Making the most of your time in shower

My critics will claim I haven't had any great ideas.  But, the ones I have had, came when I was in the shower!

Now - shower and bathtub research is backing me up.  Although - this is hardly new stuff.  The former darling of Wall Street and Main Street alike, Alan Greenspan claimed his finest economic policy was formed during bath-time (pause for angry chorus from critics of Greenspan-era fed policy).

Still not convinced?  Archimedes was a first-class genius. Among other things he invented machines that could lift a ship out of the water back in 300 BC.  That's pretty smart.  Want to know where he did his best thinking... by now, if you're not too dense, you'll guess correctly... in the bath - of course.  In fact, the word Eureka became famous when Archimedes leaped from the tub in all his glory upon the realization of some grand new thought.

So, make some use of your time in the shower.  Or in the bath, for those of you still operating in the 20th century.

Realize the Awesome Speed of Formula 1

Do you realize how "awesome-fast" Formula 1 racers are actually driving?  This video shows a side-by-side comparison of amatuer drivers on the track (just having fun driving their cars at high speed) and real F1 racers.  Bottom line: You'll never know what F1 feels like but this video gives you an idea.

US Stops Supplying Guns to Mexican Gangs in 2012

The guns, found at the shooting scene that left US Federal Agent Brian Terrey dead, were supplied by the US Government.  Obama decided to stop the practice of funneling thousands of guns across the border http://en.wikipedia.org/wiki/ATF_gunwalking_scandal.  Good thing it only took a few years to make that call.

Wait till you hear the reason for supplying the bad guys with guns.  Because the guys who buy lots and lots of guns are clearly bad guys.  Wow. Clever. 

I suppose it’s similar to leaving wads of cash on the sidewalk.  Anybody who starts stuffing their pockets is a criminal – allowing cops to just round up the bad guys without having to patrol the whole city. 

Come on Government.  If you are going to give guns away - at least give them to little, old ladies.  A little common sense goes a long ways.  

Ned Stark's Minnesota Forecast

Source: quickmeme.com via Nathan on Pinterest

Pricing In Business

Pricing is 25% of marketing strategy - yet most business owners view pricing as a simple, tactical decision.  The  most commonly used pricing model is "Cost Plus" (since my labor cost is $15 per hour - I'll charge the customer $30 per hour)

Fortunately, entrepreneurial-minded business owners can take advantage of their competitor's weakness by putting aside the "Cost Plus" pricing model and adapting the superior "Price Minus" model.  Keep in mind that the "Price Minus" model may also require adapting your existing business offering to be better aligned with customer demand.  The best way to illustrate the "Price Minus" model is through an example:

The founder of IKEA may be the wealthiest man in the world (nobody knows for sure since his largest asset is privately held).  IKEA embodies the "Price Minus" strategy.  Let's examine how IKEA decides to produce a desk for college-bound students.  First, they determine the demand for a desk containing ONLY certain important characteristics (e.g. comfortable, accommodates a laptop) and decide how much people will pay (detail on this to come).  Say they figure $135.  Second, they subtract the amount of profit they need...say $13.50.  Simple math means they have $121.50 ( $135 - 13.50) to build the desk. Ultimately, IKEA's target market (college kids in this case)  will do some searching around for a desk and they find just what they want at IKEA for $135.  But what about IKEA's competitors?  Target has an oak desk for $195 - too expensive.  Pier 1 has a desk for $130 - a stylish one - but without the comfortable, plastic chair that college kids "must have".  

Now that you see the power behind the "Price Minus" model, let's apply a three-step process to pricing any product or service:

1) Identify the Competitive Range of existing prices for all substitutes and alternatives to your business offering.  Example: Southwest Airlines identified that its competitor (at the high-end of the range) North West Airlines charged $450 for a ticket from Minneapolis to Phoenix, while Budget Rental Car (at the low-end) charged $110 to rent a car for the same trip.

2) Estimate your price within the Competitive Range according to the level of difficulty for competitors to "copy" your new pricing strategy.  If your product or service can quickly be duplicated by your competitors you will need to price at the low end of your selected range (about $110 in our Southwest Airlines example) to achieve a first mover advantage.  If your business has the benefit of high barriers to entry (e.g. patents, exclusive licenses) you can price closer to the high end of the Competitive Range (about $450).

3) Launch the new, efficiently-priced product or service.  After determining a price and subtracting the profit your business requires, the remainder is cost.  That cost figure drives the good or service your business produces.  If your good or service cannot be produced at that cost its time to strip out unneeded features.  In the case of Southwest Airlines, the company may have determined that serving peanuts instead of turkey sandwiches is an acceptable cost cut (and what customer would insist on the turkey sandwich if they realized the ticket cost builds in an extra $38).  I implore you...find those turkey sandwiches in your business and stop serving them to your customers!  The other possibility that exists for many businesses is forming an alliance with another entity that allows you to tap its competitive advantage (and superior cost structure).

This post is focused on Pricing strategy, which necessarily requires discussion of Product strategy.  The two go hand in hand.  Product (or service) research allows you to identify the features customer really care about.  Execute the "must haves" flawlessly and forget the rest.  This allows your company to create a unique value proposition that is priced right and most importantly....makes the competition irrelevant.

  

A Review of EntreLeadership by Dave Ramsey

During the holidays, I like to read genuine, paper-based books.  One chill morning, I was pleased to find in my stocking, a gift from one of my favorite, well-meaning family members: A book by Dave Ramsey called EntreLeadership.

I had heard of his success, but I had also heard reasons why Dave Ramsey is wrong.  However, I am a sucker for anything to do with business or entrepreneurship.  So, I read the book. 

Before I dissect Dave, some context is necessary.  To me, original research synthesized with mind-blowing implications for business, life and the future of mankind, written by a true thought leader, make for a great book.  In other words, the author’s work should be supported by facts.  Books such as Blink by Malcom Gladwell (how people make decisions) and Stumbling Upon Happiness (how people become “happy”) by Dan Gilbert fit this description.  EntreLeadership definitely does not.

Before I tell you what I liked about the book, let me give you its glaring weaknesses:

·         Oversimplification.  Sorry Dave – nothing about business is that simple.  Even the fine virtue of hard work (hardly a revolutionary concept) has been known to fail occasionally in business.

·         One dimensional.  If you are an engineer thinking about starting a flower arranging business on the side – Dave’s steps to success will be helpful.  Just say on the other hand you have a brilliant software concept you want developed.  Heed Dave’s advice at your own risk.  Your software developers may not stick around if you do as Dave does and tell your employees they “are stealing your money” by showing up at 8:10 (Dave’s office opens at 8:00 sharp).  No, people with skills don’t put up with that when millions of other startups are starving for talent.   

·         He’s too focused on debt as a big obstacle for business.  Dave doesn’t agree with debt.  Guess what Dave.  Hardly anybody can get a business loan these days.  Not even prime borrowers.  Bank of America started 2012 off by stating they are calling in existing business loans.  Even if they wanted to do so – there are no aspiring business people leveraging themselves to the hilt like it is 2005. 

·         Dave scoffs education (except for his Financial Peace Academy - $2,000 for 11 seminars).  He may be on to something.  If you want to start a window washing business –just get out there, have passion and do it.  However, if you are excited about a more complex field (e.g. medical devices or market research) – you just may need some academic background before you hang your shingle out.

·         Technology!  In a “practical” book about business the failure to mention technology is an inexcusable oversight.  It’s by far the most important, multi-decade trend reshaping every business from Mom and Pop’s shop to Google.  Any leader that ignores technology is clueless.    

In summary, Dave’s book is not all bad.  It’s not Jim Collins’ Good to Great (which actually includes research).  It’s more along the lines of Chicken Soup for the Soul.  And I truly mean that in a soft, nice sort of way.  For the high school student, the disgruntled cubicle grunt or bored retiree thinking about starting a business there is inspirational value.  So, yes in the end I am recommending the book –depending on who you are. For the serious business leader seeking an edge in the fast moving market place known as USA, I am going to ironically repeat some Dave Ramsey wisdom: Save your money!  

Time to Fire Your IT Provider?

I recently heard about a small business that spent over $20,000 to upgrade its technology. The deliverables: New products and the installation of those new products. Did the client get their money's worth!?

A rule of thumb: Don't spend more than half of your IT budget on maintaining the status quo (e.g. keeping up the phone system, network, hardware, software etc.). Spend your budget on projects that move the needle.

Due to the rapid evolution of technology, your in-house IT director or your outsourced IT provider may be putting your business at a competitive disadvantage. How do you know if you should be seeking a better IT solution?

There is a not-so-subtle difference, with HUGE implications for your business: An IT Custodian "maintains" and "upgrades" your existing technology. An IT Leader reviews your business goals and produces a platform that drives those goals. An IT Leader executes solutions to improve collaboration between business partners and better serve customer needs. In terms of traditional IT services, businesses can't afford to ignore the potential of cloud computing (42% of medium-sized businesses have already done so... Read Article Here). But the real opportunities lie in web and mobile applications.

Your customers expect you to make doing business easy, which includes: Making relevant information available to them, offering secure online ordering and payment and being transparent about your products, services and customer service failures. I know transparency sounds a bit Kumbaya, but I suggest you get on board. The old days of mean-spirited corporations shoving products into customer shopping carts are over. Today's consumer has more clout, more information and higher expectations than ever before. Your business can achieve these expectations by developing the right tools.

Tools

A customer relationship management system allows streamlined data collection. One primary application of this data is for customer segmentation, which is the process of splitting your customers into categories based on their preferences for more targeted marketing.

Inexpensive data analytics allow you to monitor various customer satisfaction metrics: Do customers respond to your marketing calls to action? Are you wasting the time of prospective customers by proving non-relevant info?

Scheduling appointments, completing applications and subscribing for information are tasks that both you and the customer dislike. A web developer can make these tasks painless for everybody. And speaking of time wasting, your employees will appreciate their increased productivity resulting from business info at their fingertips.

Do the world a favor and stop the "push" marketing. Due to a lack of technology, many companies resort to direct mailing, telemarketing and email spamming, which are ineffective and risk alienating customers. By utilizing a broader technology platform for marketing you can allow narrow subsets of the market to approach you, whereupon you offer them appropriate info. Developing an interactive customer/prospect experience is the crossroads between marketing and technology.

Sometimes it's not necessary to fire the IT provider. After all, you have top accountability for driving business growth and profitability. First, make it your priority that IT solutions are innovative and drive business value. If IT continues producing commodities (e.g. network support) you know it's time to hire an IT Leader who will champion your technological competitive advantage.

Euro Crisis Drying Up Small Business Credit? Give Your Business Every Advantage in Applying for Credit.

Big banks are back in the spotlight. The Fed's new "stress testing" focus includes evaluating bank exposure to Euro debt. As banks limp along, getting a small business loan is increasingly difficult. However, small banks approved 44% of small business loans in 2011, compared to big bank's abysmal rate of only 10%! Read the article.

You should have every advantage available when applying for and negotiating favorable loan terms for your small business. Knowing what your loan officer is thinking, allows you to gain negotiating power.

Time is money. The last thing your loan officer wants to do is go 50% of the way to loan closing and then fail to close the loan. If you have a credible loan request it goes to the top of the priority list. Start with an in-depth conversation about your business.

Credibility Stems From:

A) Being organized - Your loan documents can't be prepared without a copy of your organizational documents (articles) and financial statements - have copies readily available.

B) Understand the parties involved - Do you have other creditors? Do you plan to obtain additional financing from other creditors at a future date? What collateral is available? Are there third parties who will need to sign pledge agreements or authorize the financing? Banks don't ever want to end up in court and they don't like to be surprised. And usually when they are surprised they have an out. It's buried in those pages of documents. I know what you're thinking...But I have an attorney to review documents! (read on).

C) There are two types of banks: those with standard documents (no negotiating of loan documents allowed) and those utilizing the services of outside counsel (this will cost you). You should know which type of documents your banker is proposing. Typically, standard documents will save time and money and will work for most financing transactions unless you have unique business circumstances.

Once you have established credibility with your banker, the balance of power shifts to you. Your banker is trying to get your loan request approved with the credit authority. Ideally, minimal new questions turn up at this point. Lots of new questions signal you and your banker haven't covered all the bases, which means you don't have an empowered advocate inside the bank. As your credit request moves forward loan terms will become the primary discussion point.

Obtain Favorable Loan Terms:

A) Get it in writing. When your banker puts an interest rate or loan terms in writing it becomes a commitment. Written offers to lend are not subject to the whims of internal bank staff. A written offer usually = legally binding offer.

B) Consider loan covenants and loan terms and ask how the bank arrived at these conclusions. Are they realistic for your business? The last thing you need is a default letter 12 months down the road as a result of unreasonable expectations.

C) Offer information and seek to understand how the bank's risk position can be improved. Can you offer guarantor support? Are you bringing deposit accounts to the bank? Pledging liquid assets and providing a control agreement makes any loan look better to the bank.

Give yourself every advantage. Know your business's financial strengths. If there are weaknesses, anticipate the bank's potential concern and try to offer risk mitigating factors. And know when to get in writing. The closing table is long way off, but at a certain point your prospective banker should issue a written commitment that you can rely on for business decision making. Like any other business transaction, a certain amount of transparency and ability to recognize the counter-party's perspective paves the way to obtaining bank financing.

Getting an approval for new loan funds will not be easier in 2012. But at least you now know what your banker is thinking.

Can Your Small Business Afford Any More Credit Card Losses

The easiest way to improve your bottom line: Prevent losses due to credit card fraud.

Credit card fraud has been a growing economic concern for years. However, it becomes a crisis for small business owners when the rightful card holder discovers the fraud and the card issuer cancels the transaction (a charge back). In some cases, the merchant (that's you) absorbs the charge back.

The basics of a chargeback include: 1) The theft of a credit card; 2) The thief pays for a product with the stolen card (typically the product is re-sold for cash); 3) The card issuer, the card-holder or the merchant absorbs the loss.

For those business owners operating a bricks and mortar shop, minimizing credit card losses is straight forward - Check ID!

For online retailers it's not so straight-forward. If you ship products paid for with a stolen card, there will be a charge back and you will suffer the loss.

Start by contacting your merchant services provider and ask them what process you should be following to prevent fraud. Then implement a basic policy and publish it on your website. For the small, start-up business the surefire method of preventing credit card fraud requires basic vigilance: If the transaction seems unusual, verify the buyer's identity. A slightly more robust process includes a comparison of the billing address and the shipping address. They should match.

In a small business, decisions such as dealing with credit card fraud will be applicable depending on your specific business. Take a practical approach. Perhaps screen only high dollar transactions. But remember, at some point a credible business has a policy for fraud prevention. The worst case scenarios? Losing money. Or your merchant provider canceling your processing services.

I suppose you could return to the gold standard. But in this case, following the rules may offer the easiest path.

How the Europe Banking Crisis Affects Your Interest Rate

Remember the banking crisis of 2009? Same saga playing out in Europe, in 2011. The players differ, but we can make direct comparisons (e.g. the United States, a republic of 50+ states vs the European Union, an economic union of 27 states). I suppose to take the analogy one step further, Germany would be the responsible budget surplus generator (like North Dakota) and Greece would be the broke, spoiled child (like Neveda). The US Federal Reserve Bank is like the European Central Bank (get it?).


When are "things" bad? I say it's when nobody wants to lend, even to a bank. The TED spread measures the spread (fear) US banks require when lending short term to one another (beyond what's considered the risk free interest rate of a short term US Treasury Bill). At the height of the 2009 crisis, the US TED spread spiked from a historical level of 0.5% to 4.5%. Since 2009, the spread returned to historical levels of 0.5%.

However, take a look at the *European equivalent of the TED spread: It spiked from 0.25% to over 0.5% in July and measures 0.83% on September,9 2011.

The takeaway? The widespread financial uncertainty the United States experienced in 2009, has come to EU member countries.

How does this affect your business? It affects American prime borrowers (individual and corporate) by making interest rates very low for the forseeable future, as lenders seek to redeploy their cash into safe assets (hey, we already had our crisis). As an example, the 30 year fixed mortage interest rate hit a new all time low of 4.01% on 9-29-11. Based on the Fed's late September plan to drive long term rates even lower, this trend appears to have staying power.

*The spread between three-month LIBOR and the three-month Eurpoean Central Bank yield (i.e. the premium banks are required to pay over the rate the government is expected to pay).

Beware of Business to Business Scam

The #1 fraud scam* in the US is the fake/forged check. And it's always some variant of this: Receive a check, deposit it, make a check from your account and send it to the fraudster.

Instead of dying out because every Craigslist buyer has "heard that one before", this scam is gaining traction in the B to B market. And for much larger dollars. The average consumer scam of this type is a few thousand dollars. Today, business owners are being scammed out of tens or even hundreds of thousands with this scam.

How the scammer targets your business:

1) A caller from out of your geographic area requests professional services from you. Say you are a web developer or an attorney. The caller may even be a referral from a legit professional (who isn't aware of the scam).

2) You receive a check from the scammer. You deposit it in your business checking account. Your bank may allow you to immediately wire those funds out. Or, even in the case your bank holds the funds, you may have other "collected" funds that can be wired out. The scammer convinces you to write them a check (under some pretense). You are out the money. The check is a fake.

Prevent this fraud with a few simple steps. Even if you do some research and feel comfortable, keep in mind, these high-stakes scams can be elaborately developed. Trust, but verify. Contact your bank and request to be notified when the check is collected. When in serious doubt, contact your lawyer or financial service provider.

*According to the National Consumers League, founded in 1899

Are You Hiring Ms. Power-Hungry, Mrs. Over-Achiever or Mr. Popular?

The ability to recognize employee types will give you, the business owner, an advantage in hiring and managing a productive workforce. Let's start with the basics. Employees are people. People have needs. Employee types are defined by the primary needs that drive their daily actions:

Need for Power -A two-edged sword for sure. These rare individuals have the ability and desire to step into the top role. Relishing responsibility, they are willing to go great lengths to prove their prowess. These people are opportunistic, easily bored and capable managers. But be careful, they're also the most likely to go to your competitor, with your customer list in hand.

Need for Achievement - This is the gold standard of employees. They have applicable skills even you don't have. You'd hire more of them if you could. In fact, if you are running a start-up, or high-tech company you should be seeking only these employees. They generally are seeking monetary rewards and/or recognition of their ability. They are premium employees and should be treated as such. Let them take measured risk or do things a little differently than everyone else.

Need to Belong - This is the most common employee in corporate America. On the positive side, these people are easy to please. Make the work environment a reasonably enjoyable place to be. You will reap the benefits of a stable, dependable employee. However, don't expect great things. After all, this is an individual that primarily wants to be liked! (Einstein didn't derive e=mc^2 because he spent every afternoon trying to be mister popular at the office).

Now that you understand the basic types of employees, take inventory! Depending on your business needs, you need the right balance and composition in your workforce. Next time you hire for a position, identify the candidate's fundamental needs. Certainly most people fall partly into more than one category. But overall, do the candidate's primary needs match the job at hand?

How to Hire a Web Developer (On a Budget)

This blog will explain how to get a decent website done within a tight budget. I'm sure you're either: A) glad to finally have a respectable website that represents your business online or B) it's one of those headaches you know needs attention. Another day in the life of a business owner. When hiring a web developer you have two basic options:

Option 1) Go inexpensive and hire a freelance web developer (cost $500 to $2,000)

Options 2) Go expensive and hire a reputable agency (cost $4,000 to $15,000)

Since I'm trying to save you money, we are focusing on option 1. Keep in mind: You cannot buy a new Cadillac for the price of a high-mileage Ford Pinto. Don't even try. Assuming you have found a trust-worthy web developer, here's the steps for getting a respectable website built, without wasting a lot of time:

Get It In Writing - I'm not saying you need an elaborate, attorney-prepared document. But mandatory elements of the contract are: total cost, monthly hosting charges, payment dates, number of "minor revisions" and a deadline for completing the work. Also, take some notes. Repeat back your expectations to the web designer to ensure good communication. Don't get surprised when the website is completed without certain functionality you thought was part of the agreement.

Special Features - If you saw a website and you must have one just like it...make sure you communicate this clearly up front. The typical freelance developer probably hasn't done anything like it. If he claims he has, be sure to see the website and ask for a reference. If it's a deal breaker and you realize you need a more capable developer, be glad you haven't paid a deposit yet.

Design - Insist on seeing a couple design options. Usually, this includes 1 home page and 1 body page design (to be used on the other 4 or 5 pages within the site).

Document Basic Info - If you ever need something changed with your website, it's no time to start trying to contact that "no-name" freelancer from 14 months ago (who recently moved to Texas). Make sure you know where your site is hosted and what your login credentials are for changing the content on your website.

Plan Ahead - Remember that the web designer will need items from you as well. Site content and images need to be provided to keep the project from stalling. If you drop off the map for two weeks and then ask why the site isn't done, you're heading for Project Disaster. For the sake of both parties, do your part.

Test the Site - When the site is done, click through it. Also, there are no guarantees your small-time developer has tested the site on multiple browser versions. If he did excellent work, he wouldn't be working on the cheap. It's easier to get "weird" problems corrected now than after you've given final payment.

One clarification. This blog assumes you are dealing with a proven freelance web developer. The bad stories we've all heard (e.g. "the third web developer I hired never returned one phone call after he took my deposit...") are usually the result of randomly selecting an individual based on price. Never a good idea. There are productive freelancers out there. Once you find one, head off problems by following the above steps.

Social Media Floundering

Business marketing is in a state of unrest. As Wall Street experiences a "tech bubble" in 2011 (i.e. fantastic valuations of unprofitable .coms), there is a parallel movement afoot in the field of social media and online business marketing. To top off the chaos, nobody seems to be able to predict what's coming next.

To imagine how different the internet world could be in 5 years, consider Google's latest effort to create a social networking platform. Google+ has the insurmountable task of dethroning Facebook (which boasts 520 million entrenched users). All the analysts proclaim a single, resounding question: "Why would anybody switch"?

The short answer is that Google+ will attempt to create a better user experience in terms of content control. Of course, Facebook has publicly acknowledged they will be making significant changes to their own platform in the years to come. Could it be that any successful elements created by Google+ will be quickly duplicated by Facebook? Or maybe at some point in the future the two networking platforms will peacefully co-exist with two separate user groups (e.g. tech and business users on Google+ with family& personal friends on Facebook).

Maybe you simply think that Google is stupid. That they're wasting time and money. I doubt it. I think they see that the game is far from over, which extends to the rest of the technology application and internet universe. We're just getting started. So, when you as a business owner hear the wild, raving claims of "social media consultants", don't be alarmed. Much like you, Google execs and many other ostensibly well-informed people... they're trying to figure it too.

A Scalable Method of Expanding Your Professional Network

(For those of you who're already pros, skip to "The System".)

More Referrals = Personal Brand

This blog is for professionals (lawyers, bankers, doctors, psychologists, asset managers, consultants etc.) who have limited time, yet need to expand their referral network. First, let's describe the respected individuals to whom you are willing to refer your own valued clients: Trusted, Established and Knowledgeable are probably adjectives that describe any successful professional. Are these terms your peers would use to describe you? If so, you have achieved a critical factor for success termed Personal Brand.

Scalable Networking

Of course, time is of essence. In this context, scalable is defined as: A "networking" method that allows you to spend fewer minutes for each incremental referral source you gain. It's possible with social media. I recently discussed social media with a professional. It occurred to me that most social media "systems" are designed to allow marketing departments to effectively push products and services. But what about social media for professionals?

The System

The three steps to scalable networking: 1) Build your personal brand within your industry and personal contacts. Facebook is primarily for friends a family while LinkedIn allows you direct control of your personal identity (as displayed in search engine rankings) and keeps you connected to business contacts and centers of influence. Your personal brand becomes obvious to the broader community as you develop a strong, expansive reputation. 2) Engage with your peers, customers and colleagues. Twitter allows rapid and convenient exchange of information. YouTube is also an option, but not one I highly recommend for professionals. Videos have the potential to "go viral" with millions of hits. So what? It won't sufficiently impress the referral network you are seeking. Create an informative blog instead. 3) Learn from industry experts. Need to exchange some thoughts with Donald Trump on transforming your real estate career? Again, Twitter is your best bet (you may want to re-think your choice of role model in this case). If you "follow" an expert on Twitter, you may want to subscribe to the same expert's blog.

Conclusion

Face-to-face will always have an important place. But how many times have you wasted time listening to a sales pitch from some know-it-all with minimal relationship potential? Spend less valuable time. Control the source and volume of inflowing information. Develop a scalable networking system, through consistent Personal Brand Building, Engaging and Learning.

The Role of the Web in Business Marketing Strategy

Introduction

The rapid advance in web technology challenges business managers to stay current, but most recognize that the internet is a critical element of marketing strategy. There is an overwhelming service offering within the three broad marketing categories of internet technology: websites, search engine optimization and social media. Poor understanding of web technology and difficulty selecting internet marketing strategies appropriate for the specific business objective, lead to mediocre return on investment and lost opportunity for revenue growth.

The Website

What are the critical elements of your corporate website? In many cases, the website is outdated and ineffective. Websites developed several years ago offered basic information, typically to existing customers or prospects familiar with the business. Today, prospective buyers utilize the internet as a primary method of researching the purchase decision. To quantify the critical elements of today’s website, a survey of 200 purchasing managers was conducted*. The goal was to rank the importance of website elements. The most important website elements, starting with the most important, were found to be: Service Description, Industries Served, Success Stories/Case Studies and Professional Web Site Design and Layout.

Search Engine Optimization

In the mid 1990s companies began developing website content with the purpose of being found by internet users. Since then, search engines began offering Pay Per Click (PPC) services, allowing business to buy key words and phrases commonly being searched by prospective customers. Although, PPC is still a proven method of driving web traffic, search engine optimization is increasingly more important. By creating content that your prospective customers want to read, you provide a valued service and drive traffic to your website free of charge.

Social Media

The least understood aspect of internet marketing strategy is social media. Even so, market research** indicates that since 2009 small businesses have started participating in social media, 65% have Facebook accounts, 64% have Twitter accounts and 19% have Wordpress (blogging platform) accounts. Facebook accounts are commonly set up incorrectly, causing the account to be deleted by Facebook. By following the required standards, companies can build a community of loyal customers and potentially tap into the Facebook user base, which numbers over 500 million. Blogs can draw web traffic to your company without paying search engines, such as Google, for clicks. Publishing content on the web is easier than ever before, as blogging platforms are free and easy to use. Twitter offers an easy way to monitor conversations about your company or issues you care about. In the same way, your company can send out 140 character messages that are relevant to your prospective customers.

Conclusion

Internet marketing offers significant opportunity to grow revenues. Although, appropriate technical resources should be hired to develop internet marketing campaigns, senior management involvement is critical. Effectively developing each category of internet marketing strategy requires: fundamental understanding of the business, an ear for stories and experiences that resonate with your customers and people skills to assemble a team that can effectively manage such a complex undertaking. Staying informed about changes in the dynamic area of internet marketing is critical. If senior management can’t do it, ensure that some responsible party is closely monitoring the company’s internet marketing, to recommend changes and identify better practices.

Social Media Advice for Executives

You're busy. You know there's something big happening in Social Media, but you wonder: Is Social Media for You? At the end of this blog, you will have current info. Then, I will leave you with two simple questions that will help you make this decision.

Overview

First, I want to bust common myths surrounding social media. Then, I will briefly describe the relationship social media growth has to a revolutionary management technique, which top-performing, world-class corporations across the globe have recently solidified into a sustainable competitive advantage; namely, that of Data Analytics (in a nutshell, data analytics relies on data to drive decision making, rather than intuition).


The Worst Case Scenario

The CEO of Best Buy was notified via panicked phone call at 4 AM that some 5,000 of his Twitter followers had received a strange tweet from his profile: “I’VE BEEN HAVING A LOT OF GREAT SEX LATELY, AND HERE’S WHY.” Read about Best Buy's response.


Is it Worth the Pain?

Obviously, the thought of this sort of "nightmare scenario" alone, could discourage business executives from participating in the social media realm (by the way, security breaches are an anomaly). Additional negative perceptions regarding social media include: consumption of valuable time, inevitable clash with corporate culture, difficulty with identification of desired outcome or the simple mindset that "it's all a fad". I want to impress the contrary upon you, that in fact, social media is customizable to your needs, highly-relevant to being informed, and even critical to long-term business success.


Who am I to Say?

I am particularly qualified to comment on this topic because I am both a professional in the banking industry, and a close affiliate of industry leaders in social media/marketing/web, I am increasingly familiar with people in their 20's, 30's, 40's and 50's effectively harnessing the power of social media to drive various business initiatives (e.g. sales leads, networking, market insight and hiring).


When Will Social Media Stop Changing Overnight?

The concept of social media itself is dynamic. Consider the absurd case of early internet pioneer Josh Harris, who used his new-found wealth to film every aspect of his daily life (for some reason this visionary executive thought society at large was soon to follow, missing the mark to put it lightly). Even in broader society today, the use of Facebook is going through a maturation stage. People don't use the ubiquitous social platform in the same way they did a couple years ago. For example, you don't accept everybody as a friend; or, you may be increasingly sharing more or less info online. This advice applies to everybody, especially corporate executives: Start slow, share information at a level YOU are comfortable with. It almost need not be said, but remember internet publications are virtually permanent.


Where are Twitter, Facebook, Linked-In (and the others) leading us?

This is a broad question; however, I am singularly focused on this context: The data relevant to driving your business initiative. In 2009, humans created (e.g. publishing social media) more data than in all of previous history combined. In the universe parallel to social media growth are management analysts at top-performing Fortune 500 companies refining enterprise scale information systems to allow data, rather than intuition, to prescribe future actions. The spectrum (from right to left) I need you to visualize is based on the amount of data available and the sophistication of the business need:

Far left - Example 1: A wedding planner looking for sales leads (on the left of the spectrum).

In the middle - Example 2: A middle-market business manager aggregating sales leads from a variety of channels to determine which marketing efforts are a waste of money and which are producing return on investment.

Far right - Example 3: A world-class, international corporation implements a work-in-process database to rigorously determine how the work production of individual employees affects each client, measured based on rates of: Sale conversion, Satisfaction with the value proposition and Retention.

Somewhere on this spectrum is your executive responsibility/business need. Social Media has relevance to examples #1 and #2, while example #3 describes a proprietary enterprise scale information system (beyond the scope of this topic). In the short-term, I recommend basic participation in social media. In the mid-term, you will need to understand your company's data strategy, with respect to your departmental responsibility.


Is Social Media for You?

#1 Is it important that you be the first to know when changes affect your industry or affect your customers, so that you can stay ahead of competition?

#2 Do you have any useful info for others in your industry or for your customers, which will foster a deeper relationship?

Perhaps, you're already convinced that Social Media is a growing force; if so, the next logical consideration is: Who's responsible? If anybody in the organization should be tuned in, it's executive level decision makers. To ignore this societal trend, would be akin to Henry Ford ignoring the advent of the Second Industrial Revolution and delegating "production" to junior management!

If you answered yes to either of question #1 or #2 above, social media will be a powerful venue to accomplish these objectives. I propose you start by following me on Twitter. Need more info on Twitter? Link to Jeremiah's article (he's an expert on disruptive technology this is timeless advice on Twitter for professionals.) Follow my blogs and my tweets; I will do my best to send you timely, concise industry updates that affect business managers -Thanks for reading!

Make Strategy the Driver, not the Unused Map Under the Seat

Did you make a New Year's resolution? Okay - enough on personal embetterment (to borrow a phrase coined by the recent ex-pres). What does your company need to change? If no change is needed, you and your generals must already rule the universe, I suggest you focus on Meditation.

Assuming self actualization is less important (at this moment) than business success, read on... The following is technique proven to yield successful execution of business strategy.

Let's assume you've developed a great strategy (no small feat - its what you're doing and why). Let's further assume your employees then didn't accomplish their respective responsibilities, thus resulting in failed strategic execution. Sounds typical. And frustrating. Not to mention expensive and unacceptable due to lost opportunity.

1- State Your Mission

Mission is a loosely-used term. Don't confuse this with your "Mission Statement" (typically a lengthy, un-utilized collection of words). Instead, define a mission (or intent) for your employees to accomplish that will make YOU (assuming you are the business owner/CEO) happy. As an example, perhaps 20% sales growth would be exciting.

2 -Re-State Your Mission

Context is critical. Think of this step as an executive-level exercise in remembering why your company exists (hint: customers). You may need to refine your Mission upon further consideration of the context. If the identified mission is important, it has to be in sync with the company's ultimate purpose. Another way of putting it, is this, "Our customers will accept a 20% price increase because we offer world class service" (see how the company's ultimate purpose dictates all missions). CAUTION - Missions should flow upward and support higher level objectives, as opposed to shaping higher level objectives. That's not to say top level missions can't change but it should be done with intention.

3 - Define Performance Metrics

How will your employees know they've been successful? Their input is important here. If they understand their mission (i.e. what they will do) and why its important (how it will support the executive level mission) the organization is aligned for success.

4 - Define Tactics

Convert your strategy (executive level plan) into tactics (employee level plan). Specific responsibilities are parceled out. Failure to accomplish the broad strategy will be directly traceable to unattained performance metrics, which in turn will point to ineffective tactics of those front line employees (who are highly engaged with critical operations or customers).

5 - Set limits and boundaries and debrief

Your employees will set their own boundaries if you don't ("Gee, I think I will start leaving work at 5 as long as I get here by 7"); employees may set loose or restrictive boundaries on themselves with the worst case being that said boundaries are not focused on accomplishment of their missions. By setting initial boundaries and occasionally holding a debrief session to gain better business insight, your strategy has a dynamic element, which seeks to take advantage of new information gained and develop best practices. Boundaries may need to be redefined to allow a different level of flexibility. Debriefing is concerned as much with maintaining high psychological health of the employee as it is an opportunity for information gathering.


Conclusion

The technique described above was utilized in Caesar's military operations; the general form of this technique is so timeless its utilized today to maintain the largest operation on the face of the earth - the US Military (not to mention virtually all corporations with an element of strategic sophistication). Although, this technique is highly effective for execution of strategic initiatives, the top level executive must be ultimately responsible for the strategy and ensuring that the employees feel empowered to engage the customer and impact the business.

Conquest!

Now, I want you to conquer new business (since you already understand Situation Analysis and Strategy, Conquest is a matter of connecting the dots and perhaps hiring a savvy internet marketing consultant like Sanna Lee to pull it all together). What will you need before unleashing the power?

The Group: Pull together individuals from your employees and collaborators, with the following three traits:

1. People with an ear for stories and trends that resonate and are relevant to the business.
2. People with "people skills" who are unafraid to motivate cooperation and inspiration from others.
3. People who can think/move/respond fast.

The Promise: Does Social Media Marketing really have promise?

If you are a responsible business manager you probably recognize that businesses are managed by humans and humans love to be fooled. And parted from their money. To answer the question... Yes - SMM offers amazing potential for results at minimal cost. First, from a cost standpoint, marketing via the web is cheap, because resources you already have access to are pulled into play. In a cruel twist of fate, Social Media Marketing has yielded success to a stodgy cornerstone of the US Economy; namely, Fortune 500 companies, who first properly embraced and leveraged the newfound power of the net. How can this be? They have the cash. They can throw cash at the problem until its done right. SMM costs a fraction of a large corporate budget; conversely, many businesses that could benefit from SMM don't even have a marketing budget. The majority of businesses attempting to employ SMM are wasting time and money on empty promises from hucksters.

Interested in harnessing the power of SMM for your business? Here's the four part breakdown...

1) Pricing - For years, individuals in your company have secretly envisioned a pricing nirvana where customers are charged more when they are willing to pay more. Practically speaking, you can see the risk in offending your prized customer: "Hey Mel, I see you in here everyday, you love us, I will now charge you double for your cupcake". Powerfully, Social Media allows this. Think Groupon. Or for your business, what if "socially" connected customers (probably newly discovered via the web) get a special discount. Your regulars pay the regular full price. SMM allows varied simultaneous price points, which is palatable because NOBODY KNOWS. If they did know, they would connect with you. Don't confuse this with a "loyalty program", here we are offering different prices to prospect customers we select.

2) Product/Service - Your product/service may be your crown jewel. Hopefully, your customers feel that way too. Speed is critical. Act quickly. Monitor feedback, consider modifications or simply begin the conversation to explain what the customer is missing (making them happier). Don't forget to integrate SMM with traditional functions (e.g. customer service and product development), as they will have valuable input and ability to determine implementation options.

3) Place/Distribution Channel - In the old days the purchasing manager had a rolodex containing names of salesman (and vice versa). Also, important was shelf space, for retail buyers. Today, many of your customers check in daily with the most influential aspects of their lives, usually friends, associates or selected content providers. Whatever these influential entities have to say about your brand will influence the purchase decision. Powerful info is relayed with minimal investment on the behalf of the sender. By the time a purchaser drives to the physical location or picks up the phone, they already know what to buy. How many gamers had to visit the retail store to determine the purchase of "Call of Duty"? Marketing to them at the point of physical contact, is a day late and a dollar short. The rise of FedEx is an indicator that mentally connecting with your customer is key, while physical delivery of items is fast becoming a commoditized element of the value chain - to be outsourced.

4) Promotion - First off, let's discount the typical mentions that don't actually work that well, such as SEO and email marketing. Why? Because they are outdated, reminescent of the era known as outbound marketing. Today, consumers select the information source. To advertise to them you are asking for their time. In exchange they will require compensation (e.g. entertainment, valuable info, etc). What can you give your prospect in exchange for permission to market your wares? Find timely stories (internal or external) that will resonate with the market. See how Nike harnessed the Lebron story.

Don't be overwhelmed. Hire a consultant to make your internet strategy happen. Just do it. Or perhaps you want to learn more. I suggest following @sanna_lee.

Marketing Strategy! More Exciting than Situation Analysis

Strategy. The term evokes great inspiration, perhaps due to it's military origin. Alas, Julius Caesar you are not, but you do have a business to run. Skip the MBA and the ancient world philosophy. Instead, lets break it down and get your focus group thinking in productive terms (last week was Situation Analysis).

Segmentation: A Fortune 500 Marketing Director said that during interviews for marketing analysts, the interviewee gets 10 minutes to mention segmentation - its that important. Segments, which your business and your competitors are concerned with, are groups of customers who will respond to identical marketing efforts in a common fashion (e.g. laptop owners who check their personal email regularly). If customers within the segment don't respond in a similar fashion, let me clue you, this is a poorly defined segment. Back to the drawing board.

Targeting: Your business can't please everybody. Those segments, which are your sweet spot, mean everything, ditch the rest. Here is an example. If your business offers Quality and there is a segment that only cares about Price, ditch 'em. You should get a sinking feeling from segments demonstrating elastic demand. No marketing expert can help you with those price-sensitive folks! You are an extractor, in the no man's land of operational efficiency and price wars! I pity you! Sorry about that, I get a little emotional around commoditized services.

Positioning: "You are the one I've been looking for all my life"! Okay, that's dramatic; hopefully, you see the analogy: Your company's brand occupies a place in the hearts and minds of the customers (if it's strong) who comprise your targeted segment. Your company's brand compels a purchase decision (if it's positive, "BP" = "oil spill" to most people, not exactly warm and fuzzy).

As Julius said: "People worry more about what they can't see (understand), than what they can". So, understand your business marketing strategy.

Next week is about Strategy Execution. I must leave you with a Julius quote that happens to coincide with this blog's 3 part series: "I came, I saw, I conquered. Veni Vidi Vici."

Part 3 - Conquest!