Increasing Prices for Mediocre Services

I read yesterday that the U.S. Postal Service wants to increase its rates.  Not only are they seeking to increase the cost of stamps by 2 cents, but they also want a 5.6% increase in standard mail rates.  What justification do they use for these proposed price increases?  They need money. 

I don't use the U.S. Postal Service very often these days.  There's just not much that they do better than their competitors.  If I'm sending something urgent, I use UPS or FedEx because they're faster and more reliable.  Anything I purchase online get sent to me via UPS or FedEx (usually) because large company accounts make it too convenient for online retailers not to use them.  I almost never mail a check anymore: it's all done instantly online.  Pretty much the only time I mail something is an occasional birthday card.

Instead of increasing rates for services that are increasingly unwanted, shouldn't the U.S. Postal Service try to find out what services their customers really do want?

Business Links

Like most American workers I'm off today as part of a three day holiday weekend, which fits quite nicely at the end of a week long vacation!  Anyway, for those who are at the office (or have set off all of their fireworks) I thought this would be a good time to post a few links from my Google Bookmarks stash.  Enjoy!

13 Essential Tips for Landing a Job on LinkedIn

How to Use Social Media for Competitive Intelligence

Differentiate Or Die: How To Survive The Competition

Which Smartphone is Better for Business?

There's a great article on pcworld.com that compares the upcoming iPhone 4's operating system, IOS4, with Android 2.2 to see which mobile OS is better suited for business users.  The quick comparison:

• Email: IOS4 

• Apps: draw

• Flash: Android 2.2

• Hotspot: Android 2.2

• Availability- IOS4

• Diversity: Android 2.2

• Management Tools: IOS4

Looks like it really depends on which tools are more important to you.  Be sure to check out the full article for a more detailed breakdown:  IOS4 v. Android 2.2: Which is Better for Business?

Memorial Day Links

Rather than write a full blog post I thought I'd share a couple of BizSugar articles I enjoyed reading this weekend.  Yes, it's kinda lazy on my part, but that's what 3 day weekends are for!  Seriously, both articles are well worth reading.  Enjoy!

Ten Great Lessons Learned from Business History: The 1970s Harley-Davidson/AMF Fiasco!

What's In A Name?

The Silo Effect

Every business, no matter how big or small, has three primary functions that are essential to it's success: operations (production and services), accounting, and marketing.  As a business grows other functions are established like customer service, human resources, shipping/receiving, and more.  These functions are usually grouped into departments, each with their own sets of concerns and procedures.

Departments often have trouble working together to achieve common goals.  The people in these different departments have been given objectives that sometimes conflict (marketing wants to improve quality; accounting wants to reduce costs).  This is called the silo effect, and it can destroy a company.  When something goes wrong in a business, many managers try to determine which department screwed up.  Often it's a failure in how the company processes its products, services, and information.

Blaming a department manager is easy; fixing the system is much harder.

Microsoft Joins Google In The Clouds

Today Microsoft will finally launch its newest software package, Office 2010.  One of the most highly anticipated features of this latest version of Office is the ability to store and share documents online, making collaboration easier.

While this may be a breakthrough for Microsoft users, Google Docs has offered this service since before most people knew what cloud computing was.  An article on CNNMoney.com shows a great comparison between the two offerings:

Check out the full article here: Google compares Office upgrade to Docs.  It's well worth reading.

Do We Really Own eBooks?

This week I read Seth Godin's Unleashing the SUPER Ideavirus on Vook.  I really enjoyed the material, and I absolutely loved experiencing the content as a blend of text, video, and hyperlinks.  This is my first time purchasing an eBook (I've read a few free pdfs) and it was an overwhelmingly positive experience.

But I still won't be buying eBooks.  Not yet anyway.  Many people in cyberspace have proclaimed the death of bookstores, but don't be too sure.  It may cost me more money to buy a paperback, but it's completely mine.  I can reread it as often as I want.  I can loan it to a friend.  I can give it away if I want.

eBooks are cheaper than physical books and more convenient to purchase.  Click a button and it's on the screen of your eReader in seconds.  You can still reread your books, unless you don't want to keep your current eReader.  What if you purchased Linchpin for your Kindle last fall?  Will you still use your Kindle when the iPad comes out?  What happens if you buy the iPad and something new comes out in a year?  Does all of the content you bought become worthless?

Last fall I bought Influence: The Psychology of Persuasion at a local Barnes and Noble.  Not long after I bought The 4-Hour Workweek from Amazon.com.  Barnes and Noble didn't make me give back Influence.  I still have it, and I've gone to it for reference at least once after reading it.

Until eBook sellers figure out how to let customers own the material they buy physical book will still have their share of buyers, including me.

Any avid eBook readers please feel free to comment!

Google Apps Marketplace- First Glance

This week Google launched its newest offering- the Google Apps Marketplace.  I'm a huge fan of all things Google (my apologies to all Apple fans), so naturally I'm excited about their app store.

Google Apps Marketplace provides a great opportunity for small businesses, both buyers and sellers. This article on TechCrunch does a great job of explaining the details, so I won't try to here.  Instead I'd like to highlight a few of the apps that caught my attention.

Google Calendar Time & Activity Report - FREE

Description

Add time and activity reporting to your Google Calendar.
Calculates and charts hours spent and amount and duration of different event types, for specific users, within a specific date range, etc.

• Connects to your Google Calendar data
• No software, no setup
• Easily manage time and people

 

Office In Cloud: Microsoft Office Integration for Google Docs

Description   

Office in Cloud for Google Docs is the first native and easy-to-use integration between Microsoft Office and Google Docs

• Cloud's tagging for personal documents
• Save/Open/Update/Merge Google Docs from MS Office
• Share documents with others with notifications

 

BatchBook Social CRM

Description 

BatchBook is a lightweight but powerful CRM that allows you to easily organize contacts, monitor social networks and track leads and deals.

• Integrates with other small business web apps
• Tracks contacts, communications and tasks
• Highly customizable; custom fields and reporting

 

OnState Virtual Call Center for Google Apps

Description 

Firmly at the crossroads of Google and SaaS, OnState is a true hardware-free call center and ACD that enables full customer collaboration when paired with Google Apps.

• Unified communications across voice, video, chat
• Combine Google, Salesforce, SIP, and others
• Ensure the right team members are reached

 

Google Analytics Dimension Analyzer - FREE

Description 

Identify and analyze top landing pages, campaigns, keywords, etc. by any metric, e.g. top landing pages by conversions, top traffic sources by new visitors, etc. No setup, runs on your live data.

• Connects to your live Google Analytics data
• Easily identify top performers across dimensions
• No software, no setup

Has anyone else looked at or purchased any of the apps?  Feel free to comment.

The Joy (and Pain) of Social Networking

I've been increasing my online presence this year, and it's going quite well.  I've made friends on Facebook.  I've connected with colleagues on LinkedIn.  I have a few of tweeps on Twitter.  I have a handful or regulars that read this blog (thank you, by the way).  Recently I started a website and a Facebook fan page.  I've enjoyed it much more  than I'd expected.  I love reading tweets from @iannarino, blog posts from Seth Godin, and status updates from my friend Tracey. 

There have been a few people along the way that make the experience less enjoyable, particularly on twitter.  You know who I mean: the people who follow your tweets hoping that you'll follow theirs.  The ones that send a personalized message that is clearly scripted.  Those who send several updates a day with a link to their website hoping to drive traffic.  I quickly remove them from my contacts, but in doing so I usually notice something disturbing: they have thousands of followers!  Thousands of people who are bombarded with spam from their "friends" because they are trying to make new contacts.

I'm currently following 6 people on twitter.  Only 6.  But I find them all interesting, and I enjoy getting new tweets.  I only have 34 friends on Facebook.  But I know most of them personally, and I love seeing how life is treating each of them.  I follow 15 blogs, and I look forward to new posts appearing in my reader (a list of the blogs I currently follow is on the home page). 

I purposely keep all of my social networks small so I can manage them.  I keep them small so I can be more social.

Startup Advice In Exactly Three Words

I was browsing discussion topics and news items posted in my Linked-In groups yesterday and this article caught my eye:

http://onstartups.com/tabid/3339/bid/11539/Startup-Advice-In-Exactly-Three-Words-StartupTriplets.aspx

It's a collection of 50 pieces of advice for start-ups, all of them three words (as the title suggests).  I think it's worth a look.  Some of my favorites:

• Defer renting space.
• Sell something today.
• Respect your competitors. 
• Cancel unnecessary meetings.

My least favorite:

• Avoid business plans.

Check it out and see if any are right for your business.

Small Business Use of Social Media Increases

A recent survey by the University of Maryland’s Smith School of Business showed that the rate at which small businesses are using social media doubled from 2008 to 2009 (12% to 24%).  There's a great article about it posted here on Mashable and another here on Marketing Pilgrim.

As this graphic suggests most small businesses that are using social media use Facebook and LinkedIn.  Twitter usage is relatively small, even smaller than blogging. 

Interestingly 50% of small businesses complained that using social media takes more time than they expected.  17% believe social media gives customers an forum for complaining, and 6% believe social media has hurt their business's image.

The main takeaway from this data: Social Media is a great resource for small businesses, but it isn't magical.  Any marketing campaign takes effort and planning, and that includes social media.

Clients Don't Want Advice, They Want Results

In doing some research this weekend (the not so glamorous life of an MBA student) I came across an interesting bit of information about strategic consulting:

Recent trends have shown clients to be tired of strategy in itself.  They have become increasingly sophisticated consumers of strategy consulting services, and are looking for results that can be implemented quickly.  Clients have become more results-driven with the result being a greater desire for compensation to consultants being tied to these results.

The above is from the Business and Company Resource Center, a proprietary database that I can't paste a link to (check out your local library for access).  It's a short excerpt from a much broader industry analysis, but I think it makes two notable points:

•  Clients want to be able to implement changes quickly.  They have a problem, and they want to hire someone to fix it ASAP.

• Clients are more inclined to hire a consulting firm whose compensation is based on achievement of predetermined goals. 

Both of these points can be good for clients.  They force the client and consultant to determine what their objectives are up front, and they ensure that incentives are aligned accordingly.

However, both of these points have their drawbacks.  Being held to a rigid time-line and agenda limit a consulting firm's ability to advise.  Consultants that are paid to complete a specific task will complete it, even if it is not in the client's best interest.

Should Companies Focus on New or Existing Customers?

I've read two very interesting articles this week about customer focus:

In Keep Those Customers! on Inc.com Howard Greenstein says that companies focus so much of their energies on obtaining new customers that they ignore the customers they already have.  Christopher Penn, Vice President, Strategy and Innovation at Blue Sky Factory Email Marketing, quantifies this perspective:

A good marketer in general can move 10% of the attention they create into qualified leads. With good customer retention, good service, good product, you have a huge amount of control about keeping your customers. They’re yours to lose.

Not everyone agrees.  In Dear Catalog CEOs: New Customers, Kevin Hillstrom at MineThatData.com points out that no matter how customer-centric your company is there will always be customer turnover.  He addresses the idea of building customer loyalty directly:

If there were easy ways to increase customer loyalty, everybody would be doing it and loyalty would dramatically improve and the economy wouldn't be a mess, right?

His suggestion: "Focus a disproportionate amount of time and energy on finding new customers."  His point is that there are far more ways for companies to acquire new customers than ways for them to improve their customer retention rates.

A successful company should strive to both earn new customers and to please existing customers, but often resources are spread thin.  Which should be the priority?  Should companies give the majority of their focus to existing customer relationships or to creating new customers?

Do Meetings Have to be Boring?

I've mentioned previously how frustrated I get with meetings, and I know I'm certainly not alone.  I spent most of my afternoon today in an especially dull one.  There were four or five different presenters, many of whom repeated things that had already been said.  Everyone read from Powerpoint slides.  It was painful.

I wanted to write a few thoughts on how to make meetings less torturous, but unfortunately my brain has shut down for the day.  Luckily I found some posts that present some great ideas:
Make Meetings Fun
How To Make Meetings Less Boring, Super-Soakers Included

I don't recommend trying anything from this post, but if you do please let me know :)
Tricks to Liven up a Meeting

Tiger's Apology Is Too Little, Too Late

I have tried my best to ignore everything about the Tiger Woods scandal.  His personal life is of no interest to me, and frankly I'm sick of hearing about it.  That being said, I had to watch his recent apology to see how he handled it.  If you haven't seen it yet check out the video:

http://www.youtube.com/watch?v=Xs8nseNP4s0

I'm not sure many people watching will view his apology as sincere.  Why did he wait for 3 months to issue an apology?  Did he think it would blow over?  Did he think people would just forget about it?  He had an opportunity to speak up early on (he did vaguely apologize for his "transgressions" on December 2nd) but this press conference only took place after he lost several sponsors. 

Businesses tend to make this same critical mistake.  They often try to salvage their image by denying any wrongdoing:

Ford and Firestone blame each other for deadly tires

Occasionally companies do it the right way:

Tylenol's quick recall causes only slight dip in stock prices

Don't wait for the public to demand an apology.  Once a mistake has been made get in front of it as quickly as possible.  Accept full, unconditional responsibility.  Apologize.  Then perhaps you can move forward.

Keep Yourself and Your Employees Well Informed

One of the things I like most about small businesses is that they can be much more flexible than larger companies.  There are fewer layers of management to convince, no board of directors or shareholders to placate, and far fewer regulations to consider.  Because of this fewer resources are wasted on generating mountains of reports and a never-ending series of meetings.

But some reports and meetings exist for practical purposes.  All companies need to have insight into their business.  Every business should be able to answer some basic questions:

• Are we making a profit?  
• If we are not yet profitable are we doing the right things to become profitable?
• Do we have enough available cash to run our business?
• What are the amounts in our Accounts Payable?
• What are the amounts in our Accounts Receivable?

There are countless other questions that should be asked regularly.  Most large businesses so this automatically as part of their month end closing process, and small businesses should do the same.  It is important to do this every month to catch problems early and ensure that the company is moving in a productive direction.

It's equally important to make sure everyone in your company knows how the business is doing.  While you don't necessarily want all employees to have full access to your financials (unless you have an open-book management policy), make an effort to let everyone know about your successes and failures.  A quarterly or semi-annual meeting with everyone is a great way to keep employees informed, and it can also be an forum to receive valuable feedback.

Social Media Isn't a Substitute for a Marketing Plan

I found a couple of articles online regarding social media for small businesses:

http://www.businessweek.com/smallbiz/content/jan2009/sb20090116_666697.htm

http://www.reuters.com/article/idUSTRE59759L20091008

The Business Week article explains that social media is a great tool for small businesses because it's a great way to reach a large audience for free.  The Reuters piece, however, suggests that 75% of small businesses don't find social media at all helpful in their business.  The article quotes Maria Veltre, executive vice president of Citi's Small Business segment:

"What this survey indicates to us is small businesses are very, very focused on running their business and on generating sales and managing their cash flow and doing the things that are really important, especially in these economic times," Veltre said. "I don't think quite yet the social media piece of it has proven to be as significant."

I think both articles are right.  Social media presents an incredible opportunity for small businesses, but it has to be based on a solid marketing plan.  And any social media used must be consistent with that marketing plan.  Creating several accounts with differing messages (or forgetting to update them) won't help your business.  It might actually hurt it.

Charging a Premium

There's an Irish pub I used to frequent when I was an undergrad.  One day I glanced at the drink list above the bar and was surprised to find that an Irish Car Bomb cost $10.  That's expensive!  Curious, I asked the bartender why one drink cost so much more than everything else they offered (most drinks were $5-$6).  I expected him to tell they were bigger than usual, they used a special blend of whiskey, something that justified the high price.  He told me the real reason: "We don't like to make them."  Wow.  I didn't see that one coming.

Years later it makes perfect sense to me.  Sometimes a client asks for a service you'd rather not provide.  Rather than turning business away (especially if you want repeat business) charge a premium.  If they decide you're price is too high, great: you didn't want to do it anyway.  And if they accept your price you make extra money.  Good news either way!

Specialize Your Business

Many small businesses make the mistake of trying to sell their products and services to everyone.  It makes sense at first: selling to more customers means more money, right?  Not necessarily.  Different customers want different things, and it is extremely rare for one good or service to satisfy everyone's needs. 

Take television, for example.  Back in the old days there were three networks: NBC, ABC, and CBS.  They all produced similar programming choices (local news, half hour sitcoms, one hour dramas, etc.).  A particularly successful show could most American households to watch on a regular basis.  Today, however, there are too many viewing choices to count including newer broadcast networks like Fox and CW, cable, premium cable, satellite television channels, and the internet.  Many of these networks are highly specialized like themed networks (i.e. Comedy Central or the Travel Channel).  The internet is ultra specialized and consumers can find exactly what they want, when they want it. 

The Lifetime Channel does not show James Bond movies.  The Food Network doesn't air Nascar races.  They stick to what they're good at.  That's just smart business.

It's All in The Way You Package Things

Many companies try to sell additional products and services to their existing customer base.  This can be a great opportunity to strengthen an existing relationship, but if done wrong it can alienate great customers. 

Since buying my house a few years ago I have used the same lawn care service to fertilize my lawn, spray for weeds, and spray for insects.  I've always been satisfied with their services, and last spring when I hired them to trim my trees and bushes they did a wonderful job.  Despite these positive experiences they nearly lost my business.

Last summer I began receiving "up-sell" calls trying to get me to purchase extra treatments, weather-proofing, and whatever else they could offer.  The calls came regularly enough that I recognized the phone number when they called.  One day in November I received a call from a representative telling me about a new de-icing product they were offering as an alternative to rock salt.  The rep suggested that if I wanted to buy the product they could drop it off when they came out to winterize my lawn the following week.  I declined, and he thanked me anyway and said they would see me the following week.

A couple of minutes after the call I realized that I had been conned: I hadn't previously scheduled the treatment, and this guy just tricked me into accepting a service I didn't want!  I called the company's main number and canceled the treatment.  I told the woman who answered how angry I was that they tried to dupe me and that I wanted to cancel all of their services.  She apologized profusely and offered me a discount on my first few treatments next year if I would stay with the service.  She also assured me that they would put an end to the constant phone calls.  I grudgingly agreed and that was the end of it.

A few weeks ago I came home from work and found a package of ice-melter from the company with a note asking me to accept it as a thank you for being a customer.  I like that.  I just used it on my driveway last night, and if it works well enough I may consider purchasing some in the future.  It's nice to be treated like a customer rather than a target.