3 Things You Don't Know About Sales

Ideas are great, but no start-up can survive without sales--and a mastery of the psychology behind selling. (Hint: manipulation skills are not required.)

Sales can be a daunting task for any young entrepreneur.

If you're working on a start-up, you're spilling your heart and soul into your idea. Now, you somehow have to convince others to buy into--and literally purchase--your idea too. The truth is, most entrepreneurs don't know the first thing about getting an effective sales process up and running, let alone how to pitch customers.

Since we created ElasticSales, which is essentially a sales team on demand, I've had the opportunity to work with several different young companies. I always start by teaching them about the psychology behind sales. Why? Because most people think a sale is about manipulating or pushing people into making a decision. That couldn't be further from the truth.

Here are the most important things I tell my clients (and my own salespeople) again and again about the psychology of sales:

1. People don't buy products or services. They buy emotions.
By "emotions," I mean: A desired feeling. Superiority. Love. Comfort. Excitement. Security. Or sometimes, the opposite--fear.

These and more are all emotions around which you can position your product or solution. However, you have to know what emotion your customers are actually looking for. If you don't, you won't understand how to sell to them.

The best way to determine this is to ask the customer what's important to them and what they need. Once you know this, you can position your solution around their needs and then sell your benefits--NOT your features.

2. Emotional states dictate buying (and all other) decisions.
Have you ever been in a "shopping rush?" A state in which you wanted to buy something desperately, though the feeling has very little to do with what you are about to buy?

This phenomenon happens in both consumer and enterprise sales. Make sure you pay attention to what emotional states your customers are in before selling them anything. Are they depressed? If so, they really shouldn't be making a big purchasing decision. Are they in that "shopping rush" where they have no idea what you're offering? Then the last thing you want is your customer to feel buyer's remorse because you pressured them into a purchase.

Above all, make sure you're in a good state for your customers as well! Customers can pick up if you're not in a good state to sell them your business.

3. Communication is all about tonality and body language--it has little to do with content.
This is a very old truth, but it's still surprising to most people. If your lips are saying "buy!" but your body and voice are communicating "don't do it," you won't win many deals. Listen to your phone calls or record yourself conducting a presentation. Make note of your tone and posture and ask yourself, "Would I buy from this person?"

If the answer is "no," then you have to adjust your pitch. Be conscious of your tone and body language to make improvements everyday. After a few weeks, you'll see improvements in your tonality, body language, and sales.

http://www.inc.com/young-entrepreneur-council/rules-to-work-by-steli-efti.html

Master the Art of Customer Loyalty

If you don't have a loyalty program, you're not taking advantage of your happiest customers. Here's how to get started.

Marketing your small business is easier said than done. Maybe you’ve tried Google AdWords or created a Facebook page but were disappointed with the results or complexity. You may have considered daily deals but realized that selling products at negative gross margin to one-time customers is not a winning combination. So what’s your next move?

There are no silver bullets in marketing, but I learned one important lesson from the Fortune 500 clients I consulted for at McKinsey--the power of customer loyalty. For many small businesses, loyalty marketing may be the only marketing they need, because it builds upon their greatest asset: their most satisfied customers. Bain & Company famously wrote that it costs 6 to 7 times more to acquire a new customer than to retain an existing one. Though you probably can’t invest in loyalty like a Fortune 500 company would, there are steps small businesses can take to begin loyalty marketing.

First, invest in service. Zappos pioneered the mantra that customer service is the new marketing. An American Express study showed that 70 percent of Americans would spend more with companies they believe provide excellent customer service. Service is the strength of most small businesses, so you should be able to do this well immediately.

Second, build a robust loyalty program that:

• Increases Customer Visits. Remember the first time you joined an airline frequent flyer program? Initially you were probably comfortable spreading your miles across a few airlines, but as you neared a reward in one, you started to stick with your preferred airline. And then once you experienced the benefits of airline status, you were hooked. When you build your loyalty program, make the first reward easily attainable, so customers experience the thrill of getting a reward early on. Then add additional tiers to earn even more memorable rewards and maybe bonuses after a certain number of visits. Even if you use a simple punch card, you should be able to launch this kind of program. Companies that implement simple visit-based loyalty programs can increase customer visits by 30 percent with very little cost.

• Increases Spend Per Visit. As a second step, consider rewarding customers not just based on visits but spend. For example, if you are a restaurant, give a point for every $5 in spend. This encourages customers to not only come more frequently but also spend more per visit. This has a multiplicative impact on sales.

• Increases Revenue from Promotions. Fortune 500 companies love loyalty program signups because you are no longer just an anonymous customer to them. Once you’ve joined, they have your contact info and can reach you with promotions. Do you collect emails when you sign up customers to your loyalty program? It’s a small step that will give you an additional revenue stream when you send them relevant promotions on holidays or special events. 

• Increases Word-of-Mouth. Do you encourage your loyalty program participants to follow you on social media as well? You’ll have another channel to share news and promotions, and they can amplify word-of-mouth about your business to hundreds of friends.

I was chatting with a friend recently who said that he wished his favorite pizza shop around the corner had a “frequent flyer program.” Shortly thereafter, they rolled out a digital loyalty platform, and now that he’s earning rewards, he loves his shop even more. That love is likely to translate into 30 percent more visits over the course of a few months. And what did the pizza shop owner have to invest to get this return? A few free pizzas.

http://www.inc.com/victor-ho/master-the-art-of-customer-loyalty.html

5 Power Questions for Your Sales Team

Smart questions bring in good answers. If you want to know what's really going on at your company, make sure you're asking the right ones.

Your interactions with your sales team have an obvious impact on business--and the questions you ask can enhance or degrade your company's performance.

By asking the right questions, and then carefully listening to the answers, an astute leader can influence and gain insight into an employee's business competence and morale, as well as a team's overall effectiveness. As a bonus, you'll enrich morale by showing your sales team you understand their key concerns.

Here are five smart questions that can give you a deeper understanding of employees, the business, and the competitive marketplace.

1. What is the biggest obstacle to adding new customers?
Reps are cautious to court new accounts if they believe the company will not be able to service them effectively. So the answers to this question can reveal operational issues, such as a lengthy procedure for setting up new accounts or order processing problems within your company.

On the other hand, if you get the answer, "Only my lack of time," that's good news: It says that all systems are in good order and that morale is likely high.

2. What is working and what isn't?
Such open-ended questions will quickly identify chronic complainers as well as uncover significant problems. When asking this question, be prepared for fix-it requests that may or may not be valid, such as, "We need more samples," "Delivery is too slow," or "We are not competitive." You may need to do some digging to find out whether the problems really need solving.

Most importantly, answers to this question communicate morale. If the responses suggest that little or nothing is working, then you have a morale issue. That's a sales killer, and a leader should uncover and fix causative issues.

3. What are your most (and least) significant opportunities
The answers to this question indicate where a sales team is focusing its attention. The answers may signal that a sales team is operating contrary to company plans--perhaps spending time on a product or service that is not in the company's best interest, for instance. You may also uncover an opportunity that management has not previously identified.

4. If you had a magic wand and could fix one problem, what would it be?
This question forces a targeted answer to avoid a rambling discussion. A wise leader will ask why an employee picked a particular answer, and follow up by soliciting suggestions to correct it.

While the specific answer may give you additional insight into business challenges, it's the suggestions that indicate the depth of a salesperson's business understanding. An unfeasible answer implies a shallow understanding; practical answers convey a solid business understanding.

5. Who is your toughest competitor--and what are they doing right?
One of a leader's most important duties is to stay current with competitors. Your sales force faces the competition each day; team members should have the best on-the-ground reconnaissance.

Once you know the competitive landscape, you can proceed with "risk vs. opportunity" analyses. What you do not want is to find out after the fact that you could have avoided a sales failure by countering competitive activity.

By asking power questions of the sales team, leaders keep in touch with team morale while staying informed about the competition and showing that they care about the team's success. When issues need correction, take action quickly, and give credit to an idea's originator--both clear signals that a good leader is in charge.

http://www.inc.com/john-treace/sales-management-power-questions-sales-team.html

How to Build Customer Trust: 9 Rules

No one is going to buy from a person they don't trust. Here's how to build a better client relationships.

Customers don't buy from people they don't trust. Unfortunately, most sales gurus (including some that are quite famous) define selling as "convincing," "persuading," and "winning"–presumably with the customer being the convinced, persuaded loser.

No wonder so many people put up a barrier the minute somebody tries to sell them something!
Fortunately, it's easy to build trust in a business relationship. Here are the rules, based on a conversation with a true expert in trust-building Jerry Acuff, author of The Relationship Edge: The Key to Strategic Influence and Selling Success.

1. Be yourself.
Everybody on the planet has had unpleasant experiences with salespeople, and many have walked away from a sales situation feeling manipulated. So, rather than acting or sounding like a salesperson, simply act the way you would when meeting with a colleague.

2. Value the relationship.
If you want people around you to value having a relationship with you, you must truly believe that relationship building is important. You must also believe that you honestly have something of value to offer to the relationship.

3. Be curious about people.
People are drawn to those who show true interest in them. Curiosity about people is thus a crucial element of relationship building. Having an abiding fascination in others give you the opportunity to learn new things and make new connections.

4. Be consistent.

A customer's ability to trust you is dependent upon showing the customer that your behavior is consistent and persistent over time. When a customer can predict your behavior, that customer is more likely to trust you.

5. Seek the truth.
Trust emerges when you approach selling as a way of helping the customer–so make it your quest to discover the real areas where the you can work together. Never be afraid to point out that your product or company may not be the right fit.

6. Keep an open mind.
If you're absolutely convinced the customer needs your product, the customer will sense you're close-minded and become close-minded in return. Instead, be open to the idea that the customer might be better served elsewhere. In turn, customers will sense that you've got their best interests at heart.

7. Have a real dialog.
Every meeting should be a conversation, not a sales pitch. Spend at least half of every customer meeting listening. And make certain the conversation is substantive and about real business issues, not just office patter or sports chit-chat.

8. Be a professional.
Customers tend to trust individuals who are serious about what they do, and willing to take the time to achieve a deep understanding of their craft. Take the time every day to learn more about your customers, their industry and their challenges.

9. Show real integrity.
Be willing to take a stand, even when it's unpopular with your customer or your company. You don't need to be adversarial, but have the ability to make decisions based upon what you know is right. And on a related note: Never promise what you can't deliver.

Needless to say, gaining trust is only part of the equation. You must also have a product that customers want and need, and the ability to show how you're adding value, solving problems, and so forth.
However, if you don't earn the customer's trust, they'll probably buy from someone else whom they do trust–even if the offering isn't as good.

http://www.inc.com/geoffrey-james/how-to-build-customer-trust-9-rules.html

4-Step Formula for Guaranteed Success

This amazingly simple formula drives virtually every successful business. Unfortunately, many entrepreneurs and investors lose sight of these basic principles.

Success in business, especially in growing businesses, does not require an ingeniously complex solution. Often, success comes from mastering the basic fundamentals.

In short, success is about addressing a customer need better than you or your competitors currently address it. In many cases, the "new and improved" solution is surprisingly incremental, rather than revolutionary. Examples abound:

Google, one of the most valuable companies in the world, began as a slightly better search engine.
The Toyota Camry was the best-selling car in America for many years because it had better gas mileage, was fun to drive, didn't break down, and was less expensive than other sedans.
Oprah Winfrey dominated daytime TV by tapping into topics for women in more interesting ways than Phil Donahue and others had done for years.

Starbucks reinvented the concept of the coffee shop-something that had been around for generations-by consistently serving good coffee in a pleasant environment.

As we analyze the drivers of success in these and virtually all other entrepreneurial successes, we find that there is an extremely basic, and in hindsight, glaringly obvious, four-step formula common to each.

1. Develop an understanding of customer value.
What's the value equation from the customer perspective? This is defined, most simply, as benefit minus cost. Many businesses and entrepreneurs simply don't understand what would make a customer happier or better off. Often they are trying to fit their product to the customer rather than identify what product would fit the customer

2. Create a better product or solution for a specific customer.
Because each customer is different, identifying the specific customer or segment you are targeting is critical. Attempting to be all things to all people typically results in an indistinct product that benefits no one.

3. Determine how to scale the product from one customer to many customers.
Once you've mastered the value equation for one customer, you can focus on finding many customers that think and act alike. Most management teams try to scale the business before they've created a valuable product with one customer. It's similar to launching a rocket to the moon without mastering the aerodynamics. It might have the power to get there, but it's not going to make it.

4. Develop a business model that allows you to build scale while generating incremental return on Investment.  

In the end, you'll need to build a business case for investing capital to grow the business. If the customer value equation is still in flux, no amount of growth capital will fix the problem. We like Alex Osterwalder's business model canvas as a template for building a solid business model. But, it's important to calculate how the investment will create a return on capital.

Of course, execution is everything. If business success was as easy as following a few steps, everyone would be a mega-billionaire. But it's surprising how many competent entrepreneurs, corporations, and even experienced strategists develop business models that omit one or more of these basic steps.

You Can Win Customers for Life

Looking to build strong relationships with your clients? Master their personal styles.

At AnswerLab, one of my main missions is to provide amazing service to our customers. Zappos has pioneered the revolution of customer-focused businesses with its message to spread happiness. Countless business books advise us to learn what the customers want and simply give it to them. What they don't talk about is the importance of understanding the customer's personal style and communication preferences in order to do that. Without that, how do you earn the customer's trust?

Why care about customer style?

Our personal styles govern a great deal about how we react in situations, communicate with one another, and make decisions. Each of us perceives the world around us differently. Our willingness to fulfill a request may increase or decrease simply due to the way in which a request is delivered. Provide too much information, and a client may not respond at all. Provide too little information, and a client may lose trust. How do you know how much information to share? Start by understanding your customers' styles and how to tailor your interactions with them. To do so, you need a simple framework for knowing the minds of your customers.

Find a behavioral model

At AnswerLab, we use the "DiSC" behavioral model to understand personal styles. Many models have been developed (HBDI, Meyers-Briggs, 16PF, among others), but we've found DiSC to be the easiest to adopt, communicate, and observe in others. Every employee on our team receives a DiSC assessment within a month of joining the company. DiSC tells us what motivates us, what scares us, and how we behave in various situations. It also tells us a great deal about how we absorb and process information. Using this model allows us to:

1) Better anticipate customer needs
2) Develop deeper empathy for the customer perspective
3) Make the customer's personal style differences objective rather than subjective
4) Discuss differing perspectives with customers rationally instead of emotionally

The DiSC has four quadrants: dominance, influence, steadiness, and compliance. Each of us exhibits some combination of these behaviors. Once you learn the model and specifics of the quadrants, you can easily figure out how someone might fit in it, without ever seeing a formal professional assessment. That means you can quickly assess the style of customers and learn how to better communicate with them.

Apply the behavioral model
Once you know the model and how to identify behavioral traits in customers, you can develop a few simple communication norms. Some examples:

Let's get it done! This attitude is indicative of the "dominance" profile. If your customer is high in the dominance quadrant, she'll be extremely motivated to get things done. With these clients, you should be direct, offer alternatives, ensure she "wins," act quickly, and focus on issues. A slow response to this client will particularly frustrate her.

Let's get it right! This is the mindset of a customer who is high in the compliance quadrant. He is motivated to work within established rules, guidelines, and procedures to ensure accuracy and quality. When communicating with a "High C," be sure to listen carefully, be thorough, answer questions correctly, and use written supporting materials. Send one wrong piece of information and the customer will begin to lose trust in everything you do.

Let's be positive! This sounds like an "influence" profile. A customer who ranks high in the Influence quadrant often tries to persuade, promote, or influence others in a positive way. This kind of person is very focused on keeping others happy. When managing this type of customer, be sure to maintain a positive atmosphere, allow her to express herself, take time to chat and talk, focus on the big picture, and be enthusiastic. If you use a confrontational tone, she may retreat.

Let's do it as agreed! This is the "steadiness" profile. These customers tend to be cooperative, supportive, agreeable, and highly motivated to keep the status quo. When working with this someone like this, proceed in a logical order, ask specific questions to find out true needs, provide support, and remember fairness and justice. For this customer, changing process rapidly will make them feel uneasy.

Each style in the DiSC model has a preferred mode of interaction. Learn them, adopt them in your communication, and you'll earn customer trust and loyalty for life.

http://www.inc.com/amy-buckner-chowdhry/how-to-win-customers-for-life-master-personal-style.html

Trade Up Like Steve Jobs

How Beryl Companies CEO Paul Spiegelman took a cue from Apple to charge more for his call center services.

When Steve Jobs and Steve Wozniak founded Apple Computer in 1976, they decided to embark on a premium pricing strategy in an otherwise commoditized industry. Jobs focused on differentiating the Apple product, making the mundane into something more. The rest is history—a $347 billion company with profit margin of more than 21 percent in the most recent fiscal year.

Smaller businesses can make the same choice. Here’s how. As CEO of Beryl, a company that handles hospital interactions with patients (like people calling for physician appointments or clinical advice), we charge more for our product than our competitors. In fact, we are as much as 40 percent more expensive than the rest of our competition. And, we don’t apologize for that.

You may wonder how we pull that off. After all, when you strip away everything else, Beryl is in the call center business, which is known for low margin and high attrition, and often seen as a commodity. Yet we achieve profitability five to six times higher than our competitors, and we sustain it year after year. We invest in our employees and our company "culture," so our staff enjoys what they do and where they work, and, as a result, deliver better, more hands-on service.

Premium pricing isn't about profitability for the sake of profitability. What allows us to charge more is the fact that we offer our hospital customers a better way to maintain relationships with patients, if they choose to pay for it. Here are five tips explaining how we implemented our premium pricing strategy and how you can, too:

1. Articulate your value
It’s up to you to communicate why your product or service costs more. Apple customers pay for unique design, and peace of mind from security concerns. At Beryl, they pay for our culture and customer service. We act as an extension of local health systems, and we assure clients the best people represent their brand. We invest heavily in a community of fun because happy people provide better service. We also invest in recruiting and training people with empathy and compassion, something that is very important in health care.

2. Align your offering to their core objectives.
If you want customers to pay more, it is important to connect your product or service to their most critical strategic initiatives. At Beryl, we do more than just conduct phone calls on behalf of our hospital customers. We also gather real-time data that helps them better understand their customers—patients—and build their business. This is even more essential now that hospital reimbursement for Medicare is tied to the patient experience. Apple did this by reinventing the computer into a device that combined a computer, phone, and music player.

3. Elevate the conversation beyond the product or service you sell.
By attaching your mission to a more global topic, you have the opportunity to connect with clients on a more strategic level. One of The Beryl Companies, The Beryl Institute, generates research and dialogue about one of the most important topics in health care, the patient experience. Similarly, when people commit to the Apple brand, they aren't just buying a computer or a music player or a mobile phone. They are buying into a desire to "Think different," and stay on the cutting edge of technology.

4. Put a price on everything.
If you are more expensive, you should be able to put a price on what your customers receive for their extra expenditure. For example, since Beryl’s calls cost customers $1 more than our competitors do, we're sure to explain that extra dollar: $.20 for better data, $.15 for more extensive training, $.10 for recruiting better people, etc. This helps the customer understand why our business charges more. If your customer cares about the premium features you offer, they'll continue to choose you over the competition. Apple conveys the value of its higher prices by being first to market with new features. The iPhone's debut caught competitors off-guard. The "apps" interface was a superior experience, and its novelty allowed Apple to price it accordingly.

5. Stick to your decision.
Once you become a premium provider, you must commit to it if you intend to maintain your pricing. Sometimes that means turning away potential clients who value low prices over quality services. Negotiating down your price is a slippery slope. Notice that Apple only cuts the price of its products once the next generation is introduced. At Beryl, it is tempting for us to price some of our new services more competitively in order to gain entry into the market. However, we realize that once we go down that path, we can't go back.

Not everyone wants to drive a Cadillac. Not every customer will choose to pay more. No wonder some businesses compete solely on price. But, if your business has a sustainable competitive advantage, like Apple's ownership of creativity and design, or Beryl's impeccable customer service, take a bold step forward and ask the market to place a higher value on it.

5 Ways to Grow Your Business

Turn your customers into salespeople.
Customer referrals can be an effective way to tap into your current customer base and explore new revenue streams. Roku, a Saratoga, California-based company that makes a device that allows users to stream media to their televisions, understands this concept. Last year, the company introduced a refer-a-friend campaign where, for every friend you refer, your friend gets the lowest price on a Roku player and you get a free month of Netflix. "We knew we had an engaged customer base that was passionate about the product, and we wanted to tap into that," Lomit Patel, Roku's senior director of direct marketing, told Inc. magazine.

Learn how to delegate.
"As organizations grow increasingly complex, duties and responsibilities across the workforce can become less well defined," writes Robert Heller in How to Delegate. "Often it seems as though everyone is doing everyone else's job. Delegation is the manager’s key to efficiency, and benefits all." In other words, in order to scale the business, a CEO needs to learn how to delegate so he or she can focus on the company's bigger picture issues.

Develop new products.
Innovative companies understand that in order to grow, they must continue to develop new products and services. "No executive today is unaware of the strategic need for winning new products," writes Robert G. Cooper in his book, Product Leadership: Creating and Launching Superior New Products. "And so the pressure is on virtually every leadership team to deliver great new products. The new corporate motto is 'innovate or die.'"

Penetrate new markets.
The Obama administration has advocated for small businesses to push into global markets, and has set the goal of doubling U.S. exports by 2014. Today, only about one percent of small businesses export overseas. One of the biggest challenges for small companies wanting to export is communication, says Marc Meyer, a professor of entrepreneurship at Northeastern University. This is especially true in emerging markets like China where little is known about marketing and consumer culture. "These countries are fundamentally different from Western Europe and you need to go there and do your homework—learning the local selling culture, how your product will be sold and merchandised," he says.

Learn how to automate.
If too much of your time is being spent on tasks that could be automated, it pays to figure out a technological solution. Technology can empower your organization, helping you improve efficiencies and even expand operations," says Mike Gorsage, a partner and technology practice leader for Tatum. "But to use that technology well, you must balance your needs with the realities of how you do business. That means understanding not only which technology to invest in, but also how it will affect your operations and how to maximize your returns on that investment." —Eric Markowitz

http://www.inc.com/ss/5-ways-to-grow-your-business

Entrepreneurs Most Valuable Learning Experiences

One of the reasons I love my job is having access to so many customers who are bright entrepreneurs. When you treat your customers like the gifted business people they are, you’ll be surprised how much they can teach you.

A few weeks ago I was curious to see what SurePayroll customers consider their most valuable learning experiences. For years, I’ve said the best learning tool is making mistakes — I even give one lucky employee an award for the year's best new mistake every year. After sending a survey about their most valuable learning experiences, I learned quite a bit from their real-life stories and what their experiences have taught them.

Many of their learning experiences fall into three main categories, ranging from practical office tactics to the philosophy of running their businesses.

1. Effective employee management is a must.

One of my customers summed it up nicely: “I have been in business for over 35 years, and I’m not sure any one experience is the most important. But one thing is for sure: Hiring the right people is critical to anyone's success.” I’ve learned over years that hiring is one of the most difficult aspects of running the show and that the overwhelming majority of my customers agree.

And they’ve also learned that part of having the right people is firing the wrong people, and doing so quickly. That may sound cold, but it’s a reality business owners need to face. A few customers discussed how they struggled in their first few years because they didn’t want to be the small business owner who fired people. Or they weren’t checking candidates’ backgrounds and references properly.

Once the right employees are on board, you have to communicate the vision of your company and make sure they’re aligned with it. And as tough as it sounds, you’re going to have to give your employees breathing room to do some things their way, and to make the occasional mistake. You can trust me that when employees aren’t belittled for making mistakes, it’s good for your business. But you don’t have to take my word for it — many of my customers feel the same way.

Employees want to work somewhere they feel welcome and appreciated – and like they can be themselves. As another customer said, “We all spend so much time at work, it is important to make it a fun environment. When people feel good, their work performance improves. It’s a win-win situation.”

2. Sales and marketing won’t take care of themselves.

Ralph Waldo Emerson is famous for a lot of good reasons, but he couldn’t be more wrong when he wrote “Build a better mousetrap and the world will beat a path to your door.” My customers agree that your mousetrap won’t sell itself.

Many SurePayroll customers started their own businesses because they loved what they were doing, and wanted to concentrate on it full-time and be their own bosses. Then they found out people weren’t beating paths to their doors, even though they offered top-notch products or services. They needed to spread the word via marketing and acquire new business by spending time on sales.

One of my customers learned this by accident, quite literally. After an injury took him out of commission from his carpentry, he needed to hire a replacement for six weeks. That’s when he discovered his strength wasn’t just in his carpentry but in promoting his business. He wrote that “There were plenty of competent carpenters willing and able to take my place as lead site carpenter. I focused my efforts on sales and marketing. Sales picked up significantly. My net income doubled in the span of a year and grew by 50% more the next year.”

Taking on sales and marketing yourself might not be the answer. If you want to stay focused on your trade, let someone else take care of it. The joy of owning your own business is that you can focus on your strengths and outsource your weaknesses, whether that means relying on services or hiring competent employees.

Even the carpenter-turned-salesman would have done it differently: “The next logical step in that duplication would have been to replace myself in my sales and marketing duties, too. Remember, the duplication of effort can be applied to all people in all positions performing all tasks. My end goal could have been to become CEO where all lower level tasks were delegated to highly qualified employees.”

3. You’re your own boss—and your own teacher.

Yes, hiring experts can help you grow your business, but at the end of the day, you’re the one who has to keep learning. As my customers can attest to, education covers everything from gaining new skills to realizing your limitations.

What’s the best place to begin your education? One customer offered a great starting place: “Read. Sounds simple, but it is one of the most important things a business owner can do to improve his or her business. While it is great to have a mentor, and I have many, books are portals to some of the brightest minds from our past and present.”

In addition to traditional education like reading and business school, many customers stressed the importance of on-the-job learning — taking on projects that require them to become experts. One customer wrote, “I had a client ask me to work on a project that required me to do educate myself about the details and the best way to accomplish the task. Rather than tell them, ‘No, I do not have those particular skills,’ I tell them, ‘I will look into it and give it a try.’ So far my clients have been pleased with the results, and I continue to learn and expand the services I can provide.”

Unfortunately, sometimes you learn the hard way. A few customers got caught up in the whirlwind housing market a few years ago before the crash, losing hundreds of thousands of dollars on their office space and housing purchases. Learning not to succumb to pressure is a hard pill to swallow, but an invaluable one.

http://www.inc.com/michael-alter/my-customers-3-most-valuable-learning-experiences.html

My Customers’ 3 Most Valuable Learning Experiences

One of the reasons I love my job is having access to so many customers who are bright entrepreneurs. When you treat your customers like the gifted business people they are, you’ll be surprised how much they can teach you.

A few weeks ago I was curious to see what SurePayroll customers consider their most valuable learning experiences. For years, I’ve said the best learning tool is making mistakes — I even give one lucky employee an award for the year's best new mistake every year. After sending a survey about their most valuable learning experiences, I learned quite a bit from their real-life stories and what their experiences have taught them.

Many of their learning experiences fall into three main categories, ranging from practical office tactics to the philosophy of running their businesses.

1. Effective employee management is a must.
One of my customers summed it up nicely: “I have been in business for over 35 years, and I’m not sure any one experience is the most important. But one thing is for sure: Hiring the right people is critical to anyone's success.” I’ve learned over years that hiring is one of the most difficult aspects of running the show and that the overwhelming majority of my customers agree.

And they’ve also learned that part of having the right people is firing the wrong people, and doing so quickly. That may sound cold, but it’s a reality business owners need to face. A few customers discussed how they struggled in their first few years because they didn’t want to be the small business owner who fired people. Or they weren’t checking candidates’ backgrounds and references properly.

Once the right employees are on board, you have to communicate the vision of your company and make sure they’re aligned with it. And as tough as it sounds, you’re going to have to give your employees breathing room to do some things their way, and to make the occasional mistake. You can trust me that when employees aren’t belittled for making mistakes, it’s good for your business. But you don’t have to take my word for it — many of my customers feel the same way.

Employees want to work somewhere they feel welcome and appreciated – and like they can be themselves. As another customer said, “We all spend so much time at work, it is important to make it a fun environment. When people feel good, their work performance improves. It’s a win-win situation.”

2. Sales and marketing won’t take care of themselves.
Ralph Waldo Emerson is famous for a lot of good reasons, but he couldn’t be more wrong when he wrote “Build a better mousetrap and the world will beat a path to your door.” My customers agree that your mousetrap won’t sell itself.

Many SurePayroll customers started their own businesses because they loved what they were doing, and wanted to concentrate on it full-time and be their own bosses. Then they found out people weren’t beating paths to their doors, even though they offered top-notch products or services. They needed to spread the word via marketing and acquire new business by spending time on sales.

One of my customers learned this by accident, quite literally. After an injury took him out of commission from his carpentry, he needed to hire a replacement for six weeks. That’s when he discovered his strength wasn’t just in his carpentry but in promoting his business. He wrote that “There were plenty of competent carpenters willing and able to take my place as lead site carpenter. I focused my efforts on sales and marketing. Sales picked up significantly. My net income doubled in the span of a year and grew by 50% more the next year.”

Taking on sales and marketing yourself might not be the answer. If you want to stay focused on your trade, let someone else take care of it. The joy of owning your own business is that you can focus on your strengths and outsource your weaknesses, whether that means relying on services or hiring competent employees.

Even the carpenter-turned-salesman would have done it differently: “The next logical step in that duplication would have been to replace myself in my sales and marketing duties, too. Remember, the duplication of effort can be applied to all people in all positions performing all tasks. My end goal could have been to become CEO where all lower level tasks were delegated to highly qualified employees.”

3. You’re your own boss—and your own teacher.
Yes, hiring experts can help you grow your business, but at the end of the day, you’re the one who has to keep learning. As my customers can attest to, education covers everything from gaining new skills to realizing your limitations.

What’s the best place to begin your education? One customer offered a great starting place: “Read. Sounds simple, but it is one of the most important things a business owner can do to improve his or her business. While it is great to have a mentor, and I have many, books are portals to some of the brightest minds from our past and present.”

In addition to traditional education like reading and business school, many customers stressed the importance of on-the-job learning — taking on projects that require them to become experts. One customer wrote, “I had a client ask me to work on a project that required me to do educate myself about the details and the best way to accomplish the task. Rather than tell them, ‘No, I do not have those particular skills,’ I tell them, ‘I will look into it and give it a try.’ So far my clients have been pleased with the results, and I continue to learn and expand the services I can provide.”

Unfortunately, sometimes you learn the hard way. A few customers got caught up in the whirlwind housing market a few years ago before the crash, losing hundreds of thousands of dollars on their office space and housing purchases. Learning not to succumb to pressure is a hard pill to swallow, but an invaluable one.

What’s the most valuable learning experience you’ve had as an entrepreneur? Please comment below so we can all learn from your experience.

http://www.inc.com/michael-alter/my-customers-3-most-valuable-learning-experiences.html

Online Marketing's Best Kept Secret

Over the last few months we've been working with a number of our clients on establishing and growing their email marketing strategies. We helped one client send out an email for the first time and saw conversion rates that were 2-3 times higher than their Web site conversion rates. I mean conversions from subscribers to buyers which meant real dollars in their pocket.

As we start 2011 and face the hype over new tools and new ways to use "old" tools like Facebook, this is an excellent time for you to consider the importance of email communications in your marketing strategy.

While email marketing doesn't usually get you in front of millions of people, it's good to remember that for most small businesses, getting in front of millions of people is not the point.

The point is to put what you have to offer in front of the people who have the greatest interest in it, and are most likely to either buy it or share it with someone who will. I may ruffle a few feathers by saying that I still think the best way to do that online is email. Social media can be more fun but it is also usually far more distracted. And because it's so easy for people to join and unjoin your social media groups, it also feels like less of a committment.

The psychological and physical barriers that make your email list hard to grow (subscribers' fear of having their email address snatched up, gradually tormented, and then hurled into the bottomless pit of spam despair, or the plain realization that it's just more work to actually type something than to click a "like" button) on the flip side can also make your email list an audience of much higher quality than many of your social networks. When someone joins your email list, they usually mean it. They've often made a greater committment to you and are showing that they actually want to hear from you.

So here are...

5 reasons why you should make 2011 the year you dedicate to email marketing:

1.it requires very little effort to get started - sign up for a mailing list software and put the signup form on your Web site and you're off to the races!


2.you don't have to write that often - even once per quarter is enough at the start and is better than the extremes of not at all or emailing every month with nothing interesting to say.


3.there are hordes of people out there who WANT to hear from you - who are you to deny them? Social media, social schmedia! Email was the original excellent way to keep up those one-to-many relationships, build your brand among people who want it, and turn your customers into evangelists. It still works, and for some things, better than social media.


4.it is an excellent way to get you in the habit of something you should be doing anyway - sharing your story. You need to tell people what you're doing. Thinking about content to share on a regular basis is healthy for your business.


5.average direct marketing response rates are usually less than 3% - that means 97% of the people you paid to reach will not be ready to buy from you. If buying is the only option you give them, those 97% of people will probably just disappear - even if many of them liked what you had to offer. Don't give them a "buy it" or "beat it" ultimatum. Give them the option of saying "please stay on my radar" for when they *are* ready to buy.


Build Your Email Marketing Chops

Mastering email marketing takes time, attention and planning. You will probably not see huge amounts of additional revenue in the first 6 months. This is one more reason why you should START NOW!

As my very wise grandfather would have said, you need time to "build your chops". Make a few mistakes. Publish a few pieces of horrible content that your 100 readers will tell you they hate and then as your list grows you'll be able to publish a few pieces your 1,000 readers will love. Learn what your audience wants. They will tell you through their email opens, their clicks and their actual responses to the messages you've sent them. All you have to do is give them the chance, and listen.

http://www.inc.com/maisha-walker/online-marketings-best-kept-secret.html

How to Manage Seasonal Fluctuations in Sales

As the holiday season approaches, many small and mid-size retailers are looking to better manage seasonal sales by studying their supply chains, buying the right inventory, and limiting their exposure to leftover merchandise.

A lackluster 2009 holiday sales season came on the heels of a ruinous 2008, when retail sales plummeted 3.9 percent. This year, the National Retail Federation (NRF) is hopeful that retail sales will increase a moderate 2.3 percent this year to $447.1 billion.

As retailers prepare for seasonal sales and how to accommodate fluctuations between Thanksgiving and Christmas, some things are different this year. Businesses are tech-savvy and trying to leverage new ways to drive sales, such as reaching consumers on their mobile phones and providing ways to accommodate the growing numbers who want to be able to shop 24/7.

But some aspects to managing seasonal sales fluctuations always manage to stay the same, year in and year out. "For most retailers, that fourth quarter is extremely important for their overall profitability," says Dan Butler, NRF's vice president for merchandising and retail operations. "For retailers, if you have a lackluster February or August, or back-to-school season, you can usually make up for some of that shortfall at other times of the year." That is often not true for the winter holiday season, however.

The following article will go over ways to plan for seasonal fluctuations in sales, how to best manage inventories, and when to start marking down merchandise.

Managing Seasonal Sales: Plan for Fluctuations

The best way to manage seasonal fluctuations, and maintain positive cash flows throughout the year, is to develop detailed sales and inventory plans before the season begins, use those plans to guide your merchandise purchases, and as benchmarks in-season to guide your progress, according to Ted Hurlbut, the principal of Hurlbut & Associates, a merchandising and inventory management consulting firm based in Foxboro, Massachusetts.

"Planning takes time -- time you may not think you have -- but invariably those independent retailers that take the time to carefully plan their sales and inventory are far more profitable than those that don't," Hurlbut says.

Before you begin the planning process, you will need to know what you've sold in the past, and how much inventory you had on-hand to generate those sales. That means using your point-of-sale (POS) system as a resource. "While effective planning goes far beyond merely what you did last year, this information is an important reference point," Hurlbut says. "You will need to extract that data from your POS system, by category and month. Unfortunately, many POS systems do not maintain a history of monthly inventory levels, so all you may be able to extract is sales data."

Second, you will need to determine the unit of measure that you will plan with. The two primary options are to plan in units or in retail dollar value. "In almost all instances, I recommend planning in retail dollars," Hurlbut says. "If you are going to do your planning in units, be clear in your own mind why units are the way to go in your particular business, and planning in retail dollars is inappropriate."

Managing Seasonal Sales: Building a Plan

To start, you need to develop a sales plan. For independent retailers, most sales plans are broken out by category and month. In some cases, especially highly seasonal businesses or categories, it may be more appropriate to plan sales by the week. "The question to ask is a very basic one: 'What is the most likely level of sales from stock (excluding special orders) by month (or week)?'" Hurlbut advises. Note that the question is what the most likely level of sales is, not what's the most you could possibly sell, he says. A business could easily get in trouble by planning on the latter.

The following are considerations in developing your seasonal sales plan:

• Review the prior year's sales histories. Make allowances and adjustments for unusual events, such as weather, out of stocks, one-time promotions, etc., Hurlbut says.

• Factor in the appropriate increase or decrease. Based on your current sales trend and your reading of the sales potential of the category for the upcoming season, you may forecast for higher or lower seasonal sales. For larger categories, it may make sense to break the sales plan down further, by sub-categories, styles or vendors.

• Marketing plan. How are you going to reach potential customers? In addition to advertising and direct mail, the Internet has opened up a wealth of new ways to reach customers. Hopefully, all year long you have been collecting customer e-mails so that you have a manageable list of contacts. Some companies are also toying with location-based advertising to reach customers when they are near by a store and lure them in with promotions.

• How to differentiate your business. One common issue for many independent retailers is how to remain competitive with national chains in your market and other retailers, particularly if they offer customers low prices. Butler suggests thinking along the lines of these questions: "What makes my store unique and different to customers? What makes me distinctive? What do I offer that they don't?"

• Hours and staffing levels. Determine whether you need to add seasonal staff to help make this a banner year, or work with staff to stagger schedules so that your business can be open when people are available to shop -- which may involve more nights and weekends. "Many retailers are adjusting their hours. Maybe they close on Mondays or are only open Monday afternoon," Butler says. "For many retailers, Sunday has becomes the second busiest day of the week."

Managing Seasonal Sales: Buying Inventory

For many independent retailers, the largest asset on the balance sheet is inventory. "Inventory is the 'active' asset, which generates the business's sales and profits," Hurlbut says. "But without careful planning, inventory can easily get out of line, resulting in heavy markdowns due to overstocks and, ultimately, serious cash flow problems."

For retailers whose businesses are subject to seasonal fluctuations, the challenge of managing inventory levels is magnified. Seasonal fluctuations in sales levels require that inventory levels anticipate both the seasonal peaks in sales as well as the seasonal ebbs.

Plan inventories
Once a sales plan has been developed, the next step is to build an inventory plan. "The question to ask is this: 'How much inventory do I need at the end of each month to support the next month's sales, as well as maintain effective merchandise displays?'" Hurlbut says. In some cases, the ending inventory may need to support more than just one month of future sales.

It makes little sense to bring in more inventory at any given time than you need to set your displays, support your planned sales until the next vendor delivery, and provide a safety stock in the event of an unexpected sales spike or a late delivery, Hurlbut says. Committing to inventory too far in advance, and then bringing it in all in one shot is one of the surest ways to find yourself over-stocked down the road.

Plan discounts ahead of time
There are two primary types of discounts a retailer might take:

• Promotional discounts during the season
• And clearance markdowns as the season winds down.

Planning these discounts goes hand in hand with planning sales and inventories if you are using retail value as your unit of measure. "A discount, just like a sale, decreases the retail value of your inventory on hand," Hurlbut says.

Keep in mind that any retailer needs to protect gross margins and cash flow when planning clearance markdowns. "If you plan the date of the first seasonal markdown before the season even begins," Hurlbut says, "you can plan the inventory you want to have on hand at that point in time, and thus your markdown percentage.

If you've planned sales by month, ending inventories by month, and discounts by month, it's easy to calculate how much inventory to bring in each month, by category. Hurlbut says retailers need to bring in enough to cover that month's planned sales, planned discounts, and planned ending inventory, less the prior month's planned ending inventory. "In this way, for example, a buyer can know before a season begins how much inventory to plan on bringing in each month of the season," he says.

Once inventory receipts have been planned, the next step is to plan how to execute those receipt plans. Ask yourself: How much of my receipt plan do I want to commit to buying now, before the season begins?

"The pre-season commit percentage is the percentage of the season's receipt plan that you commit to before the season begins," Hurlbut says. "It's the bets you place before the season has even opened up." Every seasonal retailer has to place these bets. A seasonal retailer has to commit to enough inventory to set displays and cover early sales, sales which are a critical early indicator of the season to come. Similarly, a retailer frequently has to commit up front to merchandise scheduled for delivery later in the season to assure they'll have core stocks of key items and categories at that critical time.

Managing Seasonal Sales: Take Markdowns Expeditiously

The process doesn't end once the holidays are upon us. It's a continuous process. In-season planning is even more important. "As each week goes by, and sales trends begin to develop, adjust your sales plans accordingly, and adjust inventory plans for those updated sales plans," Hurlbut says.

When sales start to fall behind plan, it's very tempting to think that you'll make up the sales later in the season. But when sales fall behind plan, inventories begin to back up as well. When inventories back up, pressure builds on prices, which, if not addressed, can lead to steep markdowns that decimate margins. The first thing to do is adjust future receipts to get inventories back in line, but it usually doesn't end there.

"When sales are soft, the weakest of your items or categories will usually suffer disproportionately," Hurlbut says. "They simply aren't as desirable at their full retail price." As soon as you identify these items, mark them down. A 25 percent markdown, for instance, taken immediately, will accelerate their rate of sale and get you out of that inventory, he adds. But if you wait until clearance time, when everything is marked down, it may take 50 percent to 75 percent to clear the inventory.

Look behind the sales to understand why you are taking markdowns. "You have to be aware and smart. Don't just say, 'It's not moving fast enough,'" Butler says. "Why is it not selling? Do customers not like it? Or are they not seeing it?" Make sure that you are pricing the items right to begin with, particularly in this economic climate. "You want to be very sensitive about how you price merchandise," Butler says. "The customer is not looking for everything to be marked down. They're looking for good values, and there is a balance between value and price."

Managing Seasonal Sales: Recommended Resources

National Retail Federation's 2010 Holiday Sales Headquarters - Retail association's website for seasonal sales statistics and holiday survival guide.

RetailSales.net - A collection of resources aimed at helping independent retailers develop the skills required to thrive in today's intensely competitive business environment.

The Retail Owners Institute - Self-help resources for retail owners.

http://www.inc.com/guides/2010/10/how-to-manage-seasonal-fluctuations.html

10 Mistakes That Start-Up Entrepreneurs Make

When it comes to starting a successful business, there's no surefire playbook that contains the winning game plan.

On the other hand, there are about as many mistakes to be made as there are entrepreneurs to make them.

Recently, after a work-out at the gym with my trainer -- an attractive young woman who's also a dancer/actor -- she told me about a web series that she's producing and starring in together with a few friends. While the series has gained a large following online, she and her friends have not yet incorporated their venture, drafted an operating agreement, trademarked the show's name or done any of the other things that businesses typically do to protect their intellectual property and divvy up the owners' share of the company. While none of this may be a problem now, I told her, just wait until the show hits it big and everybody hires a lawyer.

Here, in my experience, are the top 10 mistakes that entrepreneurs make when starting a company:

1. Going it alone. It's difficult to build a scalable business if you're the only person involved. True, a solo public relations, web design or consulting firm may require little capital to start, and the price of hiring even one administrative assistant, sales representative or entry-level employee can eat up a big chunk of your profits. The solution: Make sure there's enough margin in your pricing to enable you to bring in other people. Clients generally don't mind outsourcing as long as they can still get face time with you, the skilled professional who's managing the project.

2. Asking too many people for advice. It's always good to get input from experts, especially experienced entrepreneurs who've built and sold successful companies in your industry. But getting too many people's opinions can delay your decision so long that your company never gets out of the starting gate. The answer: Assemble a solid advisory board that you can tap on a regular basis but run the day-to-day yourself. Says Elyissia Wassung, chief executive of 2 Chicks With Chocolate Inc., a Matawan, N.J., chocolate company, "Pull in your [advisory] team for bi-weekly or, at the very least, monthly conference calls. You'll wish you did it sooner!"

3. Spending too much time on product development, not enough on sales. While it's hard to build a great company without a great product, entrepreneurs who spend too much time tinkering may lose customers to a competitor with a stronger sales organization. "I call [this misstep] the 'Field of Dreams' of entrepreneurship. If you build it, they will buy it," says Sanjyot Dunung, CEO of Atma Global, Inc., a New York software publisher, who has made this mistake in her own business. "If you don't keep one eye firmly focused on sales, you'll likely run out of money and energy before you can successfully get your product to market."

4. Targeting too small a market. It's tempting to try to corner a niche, but your company's growth will quickly hit a wall if the market you're targeting is too tiny. Think about all the high school basketball stars who dream of playing in the NBA. Because there are only 30 teams and each team employs only a handful of players, the chances that your son will become the next Michael Jordan are pretty slim. The solution: Pick a bigger market that gives you the chance to grab a slice of the pie even if your company remains a smaller player.

5. Entering a market with no distribution partner. It's easier to break into a market if there's already a network of agents, brokers, manufacturers' reps and other third-party resellers ready, willing and able to sell your product into existing distribution channels. Fashion, food, media and other major industries work this way; others are not so lucky. That's why service businesses like public relations firms, yoga studios and pet-grooming companies often struggle to survive, alternating between feast and famine. The solution: Make a list of potential referral sources before you start your business and ask them if they'd be willing to send business your way.

6. Overpaying for customers. Spending big on advertising may bring in lots of customers, but it's a money-losing strategy if your company can't turn those dollars into lifetime customer value. A magazine or website that spends $500 worth of advertising to acquire a customer who pays $20 a month and cancels his or her subscription at the end of the year is simply pouring money down the drain. The solution: Test, measure, then test again. Once you've done enough testing to figure out how to make more money selling products and services to your customers than you spend acquiring those customers in the first place, roll out a major marketing campaign.

7. Raising too little capital. Many start-ups assume that all they need is enough money to rent space, buy equipment, stock inventory and drive customers through the door. What they often forget is that they also need capital to pay for salaries, utilities, insurance and other overhead expenses until their company starts turning a profit. Unless you're running the kind of business where everybody's working for sweat equity and deferring compensation, you'll need to raise enough money to tide you over until your revenues can cover your expenses and generate positive cash flow. The solution: Calculate your start-up costs before you open your doors, not afterwards.

8. Raising too much capital. Believe it or not, raising too much money can be a problem, too. Over-funded companies tend to get big and bloated, hiring too many people too soon and wasting valuable resources on trade show booths, parties, image ads and other frills. When the money runs out and investors lose patience (which is what happened 10 years ago when the dot-com market melted down), start-ups that frittered away their cash will have to close their doors. No matter how much money you raise at the outset, remember to bank some for a rainy day.

9. Not having a business plan. While not every company needs a formal business plan, a start-up that requires significant capital to grow and more than a year to turn a profit should map out how much time and money it's going to take to get to its destination. This means thinking through the key metrics that make your business tick and building a model to spin off three years of sales, profits and cash-flow projections. "I wasted 10 years [fooling around] thinking like an artist and not a business person," says Louis Piscione, president of Avanti Media Group, a New Jersey company that produces videos for corporate and private events. "I learned that you have to put some of your creative genius toward a business plan that forecasts and sets goals for growth and success."

10. Over-thinking your business plan. While many entrepreneurs I've met engage in seat-of-the-pants decision-making and fail to do their homework, other entrepreneurs are afraid to pull the trigger until they're 100% certain that their plan will succeed. One lawyer I worked with several years ago was so skittish about leaving his six-figure job to launch his business that he never met with a single bank or investor who might have funded his company. The truth is that a business plan is not a crystal ball that can predict the future. At a certain point, you have to close your eyes and take the leap of faith.

Despite the many books and articles that have been written about entrepreneurship, it's just not possible to start a company without making a few mistakes along the way. Just try to avoid making any mistake so large that your company can't get back on its feet to fight another day.

http://finance.yahoo.com/career-work/article/110551/mistakes-of-startup-entrepreneurs?mod=career-leadership

10 Direct Mail Secrets

For the past decade, many business owners have regarded direct mail as the ugly stepsister of print or broadcast advertising. Loud, misleading and cluttered pieces mailed anonymously to millions of prospects only served to reinforce this perception.

Today, however, some of the most innovative and effective advertising is delivered through the mail, and more and more business owners are finding the rewards of direct mail are great if their campaigns are designed with a discerning eye and a realistic strategy in mind. Looking for some tips to help you create a direct mail campaign that brings in results without breaking the bank? Here are 10 smart tactics, culled from my 15 years as a direct mail professional:

1. Develop a visual sense for what works and what doesn't. You have an abundance of learning materials right inside your mailbox. The next time you go through your mail, take a minute to examine what's there, what catches your attention, what attracts you and what repels you. Do you have examples of previous campaigns you've sent out? Or pieces from your competitors that you can learn from? "Junk mail" has a unique style--learn to recognize it and think about how you can create the opposite.

2. Don't insult your prospects' intelligence by using cheesy tag lines or see-and-say visuals. Believe it or not, "FREE MONEY" doesn't attract much attention in the inundated world of today's consumers. So avoid using bold with italics, ALL CAPS, and multiple exclamation points (!!!!), as these are the clichéd visual cues of junk mail.

And try to be innovative in what you do show. Make a point of avoiding see-and-say graphics, which are too elementary to involve and activate the brain of a potential customer. For instance, let's say you were sending out a postcard for your lawn-care service that reads "Lawn-Mowing Service" and the photo or illustration depicts a company employee mowing a lawn. (See: picture of employee mowing lawn. Say: "Lawn-Mowing Service.") Boring! Instead, be more creative.

The key here is to entice your audience to complete a story in their minds of how your product or service solves a problem they have. In the example above, you might show the uniformed employee mowing the lawn but have the caption read "Honey, did you mow the lawn today?" "Yeah, it's a tough job, but someone had to do it." That way, the audience has to figure out the picture. They might complete the riddle like this: "Why is this guy taking credit for mowing the lawn? Because he hired this lawn-mowing service and got the job done. Maybe I could relegate my lawn-mowing responsibility like this guy did." Involving your audience lengthens the time they take to look at your mail piece and improves the odds they'll take in the information they need to make a decision for your business. Humor can also play a great part in these visual stories.

3. Don't assume your audience knows everything. An educated consumer is one that's more willing to make a purchase. Your headline should draw attention to your body copy, which is your most powerful selling tool. Ignore what people say about how no one reads anymore--if compelled by a good headline and provoking imagery, a potential customer will want more information immediately. Directing them to a website or phone number is asking a lot of your audience, so instead, include essential information right on the mail piece. When writing copy, start from the beginning, be direct, and include as much information as you can in five sentences or less. Chances are, the reader is scanning, so use words that are easy to understand but are descriptive enough to accurately communicate your message.

4. Use what you know. If you know your customers inside and out, by all means, use that information in your mail piece. Meeting your potential customers where they are is a great way to attain trust quickly. Become familiar with your market so you can be specific about your mailing list. Consider demographics like gender, age, income, climate, leisure activities and more when deciding where to mail each piece. The more you use information that's been hard-earned in years past, the better your response rates will be.

5. "You Won't Believe This Amazing Offer!" At least that part's true, when it comes to your prospects--people are much more skeptical these days. So do something completely unusual with your direct mail piece: Tell the truth. Exposing your weaknesses make your strengths seem even greater, and (yes, believe it) creates a sense of honesty and trust. Consider this example: A flooring company boasts "the best styles at the best prices." While the claim sounds attractive, it doesn't have the same believability (thus response-eliciting) factor as a piece that claims "the same styles at the best prices." Creating a trustworthy message allows consumers to set positive expectations, rather than refuting any false ones they might be reading. And when potential customers set expectations, you can bet they're ready to take a risk on your business.

6. Ask and you shall receive. Know exactly what action you want your mail piece to elicit, and then ask for it. Then ask again. This is known as the call-to-action in the world of direct mail, and it's the consumers' cue for getting what they want. If there's no call-to-action, your direct mail piece is just creating brand recognition. Is there a number to call? Don't just list the number--ask them to make the call. Is there a website to visit? A response mail required? Ask, suggest and entice your audience to respond to your piece. Make the information accessible, easy to read and effective--which may mean making some changes in the office, whether that's a designated phone line or a more memorable web address.

7. Consider the medium. What will your message be delivered on? Postcards are an effective medium for most products, because they cut down a barrier (the envelope) between the consumer and the message. However, some direct mail is more appropriate when crafted as a letter, especially those that involve high-dollar sales and financial services.

Think carefully about your product and your message before making a decision about the medium. No matter what format you choose, consider the paper your message will be printed on. Inexpensive paper communicates something very different from high-quality paper. If you're selling anything that's considered expensive, high-quality or custom, nice paper will communicate that message much more effectively than something inexpensive. On the other hand, the type of paper you choose makes little difference when you're selling items that are inexpensive, sold at bulk rates or discounted. Deciding what's best for your direct mail piece will improve your response rates exponentially.

8. Use color wisely. Color will always catch more attention than black and white, but when it comes to color, more is not necessarily better. Additional colors may cost more money to produce--and too many colors can create a piece that's confusing and cluttered--so it's important to find what's best for your project.

Begin by choosing one or two main colors and one or two supporting colors based on the feelings they elicit: Warm colors are exciting and energizing; cool colors are relaxing and refreshing. Bright colors speak loudly; dull colors suggest quietly. Think about your product, corporate image and your audience when choosing color. Metallic colors are a great option for one- or two-color jobs.

And check with your printer to see what's available that might make your piece stand out for a small--or no--increase in price. Consider colored paper, as well as using a color as a field (covering a large shape area) and reversing out the text (that means showing white text on a colored background). These techniques will help you make the most of your budget and color choices for maximum impact.

9. Personalize your pieces. You've seen them: "[your name here], you've got to check out this deal!" Personalization can enhance a consumer's inclination to read your direct mail piece by creating a sense of familiarity. It also emphasizes their importance to your business. For example, are you more likely to open an envelope that says "Current Resident" or "[Your Name]"? Most likely, you'll feel important to the second business and choose to open that mail first.

When it comes to personalizing a direct mail piece, there are a lot of options, ranging from addressing it to a specific consumer or including their name in the letter portion to printing their name in the art area on the actual postcard or letter. Some of these options can get pricey, so if you think it's appropriate for your mailer, talk with your printer about your personalization options so you'll know what options fit your budget.

10. Determine the best way to mail it. When it comes to mailing your direct mail pieces, you have options regarding the postage you purchase. Think about your customers and the value of your product, as well as time sensitivity. Will "presort" (formerly bulk rate) arrive in time? Do your potential customers care about first-class postage or not? Are you eligible to receive special, not-for-profit postage rates? And don't forget to consider the type of postage for your direct mail piece. You can choose to use first-class or presort stamps, or you can print the first-class or presort postage directly on the mail pieces (this is known as the indicia). In pieces that are highly personalized and official-looking, a stamp can enhance response rates because consumers infer a human touch. On postcards, indicias work just as well as stamps and don't cost anything to apply to the mail piece.

http://www.entrepreneur.com/article/79016

How to Hammer Out Deal Terms Like Warren Buffett

In the early stages of selling your business, you're better off taking cues from the Oracle of Omaha and keeping the lawyers away from the negotiations.

I once went to a Broadway play starring James Belushi. I had good seats, so Belushi was only a few feet in front of me. I remember how captivating it was to be that close to someone famous. I became engrossed in the show and felt as though Belushi was talking directly to me. I lost touch with time and my surroundings. I forgot about all of the work behind the scenes—the lighting, staging, music—and just sat there and enjoyed Belushi’s performance.

Selling your business should work like a good play: You should put your best, most engaging actors onstage and keep the people handling the messier details of the deal behind the curtain. In my opinion, the lawyers should remain offstage until you agree to a set of business terms with the acquirer.

It's tempting to let your lawyer be the “bad cop” in the early stages of negotiations, pounding on the table, demanding better terms. However, coming to an agreement on the core business terms before the lawyers get involved will ensure a positive foundation that will serve you well when the legal teams inevitably reach loggerheads on some of the finer details.

One of the biggest hurdles in coming to an agreement on the core business terms is drafting a simple letter that outlines the deal in language both parties understand. It's hard not to get mired in the details and document every conceivable possibility. If you get bogged down, take inspiration from Warren Buffett.

Buffett is the master of writing about business in plain English. When Buffett tries to buy a company, he approaches the CEO with a short, plain-spoken letter before any of the deal-makers get involved. Read Buffett’s annual letter to Berkshire Hathaway shareholders if you find your correspondence with a potential acquirer becoming too technical.

Here are a few things to work out with an acquirer (in plain English) before you get the lawyers involved:

• The cash on closing (what you get the day the deal closes)

• The earn-out (or vendor take-back) you are agreeing to, along with a clear understanding of what budget and resources you have at your disposal to meet the goals you’re signing up for

• What happens if you decide to leave or the buyer asks you to leave before the earn-out or transition period is over

• The working capital in the business at closing (how much money needs to be left in the company the day it changes hands)

• Your salary and benefits when you become an employee of the acquirer

• The degree of decision-making autonomy you’ll have as an employee during the earn-out or transition period (e.g., Do you get to decide what technology platform to use? Do you control decisions around marketing and selling? How about hiring and firing?)

If you can agree to a set of business terms, you’ll be building a good working relationship with your acquirer, which will be important once you become a division of their business. Besides, if you can’t come to an agreement on the basic business terms with a buyer, no two lawyers will be able to agree to the legal terms, which are infinitely more complex.

So follow Buffett’s lead and get the basics down in plain English before you invite the lawyers onto the stage.

http://www.inc.com/articles/2010/04/negotiating-basic-deal-terms.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+inc%2Fheadlines+%28Inc.com+Headlines%29&utm_content=My+Yahoo

Building a Loyality Plan

http://www.loyaltysolutions.com/building-loyalty-plan/

Messaging for the Apathetic

So I look at the mail yesterday and there’s a catalog from Bliss. If you don’t know Bliss, they are an online / catalog / storefront multi-channel retailer. The tagline on the book is “beauty by mail from new york’s hottest spa” - yes, no caps at all. So you pretty much know this book is positioned for younger - or want to feel younger - gals.

The book had a wrap on the outside with a message for the Apathetic. This is a great technique to use because you can do it “in-line” with the rest of the mailing, which saves a lot on postage. The Engaged just get the catalog, the Apathetic get the catalog with this special wrap around and they all are processed inline and enter the mail stream together.

It’s one of my favorite catalog tricks, check out the piece:

Let’s do the copy thing:

You can see on the left spine the macro message of “we want you back” - again, no caps. This is an acknowledgement of the state of the relationship - we’re not sure if you like us, but we still like you! This is a classic Date message tactic, it sets the proper tone and pulls the customer into the conversation.

Then they just come out and say it:

We haven’t had an order from you in a while and - what can we say? - we miss you. We feel lost without those 3 a.m. ‘beauty’ calls and the sweet, soft sound of your mouse clicks.

Yes, they’re great copywriters, but there’s a bigger point I think you should take away: you couldn’t possibly get away with copy like this if you had not set up the personality of Bliss in the first place. They can speak like this because they have spoken like this to the customer in the past - all over the web site and throughout their catalogs and hopefully in customer service phone / e-mail. Consistently. Everywhere. That’s a Brand in remote retailing, that’s how Brands are built. Theatre of the Mind is the best weapon you have. Copy. Art. Get it? What about your web site?

This is probably the most common retail problem on the web today - web sites / businesses that completely lack any kind of personality. Catalogs know how important this idea is in remote retailing and have been using it for a very long time.

So, in a totally shameless attempt to woo you, we’ll send you a Free full-sized bottle of our clog-dissolving cleansing milk (a $28 value) when you order $75 or more from this catalog or at blissworld.com.

The classic Dating offer, complete with a threshold ($75) as explained here. They’re testing. The importance of the words “full-sized bottle” you don’t know about but I do; about 4 weeks ago we received another “we want you back” effort that offered a trial size. They’re essentially starting small with the offers and when we remain Apathetic, they up the offer.

This approach drives down the cost of the average customer reactivation; the strategy is called The Discount Ladder.

(If that’s not a great excuse to arm yourself with our all-out flab attack kit (p. 49) or smooth yourself citrus with our lemon+sage set (p. 09), we don’t know what is.)

This is just very smart merchandising, it is persuasive because it directs you to a specific place rather than giving you a lot of choices - by the way, how many different offers do you make in a promotional e-mail? The choice of products promoted here may have been customized (not sure of my wife’s buying history) or they may simply be very popular products with a high conversion rate to lapsed buyers on catalog covers.

I would bet the latter; that’s how I would play it because after all, she’s a lapsed buyer. She’s stopped buying because she doesn’t want what she has bought before. Do you make offers based on what customers have bought before? Why is that? Why not offer the products that convert people like the targets?

Unless you have specific evidence that “people who buy this also buy this” I’m pretty sure that outside of certain niches, you depress response by making “forced offers” to customers - especially lapsed ones - to buy a specific item or category just because they bought it in the past. Think about it. “Buy anything over $75″ is a lot stronger offer than “Buy these specific things we are promoting”.

A lot to test there as well…

To take advantage of this special offer, just order something from us before March 1, 2008. Our land of lotions and lip gloss just isn’t the same without you. Bliss on, the entire bliss team

Par for the course here - a deadline and an “in personality” close. Urgency and persuasion. If you’re busy, you probably keep the book at least to check out p. 49 and p. 09…

P.S. If you’ve been getting your Bliss fix somewhere other than our catalog or web site (it happens), don’t forget to keep up with our latest and greatest by signing up for Bliss beaut-e-mails at www.blissworld.com

Ah, the beaut-e of multi-channel done the right way.

They probably don’t have perfect visibility between the direct channel (web and catalog) and the retail channel (who does?) so they are acknowledging that, telling you it’s OK, and then offering you a service so you can “keep in touch” - the general theme of “we want you back”. They don’t want you to feel bad if you find their retail distribution more convenient, and at the same time they’re trying to re-engage you electronically and generate value from this catalog drop even if you don’t buy.

I guess the channel managers are team players. By the way, this relationship started on the web site…and in my experience, you can extend the LifeCycle by switching customers to another channel. But you don’t want to force it, you let it play out the way the customer wants it to. Test and look to the behavior; they will tell you what is right on an individual or segment basis through their actions.

bliss-ful job on the catalog wrap gang!

P.S. Well, almost. A search for “flab attack” (phrase from the promotional copy above) on the web site returns this result:

We’re sorry, but your search for flab attack returned no results. Please try again with a different keyword, or double check the spelling. (You’re not alone - we only learned how to spell ‘fuchsia’ properly a week ago.)

Gotta love that personality thing though…

The Low Down on Bulk Mail Permits

Wow! You’re still reading after the title. That must mean you need some help with a bulk mail permit. I’m here to help.

Before getting a bulk mail permit, consider the following:

• You will spend $360 to get the permit. ($180 for application fee and $180 for annual fee). Will the money saved having the bulk-mail permit cover these fees?

• Ex.- A first class stamp is $0.42. Bulk mail rate is roughly $0.17 per piece. The savings is $0.25 per piece. Therefore, the break even point is 1,440 pieces over the course of the year. This would drop to 720 pieces after year one since you will not pay the application fee again.

• If you will be mailing more than 1,440 pieces then consider getting the bulk-mail permit

Step 1: Complete Form 3615, Mailing Permit Application and Customer Profile.

Step 2: Complete From 3624, Application to Mail at Nonprofit Standard Mail Rates.

• At a minimum you will need to complete all questions in Part 1.

• You will also need to complete the top half of the “Checklist for PS Form 3624) by checking the boxes for all the documentation you are able to provide. It is best to provide as much documentation as you are able demonstrating that you are a legitimate church. At a minimum include your Articles of Incorporation (or Articles of Association), Bylaws and any pre-printed materials you have such as a business card, brochure, program/bulletin, etc.

Step 3: Take both completed forms to the post office. Include the following:

• A check for $180: This is the permit application fee (Form 3615). It is a one time fee and separate from the annual fee you must pay for mailing
• 2 forms of identification: One must be a picture ID. Options include: valid driver’s license; armed forces, government, university or corporate identification card; passport; current lease, mortgage or Deed of Trust; voter or vehicle registration card; home or vehicle insurance policy.
• Evidence the organization is nonprofit: IRS letter of exemption from payment of federal income tax or a complete financial statement from an independent auditor. As a new church you may not yet have received your 501(c)3 status. Don’t let this stop you. By default churches are nonprofit. It says so in the IRS code. You may have to persuade your local post office employee, but you can submit the application without it and be approved. Stand firm.
• Documents describing the organization’s primary purpose: This will most likely be articles of incorporation.
• Documents explaining the organization’s operations: This will most likely be the church’s bylaws. You can also include bulletins, brochures, financial statements, membership applications, minutes of meetings, newsletters or a listing of activities for past 6-12 months. If you do include any of these things be sure to check the appropriate boxes on page 3 of the Form 3624

Step 4: Wait

The post office will send the Form 3624 to the national office for processing. This typically takes 4-6 weeks. You will receive a permit imprint number and a receipt from Form 3615. Keep this receipt for documentation. Once Form 3624 is approved it will be associated with your imprint number and you will be ready send bulk mail at nonprofit rates. Before your first mailing you will have to pay the $180 annual mailing fee and make a deposit into your account.