Strategies for Maximum Customer Loyalty, Profits

 

If you’re finding it a challenge to create profits, you might appreciate knowing that you’re not alone. Profits in this Great Recession are elusive  for other businesspeople, too.

A case in point: 50 percent of the members in a Seattle-area business-networking group admit to selling products at below cost to remain in float. That’s according to a survey by Washington State University and the Seattle Executives Association (Feb., 2010).

The leads group, with about 100 member businesses, is comprised of one business per category throughout the greater Seattle area.

They described their employment, financing, inventory and sales situations as “stagnant to declining.” However, they were optimistic about their prospects.

Obviously, it’s important to do a profit analysis to determine your strengths, weaknesses, opportunities and threats. Then develop a strategic action plan and implement it.

Another factor affecting profits is customer retention. American businesspeople and consumers have become cost-conscious and look for opportunities to save money.

Many companies are slashing prices and making the mistake of focusing on price in their sales messages. That means your customers are constantly hit with discount offers. And they are tempted to change to your competitors because of price, quality and service.

But it isn’t a permanent switch. Such customers will gravitate to the next low-ball offer. So advertising to attract such customers is simply not cost-effective.

It’s true that many customers base their decisions on price, only. That’s 18 percent of buyers. So, it’s key to target the other 82 percent who can be persuaded to buy based on their five perceptions about value.

My research also shows that you have to reach a prospect with five positive messages before the decision is made to buy your product or service.

Why companies lose customers

When devoutly loyal customers shop elsewhere, 70 percent of the time they feel taken for granted.

Customers will leave you for a myriad of reasons, including failure to properly answer questions, treating them abruptly, making the buying process inconvenient, failure to solve problems quickly and subsequently failing to provide added value to assuage an unhappy customer.

Losing customers also means blown opportunities for word-of-mouth advertising and customer referrals. Plus, social networking and blogs – positive and negative – have changed the marketplace even more.

That’s why listening to customers is so vital – to gather information, to analyze it, and to develop answers.

In large cities, the advertising opportunity costs are high – usually $300 to $400 or more per customer.

If you lose a customer, it will cost you more to attract a replacement. Then, you have to factor in the sales curve – how long it takes for a new customer to become profitable.

So profits suffer in a down economy if you lose customers and can’t easily replace them. That means layoffs, which will hurt you even more.

Fifty-two percent of a customer’s value-perceptions motivating them to buy from you hinges directly on what they think about your people – spokespersons, sales reps and other personnel. (For more on value perceptions, see “The Seven Steps to Higher Sales.”)

So it helps to have ongoing discussions with your staff on these topics: Why customers buy from you, perceptions about poor customer service, and the factors about your service and products they like the best.

Meantime, be proactive in other ways.

Continually query your customers in formal surveys and in casual conversations using open-ended questions to get solid answers, not “yes” or “no” answers.

Take action steps and make improvements when feasible.

After you get great feedback and measure the results of improvements, tell your customers and express your appreciation.

When customers make purchases, don’t forget to thank them and prevent buyer’s remorse by tactfully reminding them of the value of their purchases.

And explain to your employees why it’s important to stop using the most-trite phrase on the planet: “Have a nice day.” Instead, your employees need to focus on providing an attitude of service and gratitude.

You’ll be creating a happy buying environment for repeat business and customer loyalty.

From the Coach’s Corner, here’s more on how to profit from word-of-mouth advertising and customer service.

“Well done is better than well said.”

-Benjamin Franklin 

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

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

 

Who created some of the most buzz on social media in 2011 and 2012? The on-the-field heroics and off-the-field charitable work of Tim Tebow.

Ironically, 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 then-college football star Tebow and his mother for an organization called the Focus on the Family in an anti-abortion appeal.

Mr. Tebow’s awards included 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 him getting endorsements.

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. But religious conservatives usually do.

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 pro 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 or better than 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 pioneered in doing. 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

“While it may be true that the best advertising is word-of-mouth, never lose sight of the fact it also can be the worst advertising.”

-Jef I. Richards

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Business 101 Lessons: Google vs. China’s Censors, Cybercriminals

 

January 13, 2010

So Google is finally paying attention to a free-enterprise business compass. In other words, the search engine is threatening to extract itself from China over censorship and cybercrime issues. Because it’s a huge marketplace, Google and other companies have been tolerant of such problems.

Actually, tolerating an uncontrollable, hostile environment violates principles in best-practices management. So it’s a tardy development, but let’s roll out the welcome mat.

After President Nixon bridged the diplomatic gap between the U.S. and China in 1972, companies and nations have tolerated and perhaps even encouraged China’s behavior – censorship, violation of human rights, intellectual-proprietary thefts, currency manipulation for cheap exports, other discriminatory-protectionism policies, and Communist Party activities.

In 2006, I wrote that I was disappointed by the decisions of Internet companies that decided to acquiesce to China’s behavior and environment. It’s one thing to accept it, but another to condone it and build a business model around it.

My reasons:

• Values matter
• The free-enterprise system works best
• Economic and political freedoms are connected – lose one and you lose the other

Business Leadership

To be a business leader, it’s important to know who you are…what your roots are…plan strategically…and always try to do the right thing – even if your decisions and actions are unpopular.

Actually, this principle applies to all facets of life and even sports. And I love writing sports metaphors for business topics.

For example, many Seattle Seahawks’ fans were delighted with the selection of Pete Carroll as coach, especially, after his initial press conference upon being hired away from the University of Southern California. That was when he explained why he was previously unsuccessful in the NFL. By any standard, he was dominant in his tenure at USC.

Before coaching at USC, his pro football teams – the New York Jets and New England Patriots – were mediocre. It was refreshing when he admitted in Seattle that he didn’t know himself or who he was in his earlier pro jobs.

In referring to his new team he made this comment: “When we start this thing off, they’re going to know where I’m coming from, because I know where I’m coming from.”

One of his Seattle predecessors, Cleveland Browns executive Mike Holmgren, had success as coach of the Seahawks and Green Bay Packers. But he was unsuccessful his first four years in Seattle because he was both coach and general manager. It was only after the management responsibilities were taken from him that he coached the team to the Super Bowl in 2005. During that time, I speculated that his lack of success stemmed from the Peter Principle. In essence, people rise to their level of incompetence.

Few people are equipped to handle both responsibilities. Even if they have all the technical and management skills, their attention to detail, energy and efficiency will plummet.

So possibly, the Google brain trust needed to learn about themselves and the downsides from conducting business while abandoning their values.

Socrates was right

Ancient Greek philosopher Socrates is known for his aphorism: “Know thyself.” And it’s right out of my human resources training materials.

For individuals, a complete self-assessment of strengths and weaknesses is the key to success. Once an employee knows who she or he is, then it’s possible to effectively set goals. Then, execution comes into play.

For success in business, an analysis of strengths, weaknesses, opportunities and threats will pave the way for writing a productive strategic plan and a business plan. And again, it’s important to execute.

Google’s courage will help other businesses to fully realize about the problems associated with foregoing their values in order to do business in China. Certainly, it will be a catalyst for discussion.

Google believes its security was violated by hackers based in China. But there is probably another motivation.

The search giant has relatively little to lose unlike companies such as General Motors. China is a profit source for GM. Depending on your preferred source of information, Google’s search market share ranges from less than 20 percent to 35 percent. But it isn’t enjoying bountiful profits because e-commerce is not as big in China as the rest of the world.

Here is Google’s explanation  of its new perspective.

Let’s hope others are paying attention.

From the Coach’s Corner, what is your profit forecast this year?

Here is a top-10 checklist for profits:  

1. Review and fine-tune your business plan. Be sure to discern your competitive landscape and benchmark your main competitors.
2. Bring on the A team – both in staff and advisors. Recruitment and training will remain important, and seek the best mentors and professionals for inspiration to help you sustain growth.
3. Remember Pareto’s Principle – the 80/20 rule – that applies to you and your business in a variety of ways. It means, for example, that 80 percent of your revenue comes from 20 percent of your customers. So evaluate how you spend your time and resources.
4. Enhance your staying power by concentrating on your most profitable customers while identifying new revenue sources.
5. In prospecting and marketing, select and target the right customers.
6. Add sizzle by improving your niche-performance. Uniqueness will count even more in this year.
7. Watch your cash flow and your firm’s overall budget each week.
8. Focus on quality in your business processes – make it your No. 1 job.
9. Innovate – plan for more marketplace changes and evolving consumer preferences.
10. Practice the art of mental toughness. Remember when it’s appropriate to ignore the opinions of others, and to persevere in your dreams against seemingly insurmountable odds. I’m still marveling at the success of my mother, who is in her eighties. She was diagnosed with macular degeneration, which meant she couldn’t read the newspaper. A couple of years ago, she had life-threatening complications from back surgery. A few weeks later, she was back in intensive care and doctors warned she wouldn’t walk again. Well, guess what? She’s walking, passed her driver’s test, and once again insists on preparing full-course meals, especially at family gatherings.  Mmm, delicious! Go mom!

Marketing Essentials on a Shoestring Budget

Part two of a three-part series: How to grow your small business

 

Why do businesses sometimes falter? Let’s get the perspective of a retired longtime business professor and business counselor who is actively pursued for his opinions.

“One reason is they fail to understand their special niche or their market,” said Neil Delisanti, who enjoyed a unique, long career as a business professor at the University of Puget Sound and The Evergreen State College. He also ran the Small Business Development Center (SBDC) in Tacoma, WA, where he advised more than 2,000 firms.

Mr. Delisanti says the mortality rate for small business is high in the first years of operation and it’s still true that 85 percent of businesses fail in their first year. The odds dramatically improve once you’ve survived for five years. So, what can you do to win?

He advises studying the emotions of consumers in their buying habits:

“Consumers want to visualize how your products enhance their families, personal lives or professions. Usually in household situations, women make 70-80 percent of purchases. They like hearing the term ‘security’ associated with their purchases. Other key persuasive words include: easy, good, healthy, new, own, proven, and results.”

Mr. Delisanti says businesses grow by developing core values, a vision, and a business plan:

“Don’t fantasize about what you think the market will be, or even worse, what you want it to be. Find out well before you invest your hard-to-accumulate capital, or take a financially irreversible action. Most businesses will fail, if they don’t understand the market niche they are trying to serve.”

He warns about the danger of cannibalizing your business:

“This often happens when a business opens another location or takes on an additional, but similar product/service. If your first store in Los Angeles has customers coming from Pasadena, when you open the Pasadena store, you will lose their business in Los Angeles. So you may see a sizable loss of sales from the first location or the original product.”

Whether you’re challenged by other small companies or so-called box stores, he emphasizes the Internet is the easiest, most-economical way to check out competitors: their product descriptions, prices, customer lists, staff profiles, branding, and their target niches.

He prefers Yahoo finance for free financial data on big firms. You can research the press coverage of competitors on search engines and sign up for Google news alerts for competitors and your business.

To see which Web sites drive traffic to your competitors, go to Google and type “link,” a colon, a space, and then their Internet address. You can request them to link to your site, too.

You can check your competitors’ marketing strategy for free by researching listings of trade shows at www.tsnn.com. Trade magazines and associations sometimes provide information and startup resource kits.

Above all, visit SBDC. SBDC probably has an office near you.

Branding

“Regarding your brand, which will help set you apart from others, make certain you give adequate thought to your name, logo, slogan, pricing, location, and anticipated level of customer service,” said Mr. Delisanti. “Next, research what you need to trademark to protect against plagiarism and focus on presenting a consistent message.” (In Washington, the Secretary of State’s office will trademark a name or slogan for a nominal fee.)

Because advertising by itself is no longer adequate, your strategy for growth should include stimulating consumers into talking about your company’s value at the water cooler while they’re at work. That means a strategy of buzz marketing, which basically consists of three elements: paid advertising, earned advertising, and developing centers of influence.

In paid advertising, try to accomplish two objectives – short term sales and long-term branding success. However, this makes budgeting for advertising a bit tricky; 2 percent of adjusted gross sales is the maximum for most businesses. Some suppliers have co-op programs and will pay part or all of your co-op, which is welcomed by newspaper, radio and TV sales people. Co-op ads are an economical way to drive traffic to your Web site, but remember a good-looking Web site doesn’t guarantee success because it often merely serves as an online brochure.

Given all the chicanery in cybercrime and competition, see the best practices to optimize your brand and manage your Web reputation.

If you can afford TV advertising, make certain your commercial airs regularly and is highly visual. Don’t underestimate the value of audio to help grab the attention of viewers. Avoid the temptation to be too cute – concentrate instead on the benefits valued by consumers. Remember the Taco Bell Chihuahua dog? Sales actually dropped and the chain was forced to change its strategy.

It’s possible to dominate with a high frequency of TV commercials in off-peak hours. Understand whether you need a 5, 15, 30 or 60-second commercial. I like to air two 15-second commercials twice in the same break, at the beginning and again at the end. Known as bookends, they can accelerate your brand awareness. Be sure your messages don’t air adjacent to competitors.

Radio is good, too. As I do with TV news programs, my preference is a respected all-news or news-talk station. You’ll reach an active, socially aware audience. Their listeners’ average net-worth is usually higher. A good classical music station is good, too, for reaching high net worth listeners.

Sponsor worthy events and local news coverage to become a magnet for community-minded consumers with good credit.

Think about public speaking. Here’s how to get more opportunities as a guest speaker and here’s how to obtain the most profit from speaking opportunities.

Pitfalls

Direct mail coupons only attract price-conscious consumers once after each mailing. This means coupons won’t attract repeat customers to enhance your brand equity. With the success of the Internet, young adults increasingly ignore radio stations and newspapers.

Your paid-advertising campaigns need to be synchronized with earned advertising – good press about your business. Here’s how to leverage the news media for free PR. Note: journalists and bloggers also often take note of cause-related marketing campaigns that benefit the community.

Public relations is enhanced with video press releases.

You might benefit from unplanned PR opportunities by frequently advertising on TV news programs. Journalists will see your ads because they watch to evaluate their own reports as well as the work of their competitors to make certain they aren’t scooped on major stories.

A case study: After one of my clients consistently sponsored news programs for one year, a Seattle TV producer called me to request a live interview of my client regarding a new product; I hadn’t even submitted a press release. (The reporter is now an NBC newscaster.)

Developing centers of influence is a strategy of generating buzz with influential people to create referrals. Join professional, business, and civic groups (i.e. Rotary). Focus on value and customer service with strategic partnerships. For example, I’ve enjoyed synergizing clients, such as credit unions and car dealers. The credit unions advertised car sales in their newsletters, which resulted in credit unions loaning funds, dealers selling cars, and consumers happily driving home.

Don’t forget social networking media and blogging informative articles. See the best practices in search engine optimization for a No.1 rated blog.

Other Delisanti reminders for growth:

1. Develop multiple revenue streams and a new product line.
2. Be pro-active, which means making old-fashioned cold calls.
3. Maintain relationships by sending greeting cards, thank you notes, special offer notifications, and an occasional visit or phone call to just chat and not sell. Make certain your small business voice is heard – vote and make your business concerns known to lawmakers.

To check out the other two columns in this three-part series, how to grow your small business, see:

10 Scholarly Solutions for Selling More Products

Management and HR for Higher Performance

From the Coach’s Corner: To summarize the principles of marketing essentials for growth on a shoestring budget, consider the words of Theodore Roosevelt: “Do what you can, with what you have, where you are.” Note the eight best practices in small business marketing.

“I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination.” 

-David Ogilvy 

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

10 Scholarly Solutions for Selling More Products

 Part one of a three-part series: How to grow your small business

 

Small business owners face more predators than ever, which makes decision-making about growth seem very challenging.

If you’re trying to grow a small business, you’re very familiar with these challenges:

• Product returns
• Weak cash flow
• Ineffective or disloyal employees
• Rapidly changing consumer tastes
• Customers with insatiable appetites for instant products at deflated prices
• Increasingly astringent laws and regulations
• Local, state and federal tax burdens
• Marketplace competition
• Poor-performing vendors

In order to minimize the likelihood of entrepreneurial migraine headaches during bad-hair days, a business owner needs to perform like a masterful clairvoyant when decision-making about growth. Each financial decision seems like a life or death matter.

So, to help you match your assets and strengths with the right strategies, it seems fitting to turn to Neil Delisanti.

He retired as a professor of business at two colleges in Washington: University of Puget Sound and The Evergreen State College. He also counseled more than 2,000 small businesses while running Tacoma’s Small Business Development Center (SBDC). That’s the complimentary counseling service underwritten by the Small Business Administration and Washington State University.

He was hired to help small Northwest businesses, but financial institutions and economic development officials have also respected his forecasting acumen. He can be direct in his constructive criticism; the self-effacing analyst proved to be knowledgeable about countless.

In focusing with him on small business products, there is some overlap with marketplace and management issues, which we’ll primarily discuss in two future columns. To keep things simple, we’ll use the term product in referring to both product and service.

Two key questions

Mr. Delisanti says there are two salient questions a new business should be able to answer about its products: “Is the business making money off them? Where on the product life cycle is the product – the stages a product goes through from introduction until off the market?”

In other words, remember the plight of Pontiac’s Bonneville. It first hit the market in 1958. It was great car, but it has ended production because of declining sales for many years.

So, the question is: Did Pontiac wait too long before introducing its exciting new models – the G6, GTO, and Montana SV6?

Even though franchising is popular, Mr. Delisanti often recommends against buying a franchise. “Unless they are well established, the risk may be greater than starting your own business,” he said. They also go bust and often you really aren’t your own boss due to the restrictions by the franchisor.”

What does he feel are the key elements in the creativity of product?

“One has to think of the utility of the product and how some attributes enhance the product in the marketplace. Be cautious on getting too far out of the box. It may take customers awhile to get used to the product. Creativity is looking at how your product can better serve its purpose,” he believes.

He says every small business needs to focus on specific facets to develop a commercially viable product: “It needs to have a market – customers, clients, patients, etc., of sufficient numbers – to provide sufficient sales to cover costs and expenses and to produce a profit.”

Target niche

Small businesses should analyze their product differentiation. His recommendation: “Find out why customers buy the product, what they use it for and what they are looking for. Then provide it better than the competition. Remember people don’t buy flowers at a florist shop, they buy warm fuzzies.”

He, of course, is referring to every consumer purchase being based on emotion. As for determining the price of products, his principles are simple: “Anywhere between the market price, which is what the product is usually selling for, and the price that will cover costs, expenses including taxes and profit.”

In picking suppliers and vendors, when making a product-supplier assessment and evaluation, Mr. Delisanti advises caution: “Make sure that your alliances are based on good business practices. Make certain they can provide the increased products, in a timely manner and at an acceptable cost. Often, your old vendor, one that may have been based on a personal relationship, may have to be replaced by one that is better qualified for your new operation.”

He agrees diversity plays a role: “This is a key in expansion. There are two generic factors in increasing sales: sell what you have to new customers or sell something new to current customers. And selling complementary products helps, such as coffee with munchies.”

Mr. Delisanti says this also means product mix is important, too: “A product line is also important – having deluxe, very good and good – keeps a larger market served. That’s a safe way to expand.”

Often, the fastest way to grow is to acquire other companies. When does he suggest small business owners consider buying other companies to maintain product dominance? “They must look very carefully, using due diligence, at the company. If the pricing and terms are right, it can be a quick way to expand. A caution: the owner must be capable of running that size of business. One key is to be sure your current company is running well.”

His reminder about knowing when to apply for financing: “As soon as you’ve done your business plan to see if you are financeable.”

There are two other columns in this series, how to grow your small business:

Marketing Essentials on a Shoestring Budget

Management and HR for higher performance

From the Coach’s Corner, if you need free counseling for your entrepreneurial idea or small business, contact your nearest SBDC. You won’t find Neil Delisanti, but you’ll get some great help and the price is right.

P.S. Mr. Delisanti provides an analysis why women receive less angel funding than men.

“The greatest good you can do for another is not just to share your richesbut to reveal to him his own.”
 

-Benjamin Disraeli

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Checklist to Build Your Brand on a Budget

 

Branding is very important. Nebulous branding is a leading cause of business failure.

Besides ill-defined branding, when a business fails there are several likely reasons. They include poor planning, insufficient passion, ineffective management, weak finances, undesirable location, and ineffective use of technology.

A solid brand will help you land customers and insure customer loyalty. For sustainability and strong customer relationships, remember your customers want consistency and a positive tone.

Successful companies also work on continual improvement. They gain market share by becoming more competitive. That includes effective pricing as part of their branding process.

For success in brand-building, remember it’s a process to manage the feelings and thoughts of your customers by creating a happy buying environment.

How?

Address the five critical value-buying perceptions that motivate customers to buy from you. While pricing is important, target only customers who want value, not necessarily those who want the cheapest price. My research shows 18 percent of the population will only buy the cheapest product or service.

Target the other 82 percent who are concerned about price but they have other concerns about value.

No company has ever succeeded by only focusing on selling at the lowest price. Even Walmart’s branding slogan is “Save Money. Live Better.” And they always position a greeter at the store’s entrance. Costco creates a community atmosphere with lots of added value.

Much like buying a house, you need to build brand equity. That means first tapping into the value-emotions of your customers.

The value perceptions and their percentages of importance include:

• What customers perceive about you, your employees and spokespersons – 52 percent.
• Image of your company – 15 percent.
• Quality of product or service utility – 13 percent.
• Convenience –12 percent.
• Price – 8 percent.

So, for a quick primer on affordably building brand equity, here is a checklist of 29 tips:

1. Test your ideas. Rely on the opinions of successful people and get a mentor. Use them as a focus group. But in the end make sure you have a strong aptitude for decision-making and follow your instincts.
2. Develop a mission statement. What is your reason for launching a business and values?
3. Create a logo and insert it in every one of your collateral messages, such as advertising, letterhead, signage, business cards and Web site.
4. Create a Web site. Only 52 percent of businesses have a Web site, which might give you a competitive edge over others who don’t have one. Keep it current and update it every two years. Insert your logo as a favicon, which is short for favorites icon; also known as a website icon or a shortcut icon. In this way, it will show up in the search line on users’ computers. It will add sophistication to your online image much like bigger companies.
5. If you have a small company, own your keyword names – both your name and that of your company’s. If your company is named after you, that’s even better. How many quality references does the Web have about you?
6. Market yourself personally as well as your business.
7. Stay current on social media; at least LinkedIn, Twitter and Facebook.
8. Become known as the leader in your industry. Choose the right colors for your business. For example, research shows certain cars with certain colors do not sell well, such as purple or yellow.
9. Tell a great story.
10. Be consistent.
11. Personality and character is important to show value, stability, security and fun.
12. Partner with other successful people and businesses.
13. Create a leave-behind sales flyer. Differentiate yourself from competitors. Limit it to one page with short paragraphs, your contact information and logo.
14. Volunteer your time and expertise.
15. Get face time with customers.
16. Speak, write and teach. Customers love buying from experts.
17. Develop and maintain a prospect list with deadlines for action and follow-up.
18. Offer your expertise to reporters who cover your industry and don’t forget trade magazines. Don’t be discouraged if a reporter doesn’t call you. Be patient. I once offered the expertise of a law firm client as an authoritative information-source to the media and five years later he was quoted in a major newspaper.
19. Create press releases for the media and post them on your Web site on a “Press” or “Media” page.
20. Personally contact the media with your ideas.
21. Use cause-related marketing, especially in this economy.
22. Be present at as many relevant events in your community as possible.
23. Post your appearances in a calendar on your Web site.
24. Budget permitting, join your chamber of commerce and industry associations.
25. Study SEO techniques so customers can easily find you and discover information about your abilities and expertise.
26. Develop and implement policies for excellent customer service and retention.
27. Practice an attitude of gratitude.
28. Always demonstrate that you want to make sales, but you don’t need them.
29. Keep on trying whenever you fail. Every experience is a learning experience.

From the Coach’s Corner, from this portal’s Marketing/Sales section, see:

The Link between a Simple Logo and Branding Success

Checklist for Branding, Selling Your Biz as Green

“I had a marketing idea that everybody hated, decency is sexy.”

-James L. Brooks

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

Is the FTC’s Blogger-Payola Crackdown Working?

 

Few businesspeople like big-brother government imposing its will unnecessarily, but the Federal Trade Commission (FTC) crackdown on blogger payola was necessary. That’s true even though the FTC rules are hard to enforce on the massive Internet. Blogging is ever-increasing – B2B marketers especially like content marketing.

The FTC’s rules had been unchanged for 29 years. These are rules for the digital age – now that consumers get information from sources other than print, radio or TV. Three decades ago, advertisers propagated their own messages.

As a result of the FTC action, there are at least three salient points to keep in mind:

• Make certain you disclose if you have any material relationship with an advertiser or company. This means you can’t accept any form of cash or goods for reviewing or plugging a product or service – unless you make a disclosure.
• Be honest. No ridiculous claims to entice a reader to buy a product or service. You can only state what readers can “generally expect.”
• It’s not a requirement, but you might wish to consider taking legal steps to protect your personal assets if you’re sued. Forming an LLC, S Corp or C Corp shield your assets from a possible judgment.

Regarding celebrity endorsers: They’re being held accountable if they make false statements. Their endorsements, too, must state what consumers can “generally expect.” Previously, the phrase, “results not typical,” sufficed.

FTC fines are $11,000 per violation. The change was effective Dec. 1, 2009.

Another Biz Coach column – “Will Social Media Take Driver’s Seat in Search?” – pointed out the ever-increasing influence of bloggers. About 18 percent of Internet users get their information – not from authoritative news site where accredited journalists are held to high standards – but from social media. Fifteen percent of them trust blogs and 20 percent trust message boards. My sense is social media’s influence continues to expand every month.

The FTC update was a year in the making. It was consistent with the tenets under which the FTC has long been operating.

So the FTC rules are clear: It must be disclosed if a blogger’s opinion has been materially persuaded and any opinions must be based on the writer’s experiences.

The 81-page rule addition includes nine conjectural examples to explain what is OK and what isn’t.

Actually, government rules and regulations are often onerous, but deceptive blogging can be detrimental to consumers.

Every day this site is spammed, and some spammers can be very convincing. When in doubt, my practice is to delete suspected spam.

In one case, a blogger disagreed with my quoting a nationally recognized Internet security expert, Dr. Stan Stahl, who has a doctorate from an accredited institution with voluminous credentials. The column drew criticism because Dr. Stahl strongly advised consumers not to do any mobile banking. The blogger published crass comments on his blog, and he replied to me sarcastically on this portal.

However, I did not allow the blogger to insert his assertions on this site for three reasons:

1. His introductory comment about the gist of the column was rude.
2. A review of his blog indicated he was heavily biased in favor of mobile banking, but my sense was he had no credentials in Internet security.
3. His blog also indicated his whole purpose in life seemed to heavily promote mobile banking – but he did not disclose why.

Then, it was hard not to chortle about our ostensibly disingenuous blogger, when I was able to write this follow-up column: Our Mobile-Banking Warnings about Security Prove Prophetic. And yes, you guessed it — the blogger didn’t dare challenge the details in the second column on mobile banking.

If you’re not a paid blogger for mobile banking or spammer, feel free to respond.

Let’s hope the FTC crackdown is working. I’m delighted by the rules.

From the Coach’s Corner, for writing tips, here are related resources:

SEO: Strategic Primer for a No.1 Rated Blog

25 Best Practices for Better Business Writing

“Don’t focus on having a great blog. Focus on producing a blog that’s great for your readers.”

- Brian Clark

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

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.

Author’s insights

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 consultants W. Chan Kim and Renée Mauborgne.

Ms. Sharp’s Web site: www.sharpmarket.com. Be sure to read her “SharpInsights.”

More Biz Coach columns featuring Ms. Sharp’s expert opinions:

New Strategies for International Trade

Competitive Intelligence Author Shares Her Insights

(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, here are 11 sales strategies to outsell your big competitors.

“It is of the highest importance in the art of detection to be able to recognize, out of a number of facts, which are incidental and which vital”.

-Sherlock Holmes

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

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