Promoting a small business through the services of a chamber of commerce: one chamber's story.

Lacho, Kenneth J. ; Brockmann, Erich N.

INTRODUCTION

As long as commerce has existed, traders have banded together to govern the conduct of business, provide common protection against enemies and promote their businesses (Morro Bay, n.d.). As guilds formalized these collectives they formed an important part of medieval city and town life (Guilds in the Middle Ages, n.d.). Over the ensuing centuries, these guilds evolved into modern day trade associations and chambers of commerce.

The concept of a chamber of commerce first appeared in Europe at the end of the 17th century. The earliest locally-based chamber in North America was established in Charleston, South Carolina in 1772 (Morro Bay, n.d.). Today there are 2,800 state and local chamber chapters and 3,000,000 business members in the U.S. (U.S. Chamber of Commerce, n.d.).

As with their ancestral guilds, the activities of early U.S. chambers were limited to commerce, at least initially. However, over time, the role of chambers expanded to include recruiting new businesses to an area, job creation and other socioeconomic concerns such as housing, public education, workforce development, community services, and unemployment. More recently, chambers have become active in the legislative areas of local, state, and federal government in order to look out after the interests of business members and the economic and social welfare of their communities (Morro Bay, n.d.).

PURPOSE

The purpose of this article is to show how small business owners who are members of a chamber of commerce can use the services of that chamber as a means to promote their business. This study is an exploratory case and is not generalizable to the general population of chambers of commerce. Also, the study serves as an impetus to future research studies on chambers of commerce, a topic which has been neglected by academic researchers.

LITERATURE REVIEW

Chambers of commerce are an important force in any community, large or small, yet little academic research has been done on them. Studies include one by Dawley, Stephens, and Stephens (2005) who studied the multi-dimension ability of organization commitment of volunteer chambers of commerce board members. Modeling was used to examine the affects of organizational commitment on several critical roles the board member is to perform. Study results showed that normative, affective, and continued commitment based on few alternatives had a positive effect on the role of board members. Another study by Lacho, Bradley, and Cusack (2006), investigated the role of business nonprofit organizations in helping with the survival of small businesses in the New Orleans Metropolitan Area in the aftermath of Hurricane Katrina. The business nonprofits, including three chambers of commerce, made extensive use of e-mail in communicating with their members as well as holding workshops on disaster relief topics such as SBA loan programs and insurance. Cooperation or partnering on events with government economic development agencies was carried out.

Lacho (2008) studied the government affairs activities of four chambers of commerce in suburban New Orleans. Each of the studied chambers has a standing government affairs or public policy/committee which monitors local, state and federal issues and informs the membership about them. Members have the opportunity to interact with local, state, and nationally elected officers at locally-based forums such as luncheons or meet them at the state legislature. A recent development is for government affairs committees to work with similar committees of other chambers on issues of common concern.

The Schapiro Group studied if consumers really patronize businesses because they are chamber members. Data came from a scientific web-based survey of 2,000 adult consumers nationwide. Their findings show if consumers know that a small business is a chamber member the chamber enjoys a 44% increase in consumer favorability rating and a 63% increase in the likelihood that consumers will patronize the business in the future. (The Schapiro Group, n.d.).

BACKGROUND

The Jefferson Chamber of Commerce is located in Jefferson Parish (county), a suburb of New Orleans, Louisiana. It was founded in 1997 and is a private nonprofit, membership driven organization with a 501 [c] 6 IRS designation. The Chamber has over 1,000 members and is managed by a 73-member voluntary Board of Directors and 17 non-voting community representatives. A president and eight staff members manage the day-to-day affairs of the affairs of the chamber.

The chamber has seven primary standing committees. They are Business Development and Growth, Communications, Education, Government, Membership, Special Events, and Diplomats. Within these committees there are many subcommittees and task forces.

RESEARCH METHODOLOGY

An exploratory study format was used given the very early stages of any theory development concerning relationships between chambers of commerce and small business owner members (Siggelkow, 2007). Such a method is applicable to the current situation because of the lack of significant studies and because it allows for richer data (Eisenhardt & Graebner, 2007; Eisenhardt, 1991).

The president, selected committee chairs and staff members of the Jefferson Chamber of Commerce were interviewed in person or by telephone. The interviews lasted 30 to 60 minutes. Secondary sources such as the chamber website, e-mail notices, and chamber printed materials and newsletters were used. In addition, one of the authors drew on his experience as a member of the Chamber's Business Growth and Development Committee during the past ten years.

LIMITATIONS

This study shows how the services of a chamber of commerce can be used to promote a small business. It is an exploratory case study of a single chamber of commerce and limits the generalizability of the findings to the population of chambers of commerce. (Eisenhardt & Graebner, 2007; Eisenhardt, 1991). Obviously there are differences among the many chambers of commerce. There is no intent to suggest that chambers throughout the United States behave the same as the one described in this study.

The impact of the external environment on the Jefferson Chamber is not part of this study. Such factors as urban versus rural, local economic conditions, geographic, socio-cultural, employment levels and the dominant nature of the local economy, e.g., tourism, manufacturing, a distribution center are not considered as part of this study.

FINDINGS

Small business owners may be pressed for time to aggressively promote their business. The Jefferson Chamber provides opportunities for promotion through several chamber channels. The Annual Membership Directory lists every member by name and business category in print and online. Chamber members automatically have an Internet directory listing consisting of company description, and map log on ShopJeffersonNow.com and an opportunity to post coupons at no charge. The Chamber provides a link to the company's homepage from the chamber's website. Discount television advertising opportunities are available through WDSU-TV's Mini Ad Program with the Chamber Foundation showcasing community businesses.

A grand opening is available for all new members. Promotional displays or tables may be set up at chamber luncheons or networking events. The cost is $100 per event. The Chamber's logo may be put on business cards, letterhead and advertisements of the business. All members receive a plaque for location display purposes.

The Chamber offers over 100 events each year. Luncheons are held monthly. Each has a featured speaker. Some luncheons are extra special events such as the Small Business Administration Awards Luncheon or the State of the Parish speech by the Parish President. The average attendance at luncheons is 100-150, most of the attendees being chamber members. One slight exception to this is where a member company buys an entire table and invites clients who may not be chamber members.

Special events include the annual Crawfish Boil (600 attendees, some are clients of members), a Day at the Legislature (limited to 50 chamber members), the Annual Golf Tournament (400 attendees, some are clients of members), and the Jubilation Annual Gala held at night (600 attendees). Attendance varies with nature of the event. Most attendees are chamber members. Non-members would be guests, e.g., friends, spouses and clients.

The Tour de Jefferson is a special bike ride for Jefferson Parish sponsored by the Chamber. It attracts about 400 riders, one-half of them non-members. The ride is open to the public and is more of an event which promotes the chamber in general.

Similarly, there is a Halloween event in October which is open to the population of the entire parish. The event attracts an estimated 2,000 persons, mostly parents and their children. Again, the event promotes the chamber in general as a good community citizen.

The above events offer opportunities to network. However, there are two venues designed primarily for business-to-business networking. These include the bimonthly Business & Breakfast event with an average attendance of 50 people and the evening Business Card Exchange (70-100 attendees). Most attendees at these events are chamber members.

Networking can occur in committee work. There are seven committees as noted above. Committee work offers opportunities to network with other chamber members, both committee members and non-committee members. Committee work brings name recognition and pathways to higher chamber-elected positions and even more name recognition and business contacts.

DISCUSSION

The Jefferson Chamber offers a number of channels to promote one's small business with a maximum use of one's time. Listings such as the annual print directory and the chamber website are at no cost which is invaluable to small businesses on a small promotion budget. Advertising for the printed directory is sold by the publisher, not the chamber. Larger organizations such as banks, hospitals, and local utilities tend to be the advertisers.

The chamber's use of electronic media is increasing as it has a foothold in the Internet world and is moving ahead in that area. There is no advertising currently done by members on the chamber website, however, plans are for the chamber members to advertise on the chamber website in the future. The chamber does put out a monthly business report e-mail to members on the parish's economic status. Chamber members may sponsor the report with a logo at $168 per month. Also, as noted in the Findings section chamber members are provided a link from the chamber website to one's business website.

Large chamber members typically provide sponsorships for major events such as the annual meeting and Gala. For example, Presenting Sponsor-$7,500, Gold Sponsor-$2,500, and Silver Sponsor-$2,000. Small companies on a limited promotion budget may sponsor low cost events such as the Business Card Exchange. One may wish to take part in low-cost Budget Reduction Trade Opportunities by targeting those events which are related to one's type of business. For example, a sporting goods store may sponsor a Hole for Golf Tournament at a cost of $200.

The purpose of networking is to develop mutually rewarding relationships. These may result in new customers, assistance in solving business problems, sources of information, or a referral to a business provider. On the other hand, some chamber members view chamber activities which help the community as a means of giving back to the community. They are making for a better community in which to live and improve the quality of life.

Chamber members may network at luncheons, special events, networking designed events and committee work. One benefit is just plain socializing with friends. The small business owner has to weigh the opportunity costs of attending a chamber event. Not attending the event could be done for business reasons, family needs, personal reasons (illness), the luncheon speaker and his/her topic.

Speed dating is an efficient use of time. For example, at the Business & Breakfast event a set up consists of seven tables, each with seven persons assigned seat numbers. Each person has two minutes to say his/her name, company, and a brief description of what the company sells. At the end of a round, participants switch to another table. The process is repeated seven times. So in approximately one and one-half hours one can make 48 sales impressions. Follow up networking is allowed for another 30 minutes. In addition, one may set up a display table at the event. There is a $10 cost to attend.

The real value of networking requires hard work. One must carefully select events to attend and committees to work on. Next, attend and work. Networking requires repetition, repetition, repetition.

Most of the Internet exposure and networking is done with other chamber members. A study by the Shipiro Group (2007) found that when consumers know that a business is a chamber member, 63 percent are more likely to buy goods or services from that business. Consequently, it is important for a small business to inform consumers that it is a chamber member. This may be done in several ways. A plaque may be posted in a prominent place in or outside the business. One may attend chamber events where the general public attends. In addition chamber membership may be pointed out on business cards, letterhead, advertising, or other forms of promotion. One may ask other chamber members to send referral business.

These are some of the ways one can promote to the non-chamber public. Next, let us consider suggestions for future academic research concerning chambers of commerce.

SUGGESTIONS FOR FUTURE RESEARCH

Little academic research has been conducted on chambers of commerce. One possible area of research is to study what other chambers do in the way of activities to help members promote their businesses. How effective are these activities? How do activities vary by chamber according to size, the external environment such as urban versus rural, local economic conditions, geographic location, socio-cultural factors, such as ethnic group (Hispanic, Black, Asian), and the dominant nature of the local economy.

The opportunity cost of attending chamber events and taking part in activities should be studied. What factors influence attending or not attending a particular event or activity? How does one measure the benefit/cost of attending or not attending an event?

What is the extent of non-member attendance at chamber events? Why do they come? Do they become members? Why or why not? What is the extent and future of the use of the Internet in chamber operations? How the Internet is used? What is the future of Facebook in chamber promotion? How can it be used to promote the members of the chamber?

CONCLUSION

This study presents a case study of one chamber of commerce and the services it provides small business members to promote their products/services. Print and online listings are used to present the company and its products/services. Sponsorships at events, large and small are available. There are many opportunities for networking, either at general events, e.g., luncheons, specifically designed networking events, or committee work. The small business member needs to balance the cost of attending a chamber meeting against business and family demands. Most Internet exposure and networking is with other chamber members. A chamber can assist a small business promote its product/services to the general public. This may be done by posting a chamber membership plaque, using the chamber logo in one's advertising, and attending or sponsoring chamber events which attract the general public.

This study is a single case study and is not generalizable to the population of chambers of commerce. Consequently, there are many opportunities for academic research concerning chambers of commerce. One area of research concerns chambers activities and how they may differ according to urban versus rural, economic and socio-cultural environmental factors. Of particular interest is the future of the Internet and Facebook in chamber promotion and activities. Chambers of commerce have been a factor in commerce and trade for many years. Their assistance to small business owners will continue in both traditional means and technology of the future.

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Kenneth J. Lacho, The University of New Orleans

Erich N. Brockmann, The University of New Orleans