Georgia SBDC- Small Business Blog

"Hope" Is Not A Effective Business Strategy

Three days every year, all of the consultants of the Georgia SBDC Network get together for training at the state office.  We have several speakers come in and talk about business, marketing, finance, accounting and many other subjects.  This year was certainly no exception and we have had some great speakers and training.

One speaker gave some good advice that every business owner needs to remember, "hope" is not an effective business strategy.  As economic times are tough for everyone, many business owners hope that they will make payroll, hope to have customers walk in the door, or  hope to be able to pay themselves.  Are you hoping, or trying to plan.  By analyzing your expenses, revenues and other factors you may be able to find the seasonality in your business that may show you how your next few months or years may be.  Sales in your business could still be lower than usual, but the seasonal fluctuations may still be taking place.  By understanding your margins and expenses combined with your past performance, you may be able weather the storm for now. 

The Georgia SBDC network can help you review your projections to see how your business is going, or can help you create some if you do not have any as of yet.  If you need to reach any of our offices, go to our website to find our contact information.

Increase Your Price? Marketing in Tough Times

This blog post is reposted from the Marketing Blog.  It is important for us to think about our customers and the pricing situation as everyone is struggling right now.  Enjoy!

Kyle

If you have ever worked for a company for more than one year, then you have no doubt experienced price increases. This is one of the fastest ways for companies to earn a few extra dollars and quite frankly one of the easiest.

As marketers, when we have to market and sell the same items at a new, higher price, we may find that the tradition campaigns become less effective. This is especially true when we hear objections from our customers. If there have been little or no changes to a given product, then it is next to impossible to overcome objections related to price.


One of the biggest concerns that marketers have about price increases is that of customer attrition. This is especially true in markets where your competitor is priced are lower or about the same as your offering. There is always someone else that your customer can buy from. A recent study I read indicated that even though price can be an obstacle to buying, current customers are less likely to leave you after a price increase.

There are a number of factors that explain why this is the case. Also, one must consider the cost to the customer to start from scratch. This has both and emotional as well as financial component.

Customers have been conditioned to find the sale or ask for a discount. When introducing a price increase, customers do not want to incur the full impact. This is why they will continue to ask for discounts even after a price increase has been stated. As noted above however, even with a price increase, customers are not necessarily going to leave you.

Here are some ways to overcome objections related to price increases:

Add value that is greater than or equal to your price increase. Customers do not want to pay more for the same old thing. When they do, their perception of value diminishes. Provide additional services, support, or terms to deliver additional value that is substantiated by price.

Focus on switching costs. If a customer has to leave you, there are direct and indirect costs associated with doing so. Make a list for yourself. By moving to a new vendor, does you customer have to pay a new fee of some sort? Will they lose money by canceling with you or your services? How much time and effort do they need to put into finding a new vendor?

Do not treat all customers equally. I know it is taboo today to say such a thing but not all customers are equal. Some have been with you a long time. Others are working with you for the first time. Your price increases should reflect the individuality of your customers and the impact you wish to have. Consider treating customers differently.

The final bit of advice I can give around price increases is that you should really understand your competition and what types of alternatives are available to your customer.

If you have a stronger package at a better price than you competitors, switching is not an issue. If your offering is less valuable and more expensive, then perhaps you need to reevaluate your pricing. As a marketer, your job is to create a perception of value or remedy for a given need. Identify that need and focus your messaging on meeting that need. When you do, price is rarely an issue.

For more free marketing advice, visit the marketing experts at Internet marketing expert at http://www.MarketingScoop.com

Website Resources to Help Improve Your Business #2

In continuation of the series of web resources to help your business could I reccomend www.biztoolkit.org.

Biztoolkit.org is a resource created by the J.J. Hill Research Library.  They provide information to the small business owner to help them research their market as well as have tools to help them possibly solve other issues.  They have free access to information within the the following categories: Exploring, Begining, Growing, Managing, and Maturing.  They have access to many templates, forms, and other information categorized to help you out.

There is also a premium section if you so choose to use it. 

This is a excellent way to gather information on your industry and prepare yourself for growth.  The possibilities are almost endless once you start looking around at all of the information. 

Let me know what you think!

The SBDC in no way endorses the website listed above.  It is simply a suggested site that others have used successfully in the past.

Your Goals For the Next Year

Even though I am a few days late, Happy New Year!

In the small business world, this should be one of the more exciting years as we do not know exactly what is going to happen.  Of course, there is always a degree of uncertainty, not including taxes.

As we look forward to the New Year, I recommend that you make goals for yourself and your company.  Are you trying to grow, change or improve?  Write it down and try to hold yourself accountable to it.  Keep it posted on the wall next to your desk.  If you really want to see it often, post it in the background of your cell phone (I know many of you have it within 3 feet of you at all times). 

I know that it takes time to sit down and think about what your goals will be, but you need something to strive for.  Make sure that you don’t set the bar to low.  I know that you want to be able to make your goals, but don’t make them so low that you pass them in the next few months.  On the other hand, don’t make them so extremely difficult that there will be no way to possibly reach that next level.

On his blog, Seth Godin had this to say about goals:

The thing about goals is that living without them is a lot more fun, in the short run.

It seems to me, though, that the people who get things done, who lead, who grow and who make an impact... those people have goals.

So as we are now in the New Year, plan what you want to achieve, and start setting goals now.  You will have a vision to strive for in the next year. 

Election 2008: Who will win? Stories

The largest marketing campaign in the last 4 years is presently coming to an end.  And the winner?  Well, that will be decided when the polls start to close.  This campaign has been one of the largest in recent memory and we have seen more types of promotional methods used to reach the customer bases (voters).  Did it work?  Well, I think it did as in some areas over 40% of voters had already voted before the day of the election.  Some people were certainly doing something right.  

We did learn many new things from the election though, one of them is the importance of stories, and a credible one at that.  Seth Godin posted this on his blog and I wanted to add it:

Stories really matter. More than a billion dollars spent, two 'products' that have very different features, and yet, when people look back at the election they will remember mavericky winking. You can say that's trivial. I'll say that it's human nature. Your product doesn't have features that are more important than the 'features' being discussed in this election, yet, like most marketers, you're obsessed with them. Forget it. The story is what people respond to.

Stories are what drives marketing.  People respond to stories and the feelings that the stories brings out in people gives them the drive and motivation to go out and do what they do.  If you think about it, the stories from both parties this year were vivid and evoked some type of reaction on you.  If you did not feel the need to go and vote, the marketing did not work on you, or maybe it did adversely. 

As a business owner, look at what happened during the election.  The permission marketing, social media, and other new forms of marketing were the ones that starting making the difference.  Yet, some traditional methods were still seen or altered to be different.  Make sure that you are using all the marketing methods that you can to reach your customers.  All of the traditional methods are not as powerful as before, but still completely necessary.  Make sure to plan your marketing strategy accordingly.

Name the Business With the Search Process in Mind

The Duct Tape Marketing Blog had a great idea about picking a name for your business.  You can find it HERE.  He discusses when picking a name a should be to think of the marketing opportunities for Search Engion Optimization (SEO), Google, as well as marketability.  He mentioned that "Duct Tape Marketing" would be better than using his own name.  For me, "Hensel Consulting Group," would not be the best idea sincethey would not know how to search for me if they did not know who I am.

Here is what he said:

Today however, there are some other considerations that must be built into the business naming process.

1) Is the name or a reasonable substitute available as a domain name?
2) Does the name contain search engine friendly keywords?

With search becoming one of the primary ways that small business products and services are discovered, some thought must be given to maximizing a company name with that name’s search value in mind.

So think about how your customers search process.  Think of how their mind really works.  Think of them and not yourself.  I often say that one of the first big steps in a business is to finally do what the customer wants, and not what the owner really wants. 

The Status Quo No More!

A selection from Seth Godin's new book Tribes.

With a long enough crowbar, you can rip nails out of a board.  With a long enough teeter-totter, you can lift a sumo wrestler off the ground.  With enough leverage, you can change your company, your industry, and the world.  The levers just got longer (for everyone).  The Web and word of mouth and viruses and outsourcing and the long tail and the other factors involved in social media mean that everyone (every person, all six billion of us) has far more power than before.  The king and the status quo are in big trouble.

What are you going to do to ultimately get more and keep customers.  What was done in past may not work anymore because time has changed.  Challenge yourself, challenge your company, do what you can to be different and lead your company to the next level.  Try new things, use this new found leverage.  You can be just like the big companies if you try and stay consistent!  Go out and try new things, it is a new playing field!