bizsolutionsplus Featuring Solutions to Grow Your Business

Worry Doesn't Pay the Bills

Have you read today's headlines? Gas prices up for the 3rd straight day; Starbucks to close 600 unprofitable stores; and perhaps most disturbing to us entrepreneurs and business/marketing consultants, the June ADP National Employment Report® and ADP Small Business Report® showed small business employment (defined as businesses with fewer than 50 workers) added 7,000 jobs during June, the smallest gain in nearly six years.  Here's the breakdown by sector:

• Total small business employment: +7,000
• Goods-producing sector: -27,000 small business jobs
• Service-providing sector: +34,000 small business jobs

None of this news portends a sunny future for those of us in either b2b or b2c. So what to do? Worry, Binky, doesn't pay the bills. Get up off your butts, take a deep breath, and use smart, cost-effective tactics to find new customers. Start by cleaning up your own house.

• Change your web site content to reflect the times. Let potential customers know you feel and understand their pain, and have solutions to deal with it. These are the same solutions you are using in your own business.
• Write about these solutions on your blog and share them with your social networks and distribution lists.

What do those solutions look like? Try these:

• Mini-direct mail campaigns. Do online searches for your ideal clients and customers. Each week, send 5 - 10 of them a letter introducing yourself and share how you can help them. Tell them you would like to add them to your e-newsletter or monthly thought paper that contains cost-effective ways to grow a business. Include a sample. Be sure to provide the recipients an easy way to opt in.
• e Newsletters and Thought Papers. If you currently don't do one of these monthly or at least quarterly, start. Write about ways that businesses can cut costs or grow cost-effectively. Provide easy and low-cost solutions or share ideas that guarantee both short- and long-term returns.
• Step up Social Networking. Introduce potential clients to social networking. Explain how to create good profiles and how they can share their expertise by actively participating in Q&As and by sharing their blogs, for those who have them. For those who don't, share the steps for creating successful blogs designed to reap returns.
• Step up Networking. Now is not the time to drop your professional memberships. Face-to-face networking is one of the best ways to grow your business by getting noticed.

What are your solutions to growing your business in down economic times?

Getting Your Price Right

Other consultants often ask me how I determine client fees. My ideal answer: I ask the client how much they have in mind (their budget) for the project or to put me on retainer and start negotiations with that information. Unfortunately, most haven't given this much thought. And that is where my preparation for initial client meetings pays off.

Before meeting with a client, I research the following:

• Their revenues and their competitor's revenues, to get a sense how my client compares and what they can afford.
• Their profits. Often this is a guessing game based on the price(s) they charge for their products and services, my assumptions of what typical margins in their industry look like, and their revenues.
• Their need for my solutions. The greater their need for my solutions, the greater their ability to hire me.

Based on the above, I come prepared with both project assumptions (my solutions to their expected needs) and my fees, both per project and by retainer. Most of us understand (I hope) how to price projects. Essentially, we estimate our project costs plus our markup of 10% to 20% percent for managing those costs (creative, printing, mailing, online services such as PR Web, telemarketing, advertising buys, etc.) and our consulting fees (hourly rate times maximum estimated hours).

Most who ask get project pricing. But my clients usually want to put me on retainer? Why?

1. It saves them money.
2. Doing so delivers better value.
3. Clients on retainer like the idea that I am there for them whenever they call.
4. Putting me on retainer is like hiring another employee without the cost of benefits and office expenses. Clients like that.

The question most often asked is how do I build the monthly fee. Here is my process:

1. I start with a range that I am willing to accept. (In my case, that range is from $1000/month - $5000/month plus costs and expenses. The beginning price guarantees a minimum of 15 hours/month; the latter guarantees a minimum of 40 hours/month.)
2. Negotiations within that range usually take one to three months, as the client and I determine the best solutions for them, their maximum budget (usually ranges between $50,000 and $150,000 per year for my client's marketing), and the best way(s) to get them where they want to go for what they want to spend.

The question then asked is how did I determine that range. Frankly, it is based on putting people first, starting with me. Iif I am not happy, there is little chance my client will be. And my first and last goal is always to make to make the client happy. Here are the factors that went into my retainer range.

1. My stress levels. (The more I charge, the more stress and sleepless nights I experience.)
2. My wants and needs levels. (How much annual income best suits my family and me.)
3. How many clients can I have on retainer at a time and still create great customer experiences? At that number of clients, can I still take on project work? (If yes, good; if no, I need to reduce the number of those on retainer, meaning my range is wrong.)
4. Using a 70% utilization factor (I charge for 70% of my time, as most of us spend about 30% of our client time not directly addressing client solutions (interruptions, other client's work, brainstorming, research to learn something we don't know, breaks, and so on). I don't charge for that time.
5. My client's usual wants and needs (i.e., marketing/communications plans, measurable goals, web site content revisions, sales letters, thought papers, newsletters, social media, social networking, presentations, training, press releases, direct mail, graphic and interactive design, case studies, testimonials, reassurance, meetings, etc.),

In brief, that's it. Of course, much goes into this that isn't discussed here (mostly based on emotions, trust and credibility). But generally, that is how I established my retainer range, and it more often than not fits my ideal client's budgets and risk-aversion. Questions? Insights? Thoughts?

Website vs. Blog Redux

Last week, I posted a blog that asked: Do We Need A Web Site, if We Have A Blog? Received a number of comments addressing the question but it still rattles around in my head. Yes, I link my blog to my website and vice versa, but is that the best way to communicate with my customers and readers?

It seems that by having both, I separate visitors into two groups--potential clinets and blog readers. And that is not, in my mind, the best way to either communicate or to do business.

My intent with my blog is to reach two kinds of readers: 1) Consultants and those seeking some marketing/communications/business information, and 2) to reach potential clients. My blog is succeeding in doing that. Yet, some of my potential clients never visit the blog because they are not used to social media nor are they educated on the subject. So the original question continues to swirl around inside my gray matter.

Today, I received this comment from Susan Pascal Tatum:

Lew,

This is a great topic. It's one that our technology marketing firm has been studying for the last six months. Our conclusion? A blog IS a website - why do you need both? We are just about to launch our new blog/website combo. Meanwhile, if you want to see an example of how conventional website-type information can be included in a blog format, take a look at http://technobuzz.tatummarketing.com.

Best, Susan

I visited the blog and it seems to fulfill all the functions necessary for either a blog or a website. But will traditional businesses who haven't been educated on social media get it? They should discover it, as the URL doesn't give anything away (unlike my Typepad URL, which is novel length). Another person whose blog seems to meet all the necessary criteria is CK's Blog, yet she, like many of us, still maintains a web site, as well. Are we being smart bu maintaining both; or are we making our marketing and communications more complex than they need be?

The bottom line: To grow our communities of readers and potential clients, do we need two portals? Is it still too soon for traditional businesses to understand us if we offer only a blog?

Keep It Simple: Consumer Choice Is Not Always A Smart Choice

Consumer choice can hurt sales when it doesn't make economic sense and instead achieves higher costs to consumers without adding much value. Keep it Simple Stupid not only applies to the economy, it applies to us business owners, marketers, communicators, product designers, consumers and everyone looking to create, sell or purchase goods.

Henry Ford was a champion of simplicity. He understood niche marketing and creating affordable products that offer value at a fair price. His statement saying "his customers could have the $825 Model T in any color -- so long as it was black" was and remains the essence of meeting customers wants and needs with a valuable and affordable product.

But Ford and GM lost its way and forgot that the keys to success are:

1. Understanding customer's wants, needs and desires;
2. Creating products and services that meet those wants, needs and desires;
3. And then selling those products and services by offering value at an affordable price.

What happened instead was that the American Auto Industry began offering options with no customer in mind. Instead, they began producing and marketing for and to everyone. And even the most rookie marketing and sales specialists understand that if everyone is a potential customer, than no one is an ideal customer. And that is a recipe for losing market share and going into the red.

On Sunday (March 30), a Reuters article entitled U.S. car companies go back to black, Ford Chief Executive Alan Mulally says "he was amazed by the number of variations Ford offered when he arrived at the No. 2 U.S. automaker from Boeing Co in 2006.

"'I was looking at the (Lincoln) Navigator console," Mulally said. 'We have 128 different options you could choose on the console. That's just the console.'

"'With so many variations, a customer inevitably will want a vehicle that is not in stock, leading to a frustrated customer and pressure on the dealer to offer a discount.

"'They're unhappy and we're losing money,' he said of Ford, which posted losses of $2.7 billion in 2007 and $12.6 billion in 2006."

Much of that unhappiness evolves around too-expensive cars perceived as offering less value than their foreign counterparts. For when options are out of control, the results are "higher production and inventory costs and headaches for customers and dealers in sorting through a complex matrix of choices."

After four decades of misunderstanding the marketplace and building cars for themselves instead of their customers, Ford and GM are going back to black because they are meeting and sometimes exceeding their customer's wants, needs and desires--affordable and reliable cars that represent good value at a fair price.

What are the lessons to be learned here? Why do industrialists forget what made them great in the first place? Why do business executives get lost in functionality instead of customer value and benefits? We see the same things in every business, from software with bells and whistles that consumers neither want nor understand at a price higher than the software's value to them, the customer. We see it with advertising and marketing firms that offer everything but specialize in nothing.

Keep it simple stupid applies: It is not about us, our agendas; it is about them (customers), and their agendas. Why can't we get that right?

Turn Your Business Inside Out

We marketers and brand specialists often talk about building brand from the inside/out. But what specifically does that mean? Tom Clifford asks a similar question with his post, Are Your Employees Your Story Stewards?

Tom is a movie maker and he wonders why companies don't embrace employees in their branding efforts. "Employees as heroes create strong emotional connections with an audience for corporate brands." He's right of course, but the story doesn't end or even begin there.

Everything your company says begins and ends with employees. They are your brand and they conduct the most important elements of your marketing strategy because they are the ones who touch your customers. Brochures, fliers, ads, blogs, etc., are your marketing tools but their effectiveness is dependent upon how well employees represent the words and images that your marketing and brand departments communicate.

To create a culture that walks the talk and builds a great brand, here is my first advice: Instead of managing, invest all employees with the responsibility to be held accountable for success that is measured by how well your business does in putting customers and communities ahead of all else. In the simplest sense we are talking about building relationships and communities around our employees and the products and services they produce, market and sell.

Employees who are enthusiastic about their job and are given the responsibility and the ability to always say "yes" to customers by providing a solution, because that is what people want and need, will create great customer experiences. And great customer experiences result in loyal customers and steady business growth.

On page 138 of Pour Your Heart Into It, Starbucks Howard Schultz writes: "Ultimately, Starbucks can't flourish and win customer's hearts without the passionate devotion of our employees."

When business leaders, employees and consumers are passionate about an experience served up by a company, they become evangelists. And that, my friends, should be marketing's first goal, to inspire evangelism. And if we do that consistently, a chair will be placed at the table with our name on it.

Here are a few basic recommendations for building a business and its brand from the inside/out:

• Tell employees everything. Internal communications is your best marketing tool. Employees must know where you are going, how you are going to get there, what their roles are and how they will be held accountable for creating a great brand.
• Share your good news and your bad news with employees. They can't spread the good news and they can't help fix the bad, if they are not well informed.
• Train, train and train some more.
• Make it clear that every employee is responsible for creating great customer experiences, no matter their job description. From the cleaning crew, to admin, to finance to manufacturing and service, every employee decision and act affects customer experiences.
• Create great employee experiences by understanding their wants, needs and desires and then meeting or exceeding them.

Those are a few starting points for you to build a great brand. Share your ideas and customer experiences, good or bad, that show how employees represent their brand with other readers by posting a comment below.

P.S. Perhaps it's that Noise Inside Your Head that keeps you from understanding your employee and customer wants and needs, especially their emotional ones.

Competition Makes Us Better

No matter whether we talk business, politics, sports or games, competition makes us better. It encourages inspires and motivates many of us to be better and more successful than the other guy or gal. It drives us to be the best we can be. Many of us are raised to win and to drive ourselves to be winners. And in many ways, it is what makes Americans different than many of their brothers and sisters in other countries.

Michael E. Porter is the Bishop William Lawrence University Professor at Harvard Business School, an economist and the author of 15 books. On Competition is his more recent book in which he takes a critical look at the "dog-eat-dog international economy." For Porter, "competition is the ingredient that turns lemons into lemonade."

According to the synopsis at Barnes & Nobel,com: "The essence of Porter's message is that every company, country, and person must master competition to thrive in brutal international and domestic economies. Competition is the key to excellence. Worried about losing your job or your services becoming obsolete? Porter believes that a little fear is good for everyone. "Companies that value stability, obedient customers, dependent suppliers and sleepy competitors are inviting inertia and, ultimately, failure," he writes in his 1990 study and essay "The Competitive Advantage of Nations." Porter is a longtime critic of the short-term thinking on Wall Street that often stifles competition and hurts the economy. In "Capital Disadvantage: America's Failing Capital Investment System," he calls for much lower capital-gains rates for people who invest for the long term. He also urges investors and businesses to start thinking together. He contends that pension funds and institutional investors should get a greater say over the companies they own. It's wacky to have company directors with little expertise or financial interest in the company, he writes."

Is this attitude good for us? I'll leave that for you to decide and to comment on. But for me, without competition I think being a couch potato would be appealing. I love competing, even when I lose, which to me means finishing any place other than first. That translates into losing most of the time. And from those losses, I believe I have learned how to be a risk-taker, how to be a good sport and how to be a good winner. I look at being competitive as a life lesson, not a death lesson.

A life lesson means:

1. Playing by the rules.
2. Playing honestly.
3. Abhorring cheating of any kind.
4. Accepting losing graciously and shaking the hand of the winner.
5. Praising the other competitors for helping me be better at what I do.
6. Thanking other competitors for driving me to my infrequent victories.
7. Enjoying the game more than the winning but always working to win.
8. Rejecting ruthlessness for being rigorous.
9. Understanding and appreciating the value of all players.
10. Putting people first, even if it causes me to finish lower than first, but always playing to win fairly, ethically and morally.

Here are some businesses and people I believe are better for the competition:

• Starbucks as it struggles to regain market share. Competitors are causing the company to get off its butt, stop resting on its laurels and work to get an edge by providing better experiences for its customers.
• Dell as it works to improve what was once a bad history of customer service and is reaching out to engage it customers.
• John McCain who is being forced to look at his votes and his stances as he is forced to compete again Governor Huckabee and respond to the Right Wing of his party.
• Both Barack Obama and Hillary Clinton will be better people for their tight battle.
• Every team in the National Football League as they set their sites on defeating the New England Patriots.

P.S. Check out Seth's, Advice for real estate agents (quit now!), for a another view on the value of competition.

It Looks Like Bad Times

When economies are in a downturn, some businesses implement a scorched-earth policy in the belief that the solution to decreased sales is to compensates losses by cutting costs. This strategy may work for some, but for most this short-term fix will cost them more than they save, without gaining anything in the long-term.

When we are in downturns and we see comparative sales dropping, you may experiencing some decreased consumer spending. However, it is just as likely that you are seeing the results of a long-term sales and marketing problem that has been cutting into revenues and margins forever, but now it is more noticeable. This is not the time to hunker down. To avoid further losses and to gain margins and revenues when customers come back, this is exactly the time to renovate your sales and marketing house. Put on a new roof and add a coat of paint: You won't be sorry.

Here are the basic steps needing done:

Marketing

1. Analyze your efforts. What is working, what isn't? Do more of what's working and eliminate what isn't.
2. Ensure strategies are integrated and measurable. If they aren't, you have the wrong people doing your marketing. Replace them. And if that person is you, get it together or outsource it. For marketing to succeed, it must feature a strategic plan that integrates marketing tools to maximize success and that measures everything being done.
3. Ensure that marketing is a long-term effort. Starting and stopping, doing a little here and a little there, is a failed policy. You might as well host a company BBQ and burn money instead of charcoal.
4. Get a steady hand on marketing and make sure it is working every day of every month of every year. And measure, measure, measure, revise, revise, revise.

Sales

1. Have leads, referrals or walk-ins declined? If, yes, why? Fix it with marketing. If no, your sales team needs serious evaluation.
2. Sales Training is called for if closings are declining faster than are leads. The problem has likely existed forever. You may need to replace some of the sales staff with people who get it. What does "get it" mean? It means the following: doing more of the same, which likely means you are selling products and services, doesn't work.
3. Instead, selling is most successful when: it is people-focused, not products and services focused; when sales staff stop seeing themselves as sellers and instead see themselves as brand ambassadors and servants of the customers; when staff create great experiences for the customers; when they specifically understand each customer's wants and needs; and when they provide solutions to meet those wants and needs.

The above basics apply whether you are b2b or b2c. Once you understand the basics, you need to open up your wallet and fix what is wrong. You can't fix the economy but you can fix your business.

P.S. Also check out Drew's Marketing, recessions and budgets....oh my!,

PPSS: And check out Seth's Marketing in a recession.

Be A Business People Care About

In starting up or in growing a business, use strategies that create a business people care about. In other great words, if your business went away tomorrow, it would be missed. Here are the ingredients for  the foundation of just such a business:

1. Business is people-centered. People come before profit in every instance.
2. Its values talk to making the world a better place to live and work.
3. Business understands the wants, needs, and desires of it employees and its customers.
4. It creates products, services, value, prices, and most important, experiences that meet or exceed people’s wants, needs, and desires.

P.S. Name a business that you would miss if it went away tomorrow and tell us why you would miss it. Everyone who plays enters a drawing for a copy of my newest book, Lead With Your Heart. The drawing ends Friday, February 22, 2008.

Clients & Customers Are Not Required to Listen

We often complain when customers don't listen:

• We recommend a strategy, they reject it.
• We recommend a car, they purchase another.
• We recommend a special wine, they don't buy it.
• We recommend they thank their customers often, they think that is silly.
• And on and on.

That is their right. As a consultant, I offer advice. Much of it is ignored, much of it is accepted. When it is ignored, I see two choices: 1) Argue the point and feel the client is an idiot, or 2) Recommend something else that might get the client where he or she wants to go. The second choice is the one all of us should choose.

Business is as much (maybe more) art as it is science. Therefore, we may have both qualitative and quantitative data to suggest that our recommendation is the best way to go. The problem is that data only reflects past performance. And while we make many decisions based on already executed-upon strategies and tactics that perform well, that doesn't mean that our client will get the same level of performance, as their methods, their culture and their ways to execute are different.

We need to understand that all clients and customers are different, whether we offer advice or sell cars. Our job is to discover their wants and needs and to meet those wants and needs with products and services that they want to own and use, not necessarily the ones we think they should own and use. If we are convinced that are advice or a particular car must be the path they choose, we need to find ways to explain that path in ways that the client/customer accepts. Sometimes that is not possible. And that's okay. We move on and continue to do the best we can for that client or customer.

If we are worth the name on the sign, we meet the customer's wants and needs, we create a great experience for them, we help them to prosper and we leave them happy. It isn't about us; it is always about them.

What is Government's Role in Our Economy?

Does government involvement help or hurt business? Consumers? What is its role in the economy? Stimulation, regulation, laissez faire policies, free trade, protectionism, grants, bail_outs, no role at all?

This is a $13 trillion economy, with a a national debt that amounts to $9 trillion and a trade debt is  more than $6 trillion and rising faster than our national debt, according to commentator Lou Dobbs today at CNN.com. According to Dobbs, "At precisely the point in our history in which this nation has become ever more dependent on foreign producers for everything from clothing to computers to technology to energy, our weakened dollar is making the price of an ever-increasing number of imported goods even more expensive.

"Imports account for 92 percent of our non-athletic footwear, 92 percent of audio video equipment, 89 percent of our luggage and 73 percent of power tools. In fact, between 1997 and 2006, only five of the 114 industries examined in a U.S. Business and Industry Council report gained market share against import competition."

I am old enough to remember times that seemed more dangerous and difficult than these: The Cuban Missile Crisis, the hyper-inflation of the Carter years, the threat of a nuclear holocaust, the dot.com debacle and several recessions. However, the difference between those events and this one was that Americans produced and consumed more American than foreign products and services. In today's economy, we are depended on goods from foreign shores and the exporters are depending upon our cash. This state of the economy was primarily driven by government policies.

Most of you are entrepreneurs, consultants and business people. All of you are consumers. Where did we go wrong, if we did? What does the future portend? And how does your business and your personal budget stay the course during these difficult times? Are you concerned or is this just another business cycle that will come around like they always have?