Style - Small Business Blog

Build profitable customer relationships

Filed under: Marketing, Small Business — Tags: Customer retention, customer service, satisfaction — trevor @ 06/03/2010 2:16 pm

The key to building profitable relationships is to retain customers as it is far more difficult and expensive to get new customers over servicing existing customers. Small business owners should be developing strategies aimed at retaining customers.

The long term perspective towards building customer relationships which aim not to have one successful transaction with a customer but many will be far more profitable for your business.

How do you retain customers?

Don’t over promise in marketing

The expectations customers have (the value they expect) effects their satisfaction and if they decide to come back. Therefore satisfaction depends on your product or service relative to the buyers expectations.

Your marketing materials and branding should accurately reflect your product or service performance. Over promising and under delivery will only lead to dissatisfied customers who will not return.

Know which customers provide the greatest value

Its not possible to pursue and satisfy every customer, the trick is knowing which customers or market provides the greatest business value and servicing that customer or market. This is the similar concept to finding your businesses niche in the market and concentrating on servicing it better than everyone else.

You can not be all things to all people so find your place and go for it

Provide superior Customer Service to key customers

Customer service involves going above and beyond what customers expect. Live by the saying “the customer is always right”. Alot can be found on how provide superior customer service so it will not expand in this blog . Remember that some companies sell products or services where superior customer service is not expected eg compare Aldi to Coles.

Build Loyalty

You should be looking to provide a reason that your customers should keep returning. The loyalty marketing techniques used depend on the product, service and market in which you operate. At Style we have used loyalty cards, trading terms and targeted direct mail specific to the customer. At Style we can provide you assistance to use the right technique for your product, service or market.

Also remember that not every customer want a relationship with your business.

At Style we can help you build profitable relationship with your customers through our knowledge of marketing solutions.

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Persuasion – a key skill in business

Filed under: Marketing, Small Business — Tags: Influence, Marketing, Persusion — trevor @ 25/10/2009 12:30 pm

This article will list key techniques used when persuading people. Persuasion is a skill that all business people need to develop in order to become more successful.

When is persuasion used in Small Business?

Persuasion is a important skills that most successful business people have and develop without even realising it. All the situation below require the skill of persuasion.

Persuasion techniques are used heavily in the sales process – It good to know when these techniques are being used on you.
Managing staff
Working with peers
Dealing with banks

Persuasion or influencing techniques

I am highlighting these techniques to point out not only so you can use them but also to recognise when they are being used on you. These techniques come from a famous management book written by Robert Cialdini called “influence”.

1) Perceptual Contrast - this is a highly effective technique used in the sales process. When we make decisions, we tend to do it by contrasting between the decision item and reference items. When two things appear close to one another, we will tend to evaluate them against one another more than against a fixed standard.

Using it in the sales process

To make something look good, first show something of inferior quality. To get someone to buy something expensive, first show them something even more expensive.

Defending against it

When you make a decision, think about the comparison standards you are using. If it is something you have recently seen, consider whether the person who showed you the first thing is using it for the contrast effect.

2) Rule of Reciprocity – firmly states that we are all bound, even driven, to repay debts of all kinds. It is an almost automatic reaction.

Using reciprocity

The formula for using the Rule of Reciprocity to your benefit is simple: Give something away – a gift, a service, valuable information, assistance, or anything – to create in the other person a feeling of indebtedness. Once the other person feels indebted to you, then you ask for what you want and let the “Rule of Reciprocity” go to work.

Defending against

Accept initial favors or concessions in good faith, while also remaining prepared to see through them as tricks, Once seen in this way there is no longer a need to feel the necessity to respond with a favor or concession.

3) Commitment and consistency – people have a desire to look consistent through thier words, beliefs, attitudes and actions.

Using commitment and consistency

The formula for using this technique is the “initial” commitment. After making the commitment most people will be able agree to requests that are consistent with the initial commitment. Once a stand is taken, there is a natural tendency to behave in ways that are stubbornly consistent with the stand.

Defending against

To recognise and resist the undue influence of consistency pressures require listen for signals and the ability question the initial commitments.

4) Social Proof – this is one way in which people determine what is correct by finding out what others believe is correct.

Using social proof

Social proof is most influencial under two conditions:

Uncertainty – when people are unsure and the situation is ambiguous they are more likely to observe the behavoiur of others.
Similarity – people are more inclined to follow lead of other who are similar.

Defending against

You need to be sensitive to counterfeit evidence, that is what others are doing or their behaviour should not form sole basis for decision making.

Using it

To make something look good, first show something of inferior quality. To get someone to buy something expensive, first show them something even more expensive.

Defending

When you make a decision, think about the comparison standards you are using. If it is something you have recently seen, consider whether the person who showed you the first thing is using it for the contrast effect.

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How to connect with customers

Filed under: Marketing, Printing, Technology — Tags: advice, CRM, How to, Marketing — trevor @ 25/06/2009 9:48 pm

Its important for small business to stay connected to customers, the problem is how? This post provides a list of practical ways to stay connected to customers.

The importance of staying connected was discussed in my “What is marketing?” post.

Below is some practical ways to stay connected with customers

1) Pick up the phone.

A great way to stay connected to your best customers is simply pickup the phone and call them. You will be amazed how open people will be with feedback if you explicitly ask for it.

Ask your customers a few questions;

What are we good at?
How could we improve?

2) Work in the customer service / sales function of your business

If your business has a retail or customer service function spend some time in that area listening to customers. You will be amazed what you will learn

Customer Service – this area of your business gets more feedback from customers than any other. The old saying here is happy customer tell 2 people and unhappy customer tell 10. It pays to be on top of unhappy customers.
Sales team – its important to know why you win jobs, but even more important to know you didn’t win. Lost sales give you feedback about what the market thinks of your products or services compared to your competitors.

3) Invest in CRM technology.

CRM stands for Customer Relationship manager. CRM systems make staying in contact and recording conversations with customers easy. Its important to track customer through the sales process into the support process.

CRM provide a wealth of information about how your business deals with customers.

Who your biggest customers are?
Who your most profitable customers are?
Sales pipeline reporting – what the future holds
Sales conversion reporting – how effective your sales team is?
Customer service levels – how you are servicing your customers?

Even micro business can benefit for keeping accurate information about customers. You will be amazed how effective sending a small gift to a customer on their birthday.

4) Customer Feedback

Ask your customers for feedback via surveys, but be careful not to overuse this method. One way to make this more effective is to offer a prize for the feedback.

Different types of surveys

Automated web surveys – see a great free web survey site called survey monkey
Paper based survey in the retail
Mail survey cards with return address envelopes

5) Direct mailing using customer information

Direct mailing is a cost effective method of connecting with you customers. Its possible to create a design incorporating your customers details and preferences. Its called variable data digital printing, every printed page is customised to the individual which grabs their attention and increase your response.

6) Start a Blog or Newsletter on your website

Blogging is a great way to communicate with customers en-masse. The trick with blogging is having something that your customers actually want to read. Content on blog pages must be short and punchy.

Blogging actually takes a significant amount of time so don’t underestimate the effort required.

Final word

At Style we are experts in marketing and printing so we can help you connect with your customers. Connecting with your customers will help you understand them, support them and sell to them.

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How to remove Vinyl Signage

Filed under: Printing — Tags: advice, Signage, Vinyl — shayna @ 22/06/2009 1:19 pm

We all need to update our signage from time to time and I am frequently asked how to remove unwanted signage, in particular printed or cut adhesive vinyl. To remove adhesive vinyl, you will need a heat gun or if you don’t have one a high powered hair dryer will do. Heat the vinyl sufficiently enough until the adhesive on the back begins to melt thus allowing you to peel the vinyl off the applied surface.

Laminated vinyl will take a little more heating than cut vinyl and its best just to start on one area and work your way across.

You can remove all the excess adhesive with a goo remover or methylated spirits. A razor blade will also assist this process. You should make sure that the surface is thoroughly clean before applying any new signage.

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How to create a strategy

Filed under: Small Business — Tags: advice, customer needs, How to, market segementation, porter five forces, strategy, SWOT — trevor @ 20/06/2009 12:17 pm

This post is a guide for how small business could approach creating a strategy. This is only one example there are many other ways to approach creating a strategy. This is a simple guide designed for small business owners.

I have another post on “What strategy means for small business” which explains what strategy is and is not. That post also covers the three main theories for strategy.

The objective of creating a strategy is to create a sustainable competitive advantage to keep the business either;

In a niche market with no or little competition, the creative part is finding and keeping this new or unpopulated area in the market to make sustainable profits.
Develop superior capabilities abilities to dominate the market in which you compete, the creativity comes with understanding how to add more value to customers over sustained periods.

I will make this post a list even though the reality of this strategy creation process is that its not as simple as a list of tasks to follow. Strategy is effectively a creative process, but before creation you need to understand the context in which your business operates. The other point is this process should involve as many of your staff as possible.

Step 1) – Simple SWOT

I like to start with a simple SWOT. SWOT stands for strengths, weaknesses, opportunities and threats. SWOT is a good starting point because the concept is simple to understand and you can quickly get both and internal and external view of the business.

Strengths – are the internal capabilities that you excel at
Weaknesses – are the area you need to improve, be honest with yourself, if you have no where to improve then you have less room for growth
Opportunitiess – are external market based situations which the company could take advantage of.
Threat – are external things that may impact the company.

Successful businesses build on their strengths, correct their weaknesses and protect against internal vulnerabilities and external threats. They also keep an eye on their overall business environment and spot and exploit new opportunities faster than competitors. SWOT analysis is a tool that helps many businesses in this process.

Step 2) Porter 5 Forces

To understand the market in which you operate a great analysis tool developed by Micheal Porter is called the 5 forces model. This model will help you identify if you are in a market protected from strong competition or a market with high competition. This model provides a useful snapshot in time therefore to remain relevent you must revist your porters analysis regulary.

For more detail on porters five forces

Step 3 ) Customer Analysis or Market Segmentation

I use customer analysis to understand existing customers where as I use market segmentation to understand new or potential markets.

Customer analysis provides a real insight into the current customers of the business, this group of people will make and brake your business so you better know them well. I like to classify customers in terms of the following

Customer Type – a grouping that makes sense
Whats they buy from you – the products or services this group of customers buys from the company
What they are worth the the company – The 80/20 rule is that 80% or revenue comes from 20% of customers. Its important to focus your attention on the customer who generate the most profit or potential profit for you.
What is the company value proposition – why does this group of customer come to your business rather than your competitors.
Leave a blank column for what strategic tactics will address the needs of these customers.

After finishing this analysis of the customer it becomes clear what the existing customer think of the company. The trick hear is not to only focus on existing customer, Existing customer are in existing markets therefore you must also think of new types of customers or additional products.

Market segementation looks at categories of customers within the market as opposed to customer of the business. This is done by classifying the segment using the following criteria.

Classification – grouping of the segment
Reasons to choose one competitor over another – list of things the segment values
What are they primarily driven by – what primarily drives the decision making this is generally in one of price, quality, service, convenience , relationship etc
Demographics & Psychographics – what is the unique characteristics about this group of people.
Most likely choice – who would they choose to supplier the goods or service they require

The information you get from a market segmentation is the where you should position yourself, because the main point to remember you can not be all things to all people.

Step 4) Competitor Analysis

This step is important if you compete in a crowded market. Understanding competitors can give you insight into there strengths and weaknesses.

Competitors Name
Location or proximity – how close are they in terms of ability to sell to your customers
Products offered – what products or services do they offer
Competitive Advantages – what is the competitive advantage of this competitor
Target market – who are they chasing
Threat level – how concerned should you be about this group.

The idea behind understanding your competitors is to know what is being done in you market but more importantly what customer needs are not being addressed these become your opportunities.

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What does strategy mean for small business?

Filed under: Small Business — Tags: advice, porter five forces, RBV, strategy — trevor @ 19/05/2009 4:34 pm

Strategy comes from the greek word “Strategoes” which means military general. Therefore the word dates back to directing the troops in battle. This analogy is quite useful in describing a leaders role in guiding their business in a competitive environment.

Why worry about Strategy if you own/run a small business?

Strategy provides direction, essentially its a plan.
Strategy gives staff something to follow.
Allows the owners to step back and take a helicopter view, work on rather than the business

The process of creating a strategy will provide an owner a great insight. Often small business owners don’t think they need a “strategy” because they know exactly where they are going , great that is a strategy.

What a strategy isn’t!

not done every three years for the next three years.
not fixed in any way.
not a document – although writing down strategy is beneficial
not done without involving staff, customers and competitors in some way.
not only long term goals

Most definitions of strategy based around “plan for the future” but they are also “patterns from the past”.

Over the past few years there has been a number of theories on the best way to develop strategies. I think the best way to develop strategy depends on the situation.

Micheal Porters developed the five forces model which is an external view of how to develop strategy. Look at your externally to find a place in the market which you can dominate. This method is useful in static industry where competitors are well known.

Barney, Collis and Montogomery (resources based view) and others believed that strategy was best formulated by looking internally at what is your core competitive advantage. This view is better where resources are the key to success.

Teece, Pisano et all – described that strategy should be engineered into the business in the form of “dynamic capabilities” that are able to adapt to rapidly changing environments. This view is better is rapidly changing industries like technology.

The point is it does not matter how you think about strategy, its only important that you do.

Have created another post with a small business guide to developing a strategy

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How to – Survive the financial crisis (GFC)

Filed under: Small Business — Tags: advice, cash flow, Financial Crisis, How to, opportunity, revenue — trevor @ 08/05/2009 9:02 pm

This post will provide a number of simple tips (in order of importance) to help small businesses survive the current financial crisis. The main piont is that the financial crisis is short term and that by surviving it your business will be stronger over the long term.

Tip 1) Cash is the number one survival tip

Cash flow is the life blood of the business world, too survive small business needs cash. There are many examples of profitable small businesses who go out of business because they have a short term cash problem.

The following checklist is designed to ensure you have enough cash to survive.

Go to the bank and organise a line of credit just to be safe. This must be organised before you run out of cash.
Keep a close eye on accounts receivable. Companies use accounts payable as free credit and therefore will delay payment. Chase outstanding debts early. If a customer value your product or service they will not have a problem meeting your payment terms. If you have a small number of customers this activity becomes even more important.
Offer discounts for advanced or early payment . A simple Net Present Value (NPV) calculation can provide you with what your accounts receivable (debtor balance) is costing you.
Use payment terms offered from suppliers, as pointed out above its free finance.
Increase the limit on your business credit cards, avoid using credit card debt because of the cost but they can be useful in emergencies.

The key point is that you need enough cash to pay your debts when they fall due, if you don’t nervous creditors (especially banks) will have no hesitation in bankrupting you.

Tip 2) Spend time on your business not in it

Small business owners often get tied up dealing with the day to day running of the business and do not dedicate enough time thinking and planning about what they want from there small business.

Below is a practical list of ways you can spend time working on your business.

Develop a business plan, the process you need to go through in a business plan gets you to think about your business in a reflective way which helps you identify areas for improvement.
Formulate a strategy for the next 3 years, I admit a static strategic plan is of limited value becuase they represent the situtaion on the day they were created and tommorrow everything may change. I like to do a strategic plan on an intranet site that defaults as my staffs home page and update the plan with input from staff regularly. The strategy should address the following areas. (I will create detailed post on creating strategy for small business).
- What are your personal goals?
- SWOT analysis – Strengths, Weaknesses, Opportunities and Threats.
- Competitor Analysis – what are you competitors doing? – mini SWOT on each of them.
- Customer Analysis – who are your customers?; why do they choose you over the competition?; How should you approach them
- This leads to number ways of competing
  - Compete on price – lowest cost, deepest pockets generally wins
  - Compete on value – this involves developing a unique position in the market and creating exceptional value
  - Compete on quality – works in premium markets
  - Compete on service – works on customer convenience
- The key to strategy is that you can not be all things to all customers you need to focus on where you have a competitive advantage.

Formulate a marketing plan for the next 12 month. At Style we help small business develop marketing plans and one part of our strategy to add more value to our customers.

Tip 3) Financial crisis can be viewed as an opportunity

The current crisis can be seen as an opportunity to go into new or different markets because competition is reduced or the landscape has changed.

There is a concept in economics from Joseph Schumpeter called “creative destruction” it describes how during hard times is when opportunities arise. The problem is you need to see above the current crisis to view the opportunities.

A few examples

Join forces with one of your competitors, when times are good and both companies making modest return neither would be willing to join forces. The result of a properly designed merger should be increased economies of scale resulting in better returns for both parties.

New position in the market becomes available for a new product or service.

If you have the funds invest in new technology and infrastructure now. Resources are available and cheaper at the moment. When the good times return you will be well placed to ride the wave with your new technology or infrastructure. Also locally in Australia the government has provided some significant tax breaks.

Perfect opportunity to negotiate new deals with supplier for long term contracts and lock-in lower costs.

Re-negotaite a reduction in rent becuase your landlord will be keen to keep you, this may be difficult.

Tip 4) Drive revenue up

Increasing revenue sounds obvious but most small business focus efforts on cutting costs which actually drives revenue down because costs drive revenue. Now is not the time to cut on advertising, marketing, exhibitions and sales staff because all these costs drive revenue.

At Style we can help you with your marketing.

Tip 5) Cut costs that don’t add value

The focus should not be on cutting costs to maintain a profit or break-even level because this type of short term cost cutting is the beginning of the end. The following is examples of costs I would be careful in cutting.

Staff costs – for small business staff are the key. If you need to reduce them why not ask each of your staff to cut back 1 day a week. This works out better for staff and the business.
Advertising costs – if anything I would be increasing as long as you can gauage how effective you advertising spend is – topic of another post
Marketing costs – drive new business
Customer service – drive repeat business
Quality control – maintains quality
Production costs – maintains quality
Training costs – keeps resources productive

That does not mean that you should not be looking at each cost closely asking what it adds to value in the final product.

Costs which should be looked at closely

Telephone expenses
Technology expenses
Motor vehicle expenses
Finance costs – if you have security now is a gret time to secure low rate finance.
Travel expenses – although careful with this

Hopefully this practical list of tips is useful and if anyone has any additional suggestions I would like to include them.

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Technology for small business

Filed under: Small Business, Technology — Tags: CRM, SaaS, Saasu.com, Salesforce.com, Technology — trevor @ 06/05/2009 9:55 pm

As a technology specialist and small business owner I am often asked the question “what technology should I invest in?“. The answer is generally it depends on the answers to the following questions.

What technology resources do you have?
What do you want to achieve?

Lately, technology options for small business has become alot more accessible because of the increased products delivering technology via software as a service (SaaS).

Software as a Service (SaaS) is where an application is hosted as a service provided to customers across the Internet. By eliminating the need to install and run the application on the customer’s own computer, SaaS alleviates the customer’s burden of software maintenance, ongoing operation, and support. Conversely, customers relinquish control over software versions or changing requirements; moreover, costs to use the service become a continuous expense, rather than a single expense at time of purchase.

Therefore investing in SaaS allows small businesses to get the features and functionality normally only companies with significant resources can afford. SaaS allows small business to you use the software without the complex and expensive infrastructure requirements.

Below is a list of reasons SaaS makes sense for small business.

There is a lower total cost of ownership (TCO), especially important at the moment is lower upfront costs of the user pays model.
Zero or low maintenance and upgrade costs.
In the current economic crisis owners like the pay as you go option. This is seen as less financial risk.
Extensive broadband penetration within the ANZ market.
Quick & Easy deploy – plug and play.
IT press has been hot on the topic for a number of years.
Certain SaaS vendors like Saleforce.com have reached such a size, with large numbers of customers that the technology is no longer seen as “risky”.
Big players are all developing product offering which have legitimised the industry. Eg Microsoft, Google, IBM, Oracle, SAP.
More incentive for software publishers to invest in the core product in subscription licensing vs perpetual licensing. This resulting in better quality products over time.

Types of SaaS being used

What technologies should you look at?

The following list of technologies I have tested or used personally and are happy with. I am not affiliated with any of these companies other than being a customer.

Salesforce.com - is a Customer Relationship Management (CRM) system and is considered the largest SaaS company and most talked about when people refer to the SaaS industry. Salesforce.com was founded in 1999. I have been using Saleforce.com for 4 years and I think its an excellent product.

Netsuite - offer CRM, ERP/Accounting and E-commerce on-demand or SaaS product offerings.

Saasu.com – this is an Australian based company offering easy online accounting.

Google Apps – this is a messaging and collaboration tool for small business. We use this at Style after moving from a in-house managed Microsoft exchange server. Google apps provide a full list of features including spam handling.

For a full list of SaaS products by product and category I found this blog. Most of these product offerings are for micro to small business.

Full SaaS List by Melvin

Final points – even though at Style we have the technical resources to go with either Software as a Service or software installed on our servers I much prefer the SaaS option because they are generally cheaper, less of my time, more features and more secure.

The one downfall with SaaS is if you want to integrate the system with another system integration is complex unless a plug-in has already been built. This would be a benefit on going with the larger SaaS vendors.

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What is Marketing?

Filed under: Marketing, Small Business — Tags: customer needs, superior value, value proposition — trevor @ 01/05/2009 3:17 pm

The traditional definition of Marketing is ” the activity and processes for creating, communicating, delivering, and exchanging products or services that have value for customers”. Therefore marketing is extremely important for the survival of all businesses because its “marketing” that drives revenue.

Marketing is generally thought of as a task that only medium and large companies can afford to worry about, but if small businesses want to survive they need to understand the best way to add value to customers. My view of marketing is that the process (marketing plan) helps small business identify how and where they add value, and what makes customer buy from you and not your competitors, therefore in many ways its a reflective process.

The problem is that small business does not have the resources to dedicate to the task of “marketing” so this blog is designed to demystify what is meant by the word marketing for small businesses.

I like to use a simple definition of marketing for clarification:

“find out what the customer wants and give it to them”

Marketing has moved from the notion of “telling and selling” to that of building long-term relationships. Small business is perfectly placed to build long-term relationships with customers because they;

Generally have smaller customer bases
Can remain closer to customers
Often have passionate owners who are involved in the business

Small business can excel at marketing if they spend adequate time and resources on all three of the following.

understand customer needs
develop products or services that offer superior value
communicate effectively

My view is small business is often good at one or two of these but struggle to excel at all three. The key to success is you must have all three.

Now the above list sounds obvious but small businesses often fail because they are so focused on developing superior products or services but they fail realise that either; its not really what the customer wanted, or customers don’t know about the great product or service offered.

1) Understand customer needs

When was the last time you asked a customer for an honest feedback.?

Have you lost a sale recently did you ask why?

Its not good enough to ask existing customers for feedback, you need to know what potential or lost customers think of your product or service offering.

Do you involve your customers in new products or services decisions?

Many technique exist for knowing what your customers want, often the simpliest is a simple call directly asking for honest opinion from your customers.

2) Develop products or services that offer superior value

This is the area most small business focus all time and resources to and therefore most do this well. The problem comes when you spend all your time doing this and nothing else.

2) Communicate effectively

These two words describe many activities in the marketing process. This is the part of the marketing process Style can help you with. At Style we are experts in providing small business with print related marketing material which is a big part of communicating effectively.

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Style new blog

Filed under: Marketing, Printing, Small Business, Technology — trevor @ 30/04/2009 12:05 pm

This is Style’s new blog which is deadicated to providing useful information to our customers. The content of the blog will be designed to answer common questions about the printing industry.

Over time we will add to the site any information we think is relevent.

Feedback on the usefulness of this blog is welcome

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