E Source Sees Small Business Internet Use on the Rise - Brief Article

Information Superhighways Newsletter, May, 2001

"Small commercial and industrial operators are adopting the Internet as a business tool at a staggering rate," according to Clay Fong, director of the E Source small business series. "They're using the Web for e-mail communications, marketing to a broad swath of customers, or procuring goods and services necessary to running a business."

Although the E Source survey of more than 900 individuals representing small commercial and industrial electric and natural gas customers in the US and Canada was designed to address the interests of power utilities, it includes valuable insights for any vendor dealing with small business.

In the last year, small businesses have increasingly taken advantage of the Internet as a marketing and operations tool. Whereas last year's survey reported that 37 percent of respondents had a Web site, this year's results indicate that 48 percent now have a site. Not surprisingly, the top use for these sites is to advertise and promote goods and services. But significant numbers of businesses also use their sites as a tool for providing information to customers, as a help line, and as an e-commerce platform.

"Small businesses increasingly rely on the Web to do business," said Fong. "And they will expect the same from their vendors, including their power utility. Offering such services as on-line billing and e-commerce is likely to be of increasing consequence."

Small businesses are also using the Web as an information-gathering tool. Of those with Internet access, more than 70 percent use e-mail and a similar number gather information on products and services, as well as competitors. In every case, use of the Internet as a business tool has profoundly increased, as evidenced by the fact that use of the Web for purchasing products and services has doubled from last year's survey and on-line bill-paying has tripled.

Besides expanding the functional capabilities of their Web sites, small businesses are also considering how an Internet presence can bolster their marketing strategies. Over half of small businesses with a Web site see it as another marketing channel, while significant numbers see the Internet as a tool to reach new geographic markets and compete on an equal footing with their larger competitors.

What are the implications of small business Internet usage for energy service providers (ESPs) that wish to target this audience? The first is that a Web presence is becoming the norm, and as small businesses enhance their own ability to conduct commerce over the Web, they will expect the same from those who sell them goods and services, such as ESPs.

E Source, a trademark of FT Energy Inc., is an energy information and consulting service providing organizations with unbiased, independent analysis of retail energy markets, services, and technologies. E Source clients include more than 400 electric and gas utilities and other energy service providers, large corporate and institutional energy users, government agencies, energy service companies, manufacturers, consultants, research institutions, and other organizations in more than three dozen countries worldwide.