Why Google AdWords Is So Important: And How it Can Give Your Business a Huge Competitive Advantage

This is all about getting in front of people who are looking for what you sell right this moment and getting them to respond. It's about understanding your audience, refining your sales message, perfecting your sales process and determining your Return On Investment, faster than ever before in the history of marketing - and doing all of this for a very modest sum of money. When you use the simple process I'm about to show you, you'll achieve the dream of "Marketing on Autopilot" faster than ever before!

Let's Put This in Historical Perspective Direct marketing has been around since the late 1800s when mail order marketing began. Back then you would run an ad in a magazine with an order form, and the reader would have to cut out the ad, write a check, enclose it in a letter and mail it. Four to eight weeks later, if the vendor was honest, you'd get your stuff in the mail. Advertisers quickly discovered that they could "key" the order forms with a code, according to which magazine, which advertising copy and offers were used, etc., and get enormously different responses. Within a few decades this became a rigorous science, and some of the very best books on direct marketing were written almost 100 years ago. The guys who did this lived and died by their ads! The biggest obstacle to direct marketing is that it's always taken lots of time and patience to test things and get it right. If you advertise in magazines, you'll rarely get feedback in less than two months. Pay Per Click has changed all that. Now you can test ideas in minutes and hours, not days, weeks or months! And you can do it for tens or hundreds of dollars, not thousands, tens of thousands or hundreds of thousands of dollars. This takes 90% of the risk out of starting a new business or launching a new product! And the messages that work in your Pay-Per-Click marketing campaigns will usually also work in other media. So PPC is the first place to test your marketing. As long ago as 1996, forward-thinking people viewed the Internet as the ultimate marketing machine. Of course by 1998, it was so "obvious" that the Internet was a killer marketing medium that millions of investors blindly dumped their money into DOT COM companies and created a huge bubble - and the recession that followed. Ouch. Why did this happen? Why was the DOT COM era such a bomb? It's basically because thousands of companies were spending $200 to get a $60 customer - and they were too dumb to know it! Understand this: Advertising is an investment, just like stocks, bonds or real estate. It has to pay for itself, without smoke and mirrors. Direct marketing is the art and science of making advertising pay. And Google AdWords is the fastest way to become a direct marketing master that the world has ever seen. So Here's What's Going to Happen: A Simple 5-Step Plan that Sidesteps All That Waste! Here's an incredibly simple way to get a website up and running successfully: 1. Put up a web page that tells your visitors what you can do for them - and asks them to respond. The response might be in the form of a purchase, an opt-in to receive a newsletter, information in the mail, a report, guide or paper - but most importantly, get the person to tell you who they are. 2. Generate a list of keywords that your customers would type into a search engine. 3. Write a Google AdWords advertisement, and start buying traffic. Here they come! 4. Monitor your results. 5. Tweak the details and improve your performance - and watch your profits grow. Why Pay-Per-Click is So Important Pay Per Click advertising is not a fad or flash in the pan. It's here to stay - permanently. As a matter of fact, in my professional opinion, history will show it to be the most important development in advertising during this decade. Why? Because it combines two enormously powerful concepts: 1) You only advertise to people who are looking for what you have right now, and you only pay when they respond and click through to your site; and 2) Pricing is determined by an ongoing, real-time auction based on true market values. Google vs. Overture There are two major players in Pay-Per-Click: Google and Overture. I believe Google is far superior for my customers. Why? Google caters much more to technical audiences, B2B buyers and savvy Internet users. They disable ads that have low click-through rates, and reward high-click-through rates with better pricing. Google is instantaneous - you get instant results and can make instant changes, while Overture has a 3-6 day waiting period while their staff reviews what you submit. And Google lets you market to specific countries if you need to. Google's instantaneous capabilities make it the ultimate, highest-speed direct marketing tool ever devised in the history of mankind. I'm not exaggerating. Google is head and shoulders above everyone else in the search engine world. Learning the Google System In April 2002, a few weeks after its inception, I began buying Internet traffic on Google AdWords both for myself and for several of my corporate consulting clients. Many people found my website and became my customer or client through this powerful tool. So I've been using AdWords intensively - some might say obsessively - for three years now. AdWords was a very exciting new ingredient to add to the mix. A Word of Caution: In using AdWords there's initially a tough learning curve for the uninitiated. Most people find their Google AdWords experience very frustrating at first, getting keywords and campaigns disabled because they can't get the requisite 0.5% click-thru rate, or else they overpay for popular keywords that have high bid prices. Those who don't truly understand direct-response marketing will have a particularly hard time, considering this is the ultimate direct-response machine. Why Google Succeeded - and Why it Matters to You Google was a relative late-comer in the search engine game. When I started marketing on search engines in 1998, Google was brand new, a tiny little player in a world of established giants. Yahoo, Altavista, Lycos, Hotbot, Inktomi, Excite, AOL Search, Northern Light, AllTheWeb and dozens of others were duking it out. On most of those search engines, it was hard to find what you were looking for. And while most of them were cluttered with ads and links all over the place, Google had just a clean white screen with a search box. And Google's results were always easy to read. Eventually Google became my home page. "Who needs ten search engines - if you have one good one?" You probably felt the same way. And THAT became the key to Google's success. Google's guiding philosophy is RELEVANCE. Give the people what they're looking for - as fast and as easy as possible. Relevance in Advertising So when Google decided to sell advertising, they had to make sure it didn't compromise the quality or usefulness of their search engine. Done properly, advertising would actually enhance it. So when they came up with Google AdWords, they decided to provide up to 8 or 10 spaces for advertisements ("sponsored links") on the top and right side of the page. Except for the top two, the listings going down the left are FREE listings, positioned according to Google's complex, secret and ever-changing ranking formula. The ads on the right are AdWords ads. The advertiser pays every time you click, and only when you click. And the lowest position, usually a few pages back, is available for 5 cents a click. Google's Partner Sites Google Syndicates their results to other search engines - normally only the top 2-4 results are included. AOL buys the top 3 AdWords positions from Google. Earthlink and Ask Jeeves show the top 4 positions. This means that being in the top 3 or 4 gives you exposure to a larger audience - perhaps twice as many searches as Google alone, in some cases. It also tends to drive the bid prices up even more, for those special top spots. What It All Means for You So when you write an ad and place it in AdWords, you have access to an audience as large as 100 million people - instantly. You get instant feedback. You can test fast, succeed fast, and profit fast from the quality Google experience. This article was written by our friend and partner, Perry Marshall. He has been a guest on our radio show multiple times, and is the preeminent expert on Google AdWords and Pay Per Click advertising on the web. Perry Marshall helps businesses beat the learning curve and profit from Google AdWords. You can get the skinny on Google AdWords with Perry's FREE 5-day course via e-mail: Visit http://www.PerryMarshall.com/google Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com Mark Deo Print this article.

Web Site Presence

So...you've just created your first website and Boy, It's Real Pretty! It has your name and phone number, some blinking logos, flashing banners, loaded with lots and lots of information..yeah, really pretty!!

Hey, everyone knows the internet is where you've got to be. You're going to make money and there are millions of surfers every day on line..and after all, with a site as nice as yours, you'll be raking in the dough real soon.

You wait. A week goes by. You check your site once more - 14 hits on the counter - all yours (you check in twice every day to admire what a great site you have and see if anyone has stopped by). OK, OK, it takes time for your site to be listed in the search engines... and when that happens...whooh, look out traffic! After all, your site's real pretty and it's packed with information and features, features, features!

Two weeks go by. Then three. No difference. Your saddened, discouraged. This Internet stuff is a crock you tell yourself.

Welcome to the real world! What you have done up till now is akin to putting up a billboard in the middle of the forest. Given time, a hunter will stumble by, take a look, and continue the hunt - hardly a way to make money!

I've spent time looking at quite a number of sites. Most are woefully lacking in both traffic and ways to market their products or business to surfers who do happen to stumble by. If you want to make money with your website, this has to change. A mentor of mine says that one of the definitions of insanity is to keep doing what you've always done and expect to get different results. Yet that's
what many, many website owners do every day.

A successful web presence requires:

creative design concept
relevant, useful content for your target audience
gives a reason for people to return often and consistently
exceptional domain packages
proper website design
secure website service
enabled for E-Commerce
automated credit card processing and check verification
a hosting service that allows you to EASILY and QUICKLY make changes yourself
fast and easy navigation
banner ad exchange programs
search engine placement and improved ranking

I hope this helps you to learn some new ways to create a strong web presence.

The E-mail Trap

E-mail is a great tool but sometimes we can fall in to several traps that make e-mail our enemy rather than our friend. I thought I’d use this business update to look at a format for business related emails or what many call, “e-mail etiquette.”

Professionalism

• Spelling and grammar communicates “who” you are

• Use your spell checker. That's what it's for. Don't rely entirely on the spell checker though. If you're using the wrong spelling for a particular use of a word, i.e. two vs. to vs. too, the spell checker won't pick it up. Don't try to guess the spelling of a word. Look it up. A great tool is the Merriam-Webster Online. Also, keep a dictionary handy! Sometimes it is faster than using the online version.

• Good grammar is important. I believe in using a conversational tone when writing. It sounds friendlier. Contractions are often okay. Slang is not. Under no circumstances should you use offensive language.

• Choose the right words. Take your time putting together a well-written message. Once you hit the send button, you won't have another chance.

• Be careful with abbreviations. Today there are all sorts of abbreviations -- U instead of you, 2 instead of to or too, plz instead of please, and thanx instead of thanks. These may be fine for personal messages; in a business, communication should be more formal. Of course, frequently used abbreviations such as Mr. and Mrs., FYI (for your information), inc., and etc. are fine.

• Be specific – don’t leave any opportunity for crossed wires or misunderstandings

• Read and re-read your email several times from the perspective of the recipient

• If you don’t change anything when you are composing an email, then you are going too fast.

• Make sure to ask answer all of the questions that have been posed by the client

• Salutation – Some are very sensitive to being addressed by their first names or worse yet NO NAME! When in doubt, use Mr., Mrs., or Dr. (if appropriate). When you are replying to an email and the sender of the original message has used his or her first name only, then you could safely assume it's okay to use that person's first name as well.

• Avoid writing your message using all uppercase letters. It might be faster to type but it looks like you're shouting. Don't use all small letters either. Some people say it will make it seem like you're mumbling.

Creating the right “tone”

• E-mail lacks the formatting of print and the body language of in-person communication; the words themselves carry more feeling. Moreover, e-mail messages are read quickly, so an inappropriate tone can distract your reader and obstruct your message.

• It's easy for e-mail writers to let their tone slip from professional to edgy or sarcastic. E-mail emboldens writers to express thoughts they would never say to a reader's face. And e-mail is written quickly then sent.

• Remember the letters: F.A.R - Come across as Friendly, Approachable and Respectful

• You don't want to sound curt or demanding.

• What three words have only 14 letters yet carry a great deal of meaning? Please and Thank You – these are 2 of the most important words we can use in our emails

• Sometimes just rearranging the paragraphs will help.

• If you're writing to someone you've communicated with before, you might want to begin by saying "I hope you are well."

• Emoticons are little faces made up by arranging parentheses, colons, and semi-colons. Use good judgment here. If you write to someone frequently and you have a less formal relationship, then emoticons are okay. If, however, you're writing to a prospect or a client that you don’t know very well, stick to words only.

• Angry e-mails – Abe Lincoln

• Try to appeal to the clients personality and language orientation

Efficiency

• Don’t waste words.

• When possible, be brief. Get to your point as quickly as you can. However, don't leave out necessary details. If providing a lot of background information will help the recipient answer your query, by all means, include it. You may even want to apologize for being so wordy at the beginning of the message.

• Use client folders and sub folders.

• Careful with “Reply To:” You may be including a thread of previous emails that are inappropriate to the recipient

• Use the “Blind Copy” feature when sending to a group. Remember Outlook will only support a specified number of blind copies

• Use links to reference material and to your web site

• Attachments should be added for more information rather than placing data in the dialog box.

• Timing is critical when sending emails

• Always place an appropriate, meaningful message in the Subject Line

• Don’t get trapped into answering emails instantly unless needed.

E-mail as a Tool of Persuasion

• Always pose a question at the end of the email.

• Leverage their curiosity and interest

• Write a compelling and truthful subject line - As with all e-mail, the first hurdle is to write a subject line that says “must open.” Great subject lines telegraph the content of the message and promise a product, service, or outcome of real value.

• Smash through preoccupation - Your readers are busy – they don’t have time to figure out what you’re offering. They’re impatient, too. They don’t want a tease, a clever anecdote leading up to the main point. Be direct and succinct. Start with a clear statement of what you’re offering.

• Many e-mail sales messages open with a lengthy reminder to the reader that he’s opted in to the mailing and detailed instructions on how to opt out. This statement is an important courtesy, but at the beginning of the message it squanders prime real estate, the first screen. You must give the reader the “opt in” information, but put it at the end of your message.

• Deliver one message – If you are trying to get the attention of a prospect, don’t inundate them with EVERYTHING you have to offer. Less is more! Focus on one topic and end with a question.

• E-mail readers have short attention spans -- long enough to digest one message, no more. The best strategy for delivering multiple e-mail sales messages is to write a separate message for each thing you’re trying to sell.

• Provide Value - In return for opening and reading your communication, give readers something of value: useful information or a special offer, and perhaps something free or discounted.

• Show Readers How They Will Benefit - It’s not enough just to tell readers about what you offer

• Include A Call To Action - Your compelling subject line and customer-oriented lead have done the trick: you’ve gotten the reader to open your message. You’ve offered insider information and showed readers how your product or service will benefit them. Now go the distance and tell your readers exactly what you want them to do.

I hope these tips help you to improve the effectiveness of your emails. Email can be a powerful marketing and management tool. Take the time to avoid the traps and it will be well worth the effort.

Searching for Answers

After coming home from a stand-up comedy show, I decided to feed my ego and check the stats on my website. Did any of the persons who have seen me lately go online and check it out? Well, my ego was dealt a crushing blow, since it appeared that they had not. What I discovered, however, was that lots of people were looking at my website- and in many cases not to find me, but to find other people's websites. It shows that people found me when looking for fellow comedians (and friends) Joey Medina, Dante, Jeffrey Steele, Dan Rosenberg, Jimmy JJ Walker, and Josh Nasar- even keywords such as, "comedy central white edgy", "hey hey hey rerun", and "latino comics in los angeles". How am I getting hits for "latino comics in los angeles" when I just may be the whitest man in America? How am I getting hits for "comedy central" when I've never been on their channel performing stand-up? I mention each of these things in a running commentary on my site, as well as link to many websites that do fit that search criteria.

It all comes down to knowing how to get your site ranked well by search engines. Most websites are either not optimized at all to encourage search traffic, or are optimized using outdated techniques. Many misconceptions are still commonplace- persons fret over "Meta tags" and "search engine submission" techniques that quite honestly in most cases are a waste of time and money. There are many site owners who spend money on firms that offer to submit their site to hundreds of search engines, when 98% of all traffic goes through a very small number of search engines, rendering most of that effort worthless! So what can you do?

Many websites still operate under the "Great and Powerful Oz" theory when it comes to search engines- they know very little about how they work, and they just leave it to the man behind the curtain to determine where their site deserves to come up. But with a little coaxing, you can get him to give you some courage, a heart, a brain, or even send you back to Kansas if that's what you want. More importantly, you can get him to include your website in the search results for specific terms.

Here are some techniques that WILL help you with search traffic. These are all things that a site owner can do themselves, and these are all FREE! There are other techniques you can employ that involve very targeted paid advertising which are not discussed in this article. Please note also that search technology changes constantly- when this is being written (April of 2004) these are considered good practices. In the future, different techniques may be recommended. Now that the warnings are out of the way, let's get to it!

1) Optimize your site content for keywords
Make sure that the content on your site (especially on the homepage) mentions the things for which you want people to search and find you. On my site, the homepage reads: "Welcome to the web home of stand-up comedian and talk show host Matt Walker. Inside you'll find links to essential comedy resources, Matt's schedule, video clips, and much, much more! Be sure to tune in every Sunday at 7 AM to The Small Business Hour on KLSX, 97.1 FM in Los Angeles, just before Breakfast with the Beatles. Check out the schedule to find where you can see Matt Walker doing stand-up." Notice that I mention "Matt Walker" repeatedly, I mention "stand-up comedian" and "comedy". I mention "KLSX", our radio station. These are all things that people may want to type into a search engine when looking for my site. Also note that I use these terms in a way that makes readable sense- just listing a bunch of keywords will often be ignored by search engines.

2) Get listed in DMOZ
"DMOZ? What's that?" That's what most people are probably thinking.http://www.dmoz.org is probably the most important directory on the Internet these days, yet it is still a well kept secret. It is a directory that sites may apply for listings with for free. No regular person will ever go to this directory to search for anything, however. So why bother? DMOZ is the seed directory for the Google search engine and a few others. That means that if you are listed in DMOZ, you are much more likely to appear in Google than if you simply submit your site to Google to ask to be listed. Getting entered into DMOZ is a time consuming process- it is managed by humans, not computers, so the time between submission and listing is often 2-3 months. Also, make sure to submit your site in the category that is most appropriate for your site to ensure the best chance of getting listed.

3) Make frequent text updates
Have you ever seen a site that was listed very high in a search engine (perhaps you paid someone to get your site ranked high) and watched it slowly slip down the rankings into the oblivion that is the Internet? This is likely due to having stale web pages. Search engines love fresh content. If you are updating your site constantly, search engines will come back more frequently to grab the contents of your site. More frequent indexing usually leads to better rankings. So set up a "Blog", change your home page often, and find a way to add newsletters, articles, or other informative content to your site frequently.

4) Get rid of the flash
Flash animation sure can look great- The only problem with it is that you can't print it out, right? Wrong! The biggest problem with flash is that search engines can't index what goes on in the flash file. You may have a killer presentation on your latest products in a flash animation on your site. Everyone who sees it loves it- but when Google crawls your site, it is ignored. Make sure that if you have Flash on your website that you duplicate the content as regular text and pictures elsewhere. Otherwise, you are hiding content from search engines, meaning it's harder for people to find the Flash animation in the first place!

5) Inbound Links
A major part of search engine rakings these days is based on inbound links. Get relevant sites to link to you, and you will automatically be considered more "important" in the eyes of search engines, and will thus get better rankings. When other sites link to you, it is best if they use a short line of descriptive text as part of the link- for my site, I ask people to use the phrase "Los Angeles comedian and talk show host Matt Walker". This means that when sites link to me they are using some of the very same keywords that I am trying to improve my rankings with.

The web is undergoing constant change. These tips will not guarantee you a top ranking by themselves. You must stay on top of the latest trends in the industry if you want to stay on top of the rankings. I don't have the time to do so personally, which is why we at the SBA Network are lucky to have a great search consultant with whom we work. Cayley Vos with Netpaths web design is who taught me all that I know about search engines, and he stays in touch with other webmasters and search professionals. I encourage you to find a search consultant with whom you can work- for more information about Cayley and his services, e-mail Mark Deo atmdeo@sbanetwork.org. We'll be happy to facilitate an introduction.

In conclusion, getting search traffic can be a lot of work. These tips WILL help with your rankings, but they are just the tip of the iceberg when it comes to driving large amounts of traffic to your website. The Internet is a great resource to businesses and individuals alike- use it!

P.S. If you're interested in seeing my comedy site, go to: http://www.funnymatt.com. Please be advised that the content on that site may be considered offensive by some viewers, so it's not for everyone.

This Business Update was written by SBA Network Sales Technology Specialist Matthew Walker- for more information, please contact him at 310-320-8190 or mwalker@sbanetwork.org.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com

Mark Deo

Proper Web Planning

Millions of new websites are launched each year, and millions close down. Most are destined to fail at educating customers, selling products and services, generating PR, or even just improving your branding efforts. Why? Lack of planning. Most website are just thrown together with little thought or guidance from the business owner. There’s no need to launch a website that flounders, however. Proper planning can help ensure that your website meets the objectives you set. I have developed a seven step planning guide to use BEFORE you spend any money on the actual development of the site.

Audience- To whom is the site directed? It is important that we define who we want the site visitors to be up front. By doing so, we can make sure that all of our planning and development takes place in a manner consistent with this audience in mind. Ask yourself throughout the design and construction phases, “How will this appear to our target audience?”

Uniqueness- What about your site will make it different from the competition? If you have a site that does exactly what your competitors do, congratulations, you’ve just wasted your time and money. If your competitors have a site that seems to do EVERYTHING, then create a site that has fewer functions but works better at doing them. Specialization on the web works just as well as in the real world.

Direction- The key question is what do we wish to have our visitors do? Every page on your website should have some direction for site visitors. Seth Godin writes about this concept in his book, “The Big Red Fez”. If you want visitors to buy a product, make that the dominant feature on your homepage. If you want them to sign up for a newsletter, make that obvious at a glance. Whatever your goal for a site visitor may be, make sure that it is obvious to everyone that it is the designed action for them to take.

Simplicity- Less is more, especially on the web. We can probably all think of numerous websites that are so cluttered, so filled with things to click on, watch, play with, etc. that we do none of the above. Too many options for a site visitor will scare them away from your site. Keep it simple, and you will have far higher conversion percentages of visitors taking action than if you pack everything you can think of on your site.

Functionality- What do you need the site to do? List all of the core functions your site needs to include. Write out how these should work. If you have a site that will let someone check the status of an order on the web, plan out exactly what someone will need to click on, type in, and how their information will be returned to them. By doing so, you can find cumbersome processes and refine them before you build them.

Branding- How does it relate to your branding strategy? Some websites look like they are from a completely different company than their other marketing efforts. Consistency in your marketing efforts is vital- so make sure that whatever is designed fits with the rest of what you are doing.

Visibility- Who can find your site? Who do you want to find it? How will people find you? You should put together a web marketing plan before you develop your site. This way you can include tracking options as part of the structure of your site. Whether that is conversion tracking for Google AdWords, different URLs with promotional codes used in advertising efforts, or even just good stat tracking. It is important to figure out where people are finding you if you want to be able to improve the quality of site traffic in the future.

I hope these items help you with your web construction efforts. Please call or e-mail me with any comments or questions.

This article was written by SBA Network Sales Technology specialist Matt Walker. You can reach him at 714-269-4123 or mwalker@sbanetwork.org.

Planning for Online Success

Millions of new websites are launched each year, and millions close down. Most are destined to fail at educating customers, selling products and services, generating PR, or even just improving your branding efforts. Why? Lack of planning. Most website are just thrown together with little thought or guidance from the business owner.

Proper planning can help ensure that your website meets the objectives you set. If you think through the goals you have online and how you plan on getting there, you can greatly increase your chances of achieving those goals.

Below is a planning guide to use BEFORE you spend any money on the actual development of your site. These questions will help you work with your web developer to come up with accurate timeframes and a working budget for the project.

General
What are your website expectations (higher sales, more leads, etc.)?
When do you need the new site up?

Audience
To whom is the site directed? (Current clients, new clients, partners, etc.?)
What are the specific industries the site needs to address?
What do you ultimately want visitors to your site to do (call you, send an e-mail, complete a form, etc.)?

Uniqueness
What about your site will make it different from the competition?

Functionality
What do you need the site to do? List all of the core functions the site needs to include.
What forms will the site include (request a quote, contact us, etc.)?
What pieces of information are required to be gathered on these forms?
To whom should the information gathered be sent?
Will information gathered on this site need to be accessible via reports in a specific format?
Will leads generated need to be automatically put into other databases?
Will visitors to the site need access to their order history or other database functions?
Will there be any payment acceptance online?
Will you maintain a blog, or other type of self published content on the site?
Does the site need to include forums or message boards?

Branding
How does it relate to your branding strategy?
Will you use your existing logo, and will it need to be modified in any way?
In what format will you provide the logo and existing graphics to your web developer?
Should the site match the "look and feel" of your existing marketing materials?
What domain name will be used for the site?
Are there alternate domains (common misspellings, alternate company names, etc.) you have?
What additional domains will you need to register?

Design
What sites do you like the look and feel of?
What sites do you NOT like?
Do you have a preference on navigation on the site being on the top, left side, or other location?
Are there particular colors that should be used?
Are there particular colors that should be avoided?
Are there particular fonts that should be used?
Are there particular fonts that should be avoided?

Content
How many pages will the site consist of?
What are these pages?
Will all copy be provided, or will your developer write some of this for you?
Will you need to shoot any photographs for this site?
In what format will images be provided?
Do you have any video content you wish to include?
Will you need to shoot any videos for your site?

Visibility
Who do you want to find your site?
How do you want them to find you?
What keywords do you hope people will use to find you in search engines?
Have you budgeted for an Internet ad campaign?

Hosting
Will this site maintain its existing host?
Will your e-mail remain with your existing e-mail service?

Marketing
How many e-mail newsletter templates will be created?
How many e-mail lists do you have? (Customers, partners, etc.)
How many e-mail addresses are on each of these lists?
In what format do you have these e-mail addresses?

I hope these items help you with your web construction efforts. Please call or e-mail me with any comments or questions.

This article was written by SBA Network Sales Technology specialist Matt Walker. You can reach him at 714-269-4123 or mwalker@sbanetwork.org.

Care to submit an article or just have a comment? Email me at: mark@markdeo.com

Have a great week!

-Mark Deo

Jack of All Trades, Master of None

As I sit here watching the NFL playoffs, I can't count all the people on the sidelines. You have 65 players on each team, broken down into offense, defense, special teams, and a head coach with offensive and defensive coordinators. These are broken down even further into smaller groups- the offense alone has quarterbacks, running backs, tight ends, wide receivers, and the offensive line, each with their own coach. These groups are then often further segmented into possession receivers, big play receivers, speed backs, power backs, 3rd down backs, blocking backs, receiving tight ends, blocking tight ends, guards, tackles (left and right), and centers. Whew! What we see is specialization on a massive scale. Every player on the team has a very specific job, and how well they do the small tasks they are responsible for is often what determines the winner and loser for each game. Even the referees are specialized. Every member of the officiating crew has an individualized job- certain players to watch for specific rule infractions. When I play football with my friends on the weekends, we don't have the same type of specialization- we often trade off who plays quarterback and receiver, and we all play both offense and defense. We also, not coincidentally, aren't very good at any of these positions. We also aren't being paid millions of dollars, because we just play for fun. What do you do to market your business on the Internet? Are you just playing for fun? Or are you hoping to make it a major part of your business? If you really want to use the Internet to generate revenue, you can't afford to be a weekend warrior that just plays around. You need to display the same type of specialization seen in the NFL. It is what makes the difference between successful Internet marketers and unsuccessful ones. The best tool available on the Internet for savvy marketers is pay per click advertising. These small ads show up on Google and other search engines and websites when you search for a term specified by the advertiser. The great thing about them is that it costs nothing to have your ad displayed- you just pay a small amount (usually somewhere between $.05 and $10.00) each time someone acts on your ad by going to your website. Let's say someone wanted to market a product to small business owners on the Internet using pay per click advertising. What many novice Internet marketers would be tempted to do is run ads for the term "business". They would then run an ad that describes their product in general terms, hoping to attract as many visitors to their website as possible. Because there are so many people advertising with the term "business", the cost per click is probably up near the $10 mark. If they sold their product for $200, they would need to convert one out of every 20 visitors as actual sales for the program to pay for itself. When you factor in the cost of development, labor, delivery of the product, and other factors, they probably need to convert more like one of every 10 visitors. While possible, this is very difficult, and far from an optimum use of their time. What they lack is proper specialization. A savvy Internet marketer would take the same product and advertise using the same method. Instead of advertising on the term "business", they would come up with hundreds of terms that relate to the benefit received from the product ("lower costs of communication for small businesses"); because there are far fewer people advertising with these terms, they can probably get clicks for about $.10. They will then run ads for each of these terms that are specific to the search term. One ad should mention items such as "business communication", "lower costs", and "small business"- the words used in the search term example. This means they only need to sell their program to one in every 2000 visitors to turn a profit. The use of specialization hasincreased the profitability of the marketing effort by a factor of 100! So let me ask again- are you a weekend warrior with your Internet marketing? Or are you a championship contender? These techniques take a while to learn and apply. If you are considering a pay per click campaign or already have one that is receiving marginal results, we offer a full analysis that includes suggested ads, keywords, and bid prices, with ad text and more advanced techniques to receive greater results. Contact me at mwalker@sbanetwork.org to find out more and see a sample analysis to learn how this can apply to your business. This Business Update was written by SBA Network Sales Technology Specialist Matthew Walker- for more information, please contact him at 714-269-4123 or mwalker@sbanetwork.org. Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com Mark Deo Print this article.

It's blog, it's blog, it's better than bad, it's good!

You might not remember the classic Ren and Stimpy cartoon’s Log Song which I co-opted above, but you certainly have heard about the hype surrounding blogs. ABC News even named bloggers as their persons of the year for 2004.

What is a blog and why should your business care?

A blog (short for web log) is a section of a website that is extremely easy to update with little to no technical knowledge. The reason these are important to businesses is that you now have a way to quickly and easily disseminate information to clients, prospects, employees, partners, and just about anyone to whom you care to preach your message. They also can dramatically help you with search engine rankings, meaning more visitors coming to your website.

Want to see some in action?

Check out our blog here, and one we set up for a client here.

Pretty nifty, eh? Companies of all sizes are jumping on the blog bandwagon, and you should too. It’s good enough for both GM and neighborhood businesses, and you should try it for yours.

Sounds great you say? Well, not so fast!

Blogs can have their downsides as well- when not properly implemented, they can look tacky and added on to your existing site, instead of an integrated part of your web presence. When adding a blog to your site, don’t settle for a pre-defined template. Insist on having it become a seamless experience for web visitors.

How can you ensure this happens?

Have your web designer check out our new Quick and Dirty Guide to Blogger Integration. This is a 21 page step-by-step guide through the process of adding a blog to a website using the popular blogger.com free service from Google.

Please let me know when you have blogs established on your website- I’d love to check them out myself to see what all of our readers are up to. I'll even link to any blogs right from our home page that readers of this update send to me. Send me your e-mails at mwalker@sbanetwork.org. Have a great week!

This article was written by SBA Network Sales Technology Specialist Matt Walker. You can reach him for more information at mwalker@sbanetwork.org, or 714-269-4123.

Attract More Business One Day Workshops
By popular demand, we are now offering the Attract More Business one day workshop. This full day workshop incorporates content from our “Attract More Business” learning program and 8 week class. The workshop will be held from 9am to 5pm on July 23, 2005 in Monrovia, CA and August 25, 2005 in Long Beach, CA. Attendees of the workshop are eligible for 2 follow up 30 minute coaching sessions.

Sign-up at: Attract More Business One Day Workshop.

Internet Specialization

The NFL draft is upon us in just 7 days. All across the country football fans are trying to figure out where each player will go. Each team has needs at different positions, and they will try to fill as many of these as possible with next weekend's draft. With 65 players on each team, broken down into offense, defense, and special teams, it's hard to keep track of what each team needs. These are broken down even further into smaller groups- the offense alone has quarterbacks, running backs, tight ends, wide receivers, and the offensive line, each with their own coach. These groups are then often further segmented into possession receivers, big play receivers, speed backs, power backs, 3rd down backs, blocking backs, receiving tight ends, blocking tight ends, guards, tackles (left and right), and centers. Whew!

What we see is specialization on a massive scale. Every player on the team has a very specific job, and how well they do the small tasks they are responsible for is often what determines the winner and loser for each game, and what share of millions of dollars they can take home. Even the referees are specialized. Every member of the officiating crew has an individualized job- certain players to watch for specific rule infractions.

When I play football with my friends on the weekends, we don't have the same type of specialization- we often trade off who plays quarterback and receiver, and we all play both offense and defense. We also, not coincidentally, aren't very good at any of these positions. We also aren't being paid millions of dollars, because we just play for fun.

What do you do to market your business on the Internet? Are you just playing for fun? Or are you hoping to make it a major part of your business? If you really want to use the Internet to generate revenue, you can't afford to be a weekend warrior that just plays around. You need to display the same type of specialization seen in the NFL. It is what makes the difference between successful Internet marketers and unsuccessful ones.

The best tool available on the Internet for savvy marketers is pay per click advertising. These small ads show up on Google and other search engines and websites when you search for a term specified by the advertiser. The great thing about them is that it costs nothing to have your ad displayed- you just pay a small amount (usually somewhere between $.05 and a few dollars) each time someone acts on your ad by going to your website.

Let's say someone wanted to market a product to small business owners on the Internet using pay per click advertising. What many novice Internet marketers would be tempted to do is run ads for the term "business". They would then run an ad that describes their product in general terms, hoping to attract as many visitors to their website as possible. Because there are so many people advertising with the term "business", the cost per click is probably up near the $10 mark. If they sold their product for $200, they would need to convert one out of every 20 visitors as actual sales for the program to pay for itself. When you factor in the cost of development, labor, delivery of the product, and other factors, they probably need to convert more like one of every 10 visitors. While possible, this is very difficult, and far from an optimum use of their time. What they lack is proper specialization.

A savvy Internet marketer would take the same product and advertise using the same method. Instead of advertising on the term "business", they would come up with hundreds of terms that relate to the benefit received from the product ("lower costs of communication for small businesses"); because there are far fewer people advertising with these terms, they can probably get clicks for about $.10. They will then run ads for each of these terms that are specific to the search term. One ad should mention items such as "business communication", "lower costs", and "small business"- the words used in the search term example. This means they only need to sell their program to one in every 2000 visitors to turn a profit. The use of specialization has increased the profitability of the marketing effort by a factor of 100!

A truly smart Internet marketer will have their visitors sent to pages on their website that deal with the specific terms they searched on, which also usually increases the conversion rate for these ads. This means that not only are your ads much less expensive, the likelihood they will turn into sales is greatly increased!

So let me ask- are you a weekend warrior with your Internet marketing? Or are you a championship contender?

These techniques take a while to learn and apply. If you are considering a pay per click campaign or already have one that is receiving marginal results, we offer a full analysis that includes suggested ads, keywords, and bid prices, with ad text and more advanced techniques to receive greater results. Contact me at mwalker@sbanetwork.org to find out more and see a sample analysis to learn how this can apply to your business.

This Business Update was written by SBA Network Sales Technology Specialist Matthew Walker- for more information, please contact him at 714-269-4123 or mwalker@sbanetwork.org.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com.

Have a great week!

Internet Marketing is as Easy as 1, 2, 3... (Part 2)

This article is part 2 of 3 in a series written by Matt Walker, VP Technology Services for the SBA Network. You may contact him at mwalker@sbanetwork.org with any questions on the issues raised.

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Last week we discussed Search Engine Optimization and how it fits into an overall Internet Marketing strategy. This week we're taking a look at an element of Pay-Per-Click advertising. To recap, last week's article gave tips on getting listed by search engines, optimizing your content, finding link partners, and testing. We also mentioned the three most important areas of Internet Marketing:

1. Search Engine Optimization
2. Pay-Per-Click Marketing
3. Internet Viral Marketing

When prospects are looking for solutions to their problems, they often start with the Internet. Using search engines such as Google, Yahoo, or MSN, these prospects are presented with regular search results (as discussed last week) and also small text ads that appear alongside the search results. These ads are inexpensive, highly targeted, and turned Google into a multi-billion dollar company, pennies at a time.

How do they work? An advertiser uses the search engine's website to select specific keywords for which their ad will be displayed. They create their all text ad with a link back to a website. They also enter the price they are willing to pay each time the ad gets clicked on. Then when the keywords specified are searched upon, the ad is displayed, and if clicked on, the advertiser pays the search engine for the traffic. Because the search engine gets paid each time the ad is clicked on, instead of each time the ad is displayed, this is known as Pay-Per-Click advertising. When implemented properly, this can be one of the most cost effective ways to generate business online.

Overall it's a simple process, but generally takes knowledge of best practices, experience, and testing to have a successful campaign. The most important tasks in maintaining a successful new campaign are:

• Selecting Proper Keywords
• Creating Compelling Ads
• Proper Bidding
• Testing
• Refining Landing Pages

For the rest of this article we'll focus most of our attention on selecting keywords using Google's AdWords program, but the techniques discussed work with all Pay-Per-Click providers.

Warning- the below content may be too technical for some readers. If this is you, don't feel bad- you can e-mail me for answers to any questions you have about these techniques at mwalker@sbanetwork.org. We are also presenting a hands-on Internet Marketing Workshop on November 7th in Long Beach, CA. At this workshop, we will be teaching how to implement these techniques. Contact Cory Halbardier atcory@sbanetwork.org to get more details about this event.

Proper keywords are the bedrock of any successful pay-per-click campaign. To research keywords, I recommend using the Keyword Tool built into Google AdWords. This tool allows you to seed a search with a website address (it will analyze the content and find relevant keywords) or a brief description of the website you will be advertising. Perform this search, and you will be presented with a list of potential keywords. This list provides estimates on advertiser competition and approximate monthly search volume.

The ideal keyword will have little advertiser competition, and a high search volume. Add all keywords that you feel represent terms on which your prospects will search. You should use the drop down box for "Match Type" and add each keyword twice more to ensure that each word is entered as a broad match, phrase match, and exact match. The reasons for using these match types and what they mean are beyond the scope of this article, but if you'd like to know more e-mail me or come to our Internet Marketing Seminar on November 7th where we will be discussing this in far greater detail.

At this stage, you want as many keywords as possible- we will refine these later in the process (usually discarding 99% of them). So if you think your list is unwieldy, don't worry, we will be shrinking it very soon.

Now that you have your keywords, create an ad and use a moderate bid to get things started. Where this ad links on your website is not important...yet. At this stage you want to get your ad running for as many keywords as possible, just to gather information about keywords. Let these ads run for a bit to gather data about search volumes.

Now that your ads have been running for a few days, use Google's reporting tools to see which keywords generate the greatest amount of searches (this will be reflected by the number of impressions your ad garners). At this point, you should keep the keywords with the greatest number of impressions, and focus your efforts on these (since they generate far more searches than the rest of the keywords on your list). The rest of the keywords can either be paused or deleted, whichever you prefer.

It is typical for a campaign to start with a hundreds or thousands of keywords that are pared down to less than ten.

Take the best performing keywords and create separate ad groups for each one. Each ad group should contain the keyword with the broad match, phrase match, and exact match. Now you should write ads that are tailored specifically for each of these ad groups. Use the search term in your ad copy if you can, and make this ad link to a landing page on your website that is specifically about the keyword.

This may seem like a lot of work just on refining keywords, but it is imperative to follow this process for your AdWords campaign to be a success. This process will allow you to create highly targeted ads that achieve very high clickthrough rates, allowing you to purchase traffic for less than your competitors (and also present prospects with content that matches with what they are looking.)

Using the proper keywords can help you follow rule 1 of Mark Deo's Rules of Attraction- Become a bigger fish in a smaller pond. By finding the keywords that generate the greatest search volume, and focusing our efforts on areas in which prospects express interest, we are able to refine ads that dominate small groups of keywords, instead of spreading our effort across large numbers of keywords that generate few searches.

To learn more about this process, and how to refine your ads to dominate these small keyword groups, please come to our Internet Marking Seminar on November 7th in Long Beach. Go to:http://www.sbanetwork.org/classes/upcoming_classes.asp for more details.

Next week we'll explore Internet based Viral Marketing, and how it can be used in conjunction with SEO and Pay-Per-Click to generate business online.

For detailed advice on any of the techniques mentioned, or for an analysis of your website and some specific recommendations on what you can do, please contact Matt Walker atmwalker@sbanetwork.org.

For more information about the Internet Marketing Workshop being held November 7th in Long Beach, go to: http://www.sbanetwork.org/classes/upcoming_classes.asp or contact Cory Halbardier at cory@sbanetwork.org.

Internet Marketing is as Easy as 1, 2, 3... (Part 1)

This article is part 1 of 3 in a series written by Matt Walker, VP Technology Services for the SBA Network. You may contact him at mwalker@sbanetwork.org with any questions on the issues raised.

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Facing an ever changing economy, businesses are spending more resources online now than ever before. As with the economy, the techniques that are most effective online are also evolving on a constant basis. Many businesses find themselves facing diminishing returns for their online marketing efforts.

If this describes your business, there are three areas on which to focus to see improvement:

1. Search Engine Optimization
2. Pay-Per-Click Marketing
3. Internet Viral Marketing

When your prospects are looking for information on the Internet, they most likely start with a search engine such as Google or Yahoo. When they enter what they are looking for, they are presented with a list of websites that match their criteria, and some ads that are targeted toward their search terms. The three techniques mentioned above can help make sure that your site is one that attracts visitors.

Search Engine Optimization (SEO) is the process of making changes to your website for the purpose of making search engines (Google, Yahoo, MSN) rank your site higher for a specific term. As a brief example, if you search on Google for "small business coaching", there are 724,000 possible results. Our website ranks 9th out of these possible matches, due to our SEO efforts on this term. For a more specific search such as "small business coach southern california", we are ranked 2nd out of 452,000 results.

How did we achieve this? There are five major areas on which we've spent our efforts:

• Getting and Staying Listed
• Optimizing Content
• Engaging Link Partners
• Testing
• Statistical Analysis

Warning- the below content may be too technical for some readers. If this is you, don't feel bad- you can e-mail me for answers to any questions you have about these techniques at mwalker@sbanetwork.org. We are also presenting a hands-on Internet Marketing Workshop on November 7th in Long Beach, CA. At this workshop, we will be teaching how to implement these techniques. Contact Cory Halbardier atcory@sbanetwork.org to get more details about this event.

To get your site listed and keep it listed, your site needs to be found by the appropriate search engines. For the most important search engine (Google), you can start by listing your site in the Open Directory that Google uses to seed many of its searches. Go to www.dmoz.org, find an appropriate category, and use the submission form on the site to ask for its inclusion. To keep your site listed, on your website you should have an XML sitemap- this is a file that lists all the pages you wish to have Google index and how recently they have been updated. To learn more about the use of site maps and Google's guidelines, go to: www.google.com/webmasters/tools

Now you should focus on optimizing your content. Your pages should discuss the terms for which you are trying to get ranked. Relevant content will make your site rank higher than sites with content that doesn't closely match the search terms. One area to make sure you address are the title tags used on your pages. These should be unique, descriptive, and reflect the content on the page. The page title is what a potential site visitor will see first when your site is listed on a search engine, and influences your site rankings.

You also need to engage in a link building campaign. Having other websites link to yours is how search engines decide the importance of your website. Google uses these links to assign a "page rank" to each page in its index. The more inbound links you have, the higher your site will be listed in search results. Having sites with high page ranks link to your site helps more than sites with low page ranks linking to yours. There are thousands of resources you can find online to help you find link trade partners, paid inbound links, and automated software to manage the link building process. Your link building campaign should be ongoing for as long as your site exists. Inbound links are generally considered the most important factor in having a highly ranked site.

If you've done a good job on these 4 tasks, you should have some traffic coming to your site. Now you need to analyze that traffic to discover trends about your site. Statistical analysis can show you which pages on your site attract the most visitors and which are indexed the most by search engines. You can then use this knowledge to fine-tune your efforts on the other pages on your site, helping improve the search ranking for every page you maintain.

Next week we'll explore Pay-Per-Click Marketing, and how it can be used to attract prospects to your website.

For detailed advice on any of the techniques mentioned, or for an analysis of your website and some specific recommendations on what you can do, please contact Matt Walker atmwalker@sbanetwork.org.

For more information about the Internet Marketing Workshop being held November 7th in Long Beach, go to: http://www.sbanetwork.org/classes/upcoming_classes.asp or contact Cory Halbardier at cory@sbanetwork.org.

E-mail Tips

I've been sending out this business update now for almost 6 years, to thousands of subscribers. I have received feedback from thousands of you, sharing your successes with me. This message you're reading is an example of e-mail marketing, yet ironically, this is one topic we've rarely discussed. It has taken us years to learn a system that works for successful e-mail marketing, and we'd like to share it with you. Before we get into this subject in depth, I'd like to invite you to share your thoughts about this newsletter with us by clicking here to take our brief survey. To show our appreciation for your feedback, you will gain access to our audio file on Why Most Marketing Fails.

E-mail can be an extremely cost effective means of maintaining contact with prospects and customers, marketing your business, and providing customer service. There are a few rules you should adhere to when considering using e-mail in your business, to ensure that you don't actually generate negative feedback from your contacts.

1. No spam. Ever.
   Spam is the term used for unsolicited, unwanted, e-mail. Notice that I didn't say "commercial" e-mail. Any unwanted e-mail is considered spam. If you are sending an e-mail message to someone, make sure that it is something worth sending first.

2. Get their permission first.
   Don't send someone an e-mail message unless they have given you permission to contact them by e-mail, or you have been in contact with them previously. If your first communication with someone is by e-mail, you will likely get a negative response, regardless of how relevant, compelling, and important your message may be.

3. Don't sell or give away their information.
   If you have someone's e-mail address, guard it. Don't send it to other people, don't have a huge carbon copy list that you make their address publicly visible on, and make sure that you guard their privacy as you would your own.

4. Keep it professional.
   If you are sending people business e-mails, don't pass on jokes, funny movies, political or religious statements, etc. Save these things for your family and friends (even though they probably don't want them either!)

5. Learn how to use your e-mail program.
   Make sure you know the difference between to, cc, and bcc. If you don't, read the help files on your e-mail program. These very important distinctions affect how an e-mail message is received, viewed, and presented to a recipient. They also help you guard the privacy of your messages.

6. Obey the law!
   There are many new legislated requirements for sending commercial e-mail. While it is unlikely that someone will complain to authorities about e-mails you send, make sure that you obey all regulations about having your contact information on your e-mail, a method for being removed from your mailing list, etc.

Now that we have that out of the way, let's get into how to best use e-mail in your business! If you do not currently have an e-mail newsletter, you're passing up an amazing opportunity to connect with your prospects and customers. It is truly the most cost effective means of positive outreach that small businesses have at their disposal. I highly recommend that you start a newsletter to maintain contact with your database as soon as is feasible.

Email - Extension of Direct Mail?
Email marketing is NOT the electronic version of direct mail. It is a far more personal form of communication. Go to your mailbox. Count how many uninvited guests you find every day. Circulars from advertisers, retailer ads, announcements and so on jam your mailbox. In fact, if you're like me, you have more junk mail than REAL mail. Does it make you mad? No. Do you get on the phone, call these folks, and yell at them for Snail-mail spamming you? No. Do you lobby Congress? No! Then why do consumers do all of these things and MORE to put a stop to SPAM email? No one really knows why, but it is a fact that some people will react negatively to any unsolicited e-mail. So you must make sure that your e-mail marketing efforts are not the same type of sales pitch you might send out by other means.

Getting Personal
Email is a very personal form of communication. Typically, people read their email messages with greater care and more deliberation than postal mail. Many folks read their email messages at home and therefore have more time to digest them and put the message in perspective. When they receive an uninvited message, it is received as a personal intrusion. While Email creates a tremendous opportunity for us as marketers, it also leaves the door open for abuse.

A Powerful Messaging Vehicle
Some marketers see Email as a powerful form of "push marketing." It is far less expensive than traditional media, is ten times faster to implement, and known to generate a higher response than it's alternatives. No wonder marketers aggressively leverage it to push their marketing message as frequently as humanly possible. The real challenge is to allow "true" communication to take place. No relationship can exist without two-way communication. My advice is "Don't turn email into a bullhorn. It's about encouraging and facilitating a dialogue." Push yourself to help your customers; don't push your product or service on your customers. Find out what is important to them, then give them something of value. Educate, inform, and inspire them. Help them to do something that they have been trying to do. Eliminate their pain. Make their lives easier. Invite them to give you feedback. Open the gates to questions, comments, and suggestions. Engage customers in a dialogue. Nowhere is the "attraction" mindset as appropriate and effective as it is with email marketing. It's about building lasting relationships and creating memorable brand value.

A Collaborative Media
Email is one of the only marketing vehicles that is NOT a successful standalone communication tool. Email will be only as effective as its integration with other media. Most email campaigns today are run as isolated marketing initiatives. Companies hire email-marketing firms to run their email strategies because traditional agencies are unable to provide the quality of service and necessary technology that email pure-plays provide. The problem is an unbroken sequence of communications that do not capitalize on the sum of the parts. The outcome is a confused and possibly dissatisfied customer, victim of your unorganized and untimely messages. Sure, the creative may look the same, but production schedules rarely match, and the integration of media is an afterthought.

One Strike and You're Out.
Email may be cheap, personal, and powerful but it is an unforgiving media. Even in baseball, you get three strikes. Email customers can fire us in a single click. It just takes those dreaded words "REMOVE ME" in the Subject Box and the fun's over. My recommendation is to empower customers, and talk to them wisely. Savvy marketers empower customers by asking them what content they want to receive, when they want to receive it, how often, and in what format. Then they follow through. To avoid burning out customers and scoring double-digit unsubscribe rates, consider customer preferences, and carefully plan the frequency with which you communicate to various customer segments.

Measure Right
Click-through, like Web traffic, has never been a good indicator of performance. Chances are that your short-term revenue forecast and long-term profitability are made up of more tangible, quantifiable data. A more accurate measure of the success of a campaign is sales or leads conversion. Some people just want customers who click. You want customers who buy. Stay away from short-term objectives, however, that may force you to over-communicate at the expense of long-term customer value. Create a customer satisfaction index and regularly track results via online surveys. Ignoring customer satisfaction is always a deadly mistake in business. And believe me, your competitors know it. So will you be the diner? Or the dinner?

The Future is Here
Email marketing is the future of direct marketing. Think about it, with Email you avoid printing costs, postage, carriers, paper, stuffing, envelopes and the licking thereof! Never resort to SPAM or unsolicited email lists. Build your own email database. Opt-in email campaigns produce the best result in marketing campaigns.

"Opt-in" & "opt-out"; what do they mean?
Quite simply, spammers utilize "opt-out" marketing. Opt-out means that a marketer can send a message at will and the recipient must contact them and "opt-out" to prevent future mailings. I do not believe in this approach. "Opt-In" means consumers have expressed interest in your topic. In my case, these folks have called in to my radio show, visited my website, attended one of my classes, or purchased one of my products or services.

E-mail Example
Let's look at a brief example. For our business, we send out a weekly "Business Update" e-mail with FREE business advice. We have been sending this e-mail out for over six years to a subscriber base made up strictly of prospects, partners, and clients that have requested it. People subscribe to our list by going to our website and entering their e-mail address in a form that explicitly states what they will receive. We give them instructions on how to be removed from the list at any time if they choose. These e-mail messages are made up of advice and examples. They are NOT sales pitches. Let me repeat that. They are NOT sales pitches. This ensures that people get our message while we establish closer relationships on a continual basis with prospects. Our meme is seen weekly by thousands of people, and it doesn't take any more effort to reach 50,000 than it does 500!

Get to Work!

I encourage everyone reading this to consider how they might plan an e-mail campaign for their business. Whom do you wish to reach? What can you offer them of value so that they look forward to receiving your message instead of viewing it as an intrusion? How frequently should you contact them? How will you encourage them to respond to your message to foster an ongoing dialogue? Please let us know how your e-mail efforts go.

South Bay Technology Expo

From time to time we send out special announcements and this is one about an event being held by some good friends of mine. The Holden-Andrew Corporation is on the cutting edge of technology, and they are sponsoring the South Bay Technology Expo in Torrance, CA this Friday, March 9th. I'll be there, as will many members of the SBA Network team, so if you have any interest in technology, I strongly encourage you to attend. Below are some of the details about this event:

The South Bay Technology Expo is a FREE event that focuses on bridging the gap between business and information technology by placing the latest products and services into the hands of the local business community. The event's goal is to be an educational resource in a fun, interactive manner. The South Bay Technology Expo is sponsored by Holden-Andrew Corporation, a Managed Information Technology Service Provider in Torrance, CA.

This year's event will take place on Friday, March 9^th from 11am to 4pm at the Torrance Marriott (Torrance, 90503)

The event's centerpiece is the presence of Microsoft Across America, a 42-foot long mobile experience where you can demo Microsoft Vista and Office 2007. In addition to Microsoft's presence, the event also features the following technology providers: Ricoh Document Imaging, BTI Communications (VOIP and Call Center applications), Dell Computers, The New Cingular- At&T Wireless, Fat Pipe, Agility Recovery Solutions, The Daily Breeze (On Line Advertising),and Holden-Andrew Corporation.

There will be many giveaways for attendees from these companies, and I will be giving away a few copies of my Attract More Business program.

For information and pre-registration please go to www.SouthBayTechExpo.com or call Melissa Stewart of Holden-Andrew Corporation at (310) 792-4999

Lessons of the Blair Witch

Before we start this week's business update, I'd like to thank all of our listeners for the great feedback we've received about our interview with Tom Hopkins on our radio show two weeks ago. In case you missed it, you can listen to the show over the Internet by clicking here.

-Mark Deo

Tired of reading already? Click here- LISTEN TO THIS ARTICLE.

In 1993, two young filmmakers decided that it had been too long since they had seen a movie that actually scared them, so they set out to make a scary movie. To keep costs down, they eschewed big name actors, fancy effects, cameramen, and even a script, instead opting to take some unknown actors into the woods, scare them, and have the actors themselves film their reactions. By now you can probably guess I'm talking about "The Blair Witch Project", which went on to gross well over $100 Million dollars in the United States alone during the summer of 1999. It is generally considered to be one of the most cost effective films ever made, with a budget that has been reported anywhere as low as $2000, to as high as $350,000. No matter where it falls in that range, it clearly was a HUGELY profitable film.

It was widely considered a good movie, qualifying for an 85% rating at rottentomatoes.com. There are, however, many low budget movies that are well reviewed, yet they never achieve the same level of success. How is it that they managed to achieve such success?

The filmmakers engaged in what is widely considered one of the best guerilla marketing campaigns of all time. Starting with phony "Missing" posters they used to get an audience at the film festivals they attended and a back story they made up about finding the film rather than making it, they were able to generate enough interest to sell distribution rights to Artisan Entertainment. Then they really got to work.

How did they get millions of Americans to see their movie? Using the Internet like no one before. This article focuses on two primary techniques the filmmakers used, and one additional technique you can use to apply to your own business.

Message Boards
Many people are familiar with message boards and on-line communities- these are what grew out of the old text based days of the Internet before the World Wide Web. Some examples of on-line message board sites I use are a newsgroup all about the car I drive, the Toyota Prius, atwww.priuschat.com and one about stand-up comedy at www.chucklemonkey.com. We also have an on-line community on our website at http://www.sbanetwork.org/forums/ where people can post messages about business issues they face and receive advice from their peers. What the filmmakers did was find message boards that dealt with horror films, urban legends, and independent films. They then became members of these communities- providing information of value to the community. Only then did they begin to post messages about the "legend" of the Blair Witch. If they had joined solely to promote their movie, and not to provide information that the readers of these message boards would find valuable, they would NOT have been successful with this tactic. It is important that if you want to use message boards to promote yourself, that you give to the community first. Try finding some message boards and communities that apply to your business, become involved, and watch the members spread the good word about you.

Chat Rooms
Another element of on-line communities is chat rooms. There are millions of people world wide chatting with another on the Internet as I write this. Go find some chat rooms that match the target audience for your products and services. Some of the more popular chat programs are AOL Instant Messenger and Yahoo! Messenger. By finding chat rooms where people who are interested in the types of products and services gather, you have the potential to gain many "sneezers" for your business. For more about sneezers, read Mark's article on Buzz Marketing. Again, focus on giving to the community first, or the members will see right through you.

Freebie Sites
One great way to get people talking about your business is by giving something tangible away to people. They can then test out your products and services, and tell others about them. How do you find interested consumers? One great way is with "Freebie" websites. One that I frequent iswww.slickdeals.net. This is a site where people post great deals for products that they find. If you have something to give away to get people interested in your products, this is a great place to make the offer. There are many other sites that are similar, and a quick Google search will find literally hundreds of places you can use to give away samples of your products and services. Be sure, however, to abide by the rules on these sites. The last thing you want to do is post something that the community isn't interested in and they consider "spam", as that can yield the opposite of what you want- negative buzz.

In short, use the Internet for all it's worth- we are lucky to have a communication medium available to us that can generate more publicity for our businesses than an army of PR firms. Use this to your advantage, and you may be the next Internet marketing success story that I'm writing about. If you're having trouble finding appropriate communities on the web, send me an e-mail- I'll help you find some people to connect with. I'd also love to hear about how you are using the Internet in your business. Send me an e-mail at mwalker@sbanetwork.org and let me know how these techniques are working for you. Have a great week!

This article was written by SBA Network sales technology specialist Matt Walker. You can reach him for more information on this topic at mwalker@sbanetwork.org.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com

Mark Deo

Internet Resources

It's been a few months since we last sent out some of our favorite Internet resources. This time around I think you'll find that these are truly some of the most powerful tools available on the web. As Peter Drucker wrote, "Time is the scarcest resource and unless it is managed nothing else can be managed." So in an effort to save you some time when looking for the answers you need on the web, here are some starting points that you may wish to bookmark.

1) Google Answers: http://answers.google.com/answers/main

I've written before about Google the search engine. But did you know you can ask ANY question and have it researched for you on-line? At Google Answers, you enter your question with the amount you are willing to pay for the answer, and pre-screened researchers will go to work finding the answer to your question. These answers are then made available to the public at no cost. Ever wonder who is in charge of marketing for PepsiCo? Thanks to someone out there who paid $15 for the answer, we can all read the result here: http://answers.google.com/answers/main?cmd=threadview&id=244423. This site can be used to provide sales reps with essential pre-approach information without them having to spend their selling time doing research. Give it a try!

2) PDF 995: http://www.pdf995.com/

Do you have the need to create PDF files occasionally, but not often enough to justify spending hundreds of dollars on Adobe Acrobat? Give PDF 995 a try. It is a FREE alternative to Adobe Acrobat. Just download and install this software and you can select PDF output just as easily as printing a document.

3) Megaproxy: http://www.megaproxy.com/

Have you ever been in a situation where you need access to a website that your network either filters out or is unable to find? Megaproxy is a proxy site for accessing web based content. What you do is use this as a web browser within a browser. Even if your computer is unable to access a webpage directly, if you are able to get to Megaproxy you may still be able to access the site. Just enter the address in the address bar, and you will be viewing content by proxy. This means that it may be able to find content for you, and relay it to your computer. There are both free and paid versions available depending on your needs.

4) RhymeZone: http://rhyme.lycos.com

Writing letters, reports, or proposals and need to add some punch to your phrases? Try The Lycos RhymeZone. This website allows you to find words that rhyme with your entries, as well as functioning as a dictionary/thesaurus to help you uncover synonyms, antonyms, homonyms, definitions, quotations, and even search the collected works of Shakespeare! As I discovered when writing this business update, Hamlet once stated, "Words, words, words." That is truly what this website is all about.

5) The Small Business Advisory Network: OK, this is a shameless plug for our own website. If you haven't seen our new version, however, click on over and try out some of our newest additions. Search our business update and radio show archives for specific topics at site search, view our library of articles sorted by category at business development articles, ask for help on our new message boards, and check out our free audio learning programs at audio coaching programs. This is THE place to go for FREE business advice on sales, marketing, and management.

I hope these sites are of some value to you. If you are looking for sites that can give you specific information, please feel free to contact us at (310) 320-8190 or send me an e-mail at mwalker@sbanetwork.org and I'll let you know if I know of any.

Have a great week!

E-Commerce

What is it?

We are constantly seeing and hearing about electronic commerce or E-Commerce. One might ask, what is it? E-electronic commerce is the conducting of business on-line. This includes, for example, buying and selling products with digital cash and via Electronic Data Interchange (EDI) as well as Internet based credit card and check transactions.

How it really works?
It's quite simple really. To understand E-Commerce all one needs to do is "Follow the money."

E-commerce can be divided into:

1. E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"
2. The gathering and use of demographic data through Web contacts
3. Electronic Data Interchange (EDI), the business-to-business exchange of data
4. E-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters)
5. Business-to-business buying and selling
6. Security of business transactions

E-tailing or The Virtual Storefront and the Virtual Mall
As a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e-commerce were skyrocketing. Apart from computer and network products, books (Amazon.com), gardening products (Garden.com), music on compact disks (CDNow), and office supplies (SuppliesOnline) were a few of the better-known e-commerce sites. By early 1999, even businesses that have always counted on face-to-face customer interaction were planning e-commerce Web sites and many businesses were planning how to coordinate in-store and Web store retail approaches. Meanwhile, new businesses based entirely on Web sales were being invented daily.

Market Research
In early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts -through site registration, questionnaires, and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. (Microsoft referred to its policy of data collection as "profiling" and a proposed standard has been developed that allows Internet users to decide who can have what personal information.)

Electronic Data Interchange (EDI)
EDI is the exchange of business data using an understood data format. It predates today's Internet. EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up.

E-Mail, Fax, and Internet Telephony
E-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet. Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing ads, about product categories or other subjects they are interested in.

Business-to-Business Buying and Selling
Thousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information.

The Security of Business Transactions
Security includes authenticating business transactors, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and, in general, ensuring the privacy and effectiveness of transactions. Among the most widely-used security technologies are SSL and RSA. Secure Electronic Transactions (SET) is an emerging industry standard.

Recommendations:
These days nearly everyone is claiming to be an E-Commerce/Web Development expert. I have found that very few can be trusted. Try not to deal with a middleman. They make big promises and deliver small results. Go DIRECT with an e-commerce provider. Find a provider that is preferably a large, public company with 24 hour technical support, fully staffed customer service, has SSL and RSA security, and has their own banking and transaction processing solution. This way you're not stuck dealing with 4 different vendors who all end up pointing fingers at "the other guy" when things don't work right.

It is also absolutely critical that you find a provider that permits YOU to make you own changes to the site and user configurations. You should be given and FTP account and password so that you can go into their server and make changes to your site directly. Some providers even have a simple interface established which will permit you to make site changes WITHOUT uploading our downloading information through an FTP function.

Win Them Back

Customer defection is one of the most overlooked and least understood problems facing small businesses today. Our economic environment and continuing price erosion are problems in just about every industry. This is causing customers to re-evaluate their loyalties for what are perceived to be "lower cost alternatives."

Lost customers means lost revenues, negative word-of-mouth and a negative impact on employee moral. I thought I'd take a moment to look at some of the things that we could do to not only recapture lost customers but also keep them more loyal in the first place.

Winning Winback Strategies
Recognize that all customers are at risk. Even satisfied customers can be persuaded to defect to the competition. Do not take any customers for granted.
Consider that customer winback strategies can be more effective than finding new customers. Many experts believe that winback success rates are far higher than recruiting new prospects.

Make sure you fully understand both the revenue potential and the cost of doing business with all of your customers. Initially this may be a massive undertaking but once complete it is easy to maintain and extremely valuable when protecting your customer base from being plundered.

Calculate every customer's life time value (LTV) and second LTV (after they are won back). This is a powerful way to identify customers that you may want to win back and how much you should invest in wooing them.

Apply CPR to customers that are threatening to bail. This kind of CPR stands for Comprehend, Propose and Respond.

Make an effort to comprehend what their issues are. What do they want? Why do they want it? Try to separate the emotions from the pragmatic realities. Sincerely make an effort to understand their side of the story.

Propose a solution that is reasonable to each party. Not a one sided solution. Truly a win-win. Rolling over and just giving in to unreasonable demands may be the worse course of action. This is why it's so important to understand the numbers. How does your business look WITH this client as well as WITHOUT them. Their departure may be the best thing for both parties but the way it is implemented can make all the difference in the world.

Then take positive and decisive response. This means action. Try to communicate at the highest levels of the organization. Be clear and concise in your offer. Put it in writing. Don't be afraid to apologize or admit where you or your company was wrong. But don't respond to threats. This is a sign of a bluff. I recommend dismissing them out of hand. Finally when you have proposed the best solution give them a deadline so the deal doesn't stay on the table forever. This weakens your bargaining power.

Make Your Company Defection Proof
While everybody is talking about customer loyalty today few are taking real action. Preventing customer defection is surely the prime motivation for building customer loyalty, but it also gives us the ability to proactively develop strategies to improve our value and service in general. Once you become a convert to customer winback efforts you can learn to prevent defection in the first place. Here's some ways to improve your position with current customers or customers that you HAVE managed to win back:
Identify all of your products or services that could possibly be of value to your customers.
Motivate your customers to use as many of your products or services as possible.
Prove to your customers that your products and services offer value that they can not find anywhere else.

• Keep track of every sale and sort in a database
• Personally communicate with customers at regular intervals
• Establish some form of satisfaction rating system
• Sell peace of mind more than just product or service solutions
• Admit when you're wrong and pick up the pieces quickly and effectively

I hope these ideas help you to improve customer loyalty and lessen customer defection. If employed consistently I know that they will succeed in producing greater effectiveness for your business in this difficult economy.

What's Your Story?

What's your story?

Who are you?

Where do you come from?

What do you believe in?

When you seek to influence others, you face questions like these. Whether you are proposing a risky new venture, trying to close a deal, or leading the charge against injustice, you have a story to tell. Tell it well and you will create a shared experience with your listeners that will have profound and lasting results.

I'm not talking about just providing information. People don't need more information. They are up to their ears with information. They want a relationship with someone they trust and believe in. They want faith, hope and an answer to their problems. Faith and hope needs a story to sustain it. A meaningful story inspires hope that your ideas indeed offer what is needed to solve their problems.

The Path to Faith
Genuine influence goes deeper than getting people to do what you want them to do. It means people pick up where you left off because they believe! The story is the path to creating faith. Whether you tell your story through lifestyle or words, the first thing people look for before believing in you is trust. Annette Simmons in her book, "The Story Factor" talks about the six steps in story telling that we can use to build trust:

1. Who you are story
2. Why you are here story
3. The "Vision" story
4. The "Teaching" story
5. "Values in Action" story
6. The "I Know What You are Thinking" story

Before being influenced by you, your listeners want to know, "Who your are and why you are here?"
If you don't take time to answer this they will make up their own responses which are usually negative. It is human nature to mistrust others. You need to tell a story that demonstrates that your are different. That you are trustworthy. That you deserve their faith. A story lets listeners decide for themselves whether they should trust you. If your story is good enough, people -of their own free will- conclude that they can trust you.

The "Who You Are" Story
Stories about "who your are" must reveal something about yourself. Make yourself vulnerable. If your story reveals that you have learned to recognize your flaws, then people will believe you can be trusted to deal head-on with tough problems.

The "Why I Am Here" Story
This story must reassure your audience that you have good intentions. However, before you tell them what's in it for them, tell them what's in it for you. If you don't they will suspect that you have a hidden agenda.

The "Vision" Story
Once people know who we are and why we are here, they are ready to listen to what's in it for them. This is where you can differentiate yourself. Like the story of the the man who came upon a construction site and asked each of three workers what tehy were doing. The first responede, "I'm laying bricks." The second said, "I'm building a wall." And the thrid said, "I'm making a cathedral." Your job is to take your vision and transform it into the audiences vision. A real vision story connects with people in a way that shrinks today's frustrations in light of the promise tomorrow.

The "Teaching" Story
Use a story when you want to get your message across, especially when you need to show not just "what" needs to be done but "how" it should be done. For example, telling your new receptionist where the hold, transfer and extension buttons are will not make her a great receptionist. But telling her that the best receptionist you ever knew was Mrs. Smith, who could simultaneously calm an angry customer, locate your wandering CEO and smile warmly at the UPS man.

The "Values in Action" Story
Without a doubt, the best way to teach a value is by example. The second best way is to tell a story that provides an example. A story lets you instill values in a way that is memorable and keeps people thinking. "We value integrity" means nothing. But a story about a former employee who hid his mistake and cost the company thousands of dollars or about a salesperson that owned up to their mistake and earned so much trust that their customer doubled their order, teaches your audience the MEANING of integrity.

The "I Know What You Are Thinking" Story
Tell a story that makes people wonder if you are reading their minds. I really isn't that hard to do. If you do your homework about the group you are seeking to influence, it's relatively easy to identify their potential objections to your message. If you address their objection first, you disarm them.

Clothing truth in the form of a story is a powerful way to get people to open their minds to the truth you carry. The naked truth sometimes must be dressed up to be seen. New ideas need room to grow. Tell it like it is. But consider telling it in the form of a story.

TRAINED SEALS

I was at Sea World not long ago and had the opportunity to watch a trainer working with a seal. Now I'm not speaking of the kind of Seal that you might find in the Navy, I'm referring to the wet, pudgy, cute, whiskered kind.

I watched as the trainer used her fingers and thumb to simply touch the nose of the creature. This was the seal's "cue" or signal to perform the proper behavior. The seal then opened its mouth for inspection by the trainer. This was the seals "response." The trainer then tapped the seal on the head and said "good." This was her way of showing "acknowledgement" for the animal doing the right thing. She then tossed the beast a whole fish - "yuck!" However if you're a seal and you're reading this, you know just how tasty that smelly old mackerel is. This was the seals reward.

What does this have to do with business improvement? Good questions. Have you ever noticed that buyer's are kind of like seals?

They are if you think about it. They automatically react to cues just as the seal did. This is what their training and conditioning has taught them. Their training tells them, "this sales person is here to sell me something therefore I must resort to what will protect my interest best: object to their pricing, terms, program or package."

Let's face it securing the business often boils down to the lowest price, in one form or another. Are you cheaper than the competition? If not you may be up for a battle of the wills. No matter what price you quote, many customers will automatically say its too high, maybe way too high. Like the seal, that response is so deeply drilled into them that just about every rep they meet gets the same reaction. The trick is to get beyond the knee-jerk reaction and into a reasonable conversation about their situation, needs, budget, and time frames. Until you achieve that level of rapport, price itself simply isn't the issue.

Some of you know my sidekick on the Small Business Hour, Matt Walker. Matt is a comedian. When people find this out they, as you can imagine, often say, "hey Matt say something funny."This irritates Matt to no end, which is why I enjoy it so much when it happens. However, Matt, being the friendly guy that he is always manages to spew out something hilarious. How does he do it? He's always ready with a joke.

As Matt likes to say, selling is like improvisational comedy: You must be ready to improvise because encounters with potential customers constantly produce reactions and situations that you could never predict. If you prepare long before you meet with customers you will be more effective face-to-face. While you're still at the office, force yourself to make a list of 10 great, potential responses when you hear that your price is too high. I mean it -- 10, and 20 would be even better. It may be what you say. Or it may involve a particular tone of voice or even your body language. Developing and using the responses will make your selling technique more flexible, resilient, and confident.

Another facet of the price objection is the explosion of options every client faces these days. There are more varieties of products, and more vendors to buy from, than ever before. Multiply varieties and vendors and it's clear that the total number of available choices has grown logarithmically. This tsunami of data can lead customers to making comparisons between options that aren't strictly comparable. Yes, the solutions on offer aren't equal, but the conditioned prospect can't look beyond Price A vs. Price B.

As I noted earlier, "Your price is too high" is an objection we all hear. In fact, if you aren't hearing it, then your prices are too low, you're leaving potential profits on the table, or you just aren't making enough sales calls. There is no single, sure-fire, works-every-time solution to this problem, but there are lots of great ideas. The more arrows in your quiver, the more options for handling -- and the greater selling success you'll experience. Then you won't have to worry about all those trained seals out there.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com

Mark Deo

To Sell or Not to Sell

Getting ready to head off to do my radio show, it was a typical Sunday afternoon as I ran to answer the incessant ringing doorbell.

Who could this be on such a beautiful day?

I peeked out the small window at the top of the door and saw no one. Likely a neighbor's visitor realized they were at the wrong house. Just about to trudge back upstairs, the doorbell rang again. Hmmm... funny business here. I opened the door and at first saw no one until I looked down and there was this miniature human of about eight years of age with a small box tucked under one arm. He looked up at me with the archetypical big eyes of an eight year-old that wants something. I brace myself for the inevitable cookie, candy or magazine pitch. You know the old, "Good afternoon sir. Would you help me to win a chance to summer camp this year," and so on.

This kid stares me straight in the eye and says: "This your place?" Stunned I blubber, "Yea."

"You've got nice plants," he says.

"Yea they're not bad," I stammer feeling dumb.

"They're kind of like a forest. Did you grow them yourself?" my amateur Botanist asks.

"Yes it's taken several years but we pretty much planted all of them ourselves."

"Who keeps them clean?" he inquires.

"Well we have a gardener and we keep after it. Are you wanting to do yard work for people, or something?" Now I'm beginning to wonder what this is all about. Next this kid says something that completely blows me away.

"Nah, I don't do manual labor. But I bet you get pretty tired doing all that planting."

I laugh and figure OK, I'll play along. "Yea, sometimes we do get tired."

Suddenly this kid beams with a huge smile. He thrusts the nearly forgotten box directly in my face. "You need energy then. You need to buy some cookies."

Now I'm rolling on the floor laughing. "OK, you've got me kid, give me a box."

I hand him the cash, he turns to go, then stops and turns back around to look at me. "Have you got any friends that need energy?"

Naturally I relieve the kid of his entire remaining inventory of cookies and realize I probably just met the next Bill Gates.
After my interaction with the eight year-old genius, I was again reminded that sales is not about jamming your product down somebody's throat, or laying on a pitch so thick it makes the prospect gag for fresh air. It's about getting people interested in YOU by being interested in them. Smart entrepreneurs, professionals and technical experts know that the true secret of success lies not in how great your product or service is, but rather, in how skilled YOU are in building genuine relationships with others.

Many people view great salesmanship as great showmanship. This is sometimes true. Showmanship is characterized by the development of sophisticated and polished presentation skills that almost unfailingly dazzle (but do not always win the business). Using enthusiasm and showmanship can help us to encourage more interest in our product or service and build greater conviction. But the art of salesmanship is often times the concealment of salesmanship. Some might even say the art of salesmanship is the absence of salesmanship.

The art of salesmanship is the concealment of salesmanship and is often characterized by well-prepared, interactive questions that elicit the "right responses" from the customer. This creates greater interaction with and feedback from the customer. Of course leading questions usually reveal what you think the issues and problems are, not what the customer knows they are.

It often takes a lifetime in sales before one has the confidence to say almost nothing and communicate effectively. And that, as the wise old sage said is the "true art of salesmanship, and of life." When you're coming at things from their perspective or point of view, you're selling from legitimacy. The switch is on, and you can solve or understand any problem. When you're not, it's off.

Reflect on your own growth regarding the art of salesmanship. Pick out a single habit or practice that you know could be improved regarding legitimacy and customer communication. Work on it every day until it's much better. Then move on to some new weakness.

Stand aside from the situation and ask yourself, "If I were this customer, and knew everything that he knows about my competitors, my products and the application of my products in his situation, would I buy from me?"

If the answer is yes, welcome to the world of legitimacy. All you need to do is get up to speed on the knowledge and communication skills needed to transfer your understanding and wisdom to the customer.

If the answer is no, you'd better start adding value until you can say yes, because the only alternative to legitimacy is the old 'razzle-dazzle.'

The Most Profitable Sales Call: Calling Past Due Customers

This weeks business update comes from Abe WalkingBear Sanchez, a business expert based in Colorado. Check out his website at: www.armg-usa.com

Current Credit Customers Keep Buying and Buying and Buying

Miami
The four day national business conference featured about 40 business speakers. One of the speakers was a sales management expert; I was speaking on B2B credit management.

I was telling the "Sales Management" speaker that as a corporate credit manager I’d print out a list for each sales person of their past-due credit customers. I’d might as well have called it the "Avoid" list.

"Don’t sales guys understand that the most profitable sale is the repeat? That it costs 8 to 14 times as much to find and sell new customers as it does to keep and sell to existing customers?", I asked.

"Unlike you, Abe, most salespeople like people and want to be liked in return. They avoid anything they think of as being confrontational.", he said. It’s a good thing for the smart aleck that I haven’t hit anyone since I quit drinking.

Hold or Hide
Believe something and it’s true, at least to you. In business there still exists an out of date and misguided belief that past due credit customers are bad; that past due credit customers can’t / shouldn’t buy. This "risk management" view of credit and A/R management results in credit managers spending much of their time releasing orders from the "credit hold / do not sell" list, and leads to salespeople crossing streets to avoid an oncoming past due customer.

The only credit customers that should be placed on "credit hold" are those few who for whatever reason can’t pay or who are trying to avoid paying. The vast majority of past due customers are good for the money and will pay. There are good reasons why most past dues don’t pay within terms.

Past due customers not only represent potential lost sales, they also represent an opportunity to elevate customer service levels. Listen to past due customers they’ll also tell you how to improve on your business processes.

Why Don’t They Pay When Due?
Many credit customers become past due because they’re disorganized or lazy about their A/P function. Some are playing games with paying vendors and suppliers; mistakenly thinking that practicing cash management (using vendors/suppliers as a form of short term financing and not paying late charges) is a good thing. Many more past due customers don’t pay because something is wrong.

There are also customers who don’t have the ability to pay when due, but can and will pay in the near future. A small percentage of customers can’t pay and have no idea when they will be able to pay. These are prime candidates for a bankruptcy filing. The smallest percentage of past due customers are those who are trying to avoid payment altogether; the best thing to do with these "avoiders" is to write them off and assign them to an enforcer; a collection agent or attorney.

The reason for contacting past due customers is not to collect, that what the enforcers do, but to "complete the sale." The goals being to keep credit customers current and buying, and to identify and control the small percent that represents a potential for loss.

Four Steps in Sales/Completing the Sale
The same 4 major steps are found in both sales and in completing the sale (past due A/R management).

Step One: Contact the Decision Maker
In sales the decision maker is the person who can say "yes." In past due A/R management it’s the person who can tell you when you’ll be paid and just as importantly why you weren’t paid when due.

The best opening in a completion of the sale call is "Our records show invoice number so and so, dated __day of __ for ___dollars still being open, can you please help me with this matter? Shut up and listen.

Step Two: Determine Need / Desire / Type
In sales we ask questions about the customer’s needs or desire so that we know their "hot button." In completion of the sale we ask questions about why the customer hasn’t paid so that we can determine the account type.

Step Three: Push the Hot Button
In sales we want to point out how our product/service meets or exceeds the customer’s expectation, their hot button. In completion of the sale we want to resolve why the account is delinquent.

If a customer is disorganized or lazy we become a friendly squeaky wheel.
If something’s gone wrong, we fix it.
If a customer has a short term cash flow problem, we work with them and encourage them and continue buying from us.
If a customer has no idea when they’ll be able to pay we need to cut off further credit sales and move at once to improve our position on the account (liens, notes, personal guarantees, returns, barters).
If a customer is uncooperative, lies and breaks payment or other arrangements we need to cut off further credit sales and then get them out to a collector.

Step Four: Close and Follow Up
In both sales and completion of the sale, we want to repeat the understanding and then calendar the account for follow up.

Telemarketing to a Captive Audience
One of the best credit managers I’ve ever met was a woman in Evergreen, CO. The first thing you noticed in her office was a bulletin board covered with pictures of children. There were black kids, white kids, Asian and brown children. They were her customers’ children.

"I love my job" she said. "I get to come to work and call my friends all around the country on my employer’s long distance service." By coincidence all her friends worked for her employer’s customers in the A/P department.

Calling past due customers can be enjoyable, if you make it so.
Early and cheerful contact combined with fixing things that go wrong, and the identification of potential losses leads to reduced losses, better cash flow, more repeat sales and higher customer service levels and customer retention.

The Author
Abe WalkingBear Sanchez is an International Speaker / Trainer on the subjects of Profit Centered Credit / Sales and bottom line enhancement. A hard hitting and fast paced speaker, Abe brings life and energy to a critical business function whose true potential has yet to be realized by most businesses.

TEC (The Executive Committee), "Inc." Magazine Annual Business Conference, CU (Denver), CSU (Ft. Collins), Texas A&M, NACM, IDA, AWCI, ARWI, PEI, BCFM, RAB, STAFDA, WIMA, ISD, Pet Industry Distributors Assn., Rain Bird, American Lock, Southern Wholesalers Assn., IBM, Touchstone/2000 Software are but a few of the groups, schools, companies and associations for whom Abe has conducted programs.

Abe can be reached through:
A/R Management Group, Inc.
P.O. Box 457
Canon City, CO 81215
(719) 276-0595
e-mail: Abe@armg-usa.com
website: www.armg-usa.com

Copyright 2004 A/R Management Group, Inc. www.armg-usa.com All Rights Reserved.

The Art of Persuasion

While preparing for the "Attract More Business" workshop I began to think about the two schools of thought in approaching customers. The more conservative alternative has always been to propose benefits to customers in an attempt at building value. The more recent approach encourages discovering the customers "pain" and emphasizing their problems rather than your company's benefits. Both approaches seem to hold merit but I began to think about how I could reconcile the two, when a recent experience came to mind.

I was talking to a successful business owner who was interested in hiring our firm to do business improvement coaching and consultation. I couldn't help but tune-in to the negative way he spoke about his current situation.

"Business has really been in the tank lately," he told me. "This economy has hurt us and I don't think we have that edge over the competition anymore. It doesn't seem that our people are working as a team or that they're even pulling in the same direction."

I nodded gravely matching his look of somber seriousness. "Our marketing isn't working as well as it has in the past and I don't even know why I bother to advertise anymore," he concluded shaking his downcast head over slumped shoulders.

I asked him some more questions and he proceeded to paint a picture as dark and depressing as any Edgar Allen Poe story. It seemed that no matter what I asked this fellow he had a negative response. I began to notice a trend.

Finally, he asked if we could help him. I told him I thought we could and that it would take six months and a specific amount of money to bring about the desired change. When he heard this he said, "Wow Mark, that's a lot of money and six months is a long time."

This is what I told him: "I understand how you feel. You have a difficult decision to make. You have to decide which is worse. Is it WORSE for you to invest the time and money. Or is it WORSE for you to wait and see if it's going to get better all by itself, knowing that it very well may get WORSE."

Which do you think this person chose?

He called me not long after this and told me, "Mark, I gave this a lot thought and I can't afford NOT to do this."

In other words he made the decision to purchase our services based upon comparing the risk of purchasing the service versus the risk of letting his situation get worse.

Ordinarily I would encourage this person to purchase our services based on the benefits or the opportunities we would offer his company. But because I noticed this person was more focused on the negative elements in decision-making I switched my orientation from benefits to risk. To this person, reducing risk is far more important than improving performance or creating opportunities.

This is not true for every person because each person's decision-orientation is different. It takes strategic listening to discover the other person's decision-orientation. Only when we discover this can we adjust our language and unspoken communication to fit the other persons perception and orientation. Some may have heard of "mirroring." This technique is similar but a hundred percent more powerful.

Many communication specialists today have made a clear connection between language and persuasion. In essence what they all agree on is that different people respond in one of two ways: positive orientation or negative orientation.

Dr. J. Mitchell Perry talks about this in his book, The Road to Optimism. He says that these two types of people display opposite and opposing traits in decision-making. Those that make decisions that "capitalize on their strengths" or those that "compensate for their weaknesses." The person who compensates for their weaknesses will usually be looking at "what is wrong" and the person who capitalizes on their strengths will usually be looking at "what is right." This has a bearing on how we approach them.

The person who compensates for their weaknesses is typically the type of person who will do everything they can to minimize risk. The person who capitalizes on their strengths will look for opportunities. Understanding your customer's orientation is critical in persuading them to see things from your point of view.

Decision-orientation is just an example of the kind of communication technique, which we will practice at our upcoming workshop, "Attract More Business." There will be very little lecture at this event. It will be very interactive and focus on applying and practicing new marketing approaches so that they create a dramatic impact in your business.

Take a Step Back

Most of us have experienced that, "too close for comfort" feeling. You know what I mean. That's when someone decides they will stand or sit just a little too close to us for our comfort. I spent a lot of time in Asia as well as in Europe and I quickly became aware of these cultural differences.

I noticed that the Japanese would never stand too close. They would never even touch my arm in a gesture even after we became very good friends. It seemed to them that getting physically close to a person implied some sort of personal, off-limits, intimacy - something which had to be earned.

On the other hand, I found that the Europeans (Italians, Spanish and French) would often stand very close when speaking with me. They would touch my shoulder or hand when making a point and even put their arm around me. I would keep backing up until there was no where else for me to go. I was hoping they would get the hint. I wanted to say, "give me some elbow room!" It was a tough situation at first. If you tell this person to stay out of your space, feelings will be hurt and a potential business relationship could be lost. Initially, I felt they were invading my personal space but after a while I realized there was nothing strange about this. It was just their way.

Don't Get Used

Often times selling can be like this. The closer we stand to the customer, the more they want to back up. Why? - out of self-preservation. They want to protect themselves from being sold or from being forced or tricked into a decision. Some customers are even more strategic. They feel that if they can keep you at bay, play hard to get, then you will work that much harder to get closer to them. In the mean time they will play you for all you're worth. While you're working your tail off at trying to add value and build a relationship, they will be extracting all of your knowledge in an attempt to use it to "improve their current deliverables and price."

In other words they will use your information to "beat up" their current supplier to get an even better deal or better service. In either case all of your efforts to "get closer" to the customer have failed to get you the business. You thought that since the customer allowed you to "get close" that you were building a good relationship which would result in you getting the business. Sadly just the opposite is true. In most cases the sale is typically lost or gained in this very critical rapport step. The die is cast in the first meeting when seller and buyer are eyeing each other up. How can we ensure that we don't get used?

Rapport is a Two-Way Street

It is interesting to note that while salespeople have a reputation for being manipulative, disingenuous and shady; it is the customer that seems to most often manipulate circumstances to their advantage. Think of how many times a prospect or a customer has told you they were interested and that they would get back to you yet they never did? Or how often they gave you strong buying signals, positive affirmations on your product or service or even a purchase commitment only to never return your phone calls or emails? If you're like most, this happens more often than not.

The bottom-line is that rapport is a two-way street. To be an effective salesperson we must be skilled at creating "influence." Good "influencers" go beyond building rapport with the customer. They create an environment that helps the customer feel good about building rapport with the salesperson themselves! The biggest barrier to building rapport is what I like to call the "salesperson act." This is where the salesperson focuses on building value by presenting features and benefits, looking for objections to "handle," and side-stepping the customer's questions about price. Remember rapport is a two-way street. Look for ways to get the customer to be comfortable with you. Let them see that you are, in fact different from all of the other salespeople that call on them. Hold the customer accountable to the same standards for which you hold yourself accountable.

It's All About Perspective

When customers understand that we really are more interested in their viewpoint rather than making a sale they will tend to become more honest with us. How can we accomplish this? It's quite simple really - by asking a series of strategically planned and well-thought out questions. Asking intelligent questions of the customer demonstrates that we have done our homework. It gives us the opportunity to show that we really do care, that we really have done some deep pre-approach and that we understand their pains, motives and political circumstances. It also demonstrates to the customer that we are wiling to take on the customer's perspective. But most of all it gives us the ability to "take a step back." The customer does not feel threatened. They do not feel as thought they need to defend themselves by manipulating you. They feel as though you are "willing" to be part of their solution. While this type of selling culture may be awkward and different for most, I can assure you it works.

So if you're looking for a way to "get closer" with your customers and clients, take a step back.

I hope that this "Business Update" has been helpful. For more information on the Small Business Advisory Network, please feel free to contact me at 310-320-8190 or mdeo@sbanetwork.org.

Sales Capacity

What is your sales capacity?

How do you know that this really IS your capacity?

I think that most sales professionals grossly underestimate their capacity. There are a number of things that negatively affect our capacity. Here are a few:

1. The Forecast- Often our capacity is determined by our company’s quota or forecast. We should never let someone else determine our level of success. In my mind our company, quota or forecast should be our “baseline” rather than our capacity. We should set daily goals that exceed the forecast by 20 to 30%. In this way we can ensure that we blow away our quota.

   
   

2. Limiting Thinking- This is a killer for someone in the selling role. Even the most “positive” individuals can impose limitations on themselves. These have often been thrust upon us as children or life experiences cause us to feel that we are capable of only “so much” success. This is why I recommend that salespeople spend at least one hour every week reviewing their vision plan and long and short-term goals. This helps us to focus on the future possibilities rather than the failures of the past.

   
   

3. Misalignment of Goals- Often times our daily activities are out of alignment with our goals. If we are very clear on our vision for the future and the specific goals that we need to reach in order to get there, then we must ensure that our daily activities are a reflection of our vision and goals. For example I play classical guitar and one of the goals is to teach guitar when I am in my 60s. Additionally, part of my vision is to establish a scholarship for students of classical guitarist. My daily activities must include practicing the guitar for several hours if I am going to achieve this vision.

   
   

4. Mistaken Priorities- Another thing that can prevent us from performing to our highest capacity is mistaken priorities. In my coaching, I hear people say, “I’m working as many hours as I can Mark.” We need to ensure that we are working “smart”, however, and not just “hard.” It is most common for people to do the easiest things first. Often the hardest things are the most critical. Yet this just reinforces the procrastination that keeps us from achieving our goals. In order to expand our capacity I recommend that we do the “hardest” things first. This allows us to not only get the most difficult and often critical things finished on or before schedule but it builds motivation and confidence.

I encourage you not to settle for less than your true capacity.

You say you don’t know your capacity?

Then be willing to push the limits.

No one I know ever died from trying to hard!

Have a great week!

Overcome Objections

In his youth, futurist Roy R. Anderson believed that truth alone -- when well argued -- would convert others to his viewpoint. If his was indeed the best solution, than by force of sheer logic others should agree and follow his advice, putting thought into action.

Many of us have shared this misconception at some point in our lives. Frequently, we have been disabused of it abruptly and with some damage to our egos and careers. The challenge of changing minds has led strategic planner Pierre Wack of Royal Dutch/Shell to rank it as his No. 1 task: "The job of the strategic planner," he says, "is to change the picture of reality in the head of the CEO."(Emphasis added.)

We're all familiar with strong-minded managers; we've worked for them. Or are them. But the term "corporate culture" -- the idea that organizations hold a collective picture of reality -- is still a concept with implications we have only recently begun to explore. The CEO we wish to influence may have shaped the culture (as did the elder Watson at IBM, the younger Henry at Ford Motor) or he may merely embody it. Either way it's there.

Today, it may be the most powerful reason that advertising agencies should exist. And the best explanation of why some are better than others.

And as Anderson found during his career at Allstate, facts and logic alone are not enough. They are usually necessary, but not often sufficient. Because to sell our ideas, and your products, we must overcome fixed perceptions of reality that all-too-often have little to do with either.

To attest that this is no new thought, the quote below is from Aristotle's Rhetoric. But more contemporaneously, sales training aimed at enabling us to overcome objections does only half the job. Thus, it leaves us frustrated and resentful as we are figuratively tossed out on our ear once again by the big customer whose order we crave. We counter every objection, but he doesn't buy. And we wonder, Why?

"One who attempts to move people to thought or action must concern himself with their emotions. If he touches only their minds, he is unlikely to move them to action or to change of mind -- the motivations of which lie deep in the realm of the passions."
Aristotle

The answer lies in the passions, or what we call subjections. Here's a short list that will show you what we mean:

OBJECTIONS

Price
Delivery
Service
Quality
Performance

SUBJECTIONS

Triviality
Image
Foreignness (to our experience)
Risk
Aesthetics

Facts and logic can overcome objections. But only creativity, which speaks to inner needs, can overcome subjections; for example, the concern that a decision may entail more risk than the corporate culture will forgive if the plan fails.

As Mike Sloan, a Miami, Florida agency founder says, "Good ads take one of two approaches: an exercise in persuasive logic you can't ignore. Or an exercise in charm so likable you want to buy the product or service...Great ads are made of superb logic and great charm."

Logic alone might be enough, were it not for the passions we have spoken of that must be charmed.

Business relationships are based on utility. If we can be of use, we may be able to form the bond that cements a sale and makes a customer. If we're of no use, all is lost right from the beginning.

Second, business relationships must be characterized by trust. No matter how many contracts are drawn, they ultimately prosper or wane based on the mutually held conviction that the parties will do -- not only as they've promised formally -- but all that their role implies. It is the understanding of this implied obligation, and the grit to meet it always, that separates a trusted business partner from a mere vendor.

A third vital element is energy. We trust and rely on those whom we believe to be most active in pursuit of our goals (and protective of our interests). Energy (the ninth sales call) is perhaps the most underrated single element in successful businesses.

Finally -- and by now almost minor in its role -- is advantage (the objective elements of quality, price, performance, service, delivery and the like). This element of business relationships is what we all know best from training and experience. It is what we once thought, perhaps, was sufficient. It is, in reality, fourth in long-term importance, as technology continues to undercut its most essential parameter -- time.

Advantages once held for product life-cycles that spanned decades now disappear in months. (Look what happened with video games and VisiCalc!) Sophisticated marketers increasingly understand that the "technology game" varies little from product to product and that time is on the side of the lowest-cost providers.

But IBM survives and quite nicely, thank you. Not because Big Blue makes the best, most powerful, fastest or cheapest computer. But because the company demonstrates a nearly- amazing capacity to deal successfully with such a wide range of subjections, and satisfy the demands of almost every corporate culture.

How do we get there from here?
An honest answer: we know the way but we've never been there. In our defense few have, because the new paths are only now being blazed. Industrial advertising is often considered a sort of commercial analogue to bailing a boat -- do just enough of it to avoid sinking. In this environment recommending that a client do more of it seems utterly self-serving and irresponsible.

Yet advertising does not exist to prevent disaster, but to create prosperity. "We are in the business of changing things," Paul Harper said. "We, as advertising men and women, are the great energizers of this marketplace."

Indeed, all advertising exists to energize the marketplace, and thereby contribute to increased sales and profits. As such, it is an integral part of selling.

In fact, as far back as 1905 it was described as "salesmanship on paper." There has never been a better definition.

The truth is that selling is closer to the nub of things than even many of its advocates like to admit. Like protein and beauty, it satisfies real needs. Like hunger and aesthetics, it is a force beyond the control of politicians and philosophers.

"Nothing is so powerful as an insight into human nature...what compulsions drive a man, what instincts dominate his action...if you know these things about man you can touch him at the core of his being." -- Bill Bernbach

The marketplace is a Rorschach of human instincts. Chaos is both its limitation and its appeal. Diamonds! Or are they rhinestones? Or cut glass? Whatever, they sparkle in the sun, shrouded by the dust stirred by avid profiteers, indolent browsers, the craven, the hopeful, the young with their dreams, the old people to whom every layered display of goods for sale is both validation of a life's ambitions, and unalloyed rebuke for all its failures.

So the new paths we have spoken of evoke the past as they point to the future. For as technological parity returns us to a focus on the human psychology of salesmanship, it is the utility, and trust, and energy of honest businessmen that will provide the ultimate advantage. And these attributes -- based on a new and far more profound analysis of the customer's real needs and how they are affected by the culture in which he operates -- must be conveyed with clarity, impact, and conviction.

Conveyed, how?
By advertising.
By advertising that goes far beyond specifications. Far beyond its traditional role of creating awareness of a brand, and some comprehension of its features and benefits. Tomorrow's advertising will do these things, yes, but almost incidentally.
The minor significance of the old trilogy -- awareness, comprehension, and preference -- has been demonstrated for years by the Ebbinghaus Curve of Forgetting, which falls off in insolent mimicry of the upward-bound course of these values under the positive pressure of advertising.

Yes, what people learn they forget. The more ephemeral the knowledge, the more rapid its loss, and in an age of technological parity most knowledge seems, if not trivial, certainly less than crucial. We are not advertising nylon, or neoprene, or the transistor. We're stuck with gradations and nuances, generic features and fragile benefits. Forgetting comes easy.

So it is essential that we go beyond awareness. Success in the future will depend on opening much more than a sample case of today's wares; it will necessitate opening up whole companies and merging cultures; of inviting the uncertain prospect in, setting him down and talking turkey.

We call this process Access. A major step beyond Awareness, it conveys that you and your company are open and receptive to the needs of your clientele. It validates your utility and trustworthiness. It exemplifies the energy you devote to satisfying your customer's needs.

It overcomes the emotional objections. The end game. Partnership with your customers in a relationship marked by a depth of real rapport, ensuring that they are never likely to forget or forsake you.

High Level Decision Makers

HLDM. What is it? A new drug to counteract high cholesterol? The latest high definition, plasma TV technology? Not at all. HLDM stands for High-Level Decision Makers. And contacting HLDMs can improve sales performance probably more than any another selling tactic.

It comes as no surprise that most salespeople feel locked in at lower levels and are unsure of what to do to get to the hi-level decision maker (HLDM). Hi-level value added selling means selling at the highest levels in an account. It's a philosophy of partnerships and value creation for the customer. Calling on the HLDM means talking to someone who has the ability to say "Yes" and "No" to your idea. Generally, it's someone in upper management. They create budgets for ideas they like and pull the plugs on projects they feel waste resources.

A recent study concluded that eighty percent of hi-level decision makers admit to getting involved in sales early in the decision process. Yet only 5% of all salespeople ever get to this decision maker. How could this be? Are these decision makers pulling the strings behind the scenes? How can sales professionals influence these decision makers?

Why face the HLDM?
Calling on HLDMs shortens your sales cycle, gets you better treatment throughout the account, and creates additional pull for your idea. There's less competition at the top because most salespeople are too intimidated to call on the HLDM. And when was the last time you heard an HLDM say, "I don't think there's enough budget money for this idea I really like."

In the sales and marketing classes that I teach weekly and in my consulting practice, I ask salespeople why they failed to call higher in their accounts. Here's what I often hear: "I'm afraid I will offend my lower-level contact," or, "They won't see me," and "I'm intimidated by the HLDM." Lack of confidence, knowledge, or skills hold back most salespeople from calling on the HLDM. There are a number of myths surrounding these HLDMs:

• They're difficult to get an appointment with.
• They're eight feet tall and bigger than life.
• Every one of them has a Harvard MBA or law degree.
• They despise salespeople.
• They eat their young.

• They're better than you.

HLDMs do not ascend to the top by being aloof. Many have sales or marketing backgrounds and appreciate the importance of a salesperson wanting to meet with key decision makers. Today's organizations are flatter, making the HLDM more accessible. They will meet with you if you have something of value to discuss with them.

Keep in mind

The first step in selling to the HLDM is to understand their personalities. They are more direct, so don't take some of their behavior personally. They like to control meetings, processes, decisions, etc. Power is important to them. They take measured risks and make calculated decisions. They are visionaries who live their passion.

Their successes are often tied to their ability to induce others to follow. Consequently, they are strong leaders. Time is one of their most important resources and they will measure your value by your sense of priority and efficiency.

The things that irritate them most are excessive chit-chat, fire hose feature-benefit presentations, not understanding their business, canned presentations, and trying to close too early. They do not want to conduct business with salespeople who have "transaction" mentalities. They want to establish business partnerships with people who are more interested in making a difference than just making a deal.

Speak on Their Level

Remember that HLDMs are not so much concerned with the best price or even the performance of your service or product. They are most concerned with how you and your company can help them reach their goals. They see past the transaction to the ultimate result. When you structure your presentation to a HLDM you want to make sure that you focus on THEIR goals. What's in it for them? We can't do this without fully understanding the needs of the HLDM. This requires some pre-approach. Try to find out as much about the HLDM as possible BEFORE you can for a meeting. What has been their biggest accomplishments at the company? What is their management style? What is their vision for the company's future? Also plan to ask appropriate questions in the meeting with the HLDM. Build on the knowledge you gain in the preappraoch. HLDMs respect someone who has done their homework and who is passionate and inquisitive.

Whether you are a small business owner/manager finding yourself in the selling role, or a professional salesperson making your living building relationships, effectively leveraging the HDLM can help you to achieve greater selling success. If you are interested in learning more about how improve your performance with HLDMs enroll in my Monday night Dale Carnegie Sales Class in Long Beach, CA.

Getting More Appointments

Lost Appointments = Lost Business

Earlier this year I found myself at the beach attempting to do a little body surfing. What did I find but an empty bottle (see photo) every 10 or twenty feet propped up in the sand. The string of empty plastic bottles seemed to go on forever.

As I closed in on the bottle I realized there was a message in the bottle with a cork at the top. The front of the bottle had a label with one word; "Lost." I of course had to open the bottle and unroll the note. This is what it said:

"We are 48 survivors of Oceanic flight #815. We were about 1,000 miles off course when we went down. The black box and radio are useless. Help. Rescue us. Come fast as you can. Please we are "lost." Look for us Wednesday, September 22 at 8pm."

The only other thing on the note was a ghosted stamp of the logo for ABC.

Obviously this was a promotion for the TV show, "Lost." I watched as person, after person picked up the bottles and discussed it with their beach-going friends. There is no doubt that ABC created some buzz over this little gimmick. While all this was happening, I also noticed several of those airplane banners advertising other TV shows to which no one paid any attention. I couldn't help thinking about how memorable, simple and cost effectiveness this promo was when compared with traditional media like airplane banners, print, radio and TV.

Attracting Appointments

Last week we talked about how to get more appointments. Imagine if we could apply this type of marketing to getting more appointments. We might be able to "attract" people to us rather than chase after them.

As I mentioned last week many people tell me "if I could only get in front of a prospect then I could sell them my services." But in getting the customer's attention and interest we run the risk of losing credibility and being perceived as a "salesperson." There IS a way to use attraction-based marketing principals to secure more appointments "without" selling!

I will actually be talking more about this in my upcoming Tele-Clinic on Monday Learn how to use a simple yet powerful five step marketing approach to getting more appointments:

1. Preparation

2. Reconnaissance

3. Contact

4. Rejection

5. Response

Simply click here and complete the brief registration form to take part in the Tele-Clinic.

Practical Application

This might be great for a television show or a product in the mass market, but what about a B2B product or service such as what most of us are offering? How can we apply this strategy?

It's quite simple. Here's my action plan developing a marketing campaign that results in getting more appointments:

1. Identify the smallest most influential market that you can possibly find - a powerful, yet reputable subgroup that will have interest in what you have to offer.

2. Create a compelling message that clearly articulates the problem of challenge they are facing.

3. Figure out a way to give them a small taste of the product. Do so in advance of everyone else.

4. Empower the leaders of this group to make claims and statements to their community regarding the product that you have created.

5. Build your marketing right into your product or service rather than tagging it on as an afterthought.

6. Inject your own passion in what you do. Do it because you believe it. And if you don't believe it, don't do it!

7. Do what you love. Love what you do. Let it show no matter what anyone thinks!

Audience for Ransom

Here's another example of a campaign that uses these elements which we launched for our radio show last year:

The average life of a radio show is less than 15 months according to a 2001 Aribitron study. The Small Business Hour has beaten the odds, this year celebrating it's 7 year anniversary on the CBS Network! I attribute this not so much to our super selling skills. Truthfully, my staff and I have spent little to no time selling sponsorships for our show. In fact, I can count the "sponsor presentations" on one hand.

How have we done it? By building a highly targeted audience of listeners and potential sponsors. These are organizations that find it difficult to get entrepreneurs and small business owners to really listen to what they have to say using traditional media. So we targeted banks, accountancies, credit card processors, Professional Employment Organizations and Internet hosting companies. Senior executives of these organizations get so many solicitations for sponsorships, they tend to ignore just about everything. While we're always involved in viral and buzz marketing campaigns for our show, we wanted to find a way to break through their preoccupation.

How do you get the attention of the marketing manager of Bank of America or AOL? We came up with a rather "shocking" campaign that not only received a great deal of attention it demonstrated how we would get the results that sponsors are looking for. We purchased the cheapest portable CD player that we could find. They cost $7 each and came with headphones. We recorded a message to precede the samples of some of our very best shows with guests like Zig Ziglar, Jay Abraham and Seth Godin. We sent this to several hundred highly targeted prospects. We also created a web site that answered all of the sponsor's potential questions about the show and helped them to see how the show would solve their most challenging problem, "increasing their small business marketshare."

This type of compelling, rather controversial message was instantly embraced and we received several sponsorships without investing very much in dollars or time.

Monday Tele-Clinic

Again these are the principles that we will be discussing in our Tele-Clinic on October 18 at 1pm. In this Tele-clinic we will present non-selling principles, approaches and techniques that will get you more appointments with qualified prospects. We will cover:

• How to establish the ground rules so it's easier to ask for an appointment.

• What information your prospect should have BEFORE you meet with them (or even talk with them).

• How to reach the right person without a battle.

• The things you should never ask a prospect when you get them on the telephone.

• The things you must ask your prospect before you set up an appointment.

• Why you should spend more time REJECTING prospects rather than trying to get them to accept you.

• How to get a prospect to ask YOU for an appointment instead of you asking them.

• Why you should give your prospect homework after you've set the appointment.

• Several ways to pre-sell your services even before meeting for the appointment.

• How to dramatically reduce appointment cancellations.

We are only able to accommodate a maximum of 20 participants for this Tele-Clinic, so sign-up today. Simply click here and complete the brief registration form to take part in the Tele-Clinic.

Forecasting Sales

Sales forecasting is the process of organizing and analyzing information in a way that makes it possible to estimate what your sales will be. This guide outlines some simple methods of forecasting sales using easy to find data. Books containing simple and sophisticated techniques of forecasting sales can be found in libraries and business oriented book stores

If you sell more than one type of product or service, prepare a separate sales forecast for each service or product group.

There are many sources of information to assist with your sales forecast. Some key sources are:

• Competitors
• Neighboring Businesses
• Trade suppliers
• Downtown business associations
• Trade associations
• Trade publications
• Trade directories

Sales Forecasting for a New Business

These steps for developing a sales forecast can be applied to most kinds of businesses:

Step 1:
Develop a customer profile and determine the trends in your industry.

Make some basic assumptions about the customers in your target market. Experienced business people will tell you that a good rule of thumb is that 20% of your customers account for 80% of your sales. If you can identify this 20% you can begin to develop a profile of your principal markets.

Sample customer profiles:

male, ages 20-34, professional, middle income, fitness conscious.
Young families, parents 25 to 39, middle income, home owners
Small to medium sized magazine and book publishers with sales from $500,000 to $2,000,000
Determine trends by talking to trade suppliers about what is selling well and what is not. Check out recent copies of your industry's trade magazines. Search the Business Periodicals Index (found in larger libraries) for articles related to your type of business.

Step 2:
Establish the approximate size and location of your planned trading area.

Use available statistics to determine the general characteristics of this area.

Use local sources to determine unique characteristics about your trading area.

How far will your average customer travel to buy from your shop? Where do you intend to distribute or promote your product? This is your trading area.

Estimating the number of individuals or households can be done with little difficulty using statistics census data. Statistics family expenditure survey can identify what the average household spends on goods and services. Information on planned construction is available from a variety of sources. Directories the Yellow Pages can help identify names of companies located in your trading area. Neighborhood business owners, the local Chamber of Commerce, the Government Agent and the community newspaper are some sources that can give you insight into unique characteristics of your area.

Step 3:
List and profile competitors selling in your trading area.

Get out on the street and study your competitors. Visit their stores or the locations where their product is offered. Analyze the location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product lines carried, promotional techniques, positioning, product catalogues and other handouts. If feasible, talk to customers and sales staff.

Step 4:
Use your research to estimate your sales on a monthly basis for your first year.

The basis for your sales forecast can be the average monthly sales of a similar-sized competitor's operations who is operating in a similar market It is recommended that you make adjustments for this year’s predicted trend for the industry. Be sure to reduce your figures by a start-up year factor of about 50% a month for the start-up months.

Consider how well your competition satisfies the needs of potential customers in your trading area. Determine how you fit in to this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, better service?

Consider population and economic growth in your trading area.

Using your research, make an educated guess at your market share. If possible, express this as the number of customers you can hope to attract. You may want to keep it conservative and reduce your figure by approximately 15%.

Prepare sales estimates month by month. Be sure to assess how seasonal your business is and consider your start up months.

Sales Forecasting for an Existing Business

Sales revenues from the same month in the previous year make a good base for predicting sales for that month in the succeeding year. For example, if the trend forecasters in the economy and the industry predict a general growth of 4% for the next year, it will be entirely acceptable for you to show each month’s projected sales at 4% higher than your actual sales the previous year.

Credible forecasts can come from those who have the actual customer contact. Get the salespersons most closely associated with a particular product line, service, market or territory to give their best estimates. Experience has proven the grass roots forecasts can be surprisingly accurate.

Sales Forecasting and the Business Plan

Summarize the data after it has been reviewed and revised. The summary will form a part of your business plan. The sales forecast for the first year should be monthly, while the forecast for the next two years could be expressed as a quarterly figure. Get a second opinion. Have the forecast checked by someone else familiar with your line of business. Show them the factors you have considered and explain why you think the figures are realistic.

Your skills at forecasting will improve with experience particularly if you treat it as a "live" forecast. Review your forecast monthly, insert your actuals, and revise the forecast if you see any significant discrepancy that cannot be explained in terms of a one-time only situation. In this manner, your forecasting technique will rapidly improve and your forecast will become increasingly accurate. In recessionary times such as these accurate forecasting is critical.

Evidence That Demands a Verdict

"That bloody glove doesn't fit his hand!"

What two letters come to mind?

There are NO two letters that could come to mind other than, OJ.

Why?

Because if "it doesn't fit, you must acquit."

I'm not going to get into whether OJ was guilty or not, but you've got to admit more than ten years later, we still remember the evidence that his lawyers used to get him off.

If you ask me Johnny Cochran is the greatest salesperson in the world (No offense Og Mandino). He was able to craft a case, produce evidence and ultimately obtain a "Not Guilty" verdict for what was probably one of the guiltiest of men ever to stand trial for murder.

Against overwhelming odds, Cochran gave the jury a reason to buy. While I don't exactly approve of his tactics or motive, not to mention his choice in clients, I think we can all learn from the power of evidence when properly used.

Yet we still see outrageous claims in all kinds of marketing, advertising and selling messages today without any supporting evidence at all. In fact there are so many messages in our media with unsupported claims that customers and buyers are confused and numbed to their effect. In the past there were far fewer choices confronting buyers. In addition there was less information available and less media coverage. All this added up to greater power for the seller.

I remember when I was a kid in New Jersey. My Dad wanted to buy a Ford. He said, "Come on Mark we're going to the Ford dealer so that we can get our new car." There was only one Ford dealer in our area so there wasn't much choice. On the other hand, last week a friend of mine also bought a Ford. He told me he did research on the Internet, visited three dealers and eventually bought the exact model he wanted with all the options he needed from an auto broker. All at a price that was cheaper than all three dealers.

Today the power is with the buyer. Greater availability to information and more competition have given an advantage to the buyer. That's good for buyers but it makes it tough for marketers and sellers. For this reason marketers must be more strategic about gaining the customers favorable attention and filling their needs. Now I'm not talking about clever marketing gimmicks but I'm talking about truly understanding the buyer's needs and motives and assembling the evidence that supports the fact that you are not just a possible choice but the ONLY choice. Yet this RARELY happens. Since everybody is saying the same thing, today most product or service choices seem to be identical.

It's hard for a customer to see how any product or service is any better or any different or any worse than any of the other competitors. Unable to determine this they do the most logical thing. They resort to selecting the product or service with the lowest price. I have done this myself.

Not long ago we realized our fence needed replacement. Every time we would into the garden or out by the pool we had to look at the brown rust on the rails and the decrepit wood. We had to struggle with the rickety gates and the shrubs were beginning to pull the fence off its moorings. We needed to buy a new fence. My wife of course elected me for this task. But where should I start? Where else - the yellow pages.

As I flipped through the pages I noticed that every ad was essentially the same - free in-home consultation, varying sizes and materials, talented experienced professionals, installation you can trust, licensed, bonded, best pricing, blah, blah, blah. Not ONE of these ads stood out or addressed my specific needs. So I started calling. I got only wrong numbers, disconnects and voice mail messages. I started receiving callbacks. Within a week I had three contractors come to my home and quote on my fence. I received quotes of $7500, $6750 and $4485. I could find no discernable differences between the se quotes. What's more, when I asked the salespeople the differences I got only, we been around the longest, we do work for the stars, if you buy cheap -you get cheap, and other dribble. By the way not ONE of these "so-called" salespeople every asked me a question about my needs.

Finally I called the lowest priced bid and began asking some questions of my own. I found out that I could upgrade the fence to have "pressure treated rails." Which would reduce the risk of rusting. When I asked the salesperson what could be done to ensure that the fence would be solid and not torn from it's moorings he recommended using two by fours rather than the standard two by threes. I also inquired about how to make sure the gates would wear out and he told me that he always used four hinges rather than two or three on gates this size. All this cost over $1000 more but it was well worth it for me. He won the bid despite his poor marketing, advertising and salesmanship.

My point simply is that if any one of these contractors would have asked me some questions to determine my specific needs and presented evidence to support the fact that their fencing company was the only one to provide this unique array of benefits I would have bought REGARDLESS of the price.

Are you finding out your customer's needs, desires and motives? How are you presenting your case to the buyer? Are you giving your client's and customers a big enough reason to buy? What are you doing to set yourself apart? What evidence can you use to make your product or service different that the competition?

These are the questions that every marketer or seller must ask himself or herself today.

You can bet OJ is glad that Johnny Cochran did.

Covert Persuasion

"The biggest mistake sales professionals make is not seeking out sales training or re-training."

Price Prichette

I sometimes think back on all the things I was taught about business when getting my MBA, and realize how little practical value most of those bits of knowledge actually have. I learned far more about the most important aspects of business by taking some basic psychology classes, because it always comes down to people.

I hear over and over again the same issues from salespeople I train, managers I coach, and business owners with which I consult. One of the most common things I am asked is, "Mark, how can I get people to buy from me instead of my competitors?"

The answer is almost always the same, and it doesn't involve lowering your price, adding incentives, or any of the other typical things that ruin profitability. It comes down to how to influence people.

I've been affiliated with just about every major sales training program there is as either a student or instructor over the past 25 years. The course I've found that really teaches influence is the Dale Carnegie Sales Advantage. It takes the human relations principles developed by Dale Carnegie a century ago and applies them to a scientifically studied method of influencing people during the selling process. Of course, many of you reading my e-mail know this firsthand as former students of mine.

Times change, and so do people- so we've got some exciting new additions to the Dale Carnegie methods that will help former students and new attendees alike. I've arranged with the Long Beach Dale Carnegie Training office to let my readers attend a free training session this Monday, February 11th at 6 PM.

I'm extending my personal invite to all of my readers to attend this session (and bring a guest!) If you've been in my class, it will be great to see you again, and you can network with some of your classmates. If you've never attended one of my sessions, I look forward to meeting you and hearing how I may be able to personally assist you in your quest to influence more prospects and turn them into clients.

Please call Aaron Kent at 562-427-1040 x210 if you would like to attend, and I look forward to seeing you all on Monday.

Sign Up Today: Covert Persuasion
Time is running out to sign up for this One-Time-Only event where you will learn the secrets of how to get more business without resorting to typical sales tactics.

You and a guest are cordially invited to this FREE Dale Carnegie workshop where you will:
- Learn the fundamentals of "Covert Persuasion"
- Polish and re-fresh your awareness and application of the Dale Carnegie Sales Process, a process that increases sales for over 80% of all sales people
- Begin to acquire your "Masters Degree" as a sales professional
- Network with other Dale Carnegie Alumni and newcomers to find new clients and referral sources
- Receive a free copy of he Dale Carnegie Sales Advantage pocket handbook
- Accelerate your sales performance in 2008 and start the year off by investing some time with the largest professional training organization in the world: Dale Carnegie Training.

Details:
Monday, February 11, 2008
2525 Cherry Avenue
Long Beach, CA. 90755
6:05 PM to 8:45 PM

*Appetizers and soft drinks will be provided.
Your Tuition: $0.00

Please confirm your attendance by emailing catrina.herrera@dalecarnegie.com, or contacting Aaron Kent at 562.427.1040 ext. 210.

PS: Come prepared with a description of your ideal customer so that we can help you generate referrals from this session.

Have a great week!

Buying Process

If you go to Amazon.com and type in a request for "books on selling" you will receive over 5,000 selections to choose from. They range from, "how to sell more," to "overcoming objections," to "building rapport," and so on. Most of these books proclaim some kind of proprietary selling system or specific process aimed at improving sales results.

Now, don't get me wrong, it's not that I think that spending time understanding the selling process is bad. I have read a good number of these books myself and have even had some of these authors, trainers and business leaders as guests on my radio show. I believe that it is critical to understand and practice the "selling process." I, myself teach how to integrate this process into business relationships every week in the Dale Carnegie Sales Advantage Class. The Carnegie organization has done a fabulous job of developing a powerful yet practical process for selling improvement. I am honored to be a sales instructor and encourage folks to check it out.

On the other hand if you were to go to Amazon.com and enter a request for books on "BUYING" you would receive less than 100 books. Why is that? Is it more important that we understand the "selling" process or the "buying" process?

Wouldn't you agree that if we can better understand the process that the buyer goes through that we would be more able to align our thinking with theirs? It is for this reason that I have spent considerable time developing a system for analyzing the process of making a decision to buy a particular product or service. Of course this process is 99% subconscious. Yet I came to the conclusion that this process existed by looking closer at why there is so much friction or resistance in the buying process. In other words, why often times buyers will resist buying simply because the salesperson is attempting to sell?

A Matter of Trust

Let's face it most would agree that the biggest challenge that business people face when attempting to persuade others is gaining their TRUST. Trust is a rare commodity these days. Information is flying at us at a staggering rate and we are preoccupied with decoding all kinds of redundant messages at the expense of building trusting relationships. Consequently business people today are more savvy, suspicious and selective than ever before.

I have often found that salespeople or even business people in the selling role try to move the customer to take action too quickly and thereby push that customer away. Maybe forever. They not only lose the sale but they lose credibility, damage their rapport with the customer and gain the reputation of being too pushy.

For this reason customers are hesitant to take action until they have passed through the first eight stages of the "Buying Decision Process." When we understand and practice recognizing this process, we can more accurately satisfy customer's needs at each stage of the process and thereby be the person that helps them to move through each stage of the process. Of course when we help them move through the process we are also earn the right to help them take action.

The Nine Stages of the "Buying Decision Process:"

Here's how the process works:

Stage 1: Become Aware of Change
Stage 2: Recognize Deficiency
Stage 3: Experience Pain
Stage 4: Seek a Remedy
Stage 5: Encounter Influence
Stage 6: Establish Buying Criteria
Stage 7: Identify Options
Stage 8: Make a Brand Selection
Stage 9: Take Action

Stage 1: Become Aware of Change
Let's look at them individually now. The first stage is that the customer is aware of change. These may be external changes in the market place or internal changes within their company. Something is changing. We can help them to address this change by making them more aware of what is happening around them and perhaps showing them that they are not alone. Other folks in their industry or profession are facing the same kind of changes. This increases familiarity, builds credibility and reduces friction in the relationship. One day I was driving home and noticed that the houses on my block looked newer than mine. I wasn't sure why but it seemed they were changing. The reality was that they were staying the same and it was MY home that was changing. We will see how shortly.

Stage 2: Recognize Deficiency
The next stage is that the buyer begins to recognize some sort of deficiency. They begin to relate the "changes" to what they are missing. They realize that they are "lacking" something. Others seem to have it and they don't. It could be more sales, profit, a better company culture or just about anything under the sun. Remember that change that I thought was taking place to the homes on my block? Well, I drove up my driveway the next day and looked closely at my house. What I noticed was that the other homes looked newer than mine because my home needed a paint job.

Stage 3: Experience Pain
During the next stage the buyer begins to experience "pain." As many of my clients, students, listeners and weekly readers know, I am fond of saying that there is no change without pain. I say pain but in reality it could simply be discomfort or unease. Surely I was not in physical pain when I discovered that my house needed painting but it did produce some discomfort. Sometimes the "pain" is more of a "pain in the neck." In this stage the buyer realizes how much it could hurt to remain in their "unchanged" state.

Stage 4: Seek Remedy
It is at this point that the buyer decides to seek some sort of remedy. The "pain" of the "unchanged" state has become MORE than the pain of change. For me there was some "pain" or discomfort in getting my house painted. I had to part with some serious coin, find a reputable company, clear the specifics with the community group and invest time in a myriad of logistical elements to make the paint job happen. But the pain of looking at my dull and paint-chipped home was getting to be greater than the pain of planning and financing the paint job.

Stage 5: Encounter Influence
At this stage the buyer comes in contact with people, data or things that may influence their decision. In fact at this stage people seem to be tuned into noticing the things that influence their decision. Have you ever made the decision to buy a particular type of car and then all of a sudden you start seeing those cars everywhere? This is called "reticular activity." It is an area of the brain that is responsible for non-cognitive or subliminal memory. I found myself driving home from work just a few days after noticing the paint peeling on my house and everywhere I turned there was a paint truck. I also noticed that one of my neighbors just painted his home and I asked him who did the job.

Stage 6: Establish Buying Criteria
At this stage the buyer begins to transfer the emotional needs to more logical needs. They assemble the criteria that will be required to fill the need. For example I began to think about what my criteria should be for the company that would paint my house. They needed to have scaffolding because my home is located on as sharp grade. They needed to bonded and insured to avoid any contingent liability. They needed to have experience in my neighborhood and so on. I began to build a logic defense mechanism for making my selection.

Stage 7: Identify Options
During this stage the buyer conducts an active search for a solution that fits the criteria. I began talking to friends to develop a list of some of the best painting companies in my area. When I put the list together I initiated contact or let others know that I was interested.

Stage 8: Make a Brand Selection
In this stage the buyer limits their decision to the brands that satisfy the criteria and sooth the "pain." The fact that I found a painting contractor that met all my logical criteria is only part of what drove me to make my selection. The larger fact was that the owner of this company actually took me for a walk up and down my block pointing out different home and discussing the pros and con's of each paint job. He asked me a great deal of questions and determined that my motive was more than just fixing the peeling paint, preserving my investment or saving money. He knew that keeping up with the Jones was important to me. He found that out by recognizing where I was in the buying decision process.

Stage 9: Take Action
In the final stage the buyer takes action. The most interesting thing about the paint company that I selected was that they were the first company to visit me nearly 3 months before I decided to "take action" on the paint job. The owner kept in touch me at every stage of the buying process. He didn't try to PUSH me to take action. He found paint chips for me to look at. He sent me a few before and after pictures of some homes he completed, he gave me names of a few people who's homes he painted in my neighborhood and he showed a genuine interest in helping me with the decision. He truly WON the business by putting me first and the decision to take action last.

Think about your own business. How can you better understand where your customers are in their buying decision process? How can you address them at every stage of the process? How can you help your prospects and customers to recognize what is changing around them? How is that causing them deficiency? What is their "pain?" What can you do to create reticular activity for those that are in the "Influence" stage?

Ultimately we can't push anyone to take action. Taking action will happen of its own accord. We can however make a greater effort to understand our customers, their environment, their concerns and their motives. In doing so we will build long-term relationships that produce greater value and profit for all.

Big Beautiful Bamboo

Have you heard the story of the black bamboo? I spent a great deal of time in Japan many years ago. While there, I met an elderly gentlemen who had a beautiful bamboo garden in his yard. One day he gave me a walking tour of this garden pointing out the different types of bamboo.

“Few people,” the old man said in a ragged voice, “realize that there are hundreds of types of bamboo. This is the Black Bamboo seed.” He held the small seed between his thumb and forefinger like it was a holy relic. It looked like a small walnut as far as I was concerned. “When planted, Mark-san, it must have water and fertilizer nearly day.”

He then led me to a patch of dirt and pointed to it saying, “In this place there will grow the most beautiful bamboo garden with stalks more than 20 feet high. But it will require great loyalty and patience from its caretaker.”

I remember thinking, “Yeah right, 20 feet high. This guy is dreaming. I always get hooked-up with the strange, eccentric odd-balls.” For the next few weeks I watched the old man lovingly tending his dirt patch but nothing grew. Week after week he kept watering and fertilizing yet there was not the tiniest sprout to show for all his efforts. On the day of my departure back to the States, I watched him outside my window. There he was on his knees gently pouring water into the dirt - sprinkling fertilizer onto the soil. But there was nothing. I remember thinking, “doesn’t this guy get it? When will he give up this lost cause?”

Surprise Surprise
I returned to Japan several years later and again rented the same room. As I looked out the window I saw the old man and I felt a tinge of sorrow for him. There he was again with his water sprinkling can and little hand-spade. Yet there was no dirt this time. In its place was the most magnificent bamboo garden I have ever seen. The beautiful black bamboo grew higher than the roof of the house itself. You see, what the old man failed to tell me was that when the black bamboo seed is watered and fertilized repeatedly nothing appears to be happening for months on end. Even after a year with the same process of feeding and watering nothing visually happens.

Then, during the tenth month of the second year, the seed opens and a stalk bursts through the ground. Within a period lasting no more than six weeks, the bamboo grows to a majestic height of 20 feet!

The question is when did all this growth really take place - 20 feet in six weeks or 20 feet in two years?

I believe that the growth was a result of precise events staged over the entire two year period. Why? Because at any time during that period, had fertilizing and watering not been maintained, the seed would surely have died.

Systemized Marketing
Marketing is much the same. To get a prospect to think of you first, to get an old customer to think of you in a new way, to get an entire organization to operate more productively or even to change long-standing attitudes and behaviors, the mental changes may require pro-active relationship building for a number of years.

And once the effort of the relationship building takes hold, results often measure in double digit percentages. The return on effective relationship development is enormous.

As business professionals we must take a more systemized approach to our marketing efforts. Whether it’s developing effective advertising or collateral material, creating an ad placement strategy or even launching a public relations campaign, using a consistent systemized approach is far more effective than the quick fix. This is true in building customer relationships as well.

Many people tell me "if I could only get in front of a prospect then I could sell them my services." But in getting the customer’s attention and interest we run the risk of losing credibility and being perceived as a “salesperson”. Now there is a way to use a systemized approach to getting more appointments “without” selling!

New Tele-Clinic
I would like to invite you to learn how to use a simple yet powerful five step marketing approach to getting more appointments. I have never used this weekly update to shamelessly promote myself for profit purposes. In fact this is the FIRST TIME I have ever made an offer in this newsletter. Yet I have received an overwhelming request from subscribers and web site visitors for information on this particular topic.

In this Tele-clinic we will present non-selling principles, approaches and techniques that will get you more appointments with qualified prospects. We will cover:

• How to establish the ground rules so it's easier to ask for an appointment.

• What information your prospect should have BEFORE you meet with them (or even talk with them).

• How to reach the right person without a battle.

• The things you should never ask a prospect when you get them on the telephone.

• The things you must ask your prospect before you set up an appointment.

• Why you should spend more time REJECTING prospects rather than trying to get them to accept you.

• How to get a prospect to ask YOU for an appointment instead of you asking them.

• Why you should give your prospect homework after you've set the appointment. Several ways to pre-sell your services even before meeting for the appointment.

• How to dramatically reduce appointment cancellations.

The five steps that we will cover in the Tele-Clinic is as follows:

1. Preparation

2. Reconnaissance

3. Contact

4. Rejection

5. Response

What’s a TeleClinic?
The content of our TeleClinics are practical and hands-on. The sessions are highly interactive, not just one way information. We discuss principles and strategies and how to put them into action. You get to ask plenty of questions. We work with participants to clarify the ideas and show them how they can implement each in their own business.

This TeleClinic will be held over a conference line and will last 20 to 30 minutes. It is supported by presentation material which each member will receive prior to the event. Additionally, the entire presentation will be audio taped and made available so that participants can replay the content "on demand".

We are only able to accommodate a maximum of 20 participants for this TeleClinic, so sign-up today. Simply click here to learn more and register to take part.

Being Different

Do you find yourself chasing prospects around?

First, they act interested, then they don't call you back. Or after the first meeting they procrastinate and won't even take your calls.

If you're like many entrepreneurs you advertise your products or services, mail information or meet prospects at industry events then attempt to follow-up on all of these "leads" to see who wants to buy something. And still - nothing happens.

How can we motivate prospects to take action?

Many marketing gurus tell us we have to DIFFERENTIATE ourselves - that we have to create more PERCEIVED VALUE.

I say this is not a matter of "perception" but rather a matter of reality. The real question is… What can we do to actually BECOME valuable advisors for our prospects?

We want to be "perceived" as different from other salespeople yet we act just like them. Most of us are still ACTING like salespeople. And most salespeople see all prospects as the same and treat them the same. The fact is that every prospect has a different timetable. They each have a unique set of circumstances that influence their actions. For this reason, one-shot follow just doesn't work.

What does work? A coordinated campaign that provides real BENEFITS for the prospect. In fact the only kind of campaign that does work is on that provides benefits for the prospect BEFORE they decide to do business with us. Oh come on Mark, how in the world can we do that?

The Prospects View
Think of how marketing is "perceived" from the prospects point of view:

FIRST: They see an ad that tells them how fabulous our product or service is. This may spark their interest and they may even call us to find out more, but does it benefit them? NO

SECOND: They get something in the mail that tells them why they should do business with us. Some of this may ring true but does it benefit them? NO

THIRD: They get a call from us asking if we received the information requested with a clear intimation that the next step is to meet with us so we can "close" the sale. Does this provide them with any benefit? NO

And we wonder why they blow us off?

The Root of the Problem
The problem starts with the follow-up process itself. In most businesses, especially small businesses, new prospects are usually contacted only ONCE or a maximum of TWICE via mail and telephone. There is always the good intention to follow up again later, but the discipline required to do this is sorely lacking. I know because I've been there. There are always a million other things to do. Sales appointments. Meetings. Paperwork. Coordinating advertising. Dealing with employees. Client issues and ad infinitum.

We have to remember that for every person who responds to our message, there are 2, 3, 10, maybe more, who ALMOST responded. They heard our message. Thought, "that's interesting," but were unsure. Perhaps they made a note and put it aside. Maybe they stumbled over the note a day or two later and read it again. Maybe, they even got to the phone and were about to call you, when someone came to the door and interrupted them. Finally, the note got buried with everything else on their desk and was forgotten forever.

These people who ALMOST responded WILL respond to another nudge, or two, if the nudges come at the right moment and the message contains some kind of benefit for them. This is what marketers call "Residual Influence" and it's an often-overlooked tool that's the real key to successful follow-up.

Understand the Timing
In my experience I have found that prospects fall into four distinct groups. Let's refer to them as: NOW prospects, SOON prospects, FUTURE prospects and, NEVER prospects. Following up with each of these different groups requires a different approach and a different type of benefit for the prospect.

"NOW prospects" are ready to make a buying decision. The only question is with "who." The goal here is to determine their motives and link your product or service to that motive. It should be relatively easy to secure an appointment with this type of customer. But beware, any delay in following up on this type of customer can and WILL cost you business. There are never enough of these.

"SOON prospects" are in the early stages of consideration. Typically they are thinking of making a purchase in the next six months but must resolve one or more issues. This could be budget, options, selection or the timing could hinge on another event. It is critical that you discover what these variables are. This presents a tremendous opportunity to provide some information or referrals that might BENEFIT this prospect and move them toward making the right decision. Know that they crave information that will help them with their decision. They also require some handholding and appropriate but consistent communication during the consideration process.

"FUTURE prospects" are people who are not likely to make a decision within the next six months. These people are usually not very interested in your product or service at the present time because they are preoccupied with other issues. FUTURE prospects could also include your past clients, and customers with whom you have a long-standing relationship. I recommend that marketers develop industry updates that could be beneficial to theses future customers. We don't want to spend allot of time with FUTURE prospects now but we do want to develop a relatively inexpensive but informative way to maintain contact with and influence over these prospects. The trick is to develop a method to keep these prospects in the pipeline by giving them something of value. Email is a great way to do this.

"NEVER prospects" have no intention to purchase from you. These people will waste as much of your time and energy as you let them. They may like your information and the benefits you provide but they have no intention of dealing with you. Perhaps consistent and regular follow-up could convert NEVER to MAYBE, but you might never know, and it might take a tremendous amount of effort. Hint: often times prospects ONLY interested in price are NEVER prospects. If all they want is a cheap price are they worth the time?

How to Tell the Difference
The problem is, how do you tell which type of prospect they are? And how do you do this without wasting your valuable time on the NEVER customers? You need to have a complete follow-up system that addresses the needs and wants of each group. The good news is that the system I'm about to describe deals with all four types of prospects automatically - you don't have to worry about what type they are, and you won't waste any time dealing with "tire-kickers".

A Typical Approach
While this can be applied to any industry let's assume you are a real estate agent and you get an inquiry from a young couple. Mr. and Mrs. Smith that are thinking about selling their home and moving up to a bigger one in your area in the next 6 months. They are requesting one of the FREE Special Home Seller Reports you offer on your web site or in your informational marketing program. Most agents would determine that this is a SOON prospect and would send the report and then call to try to get an appointment. This would not result in a listing because Mr. and Mrs. Smith simply are not ready to move at this time. Learning this, the agent would create a follow-up for six months. At that time they would call Mr. and Mrs. Smith only to find that they listed their house and it's already been sold. Has this happened to you?

Using the Residual Influence Strategy
But by using our "Residual Influence" strategy we handle things quite differently. This time we tell the prospect that we are different than any other agent. We ask questions determining what they want to "learn" about. Then tell them we will teach them for FREE! We schedule a series of twelve appointments with the couple - one every two weeks for six months. At each of these twelve appointments, we sit down with them, at their convenience, and explain everything they could ever possibly want to know about buying and selling a house. We agree to educate them. To go above and beyond what every other salesperson is doing. To provide a BENEFIT for the customer even BEFORE they make the decision to buy from us!

At the first meeting, we explain in great detail how they can find the best mortgage at the lowest rate. At the second meeting, we explain how they can find the best homes at the lowest prices.
At the third, we tell them what can be done to their house to immediately raise its market value. And so on. Every two weeks for six months, we impart all of our real estate expertise to ensure that they can make the best possible decisions. This is actually in the best interest of the customer!

Now, if at any time during this six-month period the couple decides that they are ready to make their move, whom do you think they will call? The answer is obvious: YOU! By spending the time to educate them, and by demonstrating your expertise, you have become their preferred choice - the only choice. When the time comes to list their home, you will be viewed as a trusted advisor, NOT a salesmen hunting for a commission. Residual influence in action.

As I say, the residual influence strategy can be used for just about any kind of business, product or service. It is a universal way to both improve your relationships and help your prospects see you as a unique option in a marketplace crowded with copycats. Again it's not so much about being "perceived" as different it's about actually BEING different.

Anti-Attraction

The Top 10 Ways NOT to Attract New Clients

They say marketing has a bad name. But I maintain that NOT marketing has a much worse name. If you're an entrepreneur or small business owner interested in attracting new clients, are you still committing any of the 10 deadly sins listed below?

10. Make sure nobody can really understand what business you're in. Use buzz-words and industry jargon. Never share the results of what you do or mention how you've helped your clients. Make people really work to figure out how you can help them.

9. Talk only about features and processes in your marketing materials. Don't include any benefits or case studies of successful clients you've worked with. Throw in lots of impressive industry jargon and don't worry about professional design or paper. Using 20# copy paper is fine.

8. Put up a quick-and-dirty website with most of the pages still under construction. Make sure to design it yourself and make it look as amateurish as possible. Of course, obscure navigation, huge graphics files and pages that lead nowhere will keep 'em coming back.

7. Forget about spell check and proofreading. People don't care about typos or if you spell their name wrong. Whip out every e-mail as fast as you possibly can. And never put a signature line on your email, let alone a subject line that means anything.

6. Don't ever network. Make sure nobody ever gets to meet you in person and learn who you are and what you can do for them. And if you do happen to show up at a networking event, make sure to sit in a corner with a beer and lots of hors D'oeuvres, away from pesky prospective clients.

5. Don't write any articles or do any talks demonstrating to the world that you're an expert and really know your stuff. Make sure to keep all of that a big secret. Also never share one bit of your expertise with anyone unless they pay you first.

4. Don't ask questions when meeting with a new prospective client. Just give them a long, detailed presentation on all the technical aspects of your work. If they don't understand you, they probably wouldn't be a good client anyway.

3. Do substandard work as long as you think you can get away with it. Strive for mediocrity and make sure your clients pay for it through the nose. Why should you work so hard when they end up making so much money from your expertise?

2. Don't return phone calls - ever. Just wait for them to call you back. If they really need your assistance, they'll keep trying until they catch you in. And when they do reach you, make sure to sound impatient and too busy to help them.

1. Disappear. One you've completed a project, make sure they never hear from you again. Heck if they really need you, they'll call. But don't make it too easy by ever giving them your business card or putting your name in the yellow pages. You don't want to look like you're begging. Have some dignity, for goodness sake!

If any of these symptoms are present in your business, its time to think about making some core changes to your marketing effort. At the Small Business Advisory Network we like to say that we influence decisions, improve performance and inspire change. That's what our consulting, workshops, web site, weekly articles and The Small Business Hour Radio Show are all about.

All You Can Eat

Right now on the Serengeti there is a gazelle running like the wind. Her blood is pumping in her veins. Her lungs are nearly exploding. She runs harder and faster with fear in her heart. Why does she run? She is being chased. The queen of the beasts is at her heels... a bloodthirsty lioness. She escapes as the lion takes down a different, less agile gazelle. She will live another day. A few hours later, the gazelle finds herself grazing on the same plain not fifty feet from the very same lion and her entire pride. The lions lick their chops. They are stuffed and tired from the hunt. The gazelles are no longer afraid because the lion is no longer acting hungry. I have found that most customers feel like that gazelle. They feel like they are being hunted, stalked, and eventually taken down. I guess that's because sales people are taught to act hungry. Even marketing material: ads, brochures, mailers, web sites and the like are focused on "hunting" for easy prey. Traditional selling and marketing is a manipulative process that is designed to get someone to buy regardless of whether or not they need to buy. Make no mistake, traditional marketing is about the pursuit - the hunter and the hunted. It's about overcoming obstacles, circumventing roadblocks, and tricking or trapping your enemy. What if you were able to break out of this traditional marketing trap? What if you were able to present your products and services in such a way that prospects and customers sought you out, rather than you chasing after them? How valuable would it be to your business if you could ATTRACT your ideal prospect without spending a fortune on advertising? All marketers like to believe they have a unique solution. They are confident that they are different from the competition. When you get right down to it, however, most marketing says the exact SAME thing. It talks about what the company, product, or service DOES. At best, it may promise some generic group of benefits in which buyers MAY be interested. Even the best marketing materials (web sites, brochure, flyers, ads, radio or TV spots, promotions, interactive CDs or videos) attempt to communicate to the customer why their product, service or company is better than the competition. Few focus on the problems that the customer is having. This is at the core of the attraction mindset. My advice to you is this: STOP acting hungry. The more you chase, the more they will run. Let your marketing materials educate, inspire and influence your customers and prospects rather than SELL them. Take a big step back when you approach prospects. This goes for creating marketing materials as well. Focus on the customers problems in your conversation as well as in your marketing communication. When we understand the customer's problems, we can build a viable solution that is probably very different from your hungry competitors. Taking this approach will allow you to build stronger relationships with clients and establish a brand that will be viral worthy and create a buzz in your industry. In short, the best way to have "all you can eat" is simply to not act so damn hungry. Check out my new Attract More Business Self Study program. Now you can get five days of my attraction mindset FREE. Just click here! Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com Mark Deo Print this article.

Tips on How to Find a Mentor

Mentors can help you escalate your career, boost your self-development and improve your relationships. My whole life, from an early age, I sought out mentors in many different areas of life. You can find a great mentor and here are a few tips to help you do that.

Decide what area you want help with - examine your life and determine if you want help with your career or your health or your relationships. When you know the area you want to focus on you can then begin searching for a mentor. Investigate top performers in your industry - if you want to find a career mentor, find out who are the experts in the field of expertise you want to develop. Find out where your role models hang out - check out networks, industry events and conferences to watch out for potential mentors. Spend time watching the people in the room and make note of anyone who stands out and has the "presence" you are looking for. Investigate official mentoring programs - many organizations now have internal mentoring programs you can become a part of. If you work for yourself you can also investigate Government areas that have established mentoring programs also. Select the mentor - when you find the person you believe would be suitable, spend some time watching them in action. Ask to go along to a presentation with them or ask if you can spend a "day in the life of" them and watch what they do. Ask others opinion of your selected mentor - when you have chosen someone, ask around to find out what you can about their achievements, beliefs, values and way of operating. This will give you insight into them before you approach them about mentoring you. Approach the selected mentor - phone them or make an appointment to see them. Advise them why you want to meet and schedule time. This is an important step in the process so you can show them you respect their time and you are committed to dong the right thing. Have an agenda - when you meet have an outline of what you would like to discuss. Your agenda should include why you want them to mentor you, how long it is for and what you hope to gain during that time. If they agree to mentor you, you can then work out how you can also support them. Set up an agreement - if you both decide to proceed, set up an agreement with guidelines for timeframe, contact boundaries, full honesty etc. If you would like to know more about this check out "How to be a great Mentee". Fulfill your mentee commitments - always turn up to meetings prepared, always complete any assignments or tasks given to you from your mentor and always look for opportunities to support your mentor. When you find a good mentor it can change your life. This article was written by our friend and partner, Neen James, a leading productivity expert from Australia. She has worked with many organizations to boost their performance through communications and message management. She has numerous articles on productivity available on her website at www.neenjames.com. Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com Mark Deo Print this article.

The Miscommunication Tool

I don't know about you, but I'm spending more and more time with email every year. It used to be that email was used for sending quick messages. Now people are carrying on entire relationships (personal and business) using email. It's not unusual for a client to request to be communicated with exclusively by email. When this happens, how do we truly understand their motives? How can we urge them to take action? What can we do to ensure we are being understood and how can we make sure we in fact do understand what the client is communicating? I would venture to say that email is as much a tool of Miscommunication as it is communication itself!

While some authors and trainers talk about email strategies and tactics, one of the best resources on using email more effectively is the book Email Power by Steven Griffith. I interviewed Steven on our show this week and you can listen to it by clicking below:

Email Power Interview Segment 1

Email Power Interview Segment 2

Email Power Interview Segment 3

Email Power utilizes The Language Response System, a process for analyzing and determining the communication style of the individual you're corresponding with-in less than 60 seconds! Griffiths talks about how we can identify and speak in any of the four styles of communication: visual, auditory, kinesthetic, and digital. Human beings process and interpret information in different ways depending on which sense system is dominant in their brain. While most people "mix and match" one style usually dominates.

• Visual communicators take their world in by what they see. They talk in terms of "view," "vision," "show," and "appears." A visual person is interested in how your solution, your proposal or your presentation "looks" to them.

• Auditory communicators take their world in by how things sound. They talk in auditory terms such as "I hear you," "Talk to me," "Sounds good to me," etc. An Auditory person is interested in how your solution, your proposal, your presentation "sounds" to them.

• Kinesthetic communicators take their world in through their feelings. They transform images, words, and sounds into feelings terms such as "I have a gut feeling," "Let's get a handle on this," "I have a sense this is the right decision." A kinesthetic person is interested in how your solution, your proposal, your presentation feels to them.

• Digital communicators process and organize their world by how it makes sense in their head. Digitals usually don't have many "feeling" words in their communications. They'll "think" about your offer, "consider" the alternatives, and "formulate a response." A digital person is interested in how your solution, your proposal, your presentation if it is logical and makes sense to them.

His book contains numerous examples of how to structure emails that help us to match with the intended receiver and thereby build a better relationship.

Thanks for tuning into this weeks business update. Also, remember our upcoming Dale Carnegie Sales Advantage Course starting on July 31, 2006 where we talk about how to match with others using these styles. Additionally, our Attract More Business Program is available in a 6 CD and 186 page hardbound set now. Just go to www.attractmorebusiness.com.

Relationship Marketing

I remember my first trip to England back in the eighties. We were kicking around London looking to pass the time and spotted a "tealeaf reader." For fun we thought, "let's go check it out."

I had no idea what tealeaf reading was all about. I thought they would whip out a leave from a tree or something and start reading it like a book. What I discovered was even more incredulous.

For the Highland Scots, twists of fate were prefigured in the patterns left at the bottom of one's empty teacup. The general idea of "tealeaf reading" is to interpret the significance of an alphabetical list of the natural symbols commonly found at the bottom of a cup of tea. They would apparently predict fame, fortune and failure based on these soggy herbs.

What does this have to do with business improvement, you ask?

Let's face it; running a business is a sober undertaking. There's no place for the crystal ball, as it were. Successful business leaders must possess a set of pragmatic disciplines in order to make the necessary daily decisions in running their business. They must make very rational and logical connections based on their circumstances.

For example, they may see competitors reducing their price and think, "I need to effectively compete by lowering my price or building value." Or they look inside their company and see an unproductive sales group and think, "we need an incentive program to make people work harder and sell more." Or they may look at their product mix and notice a product or service not performing as well as others and think, "let's launch a creative promotion or advertising campaign."

These are very logical and rational responses but I don't think they are enough. Not that these decisions are incorrect, but they are only part of the story. Not being one to believe in fortune telling, I do sometimes think that business leaders can learn a thing or two from these prognosticators.

Everyone's heard about the 5 P's of Marketing: Product, Pricing, Promotion, Packaging and Positioning. Certainly all of these disciplines are important but I now realize that they are somewhat lacking in our new 21st Century.

As I've said many times, today we live in an age NOT of information or technology but of relationships. Certainly consumers are still influenced by promotions, pricing and packaging but relationships have the greatest impact over brand choices and vendor selection.

Relationships often take longer to form and carry even greater weight in the B2B world. If you think about it, the higher the cost of a product or service or the more complicated that product or service is, the more critical the relationship. This means developing a powerful relationship with a vendor or supplier who will do more than quote prices and take orders.

Therefore it is not enough for suppliers and service providers to merely REACT to client needs. In fact they must learn to become PROACTIVE in predicting customer needs. In a sense good marketers need to learn to read their customer's minds. They need to become good at "reading tea leaves."

Ultimately client's need suppliers who will help them learn to evaluate and make the right purchase decisions. This is where CRM or Customer Relationship Management can become very useful in helping to predict buying trends. Customer Relationship Management (CRM) is a label that has been tacked onto practically everything having to do with marketing. Like the broad field of marketing, CRM touches all aspects of marketing analysis, marketing communications, sales, and customer service.

CRM is a technique aimed at collecting information from prospects and customers about their needs, and providing information that helps them evaluate and purchase products that deliver the best possible value. Think of CRM as a process for managing the company's resources to create the best possible experience and value for customers while generating the highest possible revenue and profit for the company.

A typical CRM system uses a centralized database to store data about marketing, sales, and customer service. This gives employees a complete view of the company's relationship with each customer. This improved communication technique results in creating a one-to-one relationship of understanding each prospect's needs and showing that the company's products or services meet those needs. This encourages the prospect to select that vendor. In other words, a CRM approach helps a company implement the learning and communications techniques that demonstrate the desire of the company -- and the value to the customer -- in forming a long-lasting relationship.

For marketing to be effective, management must understand what the needs of the target audience are, which product attributes they value, and what motivations they respond to.
This requires more than creative advertising. It requires researching and understanding a target market, making products or services convenient to purchase, and giving each customer true value and satisfaction.

You may not feel the need to go out and buy a bag of tea leaves and practice your fortune telling skills, but I encourage every business owner to think about ways that you may be able to put CRM in place within your organization. The information you will gain will help you to accurately predict buying patterns and maybe tell you more about your company today as well as your customer of the future.

Productive vs. Unproductive Conflict

From time to time we feature other experts in business improvement. I am thrilled to bring you this insightful article from Dr. Victoria Simon and Dr. Holly Pedersen of Talk Works, Inc. The ladies were recently guests on my Small Business Hour and we discussed how unproductive conflict can be turned into “productive” conflict. (Yes, there is a difference). They were even able to resolve some conflict between Matt Walker and I - a miracle in itself! Check them out at www.ourtalkworks.com.

-Mark Deo

Introduction
A couple of months ago we received a call from a mid-sized Los Angeles based company that had recently expanded. One of the new division heads called to book a communication-training program for his team. He explained that he wanted us to come “immediately, if not sooner.” Due to his obvious concern for the success of his new division, we shuffled our schedules and arrived to begin our team building training the following week. Our first in-person meeting took place in his office, just prior to the start of the first session. He explained that his team had made virtually no progress with their initial goals “because there’s too much conflict!” My only thought was, “Oy! Wait till he hears our introduction to his group when we tell everyone that we’re here to teach them how to have conflict!”

What is productive conflict? (and do we really need it?)
Here is our definition of unproductive conflict: frequent, repetitive arguments that are not resolved and that leave both parties feeling more angry and frustrated. It is common for unproductive conflict to occur when the “real” issues are not being communicated, but instead trivial issues are being expressed through provocative communication styles such as jokes, sarcasm, denial, blame, etc.

Productive conflict, however, is an open exchange of conflicting or differing ideas in which parties feel equally heard, respected, and unafraid to voice dissenting opinions for the purpose of reaching a mutually comfortable resolution. Because this type of conflict allows individuals to feel comfortable sharing conflicting opinions and ideas, it is a very creative and dynamic process that reveals new possibilities and insights.

The stronger your ability to engage in productive conflict, the more profitable your business will be. Think about it: why do you hire different “experts” in your company? Because each one of them has different education, work and life experience, and problem solving skills. The ability for teams to come together and share their ideas, expertise and opinions is what inspires the most creative and forward thinking business decisions. But this will inevitably involve conflict as your teams share their different opinions on the “best” way to accomplish each goal. Even the sole proprietor profits from successful productive conflict skills since interactions with clients or customers can be handled in ways that ways that undermine trust, create negative feelings and ultimately turn customers away or that allow relationships to flourish (and generate excellent word of mouth and referrals).

5 simple steps to productive conflict

1. State position using “I” statements, OR speaking behind a glass wall. Imagine that you are standing behind a glass wall. You can see and hear the person you are talking to, but you are only allowed to discuss what is taking place on your side of the wall. You do this by talking ONLY about yourself. Be very careful not to assume that starting a sentence with “I” is enough to avoid pointing the finger (We hear this all the time from “I” communication beginners: “I think you’re wrong!” Clearly this will not avoid an argument.). The goal is to avoid creating defensiveness in the other party and to ensure that you are clearly voicing your ideas and thoughts rather than becoming distracted from the issue by pointing fingers at the other person. Just think about how it feels when the person with whom you are arguing says something like, “You just don’t get it! Your ideas are crazy!” That “you” immediately places us on guard, so we become unwilling to engage in the kind of healthy exchange necessary for productive conflict. Try “I” instead!

2. Identify common ground or a common goal. While productive conflict does by nature involve an exchange of differing ideas and opinions, it still requires that the involved parties share the common goal of developing a mutually agreed upon resolution, plan, or decision. Clearly stating what you and the other party have in common -- to complete the project, resolve the conflict, decide on a plan of action – means that you begin the discussion as members of the same team, moving forward in the same ultimate direction, rather than as opposing forces.

3. Use reflective listening. In order for conflict to be productive, the thoughts and ideas of all involved parties must be truly listened to and understood. We are often so eager for someone to hear and agree with our point of view that we lose site of the fact that a solution that works for both parties can never be reached until all opinions, wants, needs, and desires have been shared and listened to. Reflective listening involves not responding immediately, but actually thinking about what the other person has said asking questions, if needed, to ensure that you understand and to reassure the other party that they are really being heard. For example, “It sounds like you’re suggesting that we restructure the management team, is that correct?”

4. Get curious About others’ ideas. Rather than immediately shooting down a co-worker’s ideas, or jumping to defend your own position or opinions, “get curious” about your co-workers’ ideas. Focus the discussion on finding out more information about your co-workers’ thoughts and experiences, and the reasons for their position. Uncover as much information as possible about why your co-workers think the way they do. This not only prevents the discussion from being an argument in which the involved parties staunchly defend their position, but it also may result in you learning something.

5. Gradients of agreement. Making conflict productive and creative also involves redefining what it means to “agree” with others. An agreement doesn’t have to mean a 100% consensus of involved parties. It could mean a partial agreement, or even an agreement to move forward with a decision without complete consensus from the group. Operating under the assumption that all parties must agree completely may keep you stuck in the process of resolving a conflict or making a decision. See if it is possible to achieve a gradient of agreement.

Conclusion

Business productivity depends on your willingness to engage in productive conflict. Hopefully your business creates a work environment where top, mid and lower level employees trust that openly sharing ideas and voicing opinions is not only acceptable, but encouraged. By applying these five simple steps you will be able to transform “conflict” into a powerful business tool. To learn more communication and collaborative team building skills, we encourage you to see our website at: www.ourtalkworks.com or to contact Talk Works at 310.860.5191.

Victoria Simon, Ph.D., CEO Talk Works, Inc.

Holly Pedersen, Ph.D., President Talk Works, Inc.

Negotiation

"Everything is negotiable." We've all heard that line.

Those who are most skillful at negotiating usually come out ahead. Negotiation is the key to resolving conflict. Let's face it, few of us enjoy dealing with conflict - be it with customers, employees, co-workers or even family members. This is particularly true when the conflict becomes hostile and when strong feelings become involved. Resolving conflict can be mentally exhausting and emotionally draining. But conflict avoidance just makes problems worse.

Part of the problem is that we are predisposed to think of conflict (or resolution of conflict) as an isolated incident or event. In reality resolving conflict is more of a process, or a series of events over time involving both external and internal variables. Conflict episodes typically represent the result of past behaviors of both parties. Therefore negotiation is not a static exercise. Effective negotiation must include the "background events" in the relationship. These cannot be separated from the resolution.

Professor E. Wertheim of the College of Business Administration at Northeastern University says, "an effective negotiation usually involves a number of steps including the exchange of proposals and counter proposals." In good-faith negotiation, both sides are expected to make offers and concessions. The objective is not only to try to solve the problem, but to gain information that will enable you to get a clearer notion of what the true issues might be and how your "opponent" sees reality. Through offers and counter offers there should be a goal of a lot of information exchange that might yield a common definition of the problem.

Negotiation is not so much about winning or losing but rather about meeting your opponent half way and convincing your opponent to meet YOU half way. Here are some tips in how to effectively negotiate for the win - win:

1. Conduct your negotiation tactics in order to obtain more information.
2. Try to understand and identify with your opponent's motive.
3. Conflict should not be avoided; rather it should be faced head on.
4. Confrontation is not bad, rather it is good and more often results in resolution.
5. Resentment is often the result of conflict avoidance.
6. Conflict involves the thoughts, perceptions, memories, and emotions of the people involved; these must be considered when negotiating.
7. Negotiations are like a chess match. So make sure you enter into negotiation with a firm strategy.
8. Anticipate how the other will respond and act accordingly.
9. Be honest with yourself regarding the strengths of your position.
10. Evaluate how important each issue is to your opponent and how important it will to yourself.
    · Begin with a positive approach and try to establish rapport and mutual trust before starting.
11. Try for a small concession early in the negotiation.
12. Pay little attention to initial offers. Often times these are points of departure; they tend to be extreme and idealistic.
13. Find agreements and joint gains. Make these your primary focus.
14. Focus on the other person's interests and your own goals and principles, while you generate other possibilities.
15. Be very clear on what Professor E. Wertheim calls your BATNA; "Your Best Alternative to a Negotiated Agreement. This is important because the negotiation needs to aim to match or do better than your BATNA. The BATNA establishes a threshold for the settlement. Determining your BATNA or walk away is not always easy. You have to establish a concrete value for various alternatives."
16. In the planning process it is also important to estimate your opponent's BATNA.
    · Try to come as close to the other person's BATNA as you can.
17. Aim to influence your opponent that their alternatives may not be as good as they perceive them to be.

While we all engage in many negotiations during a week this doesn't mean we will become more proficient negotiators. As they say PERFECT practice makes perfect. To become better we need to become aware of the structure and dynamics of negotiation and we need to think systematically, objectively, and critically about our own negotiations. After engaging in a negotiation, reflect on what happened and figure out what you did effectively and what you need to do better.

Often times at the Small Business Advisory Network we are called upon by our client's to both assist and coach them in negotiating business issues or relationships. If you are looking to learn more about how effective negotiation might improve your business performance, please let us know. Our mission is to influence decisions, improve performance and inspire change. That's what our consulting, workshops; web site, weekly articles and The Small Business Hour Radio Show are all about.

Love In Business

The biggest disease this day and age is that of people feeling unloved.--Author Unknown

The software engineer put on Nirvana's "In Utero" as he did every evening when he got home from work, took his gun out, loaded it, and tried to garner enough courage to put it in his mouth and squeeze the trigger. This was a ritual he had played out every night or the past year. While successful at work, he was miserable. He felt no one cared about him as a person- he was just another programmer, doing what programmers did, living a solitary life with no friends. Then one day, out of the blue, his boss sent him a personal e-mail- not related to code revisions, interface changes, or other work related items. But one that expressed his thanks and sincere appreciation for the work he had accomplished in the time he had worked there, and how he was valuable to the team not as just a programmer, but as a person. He told this employee that he was glad he knew him as a human being, not just as someone who typed away at his computer all day. That night the software engineer went through his daily ritual of putting on Nirvana, loading his gun, and for the first time- he was scared that he might actually go through with it. He sold the gun, and with the proceeds bought his boss a gift- and told him the story of how that simple gesture had saved his life.

This story was related to Mark Deo and I on the small business hour this week by Tim Sanders, author of Love is the Killer App. He is at the forefront of a new wave of business thinking- not one focused on numbers, but one focused on people. His philosophy is that one must share three things in order to have a successful business relationship: knowledge, networks and compassion. By doing so you can not only help your business, but you can help others as human beings, much as in the story above.

How does one share their knowledge? By staying informed reading about the latest trends in business reading about things that interest other people and then sharing that knowledge with people who are interested in it. How do you know what you should be reading? A great place to start is the list of books on our website www.smallbusinesshour.com. Tim Sanders also maintains a reading list on his web site at www.timsanders.com. Some publications that are excellent are business magazines such as Fast Company, Entrepreneur, Business Week, and Business 2.0. By reading these books and publications you're making yourself valuable as a walking library to people that you speak with. This allows you to become a personal resource to others- someone who they can trust and count on for information. This in turn makes you as a person more valuable.

What do we mean by sharing your networks? This is not some reference to computers and internet access- To share your networks you must take your personal contacts and instead of protecting them and hiding them in secrecy open them up to the world. Share your contacts with others who might find them to be of use. This can be a simple matter such as simply passing a phone number on to someone, or giving a referral. Better still is personally introducing two people who can both gain some value from establishing a new relationship. By doing so you become a business "matchmaker" of sorts- someone who helps others to achieve their goals through communication with people to which you introduce them.

How does someone show compassion in business? It comes back to one of Dale Carnegie's principles, "Become genuinely interested in other people." Only by being interested in someone and showing that interest can you demonstrate that you care about them as people and not just as tangible resources. People respond to being cared for- you never know how making a small gesture can profoundly impact someone's life.

I encourage you to think of someone in your business life who you can show your love to this week. Become genuinely interested in them as a person- not to try and gain something from them, but to find common ground you share. Then discover what it is that interests them, and find some information about that topic that you can share with them. Find someone in your network of contacts who also has interest in the same topics, and introduce the two. You will be amazed at how that will endear you to both contacts, turning them from business relationships into personal friends. I'd love to hear your success stories at mwalker@sbanetwork.org. Have a great week!

This Business Update was written by SBA Network Business Advisor Matthew Walker- for more information, please contact him at 310-320-8190 or mwalker@sbanetwork.org.

Listening Louder

Listening is one of the most deceiving skills in business, or in life for that matter. Ask anyone how effective they are at "listening" and most will say they are pretty good. Yet in reality many "miscommunications" and unneeded conflicts occur just because we fail to practice good listening skills. This is rather evident in sales and marketing interactions.

Salespeople are taught that the client should do most of the talking and they should "listen." Yet if we were to observe salespeople in action with their clients, as I have, we would see that the very opposite is true. They carry-on about the benefits of their product, service or company and often burn themselves out on their own "pitch."

I am not without guilt. I have stopped myself too many times in the middle of a great rant. Being a radio show host for over a decade as well as an instructor and public speaker it's no wonder that I could ever shut-up! Nevertheless I have found that the "info-download" method of selling and marketing is less effective than ever before.

Neil Rackham of the Huthwaite Organization and author of Spin Selling, conducted extensive research on the selling behaviors of high performers in sales. What he found through his research was that high performing sales people did three things differently in their meetings from those people who were not effective.

High performing sales people:
1. Asked a lot more questions
2. Allowed the client to do most of the talking
3. Waited much longer before jumping in with a solution

Use the one minute tool (inspired by Robin Ryan's excellent book, 60 Seconds & You're Hired): if you have more to say than you can say in a minute, limit yourself to one minute and use that time to give an overview of the most important points you would make if you talked longer. Then stop and ask your listener to help you decide what to prioritize and how much more detail to go into. For each point and sub-point you add, start by speaking for just one minute, asking for more feedback as you go on to clarify which issues you need to address, and taking a moment before speaking to focus what you will say.

This is also true in marketing. Often times web sites, brochures, and even mailers and promotional material is focused on "selling." Think of ways that you can "engage" the user. Make your marketing material interactive. While we can't practice the same types of listening techniques in second party marketing material, we can "listen" by making our material highly interactive. Ask for their response, advice, suggestions. Often time these materials are more like info downloads rather than engaging conversations.

Listening is a skill that impacts every area of our life. I urge you to think of ways that you can "listen louder" to your clients, prospects and those within your sphere of influence. There is no better way to practice attraction than to master the art of listening.

Please call or e-mail me with any comments or questions.

This article was written by Mark Deo. You can reach me at 310-320-8190.

Listening

The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them.

-Ralph Nichols

Listening is far too often overlooked as a skill that is important to businesspeople. Like all skills, it can be learned and improved on with practice. There are many elements that go into being a good listener- read below for some tips.

3 steps of active listening
Hearing- Hearing just means listening enough to catch what the speaker is saying. For example, say you were listening to a report on zebras, and the speaker mentioned that no two are alike. If you can repeat the fact, then you have heard what has been said.

Understanding- The next part of listening happens when you take what you have heard and understand it in your own way. Let's go back to that report on zebras. When you hear that no two are alike, think about what that might mean. You might think, "Maybe this means that the pattern of stripes is different for each zebra."

Judging- After you are sure you understand what the speaker has said, think about whether it makes sense. Do you believe what you have heard? You might think, "How could the stripes to be different for every zebra? But then again, the fingerprints are different for every person. I think this seems believable."

Reflective Listening
A good listener tries to understand how the other is experiencing the interaction and to shape their responses so that other person understands from where they are coming. There are four key elements to reflective listening.

• Empathy

• Acceptance

• Congruence

• Concreteness

Empathy
We all have a strong tendency to advise, tell, agree, or disagree from our own point of view. Empathy is the listener’s effort to understand the speakers internal frame of reference rather than an external point of view, such as a theory; a set of standards, or the listener's preferences. Expressed verbally: "I follow you," "I’m with you" or "I understand". You should be as non-judgmental as possible while listening. A person who sees that a listener is really trying to understand his or her meanings will be willing to explore his or her problems and self more deeply.

Acceptance
You should having respect for a person for simply being a person- this acceptance should be as unconditional as possible to best encourage a free flow of information. Avoid expressing agreement or disagreement with what the other person says. This encourages the other person to be less defensive and to explore aspects that they might otherwise keep hidden

Congruence
Congruence refers to openness, frankness, and genuineness on the part of the listener. Candor on the part of the listener tends to evoke candor in the speaker. This can, however, be at odds with the principles of empathy and acceptance.

Concreteness
Focusing on specifics rather than vague generalities is the principle of concreteness. Often a person who is has a problem will avoid painful feelings by being abstract or impersonal, using expressions like "sometimes there are situations that are difficult" (which is vague and abstract). The listener can encourage concreteness by asking the speaker to be more specific. For example, instead of a agreeing with a statement like, "You just can’t trust a teacher. They care about themselves first and you second", you can ask to what specific incident the speaker is referring.

Non-verbal Feedback
We listen and give feedback with our faces as well as our ears and the words we speak. Professor Alfred Mehrabian of Stanford, studied congruence and incongruent communication. He found that when 'mixed messages' were deliberately sent, 7% of people believed the words, 38% believed the message expressed in the tonality, and 55% believed the message expressed in the physiology, or body language.

Tips for being a good listener

1. Give your full attention to the person speaking

2. Make sure your mind is focused, too. It can be easy to let your mind wander if you think you know what the person is going to say next, but you might be wrong! If you feel your mind wandering, change the position of your body and try to concentrate on the speaker's words.

3. Let the speaker finish before you begin to talk. Speakers appreciate having the chance to say everything they would like to say without being interrupted. When you interrupt, it looks like you aren't listening, even if you really are.

4. Let yourself finish listening before you begin to speak! You can't really listen if you are busy thinking about what you want say next.

5. Listen for main ideas. The main ideas are the most important points the speaker wants to get across. They may be mentioned at the start or end of a talk, and repeated a number of times. Pay special attention to statements that begin with phrases such as "My point is..." or "The thing to remember is..."

6. Ask questions. If you are not sure you understand what the speaker has said, just ask. It is a good idea to repeat in your own words what the speaker said so that you can be sure your understanding is correct. For example, you might say, "When you said that no two zebras are alike, did you mean that the stripes are different on each one?"

Time is on your side! Thoughts move about four times as fast as speech.

I hope this helps you to improve your listening skills.

Have a great week!!!

Intangible Assets are More Valuable Than Tangible Ones, or Why Beer's Better Than Coffee

"You're insane, Mark," my old schoolmate and multi-millionaire buddy told me. "I'm a successful businessman and you can't convince me that intangible assets are more valuable than tangible ones. I'll take real estate, equipment, inventory, and cash over ideas, experiences and influence any day! You've been living in California too long. Your brain's starting to fry."

Tired of reading already? Click here- LISTEN TO THIS ARTICLE.

Now when Mike spoke, most people in New Jersey listened. He owned and operated the Budweiser distributorship for the state. To those unaware of the power of an exclusive alcohol distributor, let's just say it's a tad more profitable than being able to print your own money.

What makes my buddy's success even more exasperating for me is that he wanted me to be his partner after high school. But Noooooo not me. I had to go to college and be the "smart" guy. Yet, despite our economic disparity, we are still pals.

"Ok Mike!” I asked him, "what do you suppose is the ratio of tangible vs. intangible assets for say Amazon.com or Yahoo or even Microsoft?"

He looked annoyed now. "Alright techno-nerd, maybe you have a point with those cyber companies, but what about in the real world?"

"Go ahead and name a company," I asked.

"Here's one you Californians know and love. How about Starbucks," he challenged.

"Ok, they have lots of prime real estate as well as equipment, inventory and cash. But what do you think is worth more to them: these tangible assets, or their customer traffic? Or how about the ideas for leveraging that traffic in order to launch nearly intangible products like the latest obscure coffee concoctions they dream-up? Or the ability for customers to make their own CDs with the new Hear Music kiosks or the wireless high speed Internet connectivity? Isn't Starbucks really selling an experience, ideas for a cool new lifestyle, a place where people can influence and be influenced? Isn't it more about the "experience" than just the coffee?"

"Alright, alright, coffee's for wimps anyway. Have a beer," Mike goaded me as he handed me a Bud long neck. He still knew how to win an argument.

Carving Out a Piece of Your Life
Maybe you're like Mike. Not yet ready to believe that the age of market share has past. Perhaps you think that it's all about mind share. That is how aware people are of your company, product, or service.

Let me remind you that Starbucks isn't vying for more of the coffee market. Nor do they care if you remember their name. As long as you dig the "experience" in the store. As long as you and your friends like to meet and hangout there. That's what they're really after. When that happens, they've won more than a greater share of the coffee market. They've gone beyond raising their top-of mind awareness. They've infiltrated your life. They have literally motivated you to carve out a piece of your life for THEM! They have gained greater heart share.

Today winning "share of heart" is far more critical than winning share of market or share of mind. "Market share" has been described as the proportion of industry sales that is controlled by a company. "Mind share" on the other hand is a measure of how people perceive the product, service, or company as compared to the competition.

"Heart Share" is the measure of the extent to which we make ourselves more desirable to the people that are most critical to our success. Not by the quality or even the economic value of the products or services but rather in the "way" we provide them. Market share focuses on the size of the market. Mind share focuses on the perception of the brand. Heart share focuses on the intangibles in the relationship.

Improving Personal Relationships

Greetings from Mark Deo. I rarely use this newsletter to promote events unless I can personally attest to their value. My friend and mentor, Morrie Shechtman, and his wife Arleah have been huge influences on my life. You can read more about them at: http://www.morrieandarleah.com. They have a new venture they are working on, and that is the Love in the Present Tense Workshop. This workshop builds on the principles found in their best selling book, Love in the Present Tense, and helps individuals and couples learn to apply them to their lives in a lasting fashion. They have helped my wife Kathy and I build a stronger relationship than ever before. Below is some information about the event. I strongly encourage anyone seeking to improve their personal relationships to attend.

Persons that attend this workshop will learn:
Transformational, Sustained Change - We facilitate the participant's ability to act differently and experience the results over several days with feedback and coaching
New Skills And Tools - This is not therapy. It goes beyond talking about your life and allows you to learn how to take control of your emotions and create intamacy.
How Implement in Accountability - Learn the techniques for holding yourself and others accountable for their commitments.
Eliminate Fear Of Conflict - Learn how to stop arguing and start having great fights that permit you to use conflict to resolve differences.
Purge Yourself Of Self-Doubt - Banish that nagging, toxic critic, once and for all.
Develop Your Own Personal Vision And Your Vision As A Couple - Discover the force that gives meaning to your life and relationships.

Perhaps these are areas where you may seek to grow in your relationship. Or someone you know may be having trouble with communication in their relationships. Please let them know about this workshop. Just pass on this web address: http://www.sbanetwork.org/clients/morrie/blast.htm. If you don't want to bring up this sensitive issue, just reply to this e-mail with their e-mail address and we'll contact them to let them know an anonymous friend suggested that we do.

At that web page they can find everything they'll need to know about the event, and learn how they can qualify to attend. Our availability is extremely limited, and we only want to have attendees that are eager to learn why their relationships are not what they want them to be, and how to get past these issues.

Thank you for your help!

-Mark Deo

Getting More Referrals

Absolutely the best form of advertising there is. No sales pressure, no credibility problems, and very low cost of sales. People refer customers to you as a favor to their friends, the customers. If it's done as a favor to you, that's usually a bonus. Think about it. The last time you recommended a movie, or a business, did you do it as a favor to the person you were talking to or the business you were talking about? In all likelihood, it was to benefit the person you were talking to, probably a friend or business acquaintance. If your recommendation was to fall through, you lose credibility.

Referrals have to be earned. People will not tell their family and friends, to use your service if they are not confident in your abilities. Once you have earned this, it should come naturally. But it often doesn't. Why? Simply put, people forget. They're busy and your business isn't their top priority. Referrals are the absolute best way to make sure that you keep the new business coming in. That helps you to spend more time working then selling. And it means time spent with people who know what you're all about instead of cold calling! Here are 10 of the absolute best ways to get more referrals: 1. Ask for them The simplest way in the world to get referrals is to ask for them. Whenever someone compliments you on a job, let them know you appreciate it, and that you'll do just as good a job for their friends. Tell them that you'd appreciate it if they could spread the word if they really like your work. You may assume that people would tell their friends, but it's amazing the difference it makes if you give them that gentle reminder. People like to help those that do a good job for them. It makes them feel smart, and they feel good helping out their friends, who just happen to be your next customers... 2. Trade them. Make a deal with other businesspeople you know. If you know they do good work, offer to tell people about them every chance you get, and ask them to return the favor. It's a good way to start building relationships and it tells you what they really think of your work. If they agree, make sure you keep an eye out for people to refer them to. Keep up your end of the bargain, and the odds are good they'll keep theirs. 3. Reward them. The idea of `finders fees' is very common in big business, but it is frequently ignored in small business. It shouldn't be. Make it known that when someone sends you a job, there's something in it for them. Perhaps a set fee, or a percentage of the total. If they send you a new customer and you're in retail, maybe a discount on their next purchase. Whatever you do, make sure it's something worthwhile for them and sensible for you - $10 for a $25,000 job is insulting - $10 for a one time retail customer buying a used tennis racket might be too much. For client to client referrals it's best to go with discounts. That encourages the customer to make additional purchases, or increases their loyalty as they see what else they can do with the money. Anything that expands your customer base is worth rewarding. 4. Give them. Want someone to send you referrals? Send some their way. Nothing will start the process and make it solid like having them know that you're ready to return the favor. So return it in advance. Some people will send you referrals after this simply because they know it's not going to be a one way street. Others because they appreciate the thought you showed them. And some will do it out of a feeling of owing you something. Very few will ignore it. 5. Print them. Use testimonials in your literature and advertising. Some people will wonder if they are the only ones that really liked your service, or if you did a good job for them just to get some extra business. If they see that others also appreciate your work and were willing to say so in print, they'll feel more comfortable in stepping out of their shell and making their own satisfaction known. Some people need the knowledge that they're not the only ones who think a certain way before they'll say so. 6. Give out more business cards. Yes, they do make a difference. If someone has your card, or hopefully more than one of them, they will do "something" with it. If you have asked them when they're in the right frame of mind to pass it along, they will. One of the best things you can do with business cards is to give more than one. If a person has just told you how much they like your work, hand them 5 business cards. Tell them something like: "Well, I certainly appreciate the good word. If you think you'd be doing them a favor, maybe you could pass these on to people you know when they need work done. Make sure you keep one for yourself in case you need to get hold of me, though!" Yes, this works. It's different, so they remember. And it's personal, so it matters to them. 7. Community service. People are always willing to recommend those they see as leaders. Public service projects are a great way to become that leader and give something back to your community at the same time. Make sure you don't do this just for publicity, though. Find a cause you personally believe in and work with that. It will be much more satisfying for you, and more productive for the group you help. And you won't come across as a phony. If you're helping with a cause you believe in, people will see that you care. They might realize you will probably care as much about your work as well. 8. Sponsor something. A sports team, a fund-raising drive or even a cookbook for a school. This falls into nearly the same category as community service, except that it is seen as advertising. It has the same effect. It keeps your name in front of the community and gets people talking about you and your business. What you sponsor should be dictated by the type of business you're in. A doctor will do well sponsoring a marathon or charity golf tournament, but perhaps not a tavern's dart team. Sports bars and construction companies do well with baseball teams, but might not do as well with a bake-off. Match your clientele with the activity. Don't think this works? Ask the people who sponsor team after team, for years. They're not doing it solely for fun. While these sponsorships require fairly large investments they pay off if structured properly. A while back I had one of my clients sponsor the LA Marathon. The cost of this was over $50,000. Sound too expensive? They received over $100,000 of FREE advertising in the LA market. But that wasn't the biggest benefit. To top that off they received 15 new clients each valued at $12,000 DIRECTLY as a result of the sponsorship. Their $50,000 investment turned into a $280,000 return! 9. Be helpful. Yes, something that simple. People appreciate someone who is helpful. If they appreciate you, they'll remember you and want to return the favor. Again, do this where it's appropriate and where it's meant sincerely. Like most things that lead to referrals, this is something that becomes an end in itself before long. 10. Join a networking group. You may be familiar with the idea of networking groups. They get together on a regular basis and exchange leads. These groups are composed of professionals who are checked for integrity before being accepted for membership so that each member is sure that they are only recommending quality businesses to their family and friends. Joining one of these groups is like having a troop of professional salespeople armed with the best closing tool available. Personal recommendations. If your business is run with integrity and you back up your work, it's definitely an option worth pursuing. For more information on professional networking groups, see this website. Referrals can make a huge difference in the success of your business. Don't leave them to chance. Get an organized plan for generating them. And keep at it. Make it work and soon you'll be dealing with the problem of having more business than you can handle. And then, of course, you'll be referring these new customers to someone else. Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com Mark Deo Print this article.

Developing Rapport

Are you a salesperson?

Don’t answer so quickly. Do you ever need to persuade others to take action? Then you’re selling. Do you ever need to get the boss to understand your point of view? Then you’re selling. Do you ever need to get your children to try it “your way”? Then you’re selling.

We are all engaged in selling every day. Unfortunately few are very good at it. Those who can master the art of selling are successful. They get their way most often, have higher incomes, and ultimately more leisure and free time.

Yet even seasoned selling professionals fail to master the most critical part of selling…Building Rapport. I will take the next few Updates and focus on how we can build rapport regardless of our career. In fact, this is probably even more important for those not engaged in traditional selling.

Why Rapport is so important

• Over 90% of the sales process is based on having a good rapport with the prospect.

• We usually develop rapport easily with people who are like us.

• Before we can try to talk about how we can satisfy our prospect’s needs, we have to get them prepared to listen to us.

• We do this by getting them to trust us -- by developing rapport.

Ways to develop Rapport

First Method: Mirroring

• One of the most powerful ways we can develop rapport is through physiology.

• Unfortunately, only 7% of the words we use to communicate get through to others. However, 38% of our tonality and 55% of our physiology or body language are communicated very effectively.

• Match their pace, rhythm, tonality and articulation.

• Is the prospect formal or friendly?

How to implement Mirroring:

• Wait several seconds before shifting your vocal tone or pace to match your prospect.

• Mirroring is a continuous and fluid process so that as you speak, you continue to change your vocal qualities to remain in rapport.

• One word of caution -- don’t mimic. If your prospect has an accent, don’t try to copy it or they may realize what you are doing and get very insulted.

• Mirroring is very subtle.
  

The technique of mirroring takes practice to learn effectively. Try it on your family and friends so it becomes a natural skill for you to use. When you become proficient at using this technique, your prospects will not realize what you are doing. They will only feel extremely comfortable with you because you are so much like them.

The second method of rapport building is called commonality and we will discuss that next week. I hope this helps you to forge better trust, strengthen relationships and ultimately create greater success. Want to know more about this and other methods of building rapport? Check out my upcoming Dale Carnegie Sales Advantage Class beginning in mid July.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com.

Have a great week!

Being Understood

Have you ever looked at a brochure, web site, print ad or mailer and had to read it twice to figure out exactly what it was all about? Have you ever listened to someone talk about their business only to wonder what kind of product or service they provide? I am constantly amazed by the number of ads, business cards, brochures, web sites and logos that I see that leave me wondering just what it is that company does!

How can we clearly communicate what we do at a glance. And more importantly how can we communicate the BENEFITS that our target customers will receive if they deal with us.

"Marketing Mimes give us the ability to become instantly understood."

Where They Come From:
In 1976 Oxford University biologist Richard Dawkins wrote a book called "The Selfish Gene." In this book he introduced a new concept. Dawkins asserted that like a "gene," a "meme" is a self-replicating idea that is passed along from person to person. He sited examples of memes: memorable tunes, ideas, catch-phrases, fads and so on. Just as genes propagate themselves in the gene pool by leaping from body to body in the form of sperm, memes propagate themselves by leaping from mind to mind in a form of cultural imitation.

What a Meme Does:

• It is obvious in its meaning
• It focuses on the outcome
• It is self-explanatory and simplistic
• It is easy to replicate in someone's mind
• It actively transfers information

Developing the Meme:
The meme is not necessarily a slogan, headline, or a tag but it is most effective in that form. It really is the core message of what you do. In some ways the meme is your branding position statement. Memes are often seen with a company's logo. This is called a logo assembly. Here's some tips on developing your meme:
First ask: What do my clients get as a result of using my service?
Next: Strip the phrase down to the essentials.
Try to strike an emotional chord with your meme
Make it easy to remember
Make sure it rolls off the tongue nicely

Examples of Memes:
The meme is not necessarily a slogan, headline, or a tag but it is most effective in that form.

Hewlett Packard - "Expanding possibilities"
Fiji Film - "You can see the future from here"
United - "Fly the Friendly Skies"
Service Merchandise - "One Call. Done."
In Focus - "Project yourself"
Continental - "Work hard. Fly Right"
Best Buy - "Now that's a great idea"
Jeep - "There's only one"
Alamo - "Drive Happy"
AAA - "We're always with you"
Moore Paints - "We make it simple. You make it beautiful."

Testing the Meme:
Once you've developed your meme, you need to test it. When you communicate your meme, do people ask the right kind of questions?

Example:
I.T. Advertising - Not just pretty pictures and clever headlines - bottom-line RESULTS! Well that's what advertisers want, right?

The Small Business Hour - "Helping small business owners make better decisions." - - - This begs the question, What kind of decisions?

MarketingQuestions.com - "Providing answers for small businesses" - - - This begs the question, What kind of answers?

These are precisely the kind of questions that allow me to demonstrate how I am different, how I solve problems and how I may be the ONLY solution in some cases.

HERE ARE SOME TIPS for writing good memes, taglines or slogans for your business:

1) Start by noticing ads on billboards as you drive down the road. Billboard advertisers have but a couple of seconds to grab your attention and sell their product or service. Usually their copy is going to be a very good meme or tagline with a picture of the product or service. These are great examples of how to write effective taglines.

2) Notice other media forms like magazine and newspaper display ads, business cards, brief radio and TV commercials. Observe the thing that caught your attention and makes the message easily remembered. It's usually a concise and well-written meme.

3) Write down everything you can think of that relates to your business. You may even start with a narrative description in paragraph form.

4) Now, make a list of the top 25 or 30 things that are important and worth mentioning. Whittle that list down to 8 or 10 of the most important things you wish to say. Now eliminate repetition or things that are not really that necessary to your product or service. Get your list of words or phrases down to 3 or 4 central elements.

5) Based on your final core selection, make up some phrases that will serve as your meme or slogan for consideration. Keep it short and use simple, everyday language.

The authors of "Advertising: Its Role in Modern Marketing" (Dryden Press, 1994) list five rules for slogan writing. Dean Krugman, Leonard Reid, Watson Dunn and Arnold Barban say:

• Make the slogan or meme easy to remember and unlikely to confuse.
• Make it help differentiate the product (or service) from the competition.
• Make it provoke curiosity, if possible.
• Make it emphasize a reward or action.
• Use rhyme, rhythm or alliteration.

I hope this has been helpful for those of you considering tag lines or slogans for a new business or even the introduction of a new product or service. Developing these kinds of promotional elements are precisely what we focus on in our classes and workshops.

If you are interested in applying this kind of creative promotional strategy to your marketing effort, enroll in my "Out-Marketing The Competition Class." This nine week course focuses on learning and practicing specific marketing methods and strategies that can be implemented very rapidly and cost-effectively in a small business. Participants will develop a complete marketing plan by the end of the class.

Attraction Reduces Friction

Friction is the force that appears whenever two things rub against each other. Although two objects might look smooth, on a microscopic level, they are very rough and jagged. No matter which direction something moves in, friction pulls it the other way. Move something left, friction pulls right. Move something up, friction pulls down. It appears as if nature has given us friction to stop us from moving anything.

We can encounter friction in relationships with people as well. When one person’s perception differs from another then there is “relationship friction.” Creating attraction is the fastest way to bring about change because we reduce or even eliminate friction. Typically friction is inversely proportionate to the amount of change we want to produce. For example, if we are looking to launch a new product, the typical approach would be to design and print product announcements and send them to customers. We may also develop press kits and send them to the media in hopes of published product reviews. By the way, I am not suggesting that these actions are ineffective, simply that launching such initiatives will produce some degree of friction.

Let’s assume we do in fact send the above mentioned product announcements and press kits. When this happens we unwittingly create friction in a number of ways. First, the customers that receive the announcement may say; “my supplier is just looking for a way to sell me more products at a higher price.” Or the media that receives the press kit might have so many press kits to review that there is just not enough time to do so. In other words, the time required to perform the review or the investment required to buy the new product rubs up against the perception of the potential value gained.

This force operates in the world of management as well as the world of marketing. What if we are experiencing a reduction in customer satisfaction levels? What if we needed to change the way our customer service representatives are handling clients? Again the traditional approach would be to launch some type of customer service training initiative. Again this would produce friction. First, the customer service staff will need to commit the time to attend the training. This will “rub against” the time they will need to invest, which typically would be dedicated to assisting customers. When announcing such training you may have even heard employees say, “Why bother and train us to serve the customer better when all this does is give us LESS time available to serve the customer?” Again regardless of your perception of the value of customer service training, the point I am making is that merely attempting the change creates some type of friction.

Attraction is the opposite of friction. I like to believe that if we can reduce friction in our business relationships then we will be more successful in creating attraction. This can alter our ability to motivate customers to take action as well as employees to become more productive and committed. We will transform “adapting to necessary change” into LEADING revolutionary change! This is one of the reasons that I have created my “attraction principles.” I believe that with the right knowledge, mindset, and discipline we can actually “attract” a positive, desirable change, rather than being swept-up in unwanted change. Check out the Attract More Business Program and sign-up for our upcoming Attraction workshops.

Seeking a way to put this into practice for your business? Come to our Attraction workshops! Go to: http://www.sbanetwork.org/classes/upcoming_classes.asp for more information!

A Dog Named Credit Manager

While attending a business conference in a rural setting, a business executive decided to take a walk. He hadn't gone far before he encountered a large dog sitting in the middle of the road barking at everyone. Nearby was a young man who said to the executive, "He doesn't belong to anyone; in fact he didn't even have a name until some business types attending a conference took to calling him "Credit Manager."

At this point, with a puzzled look on his face, the businessman asked, "Why did they name the dog Credit Manager?" The young man answered, "They said that they named him Credit Manager because all he does is sit around on his dead end and bark at everyone."

The sales avoidance department, the ugly stepchild of accounting, and a necessary evil. Many business managers still think of credit and past due A/R management as a cost center and as a risk avoidance function. If the goal of a business is to avoid risks it should get out of extending credit terms and out of sales.

Wrong Area/Measurements
Traditionally the credit and A/R management area is found within the accounting department. The reason being to keep the sales guys from giving away the store and to safeguard the assets of the organization. Such traditional thinking often results in the credit / A/R management area taking on the characteristics of the accounting department.

Credit / A/R management is not an accounting function; it is a sales support function and those involved in credit and A/R management must be able to interface and communicate with just about every other area of the business as well as with customers, transportation companies and other vendors. Yes, the accounting department needs to know what is going on with the extension of credit and the management of what may be the largest asset a business has, its accounts receivable; but the primary goal of credit and A/R management is to support sales.

The other problem, besides the type of people involved, with credit being located within accounting lies with how it's performance is measured, i.e. D.S.O. (Days Sales Outstanding) and % bad debt.

Measure for D.S.O. and % bad debt and the message being sent is that the job is to look for a way to say no, to reject any potential risk and should a customer ever become past due the job is to stop further credit sales. Measuring performance of the credit area by DSO and % bad debt results in the investment made in getting a customer to the point where they want to buy being lost; and along with the investment you can kiss off any potential future business with that customer.

Say Yes To Sales and Profit
Credit Approval should be defined from a perspective that the job is to fine a way to say yes to a profitable sale while remaining confident of payment. The risk associated with the "type" of business the customer is in, the "time" the customer has been in business and with "how" the customer has paid in the past must thenbe weighed against "the product value at time of sale." There's always a way to say yes based on terms and conditions of sale: down payment requirements, shorter terms, personal guarantees, third party guarantees, credit insurance, first born child. There's always a way to say yes. Credit rejection should come from the customer, not the seller.

An enlightened credit department approaches credit approval from a perspective that the job is to find a way to say yes to every profitable sale.

Completing the Sale
When past due A/R management is placed within the accounting area and it's performance measured by DSO and % bad debt it is referred to as "collections," as the enforcement of payment.

An enlightened credit and A/R Management department understands that most past due accounts are good customers and that the traditional definition is out of step with the reasons why customers become past due.

A survey of 8000 businesses in a wide range of industries found that close to 25% of accounts receivable are delinquent at any given time, one day plus beyond terms, but less than 1% are written off as a bad debt loss.

Approaching the management of past due accounts, as the "process of completing the sale" recognizes that the large majority of past due customers are good, and that delinquent accounts represent lost sales opportunities. Customers who are past due may well take their next order elsewhere rather than deal with a vendor/supplier with whom they are delinquent. Keep customers current and you keep them buying. Mishandled "collections" may bring in the money, but may also create the loss of customers.

A successful client relayed to me, over a cup of coffee, that when she was a college student she had received a phone call from a bill collector working for a major retailer. She was past due and did pay the bill, but she has never again stepped back into one of the retailer's stores and twenty years later she still resents the way with which she was dealt. Even more problematic than an affluent customer boycotting a retailer is the loss of a commercial customer's goodwill; there are fewer of them and they have generational memory.

In Closing
Things are changing. More and more business executives are coming to see the role of Credit and A/R management as a sales support function. DSO and % bad debt still have a place as a way to gauge cash flow and losses, but the performance of the credit function is better measured by % of dollars applied for approved…and exceeded and by the % of A/R current to 30 days past due.

Who knows the day may come when some big , friendly, lovable dog without a name comes to be called "Credit Manager".

This article was provided by our partner, Abe WalkingBear Sanchez.

The Author
Abe WalkingBear Sanchez is an International Speaker / Trainer / Consultant on the subject of
cash flow / sales enhancement and business knowledge organization and use. Founder and President of www.armg-usa.com, WalkingBear has authored hundreds of business articles. A hard hitting and fast paced speaker, he brings life and energy to a critical business function whose true potential has yet to be realized by most businesses.

Atradius, Irish Institute of Credit Management, TEC, CU, CSU, Texas A&M, National Association of Credit Management - Kansas City, HTDA, BCFM, Poli Hi Solidur, Skinner Nurseries, Deardens, Rain Bird, STAFDA, IBM, Wisconsin Credit Association, are but a few of the groups, schools, companies and associations for whom WalkingBear has conducted programs.

WalkingBear can be reached through:
A/R Management Group, Inc.
P.O. Box 457
Canon City, CO 81215
(719) 276-0595
email: abe@armg-usa.com
www.armg-usa.com

Have a great week!

-Mark Deo

The Only Solution

It was literally unheard of a decade ago, yet today it is fast on it’s way to becoming America’s NUMBER ONE cold remedy!

How has this simple, non-prescription product become such an overnight sensation?

Victoria Knight-McDowell spent years brewing herbs and swallowing vitamin cocktails to ward off students' bacteria, but the second-grade teacher couldn't vanquish one of the world's most common plagues.

She refined her herbal-vitamin remedies throughout the 90s, and she experimented on herself and her family. After nearly two years without a cold, she realized she had come up with the proper ingredients for her potion. She called it Airborne and managed to sell it to a local drug store on consignment! Airborne is now sold at Wal-Mart, Rite Aid, Trader Joe’s and just about any self-respecting retailer.

How has this unknown product risen from relative obscurity in one of the most competitive product categories in marketing?

By using the sixth rule of attraction… "Don’t be a better option, become the only solution."

Mrs. McDowell didn’t create a BETTER option to other cold remedies. She literally formulated what was perceived as the ONLY solution to stopping the spread of airborne illness! Her solution is not just unique it is exclusive in several ways:

First, the product was initially marketed specifically to those who travel or often find themselves in public places. No herbal, vitamin or pharmaceutical product ever made a claim to such a tightly confined audience.

Second the product is aptly named so that it exclusively addresses this particular market segment… Airborne (as in "airborne" bacteria). This is quite simple and easy to remember.

Finally the formulation of the product itself is not only unique but quite exclusive. Airborne is the world’s first effervescent cold tablet. The marketing is built right into the product!

Think about this simple product and how they managed to win in such a fierce competitive arena. What can you do to make your product or service EXCLUSIVE? How can you aim your solution at a not a larger audience but rather a SMALLER market? How can you re-engineer you product or service to be "effervescent" – that is have a twist that makes it completely different than any of your competitors? Finally what can you do to build your marketing right into your product so that you are seen as the ONLY option in a sea of copycats?

For more information on how you can leverage the Rules of Attraction to gain greater market advantage go to www.attractmorebusiness.com.

Have a great week!

-Mark Deo

Setting Ourselves Apart

Remember the star of the old TV series, Wyatt Earp? Hugh O’Brian was his name but he has a greater claim to fame than being do-gooder Marshall Earp. That is the organization that he established in 1958 called HOBY. HOBY is a youth leadership development program. Every year HOBY accepts only ONE sophomore from every high school in the world to participate in a world leadership conference.

I was honored to speak at the Los Angeles Annual meeting this weekend and I can’t tell you how exciting and rewarding it was to work with these kids - (see some photos of the conference – WOW! Talk about enthusiasm!). These are our future leaders and I am proud to say that we are in GREAT hands. My presentation was on entrepreneurship. We created what is called “the management game.” This is classic business game theory at work. Teams of nine students are formed and they are asked to create a new product, develop a marketing strategy, present it to the board and then perform a 2-minute commercial promoting their product or service.

My presentation focused on how the teams could differentiate their products and services. I talked about I.P.S. This acronym is a great way to remember how to differentiate your company, product and service and create marketing attraction. It stands for: Integration, Personalization, and Scarcity.

Integration

Today traditional advertising and marketing is more expensive and less effective than ever before. People are numb to sales pitches and they have a very short span of attention. Integrated marketing solutions help us to build the marketing right into the product itself. Think of Hotmail when they first began nearly a decade ago... When you sent someone a message using Hotmail, they received an invitation to join themselves. The marketing was built right into the product. Even more relevant today is myspace.com. Now with nearly 80 million members you can configure myspace.com to automatically send information to everyone in your address book if you like. That means that everyone in your sphere of influence knows what’s happening in your life. That’s super connectivity!

Personalization

Personalization is all around us in marketing today. How about the way that Scion automobiles have created thousands of choices for car buyers? It is probably the most customizable automobile ever built. Virtually EVERYTHING can be changed, type of body style, interior, exterior, sound, wheels finish, trim, etc. This allows buyers to truly personalize their Scion. All kinds of products and services are personalizing these days. I went to get ice cream recently (that means another hour on the treadmill). It was a place I’ve never been – Cold Stone ice cream. I was amazed at the way they have build personalization into the product. At Cold Stone, you create your own personal desert. You pick the ice cream, tell them how you want it prepared, the toppings and they mix them right into the ice cream. This all happens right in front of you in minutes.

Scarcity

Finally, scarcity is another powerful marketing tactic that can be employed. Think about how many products have incorporated scarcity into their marketing. Apple’s I-pod when it first came out. The Xbox 360 - some kids waited in a line overnight just to be the first to get the product when it was released. Motorola decided to build demand for the Razr phone when it was first released by manufacturing only a very limited quantity.

Often times these three methods of marketing are counter-intuitive. We think that we should homogenize our product and design it for as many people as possible. Yet this is counter to I.P.S. and the Rules of Attraction. My advice to you is to think about ways that you can use these methods to create demand with your own company, product and services. When you do, you will find that you can spend less on marketing and reap far greater rewards.

Also, check out our Attract More Business Program that takes you systematically through creating a marketing attraction program.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com.

Have a great week!

Products That Deliver, Part 2

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The following is part two of last week's article on product development.

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This week we will be looking at some of the areas of product development that can help us to ensure that the products or services we are creating are timely, tailored to our marketplace and that everyone on the team is pulling in the same direction.

Collective Commitment

Everybody commits whole-heartedly and knowingly to a worthwhile vision. See my article on visions, missions, and goals. Make real commitments of specifications and schedules. Involve customers and suppliers. Justify project for ROI (Return On Investment) based on performance, time and cost. Finally, we must fully understand and be clear about the objectives. Management studies repeatedly cite lack of common understanding of project objectives as the number one most common reason why a project fails. You may have heard this in the office hallways: "How can we meet the schedule when we keep working on a moving target?" This is typical chaos with predictable results: nebulous corporate objectives evoking minimal commitment on the part of team members to accomplish the goals.

Seek to Inspire!

It is this kind of 'bigger than life' vision that a project leader must impart to the team. Emphasize the extensive importance of the project to your people; what is it giving the customer; where will it take the company; how will it advance their career? Consider this dramatic example.... A team of engineers was designing a very important piece of medical equipment. How did they know it was of such great importance? The project leader calculated the number of intensive care patients who were dying throughout the world for each day that this new piece of equipment was not yet ready for use. How's that for a motivating sense of purpose? As team members are shown the range of valuables, enthusiasm and a deeper sense of meaning is cultivated, which is intrinsic to commitment. Steve Jobs, the founder of Apple, used to walk throughout the office and declare about the Macintosh Computer, "It's going to be insanely great!"

Ideas from Clients

Defining requirements is much more complex than simply asking customers 'what' they want. The process must be able to handle customers who are not sure what they want or change their minds after they get what they asked for. We must develop tools for understanding the customer such as surveys, focus studies, and verification techniques. In addition, we must also use continuous customer feedback as a basis for creating better requirements.

Research

As businesses develop fresh ideas, launch innovative products, and expand, accurate and timely collection of data is essential. As fundamental as market research is to effective business management, too often the soaring price points and extended time lags associated with this work lead many to dismiss it as superfluous rather than necessary. There are numerous organizations devoted to service/product R and D. Some of my favorites are Find SVP, Brain Trust, and Lexis Nexis.

Competitive Intelligence

Competitive intelligence is a necessity for businesses of all sizes. You need to know who your competitors are and what they are doing in order to compete. By identifying the strengths, weaknesses, pricing, and incentive strategies used by your competitors, you can identify opportunities and make informed decisions about the future of your business. Knowing your competitors will allow you to develop strategies to market your strengths and maintain an edge. Prior to beginning any product/service development project, it is critical that we fully understand the competition.

Ideas from Inside Your Organization

The best ideas for new products or services can come from your customers or employees. Dean Schroeder, recent guest on the Small Business Hour, and author of the book, Ideas Are Free, states and affirms that "the key to a successful company is encouraging a corporate culture that swiftly recognizes and implements ideas and improvements. Managers who recognize this can increase profits and avoid budget cuts and layoffs."

Stepping Outside Commonly Acceptable Practice

Consider the man who became the first person to pilot a privately built craft into space called this past Monday. He took his rocket plane, SpaceShipOne to an altitude of more than 100 kilometers (62.5 miles) -- the internationally recognized boundary of space. He ascended into space at Mach 3, three times the speed of sound and accomplished what most have felt impossible. Do you think this will begin to shatter commonly held product development beliefs in the space industry? You bet! How can you step outside the Commonly Acceptable Practices in your business?

Speed

Not the drug; but rather a common precept to product/service development.

Sony has given us thousands of new versions of the Walkman since the product was launched in 1979. Every thing from tape to CD to MP3. If this week is average, we will harvest 250 or so new products aimed for American grocery and drugstore shelves. Speed is critical to success. Old-fashioned hierarchies are not only unmercifully sluggish, but their committee-born products are also usually dull as doornails when they finally arrive. But there's more to life than speed.

Tom Peters admiringly talks about his friend at CBS who drove top management crazy. He would get an idea for a documentary, he says, and then take it to his bosses -- who would usually approve. He would return to his office, sit quietly, and mull. And mull. Days would pass. Weeks would pass. Often as not, months would pass. "When in the hell is he going to go out on the road and shoot?" the hierarchs wanted to know. One day his office would be empty, and a few weeks later, he would be back with canisters of film in hand. Did he start editing? Fat chance. Back to office. Feet up. Mull. Massive accumulations of pipe ash. Eventually, he would head for the editing room, and a near perfect show would emerge. The sequence was repeated time and again, and the results were invariably so good that CBS' muckety-mucks had little choice but to put up with his aberrant behavior.

Often improvement comes in fits and starts. Each week may bring 250 new grocery products, but the odds are that only a couple will last even two years. How many will really be significant? Fewer still. Does that mean all Proctor & Gamble product developers should spend five years peddling soap door to door to get a sense for the product? No. Ought P&G aim to extend its already lengthy product-development cycle in pursuit of breakthrough products? Hardly. Yet Tom Peters would say P&G -- and CBS and Sony -- ought to have a few folks on the payroll who march to a different drummer.

Products That Deliver, Part 1

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Everyone wants products and services that deliver tangible benefits and long-term value. They are good for customers, good for manufacturers, good for merchants, and good for the entire industry.

Then why are there so few of them?

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Blame it on the marketing people, research department, or product/service development group. There isn’t a business in America that doesn’t want to be more creative in thinking through products and services.

Brainstorming new products, however, is only the tip of the iceberg in delivering real benefits and long-term value. It’s not enough to simply create new products because your competition has something similar. I see too many companies (product and service providers) playing follow-the-leader. In this new economy, there is less and less room for copycat products and services. In fact in many industries, being first with a concept and first to market are critical just to survive.

Look at the consumer electronics industry. I was in this business for many years and I know that merely developing another DVD player isn’t enough. In fact, it is suicide! Now your new line of DVD machines had better have record functions, DVR, unified remote, multiple A/V interfaces, as well as that special feature that ONLY your brand offers. If you’re an electronics buff, you know what I’m talking about. If you’re not, know this… You had better find a way to LEAPFROG the competition with your product/service offerings because simply slapping clever marketing onto “me-too” products just isn’t going to cut it any more!

With this in mind, I thought we’d taka a look at what gets in the way of truly revolutionary product/service development and what we, as leaders can do to turn these obstacles into opportunities. This two-part essay will focus on how to create products that deliver.

Managing Uncertainty and Risk

Risk minimization is not the same as risk management. Minimizing risk involves avoiding any chance of failure. Managing risk is taking gambles that make economic sense. There is always technical and market risk. We must fully understand these in the framework of our industry. Knowing the technical capabilities of our competition is paramount in developing a product/service development strategy. For example if IBM would not have underestimated the technical savvy of Dell perhaps their market share would be double what it is today in the computer business.

Specifications vs. Market Benefit

Alan MacCormack, a professor at Harvard Business School, was studying successful software development processes. He and his colleagues asked executives at a software firm to provide two case examples, one from a "good" project, and another from a "bad" one. Two projects were identified, each of which yielded products that had just shipped. Observing the state of these products over time, MacCormack and his researchers saw that the "good" project failed in terms of such factors as market acceptance, expert quality rating, and productivity. According to MacCormack, the project that management said was a good project "turned out to be uniformly bad," while the project that executives said was "bad" was a marketplace success.
MacCormack discovered that what executives judged to be a "good" project was one where the specification was completed up front, where the design had been frozen, and the project had been executed efficiently. For executives, a "good" project was one that built the product that it set out to build. A "bad" project, according to executives, was one in which the results ended up looking completely different from what they set out to build. Yet the market reaction to the project that had gone through continual change was much better than the project that had a design that was frozen in time. Says MacCormack, "The way they thought about ‘good’ and ‘bad’ in that case was completely upside down. The people who were overseeing projects there assumed that the good projects were the ones that delivered to the spec. In fact, good projects are ones that deliver to the market."

The Cost of Delay

I think this is a greatly underestimated variable of product/service development. When creating product/service development budgets we take into account all kinds of variables such as research, materials, staffing, testing, analysis, product launch and so on. We fail to quantify perhaps the most costly and critical element of the product/service development process…time. Specifically the cost of delay. Releasing a new product BEFORE its time has come can have a devastating effect on not only the cost of the product but also the entire reputation of the company and its brands. Take for example the personal computer. I remember having sold the VERY first personal computer to over 250 Target and Venture stores back in 1980! I was part of the development team at Atari, and I went on several in-store demonstrations inside Target stores. I laugh hysterically today when I think about the reception we received when we demonstrated to your everyday Target shoppers how you could use your Atari 800 to do your personal finances, play games and keep electronic records. People thought we were absolutely CRAZY! This was well before the Apple was placed in mass merchants. At Atari we were attempting to sell a product whose time had not yet come to a marketplace that even today, in 2004 is barely getting a handle on their needs for home computing.

Next week we’ll focus on product/service development research, competitive analysis, creating inspiration and outsourcing.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com

Mark Deo

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Outsourcing - "The Future of Business"

It seems that the 777 wasn't BIG enough for Boeing. Rolling off the line this week is the very first mammoth Boeing 787. Dubbed the "Dreamliner" it has already sold 584 copies as of June which makes it the fastest-selling new plane in the history of commercial aviation.

For decades, Boeing has outsourced a portion of the work on its planes, and its reliance on sub-contractors has risen with each succeeding generation of aircraft. But with the Dreamliner program, the aerospace giant has reached a point where its role has changed. It now functions less as a manufacturer than as a project manager, supervising its first and second tier subcontractors, each of which may rely on scores of more specialized subcontractors. A recent article in CNN Money and FSB Magazine outlines the commitment that Boeing has made to outsourcing. In fact it states that Boeing has utilized 900-plus contractors to develop and build the aircraft. Boeing's new manufacturing template has captured the imagination of the aerospace industry. Recently officials from Airbus announced that it will be relying more heavily on outsourcing to become more competitive.

I have said this before: "Corporate America is DEAD!" In fact, I believe those organizations that elect NOT to commit heavily to outsourcing will cease to exist in the next decade.

When you consider today's shorter product life-cycles, outsourcing provides a far more cost-effective strategy to product development. It eliminates ongoing capital investments required to constantly retool. In addition, outsourcing permits the experts in every area of endeavor to focus on mastering their technology. It satisfies a marketplace demanding ever-increasing levels of performance. And outsourcing is good for the business economy. It promotes competition, holds vendors accountable and lowers the effective cost of deliverables.

So think about how you may be able to use outsourcing to improve the performance of your business. This can be accomplished for small businesses as well as larger ones. Outsourcing has helped me to deliver a better service to my customers and our entire organization is based on the outsourcing "network" concept. Maybe outsourcing can help you to achieve your dream for your business.

Return on Investment

In today's economy many business people are looking at all kinds of ways to improve profitability. A wise man once told me that business is simple... make more than you spend!

But many translate this to mean cut as much in expenses as possible. Cut everything that is not an absolute survival necessity. WRONG! This is the worse strategy during an economic slowdown. My advise is to focus on getting a better return on your investment.

I have outlined below some powerful yet simple advice on how to improve R.O.I. (return on investment). Increase volume Sell more of what you have. Here are some ideas how:

Increase sales per customer

The largest amount of effort and expense goes into getting new customers. Why, because if your advertising yields a response rate of 2% then your doing well. Once they become your customer, you know who they are and can target them directly. Can you offer your existing customers more products or services ? See what happens to profit if you increase volume by 5%.

Increase the number of customers

Increase capacity. If you have a big backlog of orders, are short of space or your people or machines can't handle any more volume maybe you need to increase capacity. One of my favorite low-risk ways to increase capacity is to subcontract some of the work, especially if the increase in volume is non-recurring. This ties in with the collaboration philosophy which I often talk about. Of course you must ensure that the subcontractors work is satisfactory, they can deliver on time and they will not solicit your customer directly. Your cost of sales maybe higher, but your increase in sales will more than compensate.

Increase Prices

Are you charging all you can for your products or services. This question addresses how you set prices for your products and services. If your products and services have competition, then your prices cannot be significantly different than your competitor's prices. Price is generally inversely proportionate to volume. Meaning that the more you charge, the less you'll sell. What would happen to your volume if you increase prices by 10%? Will volume decrease by more than 10%? Will the customer's you lose be the most undesirable ones, the ones that have the lowest profitability, give you a hardest time or cost the most to collect?

Change your sales mix

The sales mix if the proportion of sales coming from different products or services). Are you spending a lot of effort on products that don't generate enough gross profit? Maybe you should stop selling them or raise prices for these specific services. See what happens if you increase the volume of the higher gross margin product line by 10% and decrease the lower gross margin product by 10%. The idea is to focus on product or service lines that generate the highest gross profit.

Reduce expenses

Easier said than done! This is sometimes the hardest thing to do. Which expenses are to be cut and by how much? More importantly, what affect will the expenses have on sales? In fact that is the one question one should ask when doing any type of analysis. What affect will not spending on this or that have on present and future sales? Quantify it! Spending $200 a month on meals will generate $X in new business or my employees with be $Y more productive. Here are some tips to help you along the way.

Cut the fat - Look at each expense item line by line. Do you need all the telephone lines and cellular phones. Is the travel that you're doing resulting in sales. Can you do with less office space. Are your employees productive? Do the employee have enough work or can you reduce staff and group responsibilities? Indeed if you cut staff then some employees will be laid off and moral may suffer, but if you go out of business, no one will have a job!

Don't cut into the bone - Some expenses you need to continue to incur because if you cut them you will jeopardize current and more importantly future sales. A prime example is manpower for product development or strategic planning. These ensure your future growth and profitability. Another expense which is difficult to cut is advertising and promotion. Indeed those trade shows and magazines ads are expensive, but if no one knows about you, then how are you going to sell. The idea is to target advertising so you have the maximum impact on sales.

Understand the Difference Between Profit and Cash

The Small Business Administration claims that most business failures are directly related to lack of cash flow. Many businesspeople will tell you that their profits may be skyrocketing but they are in a cash squeeze. How can this be? - Profit & Loss is calculated by deducting expenses from sales whereas Cash Flow is calculated by deducting cash disbursements from cash receipts. So if you receive the cash from your customer at the time you deliver the goods and perform the service, then sales and receipts from customers will be the same. If you give credit to you customer, then sales happen at the point you deliver the goods or perform the services whereas receipts from customers happen when you actually receive the cash associated with that sale.

Improve Collections

When you extend credit to customers you create a receivable which has a potentially negative effect on your cash flow. I advise my clients to measure their cash flow on a weekly basis. This can be done by preparing an aging of receivables. This involves calculating the amount of receivables owed based upon the time period owed. In other words, how much of your receivables is over 15, 30, 60 or 90 days past due. If your terms are net 30 days yet 50% of your receivables is over 30 days then they are past due. This will create a severe strain on your cash resources. I recommend that no more that 10 to 15% of receivables be more than 30 days past due. There are a number of ways to improve collections.

Offer an early payment incentive

For larger, high volume clients, a personal approach is recommended. Take the client to lunch and discuss it. Develop some creative letters that can be sent after a 15 days past due so they never get to 30 days. Establish a person within the company as the collections clerk that will call on behalf of you.

Make Change Happen!

I hope these ideas help you in improving both the cash flow and profitability of your organization. In my upcoming "All Day Workshop" I will be be demonstrating how to develop and implement a simple profitability and cash flow test on a monthly basis. I will be giving each attendee a sample of a custom spreadsheet that I have developed to accurately forecast sales and profit months in advance. This strategy has been invaluable to me and some of my customers.

Proper Pricing

Countless times I've heard clients tell me, "I have a better product, I provide better service, and I'm sick of customers telling me my prices are higher than the competition. If only I could convince my customers that my product or service IS worth a slightly higher investment.” In this article, we'll discuss principles, approaches and techniques that will help you to build greater value, a higher product/service perception and improved profitability.

The Lowest Price
Let’s face it- securing the business often boils down to the lowest price, in one form or another. Are you cheaper than the competition? If not, you may be up for a battle of the wills. No matter what price you quote, many customers will automatically say it’s too high. That response is so deeply drilled into their mindset that just about every product or service they come in contact with gets the same reaction. The trick is to get beyond the knee-jerk reaction and into a reasonable conversation about their situation, needs, budget, and time frames. Until you achieve that level of rapport, price itself simply isn't the issue.

Another facet of the price objection is the explosion of options every client faces. There are more varieties of products and more vendors to buy from than ever before. Multiply varieties by vendors and it's clear that the total number of available choices has grown exponentially. This overwhelming amount of data can lead customers to making comparisons between options that aren't strictly comparable- the proverbial apples vs. oranges debate. While the solutions being considered aren't equal, the prospect is conditioned such that they can't look beyond Price A vs. Price B.

The "I can do it cheaper" Strategy
An often used but ineffective strategy is the "I can do it cheaper" strategy. Why do so many small-business owners confuse low pricing with proper pricing?

Maybe the answer is because it appears as though the easiest way to attract customers is by offering low prices. Perhaps another part of the answer has to do with the fact that low prices often work well for big businesses, and a distinction is not made between big and small businesses.

We have all seen, however, small retailers go out of business after trying to compete with Wal-Mart or K-Mart on price. Even K-Mart themselves nearly bit the dust because of their aggressive pricing. Anyone who's heard my show or seen me speak knows how I feel about cutting price. A great example was demonstrated when an Ikea decided to drop their price too far:

Would-be bargain-hunters in London suffered heat exhaustion as a crowd of thousands forced a flagship IKEA superstore to close on opening night. Up to 6,000 people flocked to the opening of the store, which was touting cut-price offers throughout the 24-hour opening, including a leather sofa for £35 ($65) until 3 a.m. The company had expected 2,000 customers.
-CNN.com

Think any of them will return? Maybe when they're out of the hospital!

Harvard Professor Michael Porter, author of Competitive Strategy, tells us that "The presence of economies of scale always leads to a cost advantage for the large-scale firm ... over small-scale firms."

So why do so many small businesses charge low prices anyway? Porter says that small business owners "may be satisfied with a subnormal rate of return on their invested capital to maintain the independence of self-ownership, whereas such returns are unacceptable and may appear irrational to a large publicly held competitor." In other words, small businesses often settle for less profitability than their larger competitors.

Give them a reason to pay a higher price
Why should your prospect do business with you over any of your competitors? Especially those that have lower prices? Do you have a “wider selection than anybody in the tri-county area” or do you “deliver within eight hours after the purchase”? Often your unique competitive advantage is the biggest benefit you can offer your prospects, so consider including it in your headline, bulleted copy, or your guarantee. If by chance, you don’t have any unique competitive advantages, then you better get some…fast. Not having a unique competitive advantage with which to show value results in competing solely on price - - and that’s a losing proposition (unless you have a significant cost advantage).

As I noted earlier, "Your price is too high" is an objection we all hear. In fact, if you aren't hearing it then your prices are too low, you're leaving potential profits on the table, or you just aren't doing enough marketing. There is no single, sure-fire, works-every-time solution to this problem, but there are lots of great ideas. The more arrows in your quiver, the more options for handling it-- and the greater selling success you'll experience.

Here are some things that we discuss in our TeleClinic on pricing:

• Profitably structure your rates.

• Justify your pricing.

• Deal with price competition.

• Fight and WIN a price war.

• Realize that selling cheaper NEVER works.

• Use the unconditional guarantee.

• Non-Commoditize your product or service.

• Understand your competition’s pricing strategy.

• Ensure you are priced 5 to 10% higher than the competition.

• Offer something customers can NOT get from the competition.

• Match the customer's need with your value solution.

• Use the revolutionary "Tiebreaker" philosophy.

• Break down the price differential.

• Develop the best way to charge for your product or service

• Transform customer benefits into hard dollars.

• Get the customer to calculate the cost of NOT buying.

• Do NOT become defensive over the price.

• Never apologize for your price.

• Use option pricing.

Here is a great resource for pricing strategies on the web:
http://www.tutor2u.net/business/marketing/pricing_strategy_other.asp

Interested in LEARNING more about pricing strategies? Check out our latest workshop:

Attract More Business One Day Workshops
By popular demand, we are now offering the Attract More Business one day workshop. This full day workshop incorporates content from our “Attract More Business” learning program and 8 week class. The workshop will be held from 9am to 5pm on June 11, 2005 in Long Beach, CA and August 25, 2005 in Pasadena, CA. Attendees of the workshop are eligible for 2 follow up 30 minute coaching sessions. As a special bonus when you attend the Attract More Business one day workshop, you will receive our audio CD on “Branding in the 21st Century.”

Sign-up at: Attract More Business One Day Workshop.

Pricing Strategies

Many small-business owners operate under the delusion that they can be successful by selling their product at a lower price than anyone else. This typically will only work for large companies who dominate a market.

In this analysis, I have demonstrated some advantages of market-driven pricing strategies which focus on maximum profits. The intent was to demonstrate that there is high profit potential for small businesses who differentiate their products and then price accordingly. Once the significance of market driven pricing strategy is more widely understood, pricing strategy will become one of the most important pre-venture considerations.

Here are a couple of examples of what typically happens to small business owners when they attempt to meet the challenge of establishing competitive pricing models:

The owner of an exclusive women's clothing boutique was experiencing a financial crisis. Even though her sales were brisk, and all of the six prominent women in the community frequented her shop, the business was not profitable. When the owner asked her local banker for advice, he told her to lower her prices to stimulate sales, and he lent her more money. After two more loans and two more price reductions, her business defaulted. At the time that she closed her business, she was charging prices which earned her minimum wage to create exclusive creations, one of which was worn to a presidential inauguration!

Another retailer was puzzled by the fact that his interim reports always showed a profit, while his annual tax return showed huge losses. Initially, this business owner thought that his C.P.A.'s were helping him by saving money on taxes. What was really happening, however, was that his C.P.A. used an estimate of 50 percent for cost of goods sold (or a 100 percent mark up). In reality, the retailer was only marking up 33 percent, so cost of goods were actually 75 percent of sales. Naturally, the annual audit for tax purposes reflected reality. The retailer (who had opened a second location) thought that he had been borrowing money to expand his business, but in reality, the increased loans were used to cover operating losses.

How should small-business owners determine the prices of their goods and services?

Many people simply do not know, which may explain why pricing problems are so prevalent.
As a business consultant I have worked with the two business owners described above and many others who have experienced great financial losses that were directly related to their pricing strategies. I can understand their situations well because in the 1980s, when I owned a promotional business, my own miscalculation of prices led to my business's unprofitability and eventual failure.

In recent years, I have researched pricing strategies extensively. An increase in my understanding of pricing theory has led to a dramatic improvement in client services at my practice. Today, all of my customers have profitable pricing models and have seized a strong share of their marketplace. My goal is to help other small businesses to avoid financial difficulties caused by improper pricing.

In this article, I would like to share my findings with you. First, I will discuss two traditional pricing methods that do not, in my opinion, work well for small businesses. Next, I will present two market-driven strategies that do seem to make sense for small businesses. The first is fairly well-known and has a solid reputation. The second is a new idea that is being presented for the first time in this article.

Why "selling it cheaper" doesn't work

The first of two ineffective strategies that I would like to discuss is the "I can do it cheaper" strategy. Why do so many small-business owners confuse low pricing with proper pricing?

Maybe the answer is because it appears as though the easiest way to attract customers is by offering low prices. Perhaps another part of the answer has to do with the fact that low prices often work well for big businesses, and a distinction is not made between big and small businesses.

However, we have all seen small retailers go out of business after trying to compete with WalMart or KMart on price. Harvard's Professor Michael Porter, author of Competitive Strategy, tells us that "The presence of economies of scale always leads to a cost advantage for the large-scale firm ... over small-scale firms ... (page 15)."

So why do so many small businesses charge low prices anyway? Porter says that small business owners "may be satisfied with a subnormal rate of return on their invested capital to maintain the independence of self-ownership, whereas such returns are unacceptable and may appear irrational to a large publicly held competitor (page 19)."

I would like to approach the critical question of "Why can't a small-business compete on the basis of price?" from yet another angle. I would like to look at it from the broader perspective of strategies for managing a successful business. Porter identified three different strategies that successful businesses have used: Offer the lowest price: Be the premier high volume, low-cost producer and underprice everyone else.

Offer differentiation

Be a high-volume producer, but differentiate your product by quality, design, or brand, and charge a higher price. Offer a sharper focus: Be a specialist who focuses on one segment of the market and caters exclusively to it. These are three examples of what Porter called "generic business strategies" and are market driven pricing strategies. In other words, in each of these cases, the pricing strategy has to fit the market. Before you can determine your price, you have to decide whether you want customers to select your product because you have the cheapest prices, or because you have the best quality, or because you have the best selection.

As a small-business owner, which of these three strategies should you select? According to Porter, the first two strategies work only for high-volume businesses. Those who wish to build large volume by predatory pricing must have a bankroll which equals big business. Since it is almost a contradiction for a small business (other than a franchise) to be a high-volume producer who dominates a market, you are left with the third alternative. Your goal, then, should be to focus on a specific market segment and price accordingly.

Low prices work for only those who have high sales volumes. The rest of us have to rely on other pricing strategies.

Why 33 to 44 percent mark ups do not work

One of the worst collections of advice on pricing is found in some federal government information packages where retail examples use mark ups of 33 to 44 percent. It is true that many of the largest American retailers average a 37 percent mark up on cost. However, half of American retail establishments in 1987 were trying to survive on gross receipts of less than $150,000. (Statistics of Income, IRS).

If a retailer with sales of $100,000 followed this advice, he or she would have only $25,000 to $30,000 to cover rent, taxes, utilities, phone, fax, computers, employee wages, owner's salary, employee overhead, advertising and profit (assuming there are no stock losses, pilferage, mark downs or discounts).

Does that mean that we should respond by saying, "Obviously, this retailer should increase sales"? No. We can't deny the fact that $100,000 in gross sales is fairly realistic for many shops, when you examine the size of the facility, the location, the product line and the clientele.

Rather, I would say that the problem is caused by the one-size-fits-all pricing formula, not by the sales revenues. Big business pricing strategies are not suited for small businesses. I would also like to argue that any pricing strategy that ignores market forces is incomplete. In other words, we need to ask: What will the market bear?

Why and when you should "ride the price-volume curve"

This pricing strategy works especially well for the small businesses that produce unique durable goods. (Durable goods are products that you don't consume often, as opposed to non-durable goods, such as milk, shoes and paper. "Unique" goods are products that may be protected by a patent or a copyright, such as computer software, compact discs, art work, and "how to" video tapes. Often, academics use the term "monopolistic" instead of "unique," which means that the product is so unique that it has a monopoly on a certain quality or feature.) Often, unique durable goods have a relatively short marketing life.

Either the information is timely and/or the objects may be perishable or subject to fads. Basically, the idea is this: Start with a high price, and gradually decrease the price by calculated increments. Here's an example which will illustrate exactly how to do it. Harry Hypothetical of Hypothetical, Inc. has developed a new product, called Dubegude. The Dubegude has a variable cost of $30 and Harry is in the process of trying to price the product.

But first, let's come to an agreement on our definitions of "fixed" and "variable" costs because they are an important part of this formula. Fixed costs are constant regardless of the volume sold. Rent is a good example of a fixed cost. To a certain extent, product liability insurance depends on sales volume so it is not constant at all sales levels. Variable costs increase in proportion to the number of units sold. Raw materials and direct labor are obvious examples. If a business must borrow money to build inventory to increase sales, interest could be a variable cost.

Let's say that Harry Hypothetical hired a marketing firm that takes into consideration market forces. First, the marketing firm developed a best guess at the price-volume relationship. Price volume relationships can be developed by surveying the prices of potential competitors and estimating their volume or, in the case of a new product, test marketing in various locations at various prices and noting customer response.

As expected, the highest volume is at the lowest price and the lowest volume is at the highest price. Based on fixed costs of $250,000 and variable costs of $30, the marketing firm calculates the profit at various prices and the corresponding sales volume. The maximum profit is $130,000 at a price of $125 and a sales volume of 4,000 units.

This method yields higher profits than those derived from mark up calculations, but it does not yield the maximum profits - yet - because you haven't taken full advantage of the price volume curve developed in the market survey.

What if we sold 2,000 units at $150, and then lowered the price to $125? We would expect to sell 2,000 additional units. (It would be 2,000 units instead of the 4,000 because we can assume that 2,000 units had already been sold.) As we continue to lower the lower the price to sell more units, we can accumulate profit from higher priced sales.

Cumulative sales volume rises as we lower the price and the calculated profits. This is called "Riding the Price-Volume Curve." The profits are 154 percent higher from this method. If we had simply charged $125, and never altered the price, profits would be $130,000. But, by starting with $150, and lowering the price by increments to $60, our total profits would be $330,000.

In addition to higher profits, "Riding the Price-Volume Curve" has several other advantages. Because sales volume will be lower at the start of the campaign, time and personnel are available to insure high product quality and to resolve all customer complaints. For a new product introduction, this method of pricing also allows accelerated recovery of research costs before competitors enter the market and prices are driven to unreasonably low levels.

Also, keep in mind that consumers are much more amenable to a price reduction than to a price increase. If they are already attracted to the product because of product features or promotional activity, a price decrease might stimulate a purchase decision. A price increase, on the other hand, in the absence of excessive inflation will usually force consumers to re-evaluate their purchase intention. For consumer durable goods where the p