Microsoft’s adCenter Expands Negative Keyword Limits

 

Aug. 22, 2010

Now that the Yahoo-Microsoft merger is underway, Microsoft has announced a new wrinkle to its advertising program – an increase in negative keyword limits.

The change enables advertisers to increase by “thousands of negative words…both the campaign and ad group levels,” reports WebProNews.

“If you’re not familiar with negative keywords, advertisers can prevent their ads from appearing in response to certain search queries using negative keywords (specific words or phrases that help prevent ads from being displayed to customers who are unlikely to click),” explains writer Chris Crum.

“Doing so will also keep your keyword-level negatives from overriding your newly expanded lists at the higher levels,” he quotes Microsoft’s Tina Kelleher.

Here is Microsoft’s explanation of its negative keyword limits in adCenter.

“Advertisers need to upload their expanded lists of negative keywords at the campaign or ad group level with the negative keywords migration wizard in the Desktop, then remove keyword-level negatives, the company says,” adds Mr. Crum.

“Unless, of course, you’re perfectly happy with your campaigns as they are now and don’t need the increased capacity for negatives at the higher levels, then there’s no action you need to take at all,” he quotes Ms. Kelleher.

From the Coach’s Corner, for an explanation of the Yahoo-Microsoft merger, see:

Web Publishers: Are You Optimized for Bing?

Banks Have Credibility Issue with Affluent Women, Study

 

More than half of wealthy women are frustrated with their banks, according to a study by Boston Consulting Group (BCG). The BCG study concludes 55 percent of respondents with a quarter of a million dollars in liquid assets believe they get poor service from banks.

The women customers complained about men getting more consideration, a higher level of counseling, and better value in financial terms.

Respondents also said they feel ignored by wealth managers in discussions in favor of their male partners, even when it’s made clear that they’re the decision-maker not the man.

Women also believe they get fewer favorable choices because bankers assume they have a low-risk tolerance.

The wealth manager issues are reminiscent of the car business. Even in the 1990s, car manufacturers such as Chevrolet installed vanity mirrors only in the visor above the passenger’s front seat. Salespeople would often only address the man when a couple was in the showroom.

 “What banks need is a revolution like the automotive industry had,” said one wealthy woman, “to finally understand that women not only sit in the cars, but also choose buy and drive them.”

It’s reported that women are responsible for a third of North America’s Indeed, women control (i.e., make the decisions) 33% of North America’s affluence. Their aggregate portion is $9 trillion.

Ostensibly, wealth managers don’t know how to communicate with women. In essence, women want to be treated equally and be apprised of services designed for them.

“This may seem contradictory,” BCG reports, “but the desire for a tailored approach is really a sign that women have distinct needs and expectations as clients.”

There are several reasons why women have different concerns; they range from the birth of a child to divorce.

Preferences of women include simpler financial statements and financial goals for the long term. And women want deals structured on a friendly relationship basis – empathy, tailored counsel and trust.

My sense is that wealth managers don’t have to panic in this $4.5 trillion+ marketplace. If they start the client process with a foundation using empathy and treating the woman client like it’s an event, they should do well. Actually, that’s the same process I’d recommend for wealth managers with male clients. Simply put, wealth managers should do their homework, ask open-ended questions and be mindful of a woman’s perspective.

From the Coach’s Corner, see this site’s Marketing/Sales section for more tips for successful sales.

Business Got You Down? Tips for a Morale Boost

 

If sales are discouraging and you feel like you’re on a treadmill going nowhere, it’s probably because you’re worried about the future. Trust me, you’re not alone. The trick is taking baby steps and not worrying about the future results. Instead, focus on the positive. Business success and strong sales stem are made possible by enthusiasm, and an attitude of service and gratitude.

This means not focusing on the proverbial “results department.” That department door might not open. So only focus on footwork and simply knocking on the “results department door.” Imagine knocking on one door and then moving quickly to knock on another.

Don’t wait for the doors to open because that’s what leads to despair. It’s true that a watched pot never boils.

Moreover, this is a good time to measure your progress – not your obstacles. Consider the acronym, GO, which stands for gratitude and options.

By way of explanation, sometimes discouragement is so bad a businessperson obsesses about what’s not working instead of relishing what is working. By focusing solely on the problems they become bigger. When that happens, it’s an endless cycle of despair. The person feels trapped.

Conversely, if a businessperson focuses on the positive, such an attitude of gratitude opens the person up to a childlike wonder and creates hope. Hope leads to options. So, with hope, anything is possible. Know that for each problem – I prefer the word challenge – there are 10 possible solutions for options.

But how can you get gratitude and options?

First create hope for growth. Examine the progress you have made and start a gratitude list. Pat yourself on the back for any footwork. Start by asking yourself, “Where, how, when, why and with whom have I made progress?” Write or type your answers. No progress is too small to list.

For some examples of progress to list, ask yourself these 10 sample questions:

1. What networking events, lunches or meetings have I attended?
2. What new acquaintances have I made?
3. What recognition or positive comments have been made by others about me?
4. What free publicity have I received either from my efforts or those of others?
5. Have I created a new Web site or marketing collateral?
6. Any new skills or knowledge?
7. Have I attracted any new clients or retained old clients?
8. Are there any companies or businesspersons indicating interest in my capabilities?
9. Have I done any pro bono or volunteer work?
10. Do I have a support system or mentor?

If you can’t give a positive answer to the 10 questions, then do what you have to do for the right answers. That’s just to get you started. Perhaps there are other pertinent questions you can ask.

Now, it’s time for a new vision for growth – here’s how:

1. Write out your vision plan. One page will do.
2. Set goals for footwork – not results.
3. Periodically, each day ask yourself, “Is what I’m doing right now, productive?” (Chances are it isn’t productive, so focus on what is.)
4. Keep records of your baby steps.
5. Honor your progress with gratitude and keep it going with affirmations.
6. Stay in close contact with your support system.
7. Get exercise, sleep and medical care when needed.
8. Practice stewardship of your assets. Focus on cleanliness and organization.
9. Focus on your favorite hobby and recreation.
10. Ask clients for feedback. If a client complains, don’t get defensive just take notes. When you’re complimented, ask for referrals to two people who might also appreciate what you have to offer.
11. Keep on practicing gratitude. Always handwrite a thank you note when someone considers buying or hiring you. Thank people for their business. In fact, in every e-mail, note, meeting or telephone conversation, remember 98 percent of the time a thank you is warranted.
12. Keep in mind the adage, “What goes around comes around.” Try to listen more and avoid treating others as though they’re invisible, and you will be accorded greater respect.
13. Keep smiling. A jovial Joe or Jane is an attraction to others.
14. Look around for someone else to help. This will help you smile.
15. As you succeed, carry this message to others.

As you go along and think of other pointers, add them to these suggestions.

Now, GO! Good luck!

From the Coach’s Corner, here are 30 Time Management, Stress Reducing Skills. 

In fact, you might wish to consider a bevy of other business-coaching columns in these categories:  Planning, Operations, Marketing/Sales, Finance and HR.

How to Win Your Major Marketing Campaign

 

In major marketing campaigns – in business or politics – there’s nothing more frustrating than losing. But a lack of funds or a small war chest is not the salient reason for defeat. It isn’t necessarily how much you spend.

There are many reasons for marketing failure of a campaign.

Here are 14 of the more important reasons:

1. Inadequate analysis of strengths, weaknesses, opportunities and threats
2. Drawing incorrect conclusions from the analysis (leading to ineffective overall strategic planning)
3. Unrealistic budgeting
4. Ineffective testing of ideas and messaging
5. Arrogance – over confidence
6. Poor coordination with centers of influence
7. Not developing effective teamwork and communication among stakeholders
8. Targeting the wrong market
9. Lack of job descriptions – who will do what and when?
10. Wrong people in many key positions
11. Poor positioning in attributes and benefit statements
12. Ineffective allocation of promotional funds – wrong mediums preventing top-of-mind awareness in customers, or voters
13. Unproductive evaluation of the campaign and return on investment
14. Unsuccessful responses to negative surprises and failure to capitalize on opportunities

Two basic rules include: “Know thyself” and “Know thy audience.”

Not to over-simplify, in essence, the key is to properly plan but only after you perform a strategic analysis.

Identify your centers of influence and strategic partners, quantify your goals, make a budget, identify your target audience, test your messaging, implement your plan, create a positive image, create a call for action, continually evaluate your progress, and respond to challenges and create opportunities.

No detail is too small: In collateral, from colors to font choices, or in developing centers of influence for the multiplier effect. But don’t get paralysis from analysis.

Plan your campaign to reach each person in your target audience with a positive message for a minimum of five times. That’s the magic number for optimal results. And be consistent to develop trust.

Remember the difference between marketing and advertising, and developing the right message.  Broadcast advertising is all about frequency, reach and cost per thousand. Internet advertising is concerned about cpm, pay-per-click, pay-per-lead, and cost-per-action. Yes, despite what you’ve heard about social media, TV, especially, TV news remains the most powerful of mediums. Radio is still strong. But marketing is not simply creating a radio, TV or Internet advertisement or harnessing social networking tools. Advertising is merely one component of marketing.

Marketing pertains to the big picture. Marketing is the understanding of your target audience for the cost-effective process of selling the right product or service at the right time and at the right price. It’s a systematic development, coordination and implementation of a myriad of initiatives – proactive events to establish a dialogue – not just a bunch of advertisements.

Social media

Make certain to orchestrate and synergize your advertising with public relations, videos, word-of-mouth and social media. Thanks to the new Digital Age, consumers are in charge. Set up a dialogue, not a monologue.

For example, if you’re targeting young adults or teenagers, it’s sad to say, but they are getting their “news” from their social media.

Your communication plan should contain timelines. Press kits are helpful, but in this green age, they are not necessary. Regarding relationships with journalists, here’s a hint: Reporters like to deal with experts. So portray yourself as one.

Choose wisely. Insert and distribute effective videos and provide the right motives for people to share. The right content has to be presented in right place.

Follow the trends to see how to get the most attention. For example, Digg.com can be helpful but remember it’s mostly a young audience – big on tech and off-the-wall stories.

Just like reporters, every generation likes experts and stories. Storytelling holds great power for you. So tell a good story, write a good headline, deliver on your promises, and cite outside participants for proof in your claims.

Value perceptions

In marketing, whether its products or political candidates, people base their buying-decisions on emotion.

To keep things simple, the following explanations refer to business but are applicable or transferrable to politics.

About 18 percent of people – blue-collar and professionals, alike – will only buy your products and services at the cheapest cost in the marketplace.

The most-valued prospects are the people who are affected by their five value perceptions – motivating them to positively respond to your call-for-action.

The five perceptions and their percentage of importance in decision-making:

Employees, Spokespersons – 52 percent. The key characteristics are integrity, judgment, friendliness and knowledge.

Remember, about 70 percent of your customers will buy elsewhere because they feel they’re being taken for granted. And customers normally will not tell you why they switched to your competitor.

Image of the organization – 15 percent. They are concerned about the image of your company in the community. Cause-related marketing is a big plus in forging a positive image. So is cleanliness and good organization.

Quality of Product or Service Utility – 13 percent. The customer is asking the question – “What will this do for me?”

Convenience –12 percent. Customers like easy accessibility to do business with you. That includes your Web site, telephoning you, and the convenience of patronizing your business. 

Price – 8 percent. Price is important, but it’s the least concern among the five value-motivating perceptions.

Seven marketing elements

Once you understand what motivates the customer to buy, there are seven steps you must take for creating a happy buying environment. Fear is a great motivator. But Americans are tired of negativity. Yes, the marketing process goes a lot easier if you can make buying fun.

For marketing in a downturn or not, every PR or advertising message should – as much as possible –contain these seven elements:

1. FEE. This is an acronym for establishing a common ground for a foundation using the principles of event and empathy. Every purchase is an event in the life of a customer – no matter how big or small.  It also helps to show concern about the welfare of the customer.
2. Research/focus groups on attitudes. Use tools to get the prospect to open up.
3. Agreement on Need. Get the prospects to agree on their need to buy a product or service.
4. Generic Value Proposition or Benefit Statement. Here’s where you explain your value proposition. Remember the difference between features vs. benefits to answer the basic marketing questions, such as the acronym, WIIFM , “What’s in it for me?” or “So What?”)
5. Fill Prospect’s Need. Depending on your audience, use more specific benefit statements.
6. Commitment – Ask for the order using a non-threatening, closed-ended question.
7. Seal the Deal. This final step has three components –

• Use the magic words:  “Thank you.”
• Prevent buyer’s remorse – remind the customer of benefits they’re receiving
• Look for an opportunity to provide the person with unexpected, perceived added value without hurting your bottom line.

How to overcome objections: If you’re at a meeting and encounter an objection, be careful with your response. Always empathize. Your first statement should be a note of empathy even if you disagree.

If you don’t know how to answer the person, explain you need more information and will get back to them later ASAP: “How about if I call you at 4?”

If you do know how to respond and in order to overcome an objection, it’s still important to use empathy.

Here are the three steps to overcoming objections:

1. Get the prospect to restate his/her concern. Then repeat the person’s words:  “If I understand you correctly, you feel…?”
2. Empathize:  “I can see how you feel that way”…or “You know, someone said the same thing last week.”
3. Overcome the objection with facts.  (Then recap the seven steps.)

After you’ve won, best-practices also call for follow-up and laying a foundation for an infrastructure that promotes long-term success.

From the Coach’s Corner, do you want a fun look back at the top 100 advertising campaigns of all time?

Here are the top 100 campaigns: http://adage.com/century/campaigns.html

Of Interest to Web Publishers, Videos Continue Surge in Popularity

 

Updated June 30, 2010

Including advertisements, here are the results of studies regarding online video viewing and usage:

Short-form Videos – Website Magazine reports Metacafe commissioned a study by Frank N. Magid Associates, which shows 80 percent of consumers prefer short-form videos. That includes movie previews, music videos and television shows.

But it represents bad news for video producers. Twenty-five percent of respondents enjoy short videos more than the actual TV shows.

Fifty-five percent of Web viewers enjoy video advertisements as much or more than on TV. That’s a 3 percent increase over 2009 results.

In demographics, online videos are most-popular with 18 to 24 year-olds. Eighty-five percent of males watch Internet videos each week – a 15 percent increase over 2009. Sixty-eight percent of females count it as a weekly routine – 27 percent higher than last year.

Conclusions about short-form videos: Keep them short and break up long videos into short segments. Make them professional. Ads, before or after your videos, are OK.

Display Ads by Format – Probably most interesting to publishers is that comScore released its study, also according to Website Magazine. comScore’s May 2010 report, shows online ad-format preferences in the United States. The No. 1 preference is JPEG display ads – 42.4 percent of impressions. Flash and rich-media ads total 40.3 percent of impressions.

Display Ads by Size – comScore also reports Leaderboard ads (728 x 90) were No. 1, preferred by 23.1 percent of respondents.

Rectangles were most-enjoyed by 23.1 percent, which were followed by medium rectangles (300 x 250) at 18.3 percent, and buttons (120 x 90) at 14.7 percent.

Note: Popup and popup under ads had less than 1 percent of the impressions.

So, if you’re a Web publisher, videos are an increasingly important indicator of your relevance to Internet users.

Videos continue to be the online rage as 33.2 billion were viewed online by 178 million in America in December, 2009, according to research firm, comScore.

comScore says the Google sites were the most popular with 13.2 billion videos for a 39.8 percent market share, thanks to YouTube. It garnered 99 percent of Google’s viewers.

Here are the other rankings of viewed videos:

 ·         No. 2 Hulu -1 billion – 3 percent

·         No.3 Microsoft – 561 million – 1.7 percent

·         No. 4 Fox Interactive Media – 550.5 million – 1.7 percent

·         No. 5 Yahoo – 539.4 million – 1.6 percent

·         No. 6 Viacom Digital – 372.6 million – 1.1 percent

·         No.7 Turner Network – 366.9 million – 1.1 percent

·         No. 8 CBS Interactive – 297.2 million – .9 percent

·         No. 9 Megavideo.com – 210.2 million – .6 percent

·         No. 10 AOL – 209.9 million – .6 percent

This also means the 178 million viewers each saw an average of 187 videos.

In view of these numbers, it isn’t surprising that Google had the most unique viewers with 135.8 million. That’s 97.5 videos per person.

From the Coach’s Corner, here’s a valuable source of information in search engine optimization:

Thanks to a tip from Web Pro News, a video featuring Google’s Matt Cutts explains the problems/solutions of stale links on your site, Watch Video Here.

Fast, Easy Ways to Create Buzz

 

In the wake of the Tiger Woods’ unfortunate situation, you might recall the buzz over the CBS decision to allow a certain commercial in its 2010 Super Bowl broadcast. The commercial featured college football star Tim Tebow and his mother for an organization called the Focus on the Family in an anti-abortion appeal.

Mr. Tebow’s awards include: The Heisman Trophy, the Maxwell Award as the nation’s top football player, the Davey O’Brien Award as the best quarterback in the U.S., and the James E. Sullivan Award as the nation’s most outstanding amateur athlete in any sport.

But many advertising professionals questioned the feasibility of his endorsement.

In response to an article at AdAge.com about whether such an endorsement would hurt Mr. Tebow’s potential for getting future endorsements as a pro, I wrote:

“…it will largely depend on his success on and off the field. The Tiger Woods’ situation has created a void in this sector. If he stays true to his values in words, deeds and play on the field, he’ll be in demand.

Not many of the abortion rights groups are likely to watch football or buy products preferred by fans.

Mr. Tebow is ostensibly a very special young man in that he knows he is and for what he stands – and a great football player with a winning smile. In the main, core values and acting with conviction are what ultimately matter to mainstream Americans.”

A Tebow testimonial might not work for you. It’s important to pick the right people to be your centers of influence to create an online buzz.

OK, so you don’t own a large company and can’t afford to pay a college football star to record videos to endorse your products. So what can you do? Two adages come to mind.

Start with a famous quote by the nation’s 26th president, Theodore Roosevelt:  “Do what you can, with what you have, where you are.”

In other words, focus on making the most of your assets.

There’s another old saying I learned from a family friend and employer, Andy Andrews, as a kid growing up in Palm Springs. He hired me as a bus boy at the Palm Springs Tennis Club.  He also used to treat us to tickets to spring training games to watch the then-California Angels.

In one game, I was stunned to see Willie Mays drop three fly balls in the high desert sky – meaning it was very bright sunshine and hard to spot fly balls. It was quite an event for me as an impressionable young man because the centerfielder was at his peak. Baseball fans continually argued whether he was as good as Mickey Mantle.

And I couldn’t wait to tell friends at school about I saw. That was probably buzz the Say-Hey kid could do without.

During the excitement, Mr. Andrews said to me: “It isn’t what you know that counts, it’s who you know.”

For generating business, it was an admonition I never forgot.

Sports figures have traditionally been in demand as spokespersons.

So what if you don’t know a Tim Tebow to provide the most influence for you? Who can be a candidate to be your advocate for creating buzz in a word-of-mouth campaign?

In keeping with President Roosevelt’s advice look for a popular but respected blogger to be your advocate.

If you have salespeople, consider what Best Buy does. The chain encourages its customer service people to blog about products after trying them out. You can do this in your company by providing incentives, such as a 15 percent discount on products.

Also, look for prominent people in your community to provide testimonials. You’d be surprised if you just approach them and ask.

Loyal customers often will gladly provide word-of-mouth testimonials.

On your Web site you can enable social networking platforms.

Oh, and remember the Federal Trade Commission requirement for bloggers to disclose whether they’ve received an financial benefit for their blogs.

This is not a substitute for paid marketing but it’s a valuable, inexpensive option to create buzz.

From the Coach’s Corner, here’s a link to more tips:

How to Profit: Word-of-Mouth Advertising, Customer Service

Boeing, Airbus Rivalry – Lessons in Strategic Planning

 

Updated June 30, 2010

A major ruling against Airbus by the World Trade Organization (WTO) adds new intrigue to the Boeing-Airbus competition.  The WTO ruled that Airbus has received illegal subsidies for four decades. Litigation has been ongoing for six years.

But Airbus vows to fight the ruling as it tries to land even more government funding from the European Union for its new A350 jet, which will compete against Boeing’s 777 and 787. Airbus also predicts Boeing will receive a similar adverse ruling from the WTO this summer.

So the plot in the rivalry continues to thicken. Businesses can learn valuable lessons from the Boeing-Airbus competition. In terms of strategic planning, it has been quite a roller-coaster ride with no end in sight.

Have both sides done enough strategic homework? Should major manufacturers rely on government funding?

Here’s some more history to consider:

In July, 2006, I recall writing a column suggesting that Boeing should not break out the champagne to celebrate even though Airbus was faltering. My sense was that investors would have been impressed if Boeing employees continued to act with poise and assurance – as though they expected to win sales orders – unlike many of the flamboyant Airbus stakeholders. Their behavior was reminiscent of immature athletes taunting opponents on a football field.

Airbus sales had dropped by more than 50 percent during the first six months of 2006 compared to 2007. The company was behind schedule in landing more than 250 sales, which were needed to capitalize on its $13 billion design and production investment.

Airbus was reeling from a buyers’ strike for several reasons:

• Delivery delays in the A-380, a super jumbo jet
• A class-action lawsuit and the threat of more litigation accusing management of hiding problems
• Astronomical fuel costs
• In-fighting by French and German executives at the parent company, EADS
• A management shakeup at Airbus

All these developments occurred before the deadly Airbus A-310 accident in Russia that killed the crew and scores of passengers. Yes, Airbus appeared rather vulnerable.

Since the 2006 column, the cost of jet fuel and the worldwide recession took a toll on air travel and cargo services, which adversely affected both airline manufacturers.

For example, Dubai-based Emirates airline stopped its using its Airbus 380s on flights to New York and replaced them with the smaller Boeing 777.

Meanwhile, Boeing lost its sales throne in suffering from fewer orders while still pinning its hopes on its new 787. But the Dreamliner’s production has been postponed five times. The first delivery is now forecast for Q4 in 2010 – at best, a two-year delay for the aircraft. In other words, it is the most-expensive and delayed aircraft in Boeing’s rich history.

Other Boeing challenges:

• The estimated $35 billion Air Force tanker-bid process after initially losing to Airbus
• Allegations of illegal subsidies on both sides before the World Trade Organization
• Whether to locate a second 787 assembly line outside of Washington state
• Progress of the 747-8 jumbo jet
• Production cuts because airlines are postponing jet deliveries, cutting back on new purchases and canceling orders

On the other hand, Boeing originally strategized that its highly efficient 787 Dreamliner would prove to be popular with airlines. Airbus apparently didn’t factor whether airports worldwide would want to construct longer runways for landings and takeoffs to accommodate its huge A-380. Not to mention the increasing costs for jet fuel.

Add to the competitive mix – Aviation Industry Corp. of China (AVIC) – a competitor for Airbus and Boeing. AVIC is restructuring again as a single company. It will be listed on the Hong Kong stock exchange with about $22 billion in assets. As China’s largest aircraft manufacturer, it also has one-fifth of Comac, Commercial Aircraft Corp. of China. In 2016, Comac plans a 150-seat jet for the marketplace.

So, it would be intriguing to peek at the strategic plans of Boeing and Airbus to see if they did a thorough forecast of all these developments. The positive and negative events illustrate how important it is to thoroughly explore all contingencies. That includes funding. The controversy over government funding has unnecessarily cost both sides valuable resources.

And how can a smaller business capitalize on the Boeing-Airbus case study, and maximize performance with strategic planning?

Strategic planning starts with a SWOT analysis: Analyzing your internal strengths, weaknesses along with your external opportunities and threats.

The basic categories to be evaluated in your internal operation should include:

1. Management
2. Product/Services
3. Customer Service
4. Human Resources (including likelihood of employee strikes)
5. Marketing
6. Operations
7. Technology
8. Security
9. Financial
10. Viewpoints of your customers

Externally, you’ll want to assess these factors:

Socio-cultural – including demographic movements, the aging baby-boomer demographic, consumer tastes, population shifts, and the trend toward healthy lifestyles.

Economic developments – consider interest rates, inflation, fluctuations in currencies, and stock market trends.

Technology – including information technology, privacy concerns, production and the Internet.

Politics – issues such as federal, state and local levels in both taxes and regulatory issues.

Industry competition – obviously, you’ll need to develop a strong awareness about your competitors.

Customer profiles – analyze your target customers’ changing characteristics, wants, and needs. Determine what you want to target in average age, income, gender, and marital status. Evaluate their buying preferences and how they feel about your industry.

Once the SWOT analysis has been completed, you can develop and implement your strategic plan.

However, many small business owners and managers fail to properly budget time for strategic planning and they fail to capitalize on the expertise of their employees. After all, employees deal with customers every day.

Involving your employees will improve their character and morale. It will also promote teamwork, which will motivate employees to higher performance. So don’t overlook their experiences and instincts, and be sure to obtain their support.

In fact, every stakeholder – from employees to customers – should be part of the comment process to help develop and implement your action plan. Identify the leaders and best thinkers in your company to help you. It will enable you to plan using your vision with goals for entering new markets and introducing new services or products, and to obtain efficiencies by developing strategies for quality.

Consider other “dos and don’ts” of strategic planning.

Dos:

• Assign a strong personality to administer the process
• Develop benchmarks for performance and results
• Anticipate how the strategic planning changes will affect your employees, processes, and culture
• Publicize the strategic plan early on and regularly
• Monitor the plan’s progress and make changes when necessary
• Reward the positive behavior of supportive employees and take appropriate action against those who fail to participate productively in the process

 Don’ts:

• Don’t permit a lackadaisical attitude and employees’ resistance to change
• Don’t allow poor follow-through on initiatives

Finally, do not obsess about looking over your shoulder. Consider the teachings of author/consultant Seena Sharp on competitive intelligence, “Competitive Intelligence Advantage: How to Minimize Risk, Avoid Surprises, and Grow Your Business in a Changing World,” (Wiley and Sons).

She recommends not focusing heavily on your competition. Here’s a link to my column: Hottest Tactics to Beat Your Competitors.

From the Coach’s Corner, for an analysis on the lessons from UAL’s six strategic-planning woes, see: Losses Show Why United Airlines Needs Strategic Plan

Hottest Tactics to Beat Your Competitors

 

There’s nothing quite like a recession to prompt businesses to resort to closer monitoring of their marketing, pricing, and costs. Without hesitation, many mistakenly cut costs in marketing and human resources.

One of the first questions businesspeople ask me: “How do I affordably find out what my competitors’ prices are?”

My typical answer: “Use your salespeople to talk with your former customers, present customers, and the people who buy from your competitors.”

Not to be gauche as a business-performance consultant, my best-practice answer is to hire a competent outside-participant to learn customers’ attitudes.

A hot topic: Since early 2009, it seems all we have heard about is social media and connecting with customers.

Hence, the increasing popularity of social-media measurement, but it is still challenging to leverage social media for business success. It takes a savvy staff or outside experts to listen and engage prospective customers in the marketplace.

That’s why big companies have become astute in social-media strategies and they invest in competitive intelligence. But they do not divulge what they learn. As a result, competitive intelligence is still a relatively unknown best-practice in business, especially for small to medium-size companies.

Not to criticize, but that’s partly true because a lot of practitioners in competitive intelligence are great at what they do, but they don’t adequately explain their services.

Many small to medium size businesses owners assume competitive intelligence is simply the art of understanding business adversaries. Not true.

To use an analogy, designing speedy tactics to beat business competitors is a lot like sports, especially track. The surest way for runners to lose in a competitive race is to look over their shoulder.

Yes, many businesspeople tend to look over their proverbial shoulder. They are too worried about a competitor instead of running their best race.

A leading competitive intelligence consultant, Seena Sharp, agrees.  She wrote the book on competitive intelligence: “Competitive Intelligence Advantage: How to Minimize Risk, Avoid Surprises, and Grow Your Business in a Changing World.”

She says focusing on competitors is a misguided approach.

“A far better strategy is to monitor and deeply understand the martplace which is constantly changing,” says Ms. Sharp. “Competitors are just one piece of the puzzle and you need all the pieces.”

She points out success does not result from outsmarting competitors.

“Success is a direct result of giving the customer what they want,” adds the author. “You don’t need competitors for that.”

Her examples:

“If so, then why would another restaurant open? Do we really need another place to get hamburgers or pizza or coffee?  Business is not a zero-sum game, so beating competitors still may not bring you the results you seek.”

Ms. Sharp contends competitors may not be direct competitors from your industry. 

“They may specialize in a different industry but still offer what some customers want,” she explains. “The most important thing to learn from competitors (direct, indirect, new and substitute) is why are they attracting customers, customers who could be yours?”

Her advice: Learn how to respond to marketplace changes.

“Those changes today are likely to be unexpected, surprising, weird – and therefore, most likely to be ignored or underestimated,” says the author. “Take some time – a few weeks – to recognize more evidence of these changes and to consider what these changes mean.”

Finally, Ms. Sharp theorizes how companies unknowingly give away their power.

“Not necessarily a point for a brief article, but the highly reputed ‘Blue Ocean Strategy’ stresses the importance of not being a me-too company, of not being a direct competitor,” she concludes. “I call it the anti-competitor strategy in my book.”

Of course, “Blue Ocean Strategy” is an award-winning, best-selling book by W. Chan Kim and Renée Mauborgne.

Disclosure: I highly respect Ms. Sharp and have watched her for several years and I believe you can take anything she says to the bank. We are both members of a group of veteran consultants that meet regularly in Los Angeles, www.consultantswest.com.

From the Coach’s Corner, for more on competitive intelligence, visit Ms. Sharp’s Web site: www.sharpmarket.com. Be sure to read her “SharpInsights.” 

For more on “Blue Ocean Strategy,” visit: www.blueoceanstrategy.com.

Case Study: Mistakes Companies Make When Losing Profits

 Updated June 14, 2010

For the average businessperson, economic conditions have certainly been making it difficult to manage costs, threats from competition, and demand and supply. Oy vey! Not to mention maximizing prices for products and services. That’s certainly true for restaurant chains where discounts and promotions occur frequently.

Starbucks, of course, is known for its higher-priced coffee. So, the McDonald’s-like value meals and related issues at Starbucks provide a prospective classic business-school case study regarding price optimization and maximum profits.

Many businesses can learn from the situation in which the coffee company finds itself.

Thanks to a good store environment and consistent quality, I confess to having enjoyed countless cups of the company’s coffee over business discussions with associates. In my travels, Starbucks has been a home away from home whenever I wanted a good cup of coffee.

Now, questions about the company’s profits abound following a robust 20 years. True, the company and investors were delighted that the fiscal 2009 $175 million in cost-savings in helped Starbucks’ Q3 earnings improve to $151.5 million compared a loss of $6.7 million the same period the year before. The company’s profits had declined in significant double-digit percentages, prompting Starbucks to layoff thousands of employees as the company closed nearly 800 stores.

However, cost-savings are only part of the profit-making formula and it appears Starbucks still has more footwork to do. It’s questionable whether Seattle’s proud coffee retailer can return to its its high-profit utopia and sustain it.

Starbucks appears to be on the defensive regarding McDonald’s strategies. First, it was McDonald’s new coffee quality. Now, Starbucks has announced it will provide free WIFI — like McDonald’s.

Mega Growth

Starbucks seemed to act as if it was invincible by growing to epic proportions – it was everywhere and created a happy-buying environment for coffee lovers. The company became famous for not charging customers when it took a few minutes to brew their customers’ purchases. Cheerful baristas treated customers as if serving them drinks were important daily events and rituals.

But along with the economy, it seemed customer service sagged. My friends and associates have expressed dissatisfaction about the company’s customer service. In my frequent visits, it became rare to hear a barista say thank you to customers or prevent buyers’ remorse. Customers most-often tip jovial Janes and Joes. My sense is that such developments lowered customers’ perceptions of Starbucks’ value. 

Recession or not, consumers who love a company’s services and products, will spend their money. When loyal customers shop elsewhere, my research shows 70 percent of the time it is because the customers feel taken for granted.

Lower-priced value meals are a good idea but they are not the complete solution. At upscale stores or even low-end fast-food restaurants, eventually, it is hard for customers to swallow mediocre service. In a situation where an upscale company slashes costs – without providing noteworthy customer service – it is not conducive to sustainable profits.

Two other profit-complications: Too many company locations will cannibalize sales from each other, and it’s easy to lower prices but it’s difficult to raise them.

In general, how can you manage the sweet spot – between your price-optimization and costs?

Dennis Brown of the consulting firm, Atenga, says many companies make 11 pricing mistakes:

Companies base their prices on their costs, not their customers’ perceptions of value. “In certain circumstances, there are strategic reasons a company may decide to sell a product below its cost for a period of time, or to a certain market segment as a ‘loss leader,’ Brown writes. “However, when a price is set according to the perceived value of the product or service, sales are brisk, and profits are maximized.”

Companies base their prices on the marketplace. “Marketplace pricing is a resting place for companies that have given up, and where profits end up being razor thin,” he says. “Instead of giving up, these management teams must find ways to differentiate their products or services so as to create additional value for specific market segments.”

Companies attempt to achieve the same profit margin across different product lines. “Some financial strategies support a drive for uniformity, and companies try to achieve identical profit margins for disparate product lines,” he believes. “The iron law of pricing is that different customers will assign different values to identical products.”

Companies fail to segment their customers. “The value proposition for any product or service is different in different market segments, and the price strategy must reflect that difference, he asserts. “Your price realization strategy should include options that tailor your product, packaging, delivery options, marketing message and your pricing structure to particular customer segments, in order to capture the additional value created for these segments.”

Companies hold prices at the same level for too long, ignoring changes in costs, competitive environment and in customers’ preferences. “It is important to recognize that the value proposition of your products changes along with changes in the marketplace, and you must adjust your pricing to reflect these changes,” Brown explains.

Companies often incentivize their salespeople on revenue generated, rather than on profits. “Volume-based sales incentives create a drain on profits when salespeople are compensated to push volume at the lowest possible price,” he writes.

Companies change prices without forecasting competitors’ reactions. “Smart companies know enough about their competitors to forecast their reactions, and prepare for them,” he adds.

 Companies spend insufficient resources managing their pricing practices. “In fact pricing is of outmost importance, and a key element of the marketing mix,” he says. “Good pricing strategies use hard data generated by modern methods such as Value Attribute Positioning, Conjoint Analysis or Van Westendorp’s Price Sensitivity Meter, to generate accurate hard data on the perceived value of a product or service, thereby enabling mangers to maximize their profits by optimizing their prices.”

Companies fail to establish internal procedures to optimize prices. “Price optimization data comes from focused research,” he points out.

Companies spend most of their time serving their least profitable customers. “While 80 percent of a company’s profits generally come from 20 percent of its customers, a careful review of the data often will show surprises, since a company’s largest customers are often only marginally profitable,” he says.

Companies rely on salespeople and other customer-facing staff for intelligence about the value perceptions of their customers. “Such people are an uncertain source, because their information gathering methodology is often haphazard, and the information obtained thereby can be purely anecdotal,” he explains.

Here’s a tip of the Biz Coach hat to the consultant’s philosophies. Brown’s points are valid.

My research shows about 18 percent of the population only cares about price. Companies that focus only on the lowest price in the marketplace will generally fail.

To attract the other 82 percent of consumers, you can usually overcome a competitor’s lower price with stronger perceived value:

• Helpful, knowledgeable employees
• Robust company image
• Excellent product or service utility
• Convenience
• Price

You might also consider that many value-conscious customers would appreciate a cash discount in lieu of paying by credit card, which would also save you a credit-card processing fee.

From the Coach’s Corner, if you ask, Atenga will send you a best-practice pricing study and tips on pricing. The company’s Web site: www.atenga.com.

The Seven Steps to Higher Sales

 

Secrets for sales success – seven steps to higher sales, five value perceptions that motivate customers to buy, and the three-step process for overcoming sales objections.

Are you worried about sales?

Recession or not, there seven steps you need to take in order to effectively sell your products or services for optimal revenue. The seven steps are applicable either in a two-minute discussion in a retail store or to sell big-ticket goods or services that take months.

But first, it’s important to understand why people will buy from you – remember it’s always an emotional decision.

Admittedly, about 18 percent of customers – blue-collar and professionals, alike – will only buy if you’re selling at the cheapest price in the marketplace.

Assuming you’re selling products of value, avoid those people. They are the most troublesome.

Even if they buy, they’re more likely to show up the next day demanding to return their purchase. Even if they keep the purchase, they complain the loudest and longest. 

Focus on people who are motivated by price and value.

For them, here are the five value perceptions of what your customers sub-consciously think in motivating them to buy from you:

Employees, Spokespersons – 52 percent. The key characteristics are integrity, judgment, friendliness and knowledge. Remember, about 70 percent of your customers will buy elsewhere because they feel they’re being taken for granted by your employees. And customers normally will not tell you why they switched to your competitor.

Image of Company – 15 percent. They are concerned about the image of your company in the community. Cause-related marketing is a big plus in forging a positive image. So is cleanliness and good organization.

Quality of Product or Service Utility – 13 percent. The customer is asking the question – “What will this do for me?”

Convenience –12 percent. Customers like easy accessibility to do business with you. That includes your Web site, telephoning you, and the convenience of patronizing your business. 

Price – 8 percent. Price is important, but it’s the least concern among the five value-motivating perceptions.

Once you understand what motivates the customer to buy, there are seven steps you must take for creating a happy buying environment. Yes, the sales process goes a lot easier if you can make buying fun.

The seven steps to higher sales:

1.         FEE. This is an acronym for establishing a common ground for a foundation using the principles of event and empathy. Every purchase is an event in the life of a customer – no matter how big or small. It also helps to show concern about the welfare of the customer.

2.        Research attitudes. By asking open-ended questions, the customer will open up and you will learn what the customer is thinking. If you ask close-ended questions, you will get yes or no answers, and the sales process will end prematurely. In addition to any research I do on a prospect before trying to sell to them, my firm has a three-page questionnaire to get answers I want to provide solutions for maximum profits.

3.        Agreement on Need. Get the customers to agree on their need to buy a product or service. (e.g. “So you need good IT services?”) In other words, don’t ask them to agree they need to buy from you. You have much more ground to cover.

4.        Generic Value Proposition or Benefit Statement. Here’s where you explain your value proposition. Remember the difference between features vs. benefits to answer the basic marketing questions, such as the acronym, WIIFM , “What’s in it for me?” or “So What?”)

5.        Fill Prospect’s Need. If you listened intently in Step 2, you’re now ready to offer specific solutions to the customer’s concerns.

6.        Commitment – Ask for the order using a non-threatening, closed-ended question. For example, “Why don’t we start Monday?”

7.         Seal the Deal. This final step has three components –

• Use the magic words:  “Thank you for your consideration.”  (Avoid: “Have a nice day.”) 
• Prevent buyer’s remorse – remind the customer of benefits they’re receiving. (as a business-performance consultant, mine is “You will be very pleased with the strong results.”)
• Look for an opportunity to provide the person with unexpected, perceived added value without hurting your bottom line.

Another thought: Before the end of the day, write a thank you note. Remind the prospect what a pleasure it was to meet, include your value proposition, fill any specific needs with benefit statements, thank the person and prevent buyer’s remorse. Preferably, use your firm’s A-2 size card, or monarch or executive-size stationery. Make certain you mail your thank you note from a post office or mail box so that your correspondence arrives in the next day’s mail delivery.

From the Coach’s Corner, in order to overcome objections in sales, it’s important to use  empathy.

Here are the three steps to overcoming objections:

 1.     Get the prospect to restate his/her concern. Then repeat the person’s words:  “If I understand you correctly, you feel…?”

 2.     Empathize:  “I can see how you feel that way”…or “You know, someone said the same thing last week.”

 3.     Overcome the objection with facts.  (Then go back to the seven steps.)