Artificial Intelligence (AI) is a hot topic in today’s world, and small business owners are starting to realize the power ChatGPT brings. The business world is quick to embrace it but the education world is wary. And if I was a college student, I might get a failing grade on this post. Here’s why:
Confession: ChatGPT gave me all the info for this post.
I started to do research, and then thought – why not go directly to the source? So I asked ChatGPT:
“What prompts could I ask that would be helpful to a small business?” Here’s some of what I got (I added in some options for more specific details).
1. Chat GPT’s Ideas for Marketing Strategy
“I have a monthly marketing budget of $5,000. What’s the best way to spend it?
I got a fairly generic, but helpful, list of ways to spend a marketing budget. Though Chat didn’t give me a specific breakdown of how much to spend in each category, it did give some rough advice. Here’s a shortened form of Chat’s recommendations:
- Digital Advertising. Commit a significant portion of your budget to ads on Google Ads and Facebook Ads.
- Content Marketing. Consider using budget money to outsource content if you don’t have the time/expertise to do it internally.
- Social Media Marketing. This advice was very generic and repeated “Digital Advertising” somewhat.
- Search Engine Optimization (SEO). Invest in SEO tools for your website, or hire a specialist if necessary.
- Email Marketing. Invest in building and maintaining an email list. Focus on exclusive offers, educational content, and product updates.
- Influencer Marketing. Consider using a portion of your budget to collaborate with relevant influencers who can promote your products or services to their engaged audiences. Research and identify influencers who share your brand values.
- Analytics and tracking. Allocate some budget to tracking tools and analytics platforms to measure the effectiveness of your marketing campaigns.
I then asked ChatGPT:
“What specific influencers might share brand values with a process automation software company?”
I got a good list, with real names of influencers. So remember to drill down into each category for more. Could I Google something similar? Sure. But the beauty of ChatGPT is that right now it’s advertisement free. No one (as far as we know) can buy their way to the top of Chat’s list.
2. ChatGPT’s Take on Using Social Media
I asked ChatGPT:
“What social media platforms should a process automation company invest in?”
The answer included the platforms I would expect, in addition to a few that I wouldn’t, like SlideShare (didn’t even know this was a thing) and some examples of industry-specific platforms to look into.
I then asked Chat:
“What kinds of topics should a process automation software company write about on social media?”
In response, I got details about 10 pretty great ideas for things to cover on social media (3 of which I added to our content plan…). My favorite was promoting industry events and webinars, which is something I’d never thought about.
3. ChatGPT Takes on Customer Acquisition
“What are some cost-effective ways for a process automation software company to acquire new customers?”
ChatGPT suggested some of the expected things, like marketing and email lists, but also suggested I implement a referral program, invest in strategic partnerships, and create a “free-mium” model as a low point of entry. Pretty good ideas!
I followed up with the question:
“What’s a good CAC (cost to acquire a customer) for a process automation software company?”
Here’s what ChatGPT advised:
“A common metric used to assess the efficiency of customer acquisition is the CAC ratio, which compares the cost of acquiring a customer to the lifetime value (LTV) of that customer. A healthy CAC ratio typically ranges between 1:1 to 3:1, meaning the LTV is at least three times higher than the cost to acquire that customer. This indicates that the revenue generated from a customer over their lifetime exceeds the investment made to acquire them.
Basic, but good basic info. And Chat went on to explain more about how to determine what ratio is best for my company.
4. Customer Retention, According to ChatGPT.
Chat recommended that I ask about customer retention, so I asked:
“How can a process automation software company build strong relationships with its existing customers and improve loyalty?”
Chat quickly gave me 10 ways to do this. My favorite is:
Develop customer success programs that go beyond technical support. Assign dedicated customer success managers who can proactively engage with customers, understand their unique needs, and provide personalized guidance. Offer regular check-ins, conduct business reviews, and identify opportunities for further optimization.
I then drilled down further on another suggestion and asked:
“What are ideas for education/training sessions for existing clients of a process automation software company?” I actually saved this entire list as possible ideas for an email drip campaign to current customers. It was that good.
5. ChatGPT’s Advice about E-Commerce.
Chat suggested I ask:
“What are the key considerations for small businesses looking to start an online store or improve their e-commerce presence?”
This doesn’t really apply to our mostly-service-based business, but ChatGPT provided a list of some basic suggestions that would likely be helpful for a brand-new e-commerce company.
I wanted to get more specific, so I made up a fictional poster-selling company and told GPT:
“I sell posters in an e-commerce business. Who should my target market be?”
My immediate thought was “teenagers and pre-teens.” I don’t think that’s a bad idea, but Chat had other thoughts, like:
- Home Decor Enthusiasts
- Art and Design Lovers
- Pop Culture Fans (this may be where you would find the teenagers…)
- Inspiration and Motivation Seekers
- Gift Shoppers
- Educational and Learning
- Travel and Adventure Enthusiasts
- Hobbyist and Interest Groups
6. ChatGPT & Financial Management
“What finance metrics should a process automation software business be watching?”
This was super helpful. Here’s what ChatGPT suggests:
- Revenue: Track your total revenue, including recurring revenue from subscriptions or licensing fees, as well as one-time sales or project-based revenue.
- Gross Profit Margin: Calculate your gross profit margin by subtracting the cost of goods sold (COGS) from your revenue and dividing it by revenue.
- Customer Acquisition Cost (CAC): Determine the cost of acquiring a new customer, including marketing expenses, sales commissions, and other related costs.
- Customer Lifetime Value (LTV): Calculate the LTV by estimating the total revenue you expect to generate from a customer over their lifetime with your software.
- Monthly Recurring Revenue (MRR): If your software business operates on a subscription model, monitor the MRR. It represents the predictable and recurring revenue generated from your subscriptions.
- Churn Rate: Churn rate measures the percentage of customers who cancel or do not renew their subscriptions or licenses within a given period.
- Average Revenue per User (ARPU): Calculate the average revenue generated per user or customer.
- Operating Expenses: Monitor your operating expenses, including salaries, marketing costs, rent, software licenses, and other overhead expenses. Analyze these costs as a percentage of revenue to ensure efficient cost management and profitability.
- Cash Flow: Keep a close eye on your cash flow to ensure you have enough funds to cover operational expenses, investments, and growth initiatives.
- Return on Investment (ROI): Evaluate the return on your investments, such as marketing campaigns, product development, or infrastructure improvements.
I found this to be great information.
7. ChatGPT Gives Advice for Increasing Employee Engagement
I asked Chat:
“How can I measure employee engagement for my small business?”
Again, ChatGPT came up with the usual answers, but I did think this one was unique: monitor absenteeism and turnover rates.
I went on to ask:
“What are things I can do to increase employee engagement at my small business?”
I got back a list, along with this advice: “Remember that employee engagement is an ongoing process that requires continuous effort. Regularly assess the impact of your initiatives, gather feedback, and adapt your strategies as needed.”
One of Chat’s suggestions was: “Continuous Program Evaluation and Improvement.” I followed up with the question:
“What metrics should I watch for employee engagement at my small business?”
Keep drilling down to get to the information you want.
8. Networking and Partnerships and ChatGPT.
For this last area, I asked ChatGPT:
“How can small businesses build valuable connections, network with other professionals, and form strategic partnerships?”
Chat chewed on that for a few minutes, then gave me a pretty great list:
- Attend industry conferences & events
- Join professional associations and organizations
- Utilize online networking platforms
- Attend local business meet-ups
- Collaborate on projects or initiatives
- Offer value and be genuine
- Seek mentors and advisors
- Volunteer and support community initiatives
Sure, a lot of these are common sense, but I DO believe that if I followed all of this advice, I’d end up with more partnerships.
Here my takeaways from using ChatGPT as a small business tool:
- Be specific. The more specific info you give ChatGPT, the better answers you’ll get. Tell Chat what kind of company you have, exactly what your budget is, the number of employees you’ve lost over the past year, or what industry you’re in. I told Chat salary info for our average software engineer and asked if it was normal. Chat told me that salaries varied widely by region, but that the number was potentially on the low side.
- Drill down. You’ll often get the “expected” answer when you ask ChatGPT a question. Sure, it’s neat that AI came up with it, but it isn’t earth-shattering. Don’t be satisfied with that; continue asking more and more myopic questions to get to an answer that’s helpful. Eventually, Chat will surprise you. The true power in ChatGPT comes from continuing to narrow in on your questions.
- Brainstorming tool. Sure, a lot of the answers ChatGPT comes up with will be ones you already knew. But it’s still useful to have them all in one place and available immediately. Using Chat for small business growth is, I think, a great starting place – giving you a baseline to work from.