its business by 80 percent in less than a year by thinking local – the blogsite presents Isshin as a friendly, non-intimidating place for filling and cleaning. Photos depict smiling white-coated staff. Topics include dealing with pain, general advice, a Q&A, and “voices of patientsâ€?. the clinic feels they set this up as “a reasonable investmentâ€? that resulted in the number of patients doubling in a short period of time.

A small US-based software company:

ActiveWords, is a highly regarded software utility company whose product gives users neat little navigational shortcuts to measurably increase productivity. The company reports 100,000 downloads from its site on a six-year marketing budget of less than $15,000… blogging has been fundamental in facilitating an impressive quantity of national press clips including the New York Times, Business 2.0 and PC Magazine, PC World among others, and, says Bruggeman blogging has significantly contributed to landing a couple of company-changing OEM deals.

Bruggeman, like other successful bloggers, avoids selling on his blog. “It just won’t work and you lose credibility People will be smart to avoid the temptation,� he says. He mentions ActiveWords only in about one in four Buzznovations postings.�

A company who sells seals for bags:

Clip-n-Seal lets you put two sheets of plastic around something—anything— and melds the plastic wrap to form an airtight seal around it. In 2003, he started exclusively marketing it for the kitchen or maybe biking and hiking excursions from his blog. End users came as he had hopes [sic]. But something else happened. Other markets found him and these were industrial users including hazardous waste and nuclear labs, Scuba, aerospace, dairy farms, body bags and organ donor deliveries, commercial coffee bean packaging and a great deal more. Online distribution was bolstered by Amazon.com picking up the product. Brick and mortar specialty stores started stocking it on their shelves. When we interviewed him, he was in talks with Target, the #2 retail chain. But Clip-n-Seal has gone well-beyond the inventor’s vision into industrial applications… In two years, it has shipped more than 40,000 units all over the world, at a retail price of $4.95 per unit… where would Clip-n-Seal be without blogging? Byron’s answer: “one of the millions of inventions that never made it.”

A small restaurant in New Hampshire:

Horsefeathers has a restaurant website, just like every other restaurant. But according to Williams, theirs was dull with a few pictures and a menu that never changed — just like every other restaurant website. “Customers would look at the site once and, seeing nothing new, never return.â€? So Williams decided to try a blog. Taking a strategy that Bruggeman could have recommended, he focused on a single purpose: retain customers. “We had no desire to sell sandwiches via Pay Pal,â€? Williams told us. Nor was it aimed at telling strangers they should come and eat. Word-of-mouth from happy regulars would do that.

The blog strives to extend the sort of conversations online that you would have with Williams if you were at a Horsefeathers dinner table or sitting on one of the 13 barstools. Williams blogs about local happenings such as ski and river conditions. Recent postings profile of a local archery range and some historic tidbits on perilous Tuckerman’s Ravine, where extreme skiing began. He never hypes Horsefeathers itself. “No one wants to hear how wonderful we think we are,â€? he says. He posts often and that, of course, helps the restaurant appear prominently in search engines, which is likely to provide the second benefit of new customer acquisition. Google probably helps put Horsefeathers on the tourist “must seeâ€? list.

In the blog’s first year, it received over 50,000 visitors. “For us, this is a huge number. On an average day 150 to 200 people will electronically check-in at our home base. We have as many people visiting Horsefeathers.com every day, as we have seats in the dining room. The busiest day is always Thursday and the heaviest traffic occurs right after lunch. “You have to think that these are our customers checking in to see what’s up for the weekend,â€? he speculated.

Consequently, Horsefeathers is reducing its traditional advertising budget. There is one trade off Williams sees for cutting expenses. It takes a lot of time to blog often and well.

Closer to home, Fota House started a blog recently. They are only starting out and have much room for improvements in their blog (there is no comment facility, no syndication link, and the text is still being put up in the form of a press release – although these issues are currently being reviewed and addressed). Despite these shortcomings, the site has seen a boom in traffic since the blog was rolled out. They are now receiving 8-10 calls per week from people requesting details on having a wedding in Fota House or looking for information on an upcoming event as a direct result of the blog. These figures will continue to improve as the blog improves.

I hope this answers your question Donagh.