Thursday, July 18, 2013

How Much Social Media ???

Social media is expanding fast. More and more business owners are using it.  So you ask yourself the question, "Should I use social media to market my business and how much should I use?"

It is obviously a difficult question to answer.  I always advise my clients to analyze their OWN business to decide what is best for them.  Don't just follow the crowd.  Don't use Facebook (or Twitter or whatever) just because someone else is using it or because some "expert" in social media marketing says that you need to do so.  Don't assume you need to use social media to get your message to the "young crowd."  Maybe you do ... but you need to know that, not assume that you do.  Don't just follow the crowd for the sake of using the latest and greatest technology.  Don't use any form of marketing just because you don't want to feel left-out.

Take a good, hard look at your business.  What brings customers to your business? Even more importantly, what brings the 20% of your customers to your business who spend 80% of the revenue you receive?  Are you growing at your objective pace?

The point is that you only have 24 hours in a day.  You only have so much time and money to spend on marketing.  You need to do those things that are best for YOU and for YOUR business.

If you don't know what is bringing new customers to your business, FIND OUT.  Don't be afraid to ask new customers how they heard about you.  Keep records on why new customers came to you.  Analyze those records.  You don't want to waste time and money on marketing methods that aren't working.  You do want to increase time and money on methods that are working.

Usually no one form of marketing is sufficient for any business.  I say "usually" because there are always exceptions.  Usually a business will use four or five forms of marketing to bring in new customers.  What they use and how much of each type depends upon their business.  There is no way that I could ever make a general statement as to which types of marketing are best for all businesses to use.

The important thing to remember is that you need to know, not assume.  You need to implement a marketing strategy because you have done your homework, not because it is part of a "me too" policy.

Social media marketing can be great for your business .... if it is right for your business.  Use it - and all forms of marketing - wisely.

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Sunday, June 30, 2013

Start Big or Start Small?

When starting to sell a new product or service for your business, should you start big or should you start small?  Most people want to start big.  They want to sell to as many customers as they can as fast as they can.  I believe in the opposite.  Start small.

Despite doing surveys and various forms of market research, there is always risk when you launch a new product or service.  There is always the chance that your research was not broad enough.  In addition, sometimes we can easily produce a product on a small scale or provide a service on a small scale but when the volume increase, we may have difficulty meeting demand.

Thus, I am a firm believer in starting with baby steps.  I believe in developing a plan that starts slowly and increases at a steady, controllable rate.  I favor this method for two main reasons.  First of all, you only get one chance to make a good first impression.  If you are taking baby steps and make a mistake, fewer people are going to know.  Fewer customers are going to be upset.  Would you rather make a mistake on an order for ten units or for 1,000 units?  Would you rather 10 customers know you made a mistake or would you prefer that 1,000 customer knew?  Would you rather be late delivering to ten customers or to 1,000 customers?

Secondly, no matter how well you or I plan, plans need to be changed.  We may find that we can improve the product, improve the process, find a better supplier, etc. as we begin to sell our new product or service.  It is much easier to make the change on small orders or a small number of orders than it is on large orders or a large numbers of orders.  Taking baby steps allows us to adjust and fine-tune much easier.

Many years ago I knew a gentleman who opened a retail store in Chicago.  Business was better than he had expected.  Therefore, he immediately decided to open a second store.  Business was good there as well so he quickly opened a third store.  Two years later all three stores were closed and he was in bankruptcy.  Why? He never took the time to develop a good staff and good internal procedures.  Since he could not be at three stores at the same time, he had to depend on others.  Unfortunately, the staff that he had could not run the stores well.  He moved so quickly that he did not choose staff wisely, he did not take the time to train them properly, he did not implement good procedures, etc., etc.

You can easily see that if he had taken baby steps with one store, he would have been much better off.  After the first store was "on firm ground," then he could have opened the second store.   His desire for rapid growth put him out of business.

Crawl before you walk.  Walk before you run.  Take baby steps.  Your business will be better off in the long run.

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Monday, June 17, 2013

Be Prepared to Make a Sale

Are you ready?  Are you prepared?  Did you plan?   Just what am I asking?  I am asking if you are prepared – RIGHT NOW – if someone walked up to you and said. “What business are you in?”   “What do you do?"   Or what if they unknowingly said something that indicated they needed your product or service?

There is an old saying, “Luck is what happens when preparation meets opportunity.”  People who are not prepared when the opportunity presents itself, lose out on many sales.

In baseball, the shortstop does not know if the ball will be hit to him.  Nevertheless, a good shortstop is prepared.  He has his tools (glove) with him and ready to be used.  He gets into position.  He analyzes the situation. He knows where he is going to throw the ball if it is hit to him.

Business is no different.  You need to be prepared if the ball is hit to you – no matter where you are, what you are doing, why you are there, etc. etc. etc.

First, you need to have a good elevator pitch and practice it and practice it and practice it.  You need to be able to recite it automatically.  A good elevator pitch tells someone what you do in about 60 seconds – a few sentences.   Don’t be cute!   One person told me he “provided communication solutions to companies wanting to exceed customer expectations.  Anyone know what that means?  Great buzz words.  I said “oh,” and walked away.  If you sell telephone equipment to companies that need 20 or fewer phones, say just that.  Leave out the great buzz words.

Secondly, have your tools with you.  It doesn't matter if you are at a football game, a restaurant, or hiking the Appalachian Trail, you should have your business cards and a means or recording information (smart phone app or pen and paper) with you.  The person sitting next to you may need your service.  Give him or her your card.  Write down their name and a few notes about them.  Even if they never buy from you, they could be a great referral source.

Thirdly, don’t be shy.  Talk to that person in line in front of you.  Start a conversation with the person sitting next to you.  That person could be the source of the biggest order you ever receive.  If you don’t talk to him or her, you will never know.

I know a sales person who always says to the person in front of him in line, “Would you like to trade business cards?  If they have no card, he gives them his anyway.  Most of the times, his action simply results in friendly conversation.  Once in awhile it results in a new customer.  What did it cost to get that customer?

Be Prepared. Don't be Shy.  Watch Your Business Grow !!!

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Wednesday, December 7, 2011

The Wrong Way To Attract New Customers

All businesses lose some customers through no fault of their own. Customers move, retire, die, etc. You need new customers just to stay even. Therefore, no matter how good your business is today, you need to be always trying to acquire new customers. There is a right way to attract new customers and a wrong way.

The biggest mistake I see businesses making when trying to attract new customers is making a special offer to "New Customers Only." I have seen ads that offer special discounts to new customers, extra free services to new customers, etc. How do you think that makes the existing customers feel?

If I have been a loyal customer to a bank for 10 years and I see an offer for a higher CD interest rate to new customers, how am I going to feel? If I have been a loyal customer to an auto repair business for 10 years and I see an offer of a free oil change to new customers, how am I going to feel? If I have been a loyal customer to a CPA for 10 years and I see a special discount for tax returns preparation to new customers, how am I going to feel?

When customers have been loyal to a business, they deserve the special treatment. First, they feel they should be rewarded for their loyalty. Secondly, as a business owner, you know that you have had a loyal customer. The new customer who comes in for the free oil change may never come back again. Do you want to risk making a loyal, long-time customer unhappy for the chance (and it is only a chance) of getting a new customer?

My advice is to always take care of the known factors first. Take care of those who have been taking care of you. It takes a great deal of good business practices to keep a customer for many years. Don't let all that hard work and effort go "down the drain" on the chance you may get a new customer.

If you want to offer something special, offer existing customers an incentive to refer new customers. That is much more of a win-win situation.

Remember the old saying, "A bird in the hand is worth two in the bush."

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Tuesday, August 23, 2011

Using Your Business Time Wisely

"What is the best use of my time right now?" Those are the words that I had framed and placed on a wall in my office many years ago. They are powerful words. It is an important question - one that business people should be asking themselves numerous times throughout their day. Am I using my time wisely?

I believe there are two main factors to consider when answering that question. The first involves your focus. Do you - and your employees - spend your time focused on what has the greatest long term effect on the bottom line? Business owners need to focus on the revenue stream. An associate of mine owns a business that publishes a specialized newspaper. When you ask him what business he is in he will say, "I am in the business of selling advertising." He often says that it does not matter how good his publication is if he can't sell advertising. He can have the greatest publication in the country but if he does not sell advertising he will be out of business. I am not saying that he does not want to produce a good newspaper - he does. He has an excellent publication. But it is the advertising that keeps him in business. What do you think the best use of his time is?

The second factor is the direct trade-off between performing a function which can EARN money for your business versus a function that can SAVE money for your business. Let's start by looking at an extreme situation. If you are a professional baseball player for the New York Yankees, would you be smarter to stay home on Sunday to cut your grass so you do not have to pay the landscaper $100 or are you better off to play in the baseball game and earn the salary that a player makes for one game? The answer is obvious.

Many business owners are so concerned about not paying for a service that they do the work themselves. By performing the service themselves, they miss the opportunity to earn two, five or ten times as much money by making a sale. Often, I hear the excuse that they are doing "paperwork at a time when they could not be meeting with a customer anyway." But the question is still the same, "What is the best use of their time?" Maybe they should be writing or revising their marketing plan. Maybe they could be rehearsing their next sales call. Maybe they could be planning product improvements. Maybe they could be analyzing the competition. The answer to the question is "Perform the function that will produce the best long term results to the bottom line.

Sometimes the business owner spends time supervising a function rather than doing it herself. She has hired someone else to do it. The same analysis is required. Is she better off out-sourcing that function so she does not need to spend time supervising it or dealing with its problems? Even though the out-sourcing may cost more than hiring someone, the business owner must consider her time supervising that function as well as the other resources that the functions consume from the business.

As much as we want to take pride in what we produce and as much as we dislike paying others, we need to realize what adds to the bottom line. Many people believe that Studebaker made a fine quality automobile. Have you driven a Studebaker lately?

What is the best use of YOUR time RIGHT NOW?

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Thursday, August 11, 2011

When to Get Help for Your Business

Most people only think about their health when they are sick. Fortunately, some of us are now beginning to learn to think about living a healthy lifestyle so we do not get sick. My message to you is that the wellness theory that applies to our personal health also applies to our business health.

As a business consultant, I get the vast majority of calls from clients when their business is sick. My phones rings when their sales are down, when their costs are too high, when their employees are not performing, etc. etc. etc. In some cases they call me when it is too late. I have had the misfortune of having to tell clients that it is too late for me or anyone else to help them. It is time for them to close their doors for good.

My advice to you is this. Just as it is important for you to live a healthy life style and to see the doctor for your annual physical BEFORE you are sick, the same is true for your business. The best time to call me (or anyone else for help) is BEFORE your troubles begin. We can look at what needs to be done to keep your sales from going down or your costs from going up. We can develop programs to keep good employees and to keep them motivated. We can do the things necessary to grow your business.

My business has increased significantly since the recession started. Why? Because when times were good, everyone was happy. No one was concerned about the health of their business. They were playing golf, fishing, and on vacation. No one felt that they needed any help. My, how times have changed.

Not only are times of prosperity the best time to prevent problems, but it is also the least expensive time to get help. Just as it is less expensive to pay an attorney to review a contract before you sign it rather than pay him or her to try to get you out of a bad contract, it is also cheaper to pay a consultant to review your business practices when times are good than to pay him or her to try to dig you out of a hole. And of course, when times are bad, there is always the issue of even having enough money to pay for help.

Don't wait until it is too late. Keep yourself and your business as healthy as you can.

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Saturday, June 18, 2011

From Employee to Competitor

Business owners get many surprises. In my experience, the two biggest surprises - and the ones that hurt them the most personally – are (1) employee embezzlement, and (2) the employee who becomes the competitor. This posting is about the second item – the employee who becomes your competitor.

Have you ever noticed how businesses that are in the same industry seem to be in the same geographic location? Why does “Silicone Valley” exist? Why are all of these businesses in the same geographic location? The answer is quite simple. Employees leave their employer and start their own business “down the street.”

Here is the typical scenario. An employee sees the success of the owner. The employee has worked at the company for several years. She knows the product or service and the industry well. She wants to stop making the boss wealthy and start making herself wealthy. In many cases she feels she “runs the company” because the boss is always golfing or on vacation. One day she walks into your office and says, “I am giving my x days notice. I am starting my own business.” You can’t believe what she just said. She has worked for you for ten years. She has been to your children’s birthday parties and graduations. Now she is telling you that she is going to try to take business away from you? How can she possibly do this to you?

If you are a business owner and this has not happened to you yet, be prepared. It may. Although you can’t stop this from happening, you can make sure you have taken the necessary steps to minimize the effect.

First, make sure you do not lose contact with your customers. I am NOT saying that you should be the only one that talks to your customers. There is a fine line between keeping contact so they do not follow your employee to a new business and having the customer so dependent on you that you will never be able to sell your business. Encourage your customers to deal with your employees but never let then forget who you are. Have lunch with them. Play golf with them. Take them to the baseball game. In other words, socialize with them but let them place their orders through your employees.

Second, know what to say to your customers. Have a plan in place so you are not "on the defensive" and not acting on emotion. In many cases, the ex-employee has started working on his new business BEFORE he gave you notice. In addition, he probably contacted your customers and told them what his plans were in hopes they would become his customer when he opened his new business. The sooner you contact them the better. Do NOT say bad things about your ex-employee. Always talk about the positives of YOUR business.

Third, be prepared to compete. In my experience, the first thing that the employee says when he leaves and starts his business is, "I can do it just as well and SELL FOR LESS." Of course, competing on price is a mistake. In addition, chances are very good that the ex-employee has no idea what his costs will be. Nevertheless, he will sell for less. If you don't want to reduce prices (and you shouldn't), be prepared to let your customers know why they should continue buying from you at the higher price. You need to let them know why your product or service is worth the price.

Some business owners think that because their emloyees have signed non-compete agreements that this can never happen to them. I STRONGLY advise you to consult your attorney about any non-compete agreement. Many do not hold up in court.

You may never have an employee leave and become a competitor - but you do need to be prepared if it does happen.

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