Marketing Research for your Business

"Circumstances may cause interruptions and delays, but never lose sight of your goal. Prepare yourself in every way you can by increasing your knowledge and adding to your experience, so that you can make the most of opportunity when it occurs."
~Mario Andretti


Opening a business or expanding a product line is a big step, but so many people base this decision on their belief that there is demand or on affirmations from their friends and relatives that it is a great idea. However, your feelings or those of friends and relatives are not sufficient measures of future demand.

We were helping a very nice couple who wanted to start a pet store. The couple, who had many pets of their own, thought they would be well suited to operate a business like this, and their friends and relatives had encouraged them to move forward out of a desire to be supportive.

Despite their passion, we advised them against starting the business based on market conditions, but the couple decided to give it a shot anyway. Unfortunately, the business lasted only two years before the couple had to file for both personal and business bankruptcy.

About a year after the business closed, I ran into the couple at a restaurant and they wanted to talk. Their only real regret, they said, was that they did not do enough research on market demand in their area. In hindsight, it was clear that the market was already saturated with pet stores.

Collecting market data before moving forward with a new business venture or product line is so important. Generally speaking, doing your due diligence will decrease your chances of making wrong decisions based on insufficient information.

Marketing research comes with a price tag, but the expenditure will prove worthwhile in the end. Knowing the demand for your product or service allows you to accurately assess the viability of a business and limit your risk of failure.

When starting a business, most people generate a proforma income statement and rely on this statement to tell them whether the business will be successful. The impediment here is that the proforma income statement is driven by a sales forecast. If the forecast is not prepared correctly using valid data, the income statement will be inaccurate and viability can not be assured.

The best way to get the hard data necessary to generate an accurate sales forecast is by employing a marketing research firm. Information is such a valuable commodity when faced with these decisions and you need to make sure that you hire the best help you can afford.

There are many methodologies for obtaining actual demand information for a new product or service, but three key approaches are considered standard in the marketing research industry. The first of these is phone surveys of potential customers. A second method is the focus group, which typically produces high-quality results. With focus groups, you identify small groups of potential customers to participate in in-depth product analyses. The third standard method is conducting a survey of potential customers via mail or email.

Now before you undertake a new business venture or introduce a new product or service, make sure you use information obtained through marketing research so you are better able to ascertain future demand.

You can do this.

Twitter for your Business

There is a proliferation of neat new technologies businesses can use to communicate with their customers. As these numbers continue to grow, the problem becomes determining which technology to embrace. Twitter is one that has great potential to benefit businesses, particularly if their customer base is under 40 years of age.

When I was first introduced to Twitter, my initial impression was that everyone was making a big deal about nothing. In time however, I have come to see the value in it. This technology really can be effective and for most businesses, is worth a closer look.

For those who have not delved into this technology yet, Twitter allows users to post very short messages – less than 140 characters – called “tweets.” Tweets are also occasionally called “microblogs.”

On average, Twitter’s more than 200 million users generate 200 million tweets and 1.6 billion search inquires daily, and the number of users continues to grow exponentially. Businesses with a presence on Twitter can use the technology to maintain a dialog with their existing customers while accessing vast numbers of potential new customers at the same time.

A large furniture chain provides an example of a company that has had significant success on Twitter. The firm, who targets younger markets with their products, increased their sales by using Twitter to reach new potential customers. They invited 50 or so people with large Twitter followings to visit the store and tweet scripted messages to their followers. The firm kept track of how many times each tweet was passed on and rewarded the person that produced the most retweets. As a result of this effort, the company saw large numbers of new customers visiting the store.

I see a lot of companies using Twitter to promote themselves or drive people to their websites. In my opinion though, this is a far less effective method since people are looking for much more personal messages on Twitter. Tweets such as, “Come to Joe’s for great hot dogs,” just do not resonate in this medium. Personally, if I get too many of these self-serving tweets, I just stop following the company altogether so I do not hear from them anymore.

A far more valuable way to use Twitter is to listen in on what people are saying about your company or products. This can provide great insight into what your customers want and need. It can also be an early warning system clueing you in to potential problems so you can react before issues escalate. You can search for tweets about your company at http://twitter.com/#!/search-home.

Yet another effective use of Twitter is to invite feedback from your customers. Getting a dialog going about your company promotes your brand while providing valuable information about how you can improve your products and services.

Chris Brogan is one of the leading experts on Twitter. For entrepreneurs looking to venture into the world of Twitter and use it to its fullest advantage, Chris’ tweets can be very helpful. Follow him at http://twitter.com/#!/chrisbrogan.

Twitter is a great communication tool and it has a lot of potential for businesses who use it effectively. Del, Starbucks, Comcast and Best Buy are just a few examples of companies using Twitter very successfully, and you can check them out for some ideas and best practices. However, as with any new marketing venture, it is important that you consider how Twitter will fit into your company’s overall strategy. Twitter should not be a stand-alone effort. Your strategy should be to incorporate Twitter into a well-rounded, balanced marketing plan.

Now go out and see if Twitter is a viable option for your business. It may require that you spend some time researching how to use this tool effectively, but it will be well worth it in the end.

You can do this!

Protecting Your Business From Identity Fraud

"We can't solve problems by using the same kind of thinking we used when we created them.”~Albert Einstein

Managing staff is an entrepreneur’s most critical function. Some would argue that finances are more important, but I would suggest that if you do not have a great staff in place to get things done, your company will have little value.

Entrepreneurs frequently must deal with the issue of problem employees. A problem employee is not necessarily someone who is not productive. In fact, lately we have seen very good employees become problem employees.

For those wondering how it is possible that a good employee could become a problem, the answer is simple. An employee could be getting so much done but alienating the rest of the staff in the process.

Case in point, an employee at a high tech company was always able to get so much accomplished and, from that perspective, was a great member of the team. He consistently met his numbers and, at one point, was bringing in more revenue than many of his colleagues.

Despite his productivity however, all of his colleagues had lost respect for him because he had a very abusive management style. He went out of his way to tell his team how inferior they were, and in the rare occasions when he praised them, he would always follow it with a criticism. Of course, he thought he was being so clever that his fellow employees would not see how he was putting them down. On the contrary though, they saw right through this, and the morale of the team was deteriorating quickly. One by one, he began losing all the talented members of his team.

Despite the fact that the rest of the staff was constantly complaining about this individual, management refused to do anything about it. They were afraid he would leave and feared the business would suffer tremendously if he did.

When discontent reached a fever pitch however, management did finally agree to bring in an outside business coach for the problem employee. As it turned out though, all that did was give the employee more ammunition to say his coach said he was right and everyone else was wrong.

Obviously, this was a problem that had been festering for a long time. Management just chose to turn a blind eye to the situation and keep holding to the flawed hope that the issue would resolve itself.

Eventually, the high turnover and low morale started showing up in the numbers, and when business started dropping significantly, management finally had to acknowledge the problem. When three employees threatened to file a harassment suit, which would have cost the firm so much to defend, they were forced to take action.

In hopes of finding a resolution to this situation, the company brought in outside consultants. Their recommendation was to either let the problem employee go or move him to a place where he had absolutely no contact with the rest of the staff. They were also adamant that each manager should receive training in recognizing and responding to workplace harassment. It was also necessary that they work to ensure the channels of communications were open between employees and managers. As it was, staff was given the opportunity to express their concerns, but management was not listening to what they were saying. They just were not taking the complaints seriously enough.

After closely monitoring the situation for a period of time, the firm finally made the difficult decision to let the problem employee go. Though they initially feared that production would decrease, productivity actually improved since the rest of the staff now felt free to do their jobs.

Now go out and make sure you are not ignoring the problems an employee is causing just because they happen to be productive. The sooner you deal with this, the better.

You can do this.

Protecting Your Business From Identity Fraud

"To build may have to be the slow and laborious task of years. To destroy can be the thoughtless act of a single day." ~Sir Winston Churchill

So many business owners think that identity fraud only happens with individuals. Unfortunately, this is just not the case. The incidence of identity fraud involving businesses is increasing, and to complicate matters even further, state laws against stealing an individual’s identity are much more rigorous than those against stealing a business’s.

I see identity theft occur most often with businesses when employees are given a company credit card. It is so easy for a thief to get your card number and use it to make unauthorized purchases. This is why it is so critical that you go over your credit card statements regularly to ensure there are no fraudulent charges. Obviously, you do not want to leave that responsibility with the cardholder as it would be too easy to hide any abuse. It is always a good idea to have some checks and balances in place.

Where identity theft is concerned, prevention is key. One essential piece of avoiding theft and misuse of your information is changing your passwords every 45 to 90 days. You should always make sure the passwords you choose are complex by using a phrase to remember them. Changing passwords often can be a pain, but it is so important to protecting your financial information against unauthorized access.

Another good rule of thumb is to never send any identifying information at your bank’s request. There are numerous scams out there that do a very good job of disguising themselves as your financial institution. No matter how valid they seem, you must always verify with your bank that the information is legitimate.

Be so careful about how you use your wireless network. If your network is not protected, your information can be stolen so easily. You should never transfer sensitive information on a wireless or any other network without encrypting it first.

Free public wireless networks are one of the biggest potential dangers. Should a staff member use one of these public networks to either send or receive sensitive data, it could leave your company open to identity theft. This can happen so easily since most of these wireless hubs have no security. Before you can access them, you have to sign off that you understand the risks of using the network and agree not to hold the provider responsible in the event of a breach.

As an additional layer of protection, business owners should establish a call-back procedure with their financial institution. The bank will call the account owner to verify the transaction before any transfers are made, especially in the case of wires.

Another important practice is always shredding documents that contain your financial information. It is so easy for thieves to go through the trash and find your financial records. For me, shredding is kind of therapeutic. I like to hear that shredder going because I know that no one else will be able to access these documents. You should make sure you have a shredding policy in place, and it is not a bad idea to start moving toward a policy that prohibits hard copies of these records.

Another easy, but effective practice is turning off your PCs when you leave at night. Many businesses leave their machines on, which gives a hacker a lot of time to run password-breaking programs against their financial applications.

Finally, make sure that your virus checker and firewall are up to date and that all downloaded documents are checked for viruses or any other malware.

Now go and make sure you have a policy in place to ensure your business identity remains secure. These steps are absolutely critical if you want your business to continue to operate safely without falling victim to identity theft.

You can do this.

Not Saying No is So Important for Customer Service

"Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong." ~Donald Porter, V.P. British Airways

Customer service is so important to each and every business. If the service is great, your customers will keep coming back. If it is poor, they simply will not.

One important thing to remember is that the quality of the customer service you provide is not judged by you or your company. It is entirely about the customer’s perception. You must do everything in your power to ensure that the service rendered matches up with what the customer desires.

There probably is no better way to kill a service experience than using the word “no.” Sometimes “no” is disguised in phrases such as, “against company policy,” “we just cannot do that,” or “that is not permissible.”

Disguised or otherwise, “no” words destroy your business’ relationship with its customers because they stop the conversation and leave the customer with no choice but to walk out upset, vowing never to come back. Taking choice away from your customers is the death knell for repeat business.

If a customer comes in wanting to return an item and the clerk says the only way to accept the return is with a receipt, which the customer does not have, they will leave the store unhappy and probably not return. While intended to protect the business, this tightly framed return policy creates service experiences that customers perceive as negative and undermines the business’ ability to generate repeat sales.

Ironically, so many companies implement these rigid policies to keep from being taken advantage of to the detriment of their business. These “no” policies repel good, even great, customers who have simply lost their receipts. Where generating repeat business is a priority, a policy that undermines your ability to be successful is just not good business.

I recently bought a shirt at a store, and once I got it home, I found that it did not fit. Of course, when I went to return it, I had lost the receipt indicating how I had paid for it. Obviously, the store did not want to give me cash, but they offered me store credit instead.

The store credit alternative was absolutely fine with me. The key piece to note here is that the clerk did not say the store could not accept my return because of company policy. Rather, the clerk said they were delighted to accept my return and give me store credit to use on a future purchase of my choice.

Another person walked into a store and wanted to make an offer for an item rather than pay the printed price. The clerk told the customer that he could not take anything below the listed price. Ultimately, that may have been the appropriate response, but saying “no” should have been the absolute last resort.

The clerk could have been trained to explain the item’s value, what comparable prices are, and encourage the customer to pay retail. If that approach failed, the clerk should have been instructed to call in a manager.

I am certainly not saying that you should take less than retail if a customer comes in one day with a similar request. Rather, I am suggesting that the response should avoid using the word “no.” “No” stops all dialogue, and you want to keep the conversation with your customers going.

Now go out and make sure that your staff is trained to avoid using “no” and all its variations. The benefits will be huge and the cost minimal.

You can do this!

Capacity Is So Important When Considering Expansion

"The first requisite for success is the ability to apply your physical and mental energies to one problem incessantly without growing weary." ~Thomas Alva Edison

In today’s economy, so many businesses are looking into new markets and new products as a means of maintaining sales and profits. I have seen many businesses expand outside their geographical market or offer an entirely new product to their existing customer base.

While expansion is great, you must make sure that you have the capacity to deliver the new services or products. This may seem like a simple concept, but in reality, it is a very involved process.

We are working with a medical services business that wanted to expand their services to children. The market had very little competition and a very high profit potential, so on the surface, it appeared to be a wonderful opportunity.

Once we dove into the details, however, we discovered that the service could only be provided two hours of every business day because of school. With such a limited window of time, the firm would need a high volume of part-time help, which they were unable to find. Obviously, once this information came to light, they abandoned the proposition and began evaluating other areas where support resources were more readily available.

Another firm we are assisting wanted to begin offering a new product to its existing customer base. It was a product their customers needed and something they could easily provide.

Preliminary research showed their clients really liked the product and thought it was reasonably priced. Upon further research, we found that the firm’s sales would increase by $300,000 once they added the new product. So far, everything sounded great, and the firm was chomping at the bit to move forward.

However, the expansion did have some serious problems that we did not see when we were initially considering the proposal. First, in order to expand by $300,000, the firm’s accounts payable would have to increase by $50,000, and they would have to pay the manufacturer for the products before it could have them available for sale. Secondly, once they made a sale, it would be nearly 30 days before they would be able to collect payment from the customer.

The firm needed almost $100,000 to build up their inventory and support the accounts receivable increase. This was a problem for the firm since they were not going to be able to raise the equity, and financial institutions were not going to approve a loan. The firm quickly realized that, while the expansion seemed viable initially, the scheme just would not be feasible in implementation.

Each and every business needs to go out and look for expansion possibilities, but with any venture, you must make sure you have the capacity and resources necessary to ensure it will be viable and profitable.

You can do this!

Small Things You Can Do To Be A Better Manager!

"The productivity of work is not the responsibility of the worker but of the manager." ~Peter Drucker

Being a manager is tough, and every manager can use all the help they can get in this area. As is often the case, it is the little things that make the biggest difference in how your staff responds to you.

Effective communication with your staff is such a tenuous process and you want to make sure there are no obstructions. When talking with your employees, it is important that you do not sit behind your desk. A desk is a gigantic barrier that is both intimidating and nearly impossible to overcome.

A much better policy when communicating with staff is to come out from behind your desk and sit in chairs in front of it. By doing so, you remove the barrier between you so you can communicate without obstruction. It is a subtle gesture, but it goes a long way to improving your staff interactions. Some managers will have a table that they hold meetings around apart from their desk but I just like to sit face to face without any furniture in the way.

Another small adjustment to the way you communicate can help you become a better manager. Instead of just saying, “Jane, I would like to talk to you tomorrow at 10,” you should say, “Jane, can I talk to you at 10 about the status of project x?” Reason being, when you do not share the purpose of the meeting, the natural tendency of your staff is to assume it will be bad news, causing unnecessary anxiety.

That has certainly been my personal experience. In all my years in the workforce, meetings without a known agenda always caused me grief. I kept trying to figure out what my boss wanted to talk about, and I usually assumed I had screwed up in some way.

Just a simple statement about the meeting purpose alleviates the employee’s apprehension and makes a big difference in how they approach the meeting. In the short term, you will probably have a more productive meeting, and in the long term, you will strengthen your relationship with them.

I realize, however, there are times that you may not want to share the purpose of the meeting—if you have to let someone go, for instance. For great managers, these exceptions are limited in number.

The final relatively small thing you can do to improve your management skills and foster trust among your staff is to ask them regularly what you can do to be a better manager. Whether your staff responds to this or not—they most likely will not—asking the question tells them that you care about their concerns and are open to their suggestions.

I can personally attest to how effective this practice can be. When I have asked my staff, I rarely received any suggestions, but they frequently talked with their colleagues about how impressed they were with my sincerity and how they appreciated my asking for their input.

Now go out and look for the little things you can do to make you a better manager. Not talking to staff across a desk, sharing the purpose of meetings and asking how you can be a better manager are just a few simple ways to get started.

You can do this!