“A mediocre idea that guarantees enthusiasm will go further than a great idea that inspires no one.” ~Mary Kay Ash
Where formerly sign wavers were found exclusively at residential subdivision open houses and on car lots, now they are everywhere! In fact, it is hard to go down the road without seeing two or three of them trying to catch your attention by tossing a business’ sign around.
One of the earliest adopters of this marketing tactic was Liberty Tax Service. Liberty had to do something to solicit business from H&R Block, and their solution was a sign waver dressed in a Statue of Liberty costume.
AArow Advertising, a leading sign waving company, was started by two young entrepreneurs who were formerly sign wavers in 2002. They now have over 500 employees and are franchising their operation internationally. When training their new employees, AArow emphasizes the importance of eye contact and a grin.
So why would a company hire a sign waver? Simply put, they work. Where it is easy to lose a company’s sign in a sea of static signage, a moving object attracts attention.
Sign wavers are useful when you are announcing a sale, promotion or special, are particularly beneficial with grand openings, and can be employed at tradeshows and political events. Probably some of the most common users of sign wavers are the shops that buy and sell gold. Many, if not all, of these establishments have sign wavers out seemingly 24 hours a day.
In addition, businesses that suffer from a less-than-prime location can use sign wavers to help overcome the challenge of an obscured storefront. For example, a business located on a side street or the rear of a shopping center can station a sign waver on a main street for added visibility.
For those who would ask if a sign waver is truly an effective form of advertising, I would say yes. The higher your gross margin, the more attractive a tactic it is. And, where the cost can range anywhere from $30 to $75 an hour, depending on the effectiveness of the waver, many restaurants report that sign wavers bring in 10 new customers for every hour they are deployed.
But should sign wavers replace your existing advertising? An emphatic no. Sign wavers are simply one more arrow in the quiver of tools you can use to help market your business.
For the greatest results, sign wavers should drive traffic to a specific location and should be placed where there is a large volume of passing traffic.
Right now, many governments are considering eliminating sign wavers, or at the very least, imposing some pretty steep restrictions on the activity. The city of Delray Beach, Fla., for example, has prohibited sign wavers on public property, which normally includes sidewalks. My opinion on this is governments should not be allowed to affect our freedom of speech, per the U.S. Constitution. After all, just look at all the sign wavers used during political campaigns.
Now go out and evaluate if sign wavers are a tactic that can make sense for your business. Sometimes the best way to find out of something works or does not is simply to try it for a day or two and see what you get.
You can do this.
Sunday, January 29, 2012
Sunday, January 22, 2012
Look at your Leading Customer
“Whatever words we utter should be chosen with care, for people will hear them and be influenced by them for good or evil.”~ Siddhartha Gautama or Buddha (563-483 B.C.)
One thing that each entrepreneur should consider is the demographics of its leading customers. Knowing and understanding who your best customers are will enable you to find and attract more great customers like them.
We are working with one firm that thought its best customers had incomes in excess of $250,000 per year. They aimed all of their advertising at this demographic, and the firm was doing okay. However, upon further analysis, they discovered that their best customers actually had incomes between $100,000 and $150,000 per year. Following this revelation, they changed their advertising to target the new group, and their sales increased.
Another firm that we were assisting discovered that, while men made the actual purchase, their spouses had a powerful impact on the decision. As a result of this process,the firm learned to pay more attention to the person who influences the decision, and using this information, brought a softer edge to their advertising.
After conducting a thorough analysis of its customer base, another business found that its best customers took advantage of their sales much more frequently than any others. As a result, the firm geared its advertising to this group, targeting them with direct mail and personal calls to remind them of the sales the business was having.
It is so important that you analyze all of your customers’ habits, particularly those who account for a large share of your sales. To conduct this type of study, you will need to sort through your customer base and pick out those who account for the highest volume of sales. From these, select approximately 30 to analyze.
Once you have identified this group, you can use surveys or phone interviews to figure out the commonalities that exist among these customers. While the commonality might not be obvious at first blush, in most cases, it can be ascertained by combing through the data and looking for similarities. If you do not find any on the first pass, you should check to make sure that your questions are structured correctly.
Now go out and start collecting data from your best customers that you can analyze for commonalities and use to help develop more targeted and productive advertising.
You can do this.
One thing that each entrepreneur should consider is the demographics of its leading customers. Knowing and understanding who your best customers are will enable you to find and attract more great customers like them.
We are working with one firm that thought its best customers had incomes in excess of $250,000 per year. They aimed all of their advertising at this demographic, and the firm was doing okay. However, upon further analysis, they discovered that their best customers actually had incomes between $100,000 and $150,000 per year. Following this revelation, they changed their advertising to target the new group, and their sales increased.
Another firm that we were assisting discovered that, while men made the actual purchase, their spouses had a powerful impact on the decision. As a result of this process,the firm learned to pay more attention to the person who influences the decision, and using this information, brought a softer edge to their advertising.
After conducting a thorough analysis of its customer base, another business found that its best customers took advantage of their sales much more frequently than any others. As a result, the firm geared its advertising to this group, targeting them with direct mail and personal calls to remind them of the sales the business was having.
It is so important that you analyze all of your customers’ habits, particularly those who account for a large share of your sales. To conduct this type of study, you will need to sort through your customer base and pick out those who account for the highest volume of sales. From these, select approximately 30 to analyze.
Once you have identified this group, you can use surveys or phone interviews to figure out the commonalities that exist among these customers. While the commonality might not be obvious at first blush, in most cases, it can be ascertained by combing through the data and looking for similarities. If you do not find any on the first pass, you should check to make sure that your questions are structured correctly.
Now go out and start collecting data from your best customers that you can analyze for commonalities and use to help develop more targeted and productive advertising.
You can do this.
Sunday, January 15, 2012
Promoting from Within.
“Promotion should not be more important than accomplishment, or avoiding instability more important than taking the right risk.” ~Peter F. Drucker
Clearly every business wants to demonstrate loyalty to its existing staff by promoting from within. However, this just is not always the best policy.
Too often, I have seen small businesses promote their best salesperson into the sales manager’s position, and so many times, this turns out to be a disaster. This rarely works out since the skills the employee has mastered as a salesperson are so different from those needed to be a great sales manager.
Salespeople are normally in control of their own destiny and do not necessarily have any management skills. Their method is to form a relationship with a client and then close the sale. These skills just do not translate to the role of a manager.
Assuming the responsibility of a manager means they must shift emphasis from “my sales” to “the group’s sales.” Managers must also be accountable for motivating and enabling the team to sell more.
In addition to disparate skill requirements, staff perceptions can be an added complication of promoting from within. The staff naturally sees each salesperson as more-or-less equal, but an internal promotion elevates one employee above the others, which can be a hard situation for your staff to buy into. A person who was once their contemporary and friend is now their boss, and an abrupt change in positions like this can cause frustration and anguish among your staff.
Many years ago, I served in the Air Force Reserve during the Vietnam Conflict. I joined the Reserves out of college – Georgia Tech (I just had to put that in) – and even with a degree in engineering, no firm was willing to hire me since they knew I could be drafted at any moment. Because of this, I joined the Air Force Reserves as an enlisted man.
During my third year of service, I was selected to receive a direct commission as a second lieutenant. I did not have to complete Officer Candidate School or any other training program, which means one day I was an airman second class, and the next day I was a second lieutenant. Though I was elated about now being an officer, the commission came with a few unpleasant issues.
Prior to the promotion, I was an equal with just about every enlisted member of our squadron. We worked together, went to summer camp together and complained about our officers together. This promotion, however, elevated me above all enlisted men, meaning those who used to be on equal rank with me now had to salute me and treat me with deference. Even after seven more years as an officer, many of my former fellow airmen never accepted that I was now their boss or respected the fact that I was an officer.
After everything I have seen and personally experienced, I really believe the military and businesses should make sure that when promoting from within, the new manager does not supervise any of his or her former colleagues whenever possible. This will ease the new manager’s transition in so many ways.
There may be cases, however, when the promoted employee will have no choice but to supervise their former colleagues. In these instances, it is key that you ensure the new manager has the skills required to assume the job as soon as possible.
Sending the new manager off to school after announcing the promotion is not a bad way to handle a situation like this. The time the manager is away will act as a buffer, allowing the team an opportunity to wrap their heads around the change.
If schooling is not possible or necessary, the CEO should attend a meeting called by the new manager. The CEO’s role during this gathering will be to express their support for the new manager and reassure the staff that they will be a great leader. Before concluding the meeting, the CEO should also invite employees to come talk to them if they have any concerns about the change.
Now go out and make sure you have a plan in place for internal promotions. Remember, in the event you have to promote a staff member into a management position, you will avoid much of the turmoil if the new manager does not supervise anyone from his or her old team.
You can do this.
Clearly every business wants to demonstrate loyalty to its existing staff by promoting from within. However, this just is not always the best policy.
Too often, I have seen small businesses promote their best salesperson into the sales manager’s position, and so many times, this turns out to be a disaster. This rarely works out since the skills the employee has mastered as a salesperson are so different from those needed to be a great sales manager.
Salespeople are normally in control of their own destiny and do not necessarily have any management skills. Their method is to form a relationship with a client and then close the sale. These skills just do not translate to the role of a manager.
Assuming the responsibility of a manager means they must shift emphasis from “my sales” to “the group’s sales.” Managers must also be accountable for motivating and enabling the team to sell more.
In addition to disparate skill requirements, staff perceptions can be an added complication of promoting from within. The staff naturally sees each salesperson as more-or-less equal, but an internal promotion elevates one employee above the others, which can be a hard situation for your staff to buy into. A person who was once their contemporary and friend is now their boss, and an abrupt change in positions like this can cause frustration and anguish among your staff.
Many years ago, I served in the Air Force Reserve during the Vietnam Conflict. I joined the Reserves out of college – Georgia Tech (I just had to put that in) – and even with a degree in engineering, no firm was willing to hire me since they knew I could be drafted at any moment. Because of this, I joined the Air Force Reserves as an enlisted man.
During my third year of service, I was selected to receive a direct commission as a second lieutenant. I did not have to complete Officer Candidate School or any other training program, which means one day I was an airman second class, and the next day I was a second lieutenant. Though I was elated about now being an officer, the commission came with a few unpleasant issues.
Prior to the promotion, I was an equal with just about every enlisted member of our squadron. We worked together, went to summer camp together and complained about our officers together. This promotion, however, elevated me above all enlisted men, meaning those who used to be on equal rank with me now had to salute me and treat me with deference. Even after seven more years as an officer, many of my former fellow airmen never accepted that I was now their boss or respected the fact that I was an officer.
After everything I have seen and personally experienced, I really believe the military and businesses should make sure that when promoting from within, the new manager does not supervise any of his or her former colleagues whenever possible. This will ease the new manager’s transition in so many ways.
There may be cases, however, when the promoted employee will have no choice but to supervise their former colleagues. In these instances, it is key that you ensure the new manager has the skills required to assume the job as soon as possible.
Sending the new manager off to school after announcing the promotion is not a bad way to handle a situation like this. The time the manager is away will act as a buffer, allowing the team an opportunity to wrap their heads around the change.
If schooling is not possible or necessary, the CEO should attend a meeting called by the new manager. The CEO’s role during this gathering will be to express their support for the new manager and reassure the staff that they will be a great leader. Before concluding the meeting, the CEO should also invite employees to come talk to them if they have any concerns about the change.
Now go out and make sure you have a plan in place for internal promotions. Remember, in the event you have to promote a staff member into a management position, you will avoid much of the turmoil if the new manager does not supervise anyone from his or her old team.
You can do this.
Sunday, January 8, 2012
Pricing Your Products or Services
“What is a cynic? A man who knows the price of everything and the value of nothing.” ~Oscar Wilde
Pricing your products or services in a way that encourages sales is so important to each and every business. You spend so much on advertising and promoting your products or services to bring customers in the door, and pricing is the way you close the sale once they arrive. After all, you can have great advertising and great products or services, but if your pricing is wrong, you will just not make the sales you need.
Is there an optimal pricing strategy? No. Pricing is one of those things that you have to fine tune as you go. Normally, the narrower your gross margin, the less able you will be to reduce your prices, meaning you will need to compete on everything else without giving on price. However, if the gross margin on an item is 50 percent, you might be more amenable to reducing prices as you have this padding built in.
It is easy to increase sales if you keep prices very low, but doing so will destroy your profits and cause your business to fail. On the other hand, prices set too high will destroy profits as well since no one will choose to spend more on the same product. The key to a strong pricing strategy is finding a price that is neither too high nor too low, but fair from the customer’s viewpoint.
Does this mean you should not give on price? My thought is if a great customer comes to you with a price from a competitor, you might have to reduce your prices to preserve the relationship. However, this should be the exception rather than the rule.
One method of retaining your margins through pricing is to make sure that your prices cannot be compared to your competitors. For example, financial institutions frequently make it so consumers cannot compare CD rates by selecting unique days the CD matures (e.g. 11 months and five days).
Lately, I have noticed a trend among drug stores and clothing retailers. They keep the same merchandise in stock but re-price many of their products every week, making it hard for the consumer to remember the actual price of the item.
One large clothing store does this so effectively that every time you walk in, you feel as if it is brand new inventory. In reality, though, it has just been re-priced so that it feels new.
The problem with competing on price is that you attract only those customers that are interested in the lowest cost without regard for all of the other services you bring to the table. If they are shopping just for the best price, they will not be loyal to you, and in a heart beat, they will flip to the next vendor who offers a cheaper price.
For most small businesses, pricing should be the last component you compete on. Rather than price, you should try to compete on service, ambiance or quality. The more you can convince the customer that your products or services are unique, the less you have to compete on price.
Now go out and look at your pricing strategy for each of your products or services to ensure that you are charging and receiving a fair price.
You can do this.
Pricing your products or services in a way that encourages sales is so important to each and every business. You spend so much on advertising and promoting your products or services to bring customers in the door, and pricing is the way you close the sale once they arrive. After all, you can have great advertising and great products or services, but if your pricing is wrong, you will just not make the sales you need.
Is there an optimal pricing strategy? No. Pricing is one of those things that you have to fine tune as you go. Normally, the narrower your gross margin, the less able you will be to reduce your prices, meaning you will need to compete on everything else without giving on price. However, if the gross margin on an item is 50 percent, you might be more amenable to reducing prices as you have this padding built in.
It is easy to increase sales if you keep prices very low, but doing so will destroy your profits and cause your business to fail. On the other hand, prices set too high will destroy profits as well since no one will choose to spend more on the same product. The key to a strong pricing strategy is finding a price that is neither too high nor too low, but fair from the customer’s viewpoint.
Does this mean you should not give on price? My thought is if a great customer comes to you with a price from a competitor, you might have to reduce your prices to preserve the relationship. However, this should be the exception rather than the rule.
One method of retaining your margins through pricing is to make sure that your prices cannot be compared to your competitors. For example, financial institutions frequently make it so consumers cannot compare CD rates by selecting unique days the CD matures (e.g. 11 months and five days).
Lately, I have noticed a trend among drug stores and clothing retailers. They keep the same merchandise in stock but re-price many of their products every week, making it hard for the consumer to remember the actual price of the item.
One large clothing store does this so effectively that every time you walk in, you feel as if it is brand new inventory. In reality, though, it has just been re-priced so that it feels new.
The problem with competing on price is that you attract only those customers that are interested in the lowest cost without regard for all of the other services you bring to the table. If they are shopping just for the best price, they will not be loyal to you, and in a heart beat, they will flip to the next vendor who offers a cheaper price.
For most small businesses, pricing should be the last component you compete on. Rather than price, you should try to compete on service, ambiance or quality. The more you can convince the customer that your products or services are unique, the less you have to compete on price.
Now go out and look at your pricing strategy for each of your products or services to ensure that you are charging and receiving a fair price.
You can do this.
Sunday, January 1, 2012
Resolutions for 2012
"Be always at war with your vices, at peace with your neighbors, and let each New Year find you a better man." ~Benjamin Franklin
The older I get – "better," as some would say – the years seem to pass faster and faster, and it is always so hard for me to believe that another year is behind us. However, no matter what your age or occupation, the New Year presents a wonderful opportunity to begin anew.
New Year's resolutions are a great way to kick off a new year, and this year, I would like to share a few of my hopes and resolutions for every business owner:
I hope each of you continues to show growth and improvement in profitability during 2012.
As the unemployment rate continues to fall and more people return to gainful employment, the economy will continue to improve.
Every business owner should make a commitment this year to ensuring that each employee feels like an appreciated and valued member of your team.
Consider reading a new business book every month. If you do not have time to read, an audible edition works just as well. This is an alternative I often use.
Make a commitment to replacing marginal workers with the best staff you can find. As part of this resolution, recognize that the sooner you remove a poor employee from among your ranks, the better your business's morale will be.
Start developing plans for an exit strategy knowing that you will not be at the helm of your business forever. The sooner you have a concrete plan in place, the more content both you and your spouse will be.
Make a commitment this year to having better balance among work, family and spiritual pursuits. After all, no one on their deathbed ever wished they had worked more. Life is just too short not to enjoy more of it.
Consider getting involved with a non-profit organization beyond just providing monetary support. Go out and help however you can. Many non-profits are on thin ice and need so much guidance. Helping others will make you a better leader and a better person.
Eat right and exercise every day to ensure you stay healthy this year. I promise you, the better care you take of your body, the better you will feel and the more productive you will be.
Finally, do your best to reduce your stress level by eliminating as many interruptions in your day as you can. Nothing kills your productivity or increases your stress level more than dealing with interruption after interruption.
Depending on your business's individual circumstances, you may not be able to apply all these resolutions, but please consider making a commitment to at least three of them. Identify monthly goals and track your achievements to help invigorate yourself as the year progresses.
You can do this!
The older I get – "better," as some would say – the years seem to pass faster and faster, and it is always so hard for me to believe that another year is behind us. However, no matter what your age or occupation, the New Year presents a wonderful opportunity to begin anew.
New Year's resolutions are a great way to kick off a new year, and this year, I would like to share a few of my hopes and resolutions for every business owner:
I hope each of you continues to show growth and improvement in profitability during 2012.
As the unemployment rate continues to fall and more people return to gainful employment, the economy will continue to improve.
Every business owner should make a commitment this year to ensuring that each employee feels like an appreciated and valued member of your team.
Consider reading a new business book every month. If you do not have time to read, an audible edition works just as well. This is an alternative I often use.
Make a commitment to replacing marginal workers with the best staff you can find. As part of this resolution, recognize that the sooner you remove a poor employee from among your ranks, the better your business's morale will be.
Start developing plans for an exit strategy knowing that you will not be at the helm of your business forever. The sooner you have a concrete plan in place, the more content both you and your spouse will be.
Make a commitment this year to having better balance among work, family and spiritual pursuits. After all, no one on their deathbed ever wished they had worked more. Life is just too short not to enjoy more of it.
Consider getting involved with a non-profit organization beyond just providing monetary support. Go out and help however you can. Many non-profits are on thin ice and need so much guidance. Helping others will make you a better leader and a better person.
Eat right and exercise every day to ensure you stay healthy this year. I promise you, the better care you take of your body, the better you will feel and the more productive you will be.
Finally, do your best to reduce your stress level by eliminating as many interruptions in your day as you can. Nothing kills your productivity or increases your stress level more than dealing with interruption after interruption.
Depending on your business's individual circumstances, you may not be able to apply all these resolutions, but please consider making a commitment to at least three of them. Identify monthly goals and track your achievements to help invigorate yourself as the year progresses.
You can do this!
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