Category Archives: Business

How to Increase The Lifetime Value of Your Customers

Do you know what the lifetime value of your customers is? If you haven’t heard of it, then it’s time to start learning. Knowing how to manipulate and increase this value can make all the difference between the ultimate success or failure of your business.

dollar-signAccording to a recent Marketing Metrics study, the probability of successfully selling a product to your existing customers is around 60 to 70%, while the probability of selling to a new customer is only 5% to 20%.  It is thus more likely that you’ll be successful re-marketing your products to existing customers than it is trying to gain new ones. Existing customers have already demonstrated their interest in your products or services and are already engaged with your brand. Moreover, you probably already have crucial customer data to work with, such as contact information and buyer history, that you can pair up with your product/service life cycle and industry trends.

If you know how to actualize this potential source of sales, you can uncover a very lucrative goldmine. This process begins and ends with your customer’s lifetime value, or the prediction of the net profit attributed to the entire future relationship you will have with a customer. Knowing how to calculate your customer’s lifetime value (LTV) is thus a vital measurement of your business’ health and a predictor of long term success. But, it doesn’t stop there. You also need to know how to act on this information

To see the LTV equation in action, check out this great infographic over at Kissmetrics that attempts to break down the lifetime value of a Starbucks customer and how this may affect their business decisions.

So, how can you improve the LTV within your own business? Here are three areas to consider:

1. What is the current level of customer satisfaction? In order to increase your LTV, you need to be focused on customer retention, and this means your customer satisfaction has to be strong. So, make an effort to get feedback from customers about their experiences doing business with your company. You can conduct surveys, look at user-generated customer reviews, and pay attention to who mentions your company online and in what context.

2. How many paths of communication are open? Do you create opportunities for current and future communication with your customers? Do you have their email addresses, social media profiles, or mobile phone numbers? When previous and current customers land on your website, do they see personalized content or offers? All of these channels can be used to bring customers back into the sales funnel.

3. Where can you create additional value? Look for ways to add complimentary products or services, upgrades, or any elements that add perceived value to your basic products and services. If your brand is very clearly defined, even just providing customers the opportunity to further identify with its ideals can part of the perceived value as well.

In short, the LTV of your customer is one of the fundamental elements of your business. But, unlike many assets or sales figures, this number is not static. If you go in with a focus on customer retention, keep the lines of communication open, and constantly seek to provide value that “grows” with the customer, then this amount can be maximized to the fullest and significantly help your bottom line- now and over the long term

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5 Quick, Effective Ways to Do Market Research

Conducting effective market research has always been an essential part of business start-up, development, and growth, but these days it’s even more so. It’s hard to deny that the pace of business has been turned up several notches. There is this unspoken rush to get from concept to market in lightning speed (i.e. before anyone else does or anything changes). Moreover, countless young entrepreneurs and their Icarus moments are often being turned into public spectacles, heavily glorified and even praised by the media.

compassThe high stakes business crash and burn is has become a badge of honor.

In short, a kind of recklessness has emerged in the business world, and at the risk of sounding like a parent, it’s not the most positive of influences.

If you really want to get your new business idea off on the right foot- whether this idea is for a start-up or an established business- you’ve got to put in the time and the effort to be very clear about the current market demand and conditions.

Often, you don’t have to spend much money on this process. Here are five quick things that you can do to test out the efficacy of a new idea:

1. Get on the phone. Call up a few potential customers, the ones that best fit your ideal customer profile, and ask them if they would be interested in your product or service. This is a good way to initially gauge demand.

2. Get on social media…for research. Social media platforms are a great source of information and market research. Many of these platforms have their own built-in search functions that will help you to spot certain trends. Just a note here: don’t just focus on the trends themselves, but also pay attention to how people and businesses talk about them. What words and phrases keep coming up? What is the tone behind it?

3. Test with content. One relatively easy way to test the market waters is to create a piece of content that touches on the problem you are trying to solve and hints to the solution. You then need to post it in a place where many of your potential customers will see it and wait to see what the response is. If it generates a lot of activity and engagement from people then it’s a good sign that you are on to something.

4. Snoop out your competition. What is your closest competition doing in these space? What is working and what isn’t? What are customers’ reactions?

5. See what already works. Even if another company is not operating in your niche, you may be able to draw on their successful marketing, promotional strategies, and even products and services as examples of what you can do in your own company. Just make sure that there is some overlap in the target market.

In short, good market research is and always will be an important foundation in any business, and these days it doesn’t require a major drain on resources to do it properly. So, do yourself a favor, and don’t jump the gun in the implementation of a new business idea. Take the time and make the effort to ensure that you’ll have a profitable customer-base waiting for you at the finish line.

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How to Properly Outsource Your Content Marketing

Marketing a business today takes so much more time and effort than it used to. Your target audience is being bombarded with messages both online and off, and as technology becomes a bigger part of the marketing equation, the rules just keep changing.

ID-100146171Content marketing in particular has become an enigma to many small business owners who are still trying to figure out how to set up their websites and use social media properly. Yet content marketing, done well, can really help you to build brand awareness and create an online audience of current and potential customers. Doing content marketing properly, though takes a great deal of time, effort, and skill.

For this reason, many small business owners choose to outsource some or all of their content creation and marketing. But for a significant amount of these business owners, their efforts don’t work out. The truth is outsourcing your content marketing is not so easy to apply effectively nor does it make sense in all situations.

If you are thinking of outsourcing your content marketing, here are some important points to keep in mind:

Make sure you understand what content marketing can accomplish. Even if you will not be creating the content yourself, you still need to have an understanding of what effective content marketing allows you to do across different mediums and platforms.

You need to be actively involved in the process. You also need to be actively directing and analyzing the content marketing process from beginning to end if you want it to be effective. Don’t be tempted to just leave it to your outsourcing providers. It’s the biggest mistake you can make! Don’t forget that the content you promote as how you promote it will directly reflect on your business.

Choose your hired content marketers wisely. It’s very easy for a company to claim they they are content marketing experts; it’s much harder to prove it. Therefore, you really need to exercise your full due diligence before deciding on a company. Get a list of previous customers and make it a point to contact them. Request to see a sample of a documented content marketing strategy they have developed and implemented. Also, pay attention to any promises or claims they are making. Content marketing is a long-term strategy, and specific results may be hard to guarantee- especially over the short-term.

In short, outsourcing your content marketing can help your business get its name out there while freeing up your time. But you have to approach it correctly or else it can get out of hand taking your business’ brand and money with it.

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November 21, 2013

The Workplace is Changing; Is Your Business Ready?

For the past ten years or so, as cloud-based devices and platforms have become more ubiquitous, and a growing population of working age people have become accustomed to working on the go, there’s has been a very noticeable shift away from traditional workplace attitudes and setups.

home bizBusinesses are increasingly looking for ways to work smarter and more innovatively, relying on a new generation of workers who have literally grown up with the digital age. These people are more accustomed to flexible, collaborative work environments that often involve working outside of the office. This means more co-working spaces instead of the traditional office and cubicle set up. It means work schedules that incorporate a significant amount of flextime, and it often means allowing employees to work outside of the office. Finally, there is much more collaboration and the sharing of knowledge among employees of different departments and different functions. So, cross-training is becoming more and more prevalent

These trends aren’t something that small businesses should just push away since they can have a significant impact on worker productivity and job satisfaction, as well as the ability to attract competent employees and keep them from leaving the company.

Here is a more detailed rundown of the benefits of incorporating these trends into the way your business operates:

Attracting qualified workers. Surprisingly, approximately 30% of small businesses have job openings that they can’t fill because they can’t find qualified workers. How can this be? The truth is, these workers do exist, they are just not ready to compromise on their career development and their work attitudes to even apply for a position at company that doesn’t respect the new workplace reality. Small businesses need to recognize that maximum flexibility and mobility have to be essential parts of the workplace, or else younger workers will look elsewhere.

Increase productivity. It has been well documented that flextime improves both employee job satisfaction and productivity. It also is more in line with the lifestyle embraced by today’s workers. This means, it will not only help you get better outputs from your employees, but they’ll also be more likely to stick around as mentioned above.

Increase innovation. Creating a workspace that encourages collaboration and flexibility can actually help fuel innovation. At a time when ideas and intellectual capital are at a premium, this is no small thing. If your business involves constantly changing consumer trends, technologies, and services, then creating a collaborative works space just makes sense.

In short, the rules of work are already changing. The question is, are you positioning your business in accordance with them? In many cases, those that ignore these trends may find their businesses have fallen far behind, and it may not be so easy to catch up at that point.

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November 4, 2013

What’s the Difference Between B2B and B2C Marketing?

As the Internet, mobile technology, and media continue to evolve at lighting speed, it has created a lot of confusion about what it takes to effectively market a business these days, and as time goes on, more and more questions just keep surfacing.

handshake-616726-mWhat social media platforms should you use and how? Should you opt for free traffic generation or paid online advertisements? Should your business use mobile marketing? What keywords should you aim for? Should you even worry about keywords? In-bound marketing or out-bound marketing? Self-promotion or paid promotion? On and on…

One common question among small business owners is whether differences exist between B2B and B2C marketing. Looking into the matter, however, reveals a pretty straight-forward answer. Though the basic principles of marketing may be similar, the paths to conversion for a B2C sale versus a B2B one are often very different.

In a B2C sale, you are communicating directly with the potential buyer, so the steps of the sales cycle are typically concentrated into a relatively short time frame. Because you are usually only convincing one person, instead of having to deal with multiple people, committees, or other levels of business bureaucracy, as in a B2B transaction, you can move through the process much quicker.

With B2C sales, you need to be focused on and fully understand your ideal customer profile, and work on making all of your communications and marketing specific to that persona. The goal would be to get potential leads to engage in a series of actions that will lead them through a carefully crafted sales funnel. An example of this in action would be writing a guest post on a site that many of your potential customers read, making a desirable and valuable free offer in exchange for readers’ email addresses, continuing to provide valuable content via email, and eventually sending a sales pitch or affiliate offer. This whole process from start to finish could take a few days or even a few weeks.

With almost all B2B products and services, however, there is a long sales cycle that can take a month, to several months, to even a few years. Plus, the bigger the business being pitched, the more people you may need to deal with and the more hoops you may need to jump through, as mentioned above.

Successful B2B marketing often requires doing a significant amount of research on the industry and the companies being targeted and being ready to field any questions that business owners and their management may have. Referrals also play a much more significant role then they do in a B2C transaction. Finally, you need to research the most effective ways to reach the purchasing decision makers within a given business. These people may not hang out in an approachable way in the same places that a consumer would. This can include online communities such as LinkedIn or off-line events, such as trade shows and conferences.

In short, though there are some similarities between B2C and B2B sales, knowing the differences between them as well as how to approach each kind of buyer can help to make you marketing efforts more appropriate, more targeted, and ultimately, more successful.

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September 9, 2013

5 Keys to Increasing Productivity in Your Business

These days when the speed of life and business just keep quickening, it can seem like we are never being productive enough. There is always more to stay on top of; more to do, yet less time to do it; and often with less money and other resources at our disposal.

designing-on-a-tablet-1361061-mIronically, all this focus on productivity can end up slowing you down. Which productivity tools, techniques, and tips should you follow and how do you successfully implement them?

Though circumstances can vary from one business to another, there are nevertheless commonalities. Here are five productivity keys that can be applied to any kind of business as well as to your personal life outside of it. They are the “tricks of the trade” for productivity superstars, such as Tim Ferris and Josh Kauffman, and though they may seem simple, they can dramatically change the way you and your business functions.

1. Clearly map out your goals. It’s not enough to have some rough idea of where you are heading: I want to increase sales, improve customer service, etc. What exactly do you want to accomplish and more importantly why? Create a list of very specific goals, and list them in order of priority.

2. Break your goals down. Once you are clear about your main goals, you now need to break them down into workable chunks. Many people make the mistake of trying to bite off more than they can chew and eventually end up dropping the ball. Don’t let this happen to your business. You want to create small focus areas and then go through them one-by-one until you’ve mastered it.

3. Get the necessary resources. Make sure all the resources are in place to accomplish your goals. This includes things like equipment, materials, supplies, and even qualified workers, and it means you’re going to have to do some projections to help you anticipate what you will need to get the job done along the way.

4. Make your goals a priority. This may sound simple, but often this step is overlooked, and it can be a major pitfall. It’s not just that you need clear goals and the resources to fulfill them, but you actually have to actively commit those resources. This means setting aside the necessary time, attention, and money and doing so consistently.

5. Testing and feedback. Improving your business’ performance is not a static process. If you really want results then, you need to get feedback along the way. This will help you to stay on course and further pursue the activities and strategies that are working.

In short, if you are looking for some real increases in productivity, then make sure you are implementing the previous five steps. They may appear to be simple, but many businesses skip them, and it’s why increases in productivity can seem elusive.

 

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August 23, 2013

Paypal Offers New Cloud Packages Service, But Will Small Businesses Bite?

paypalIf you are using Paypal to process your business’ online payments and money transfers, you may be interested in the payment platform’s new cloud packages service for business owners… at least Paypal thinks you should be. Paypal Business users now have the option of four Web-based business add-on services, dubbed the Cash and Customer Management Package.

The new services are meant to help small business owners manage their flow of cash, customer data, and communications under one central login. There is also some integration between the apps which would allow users to automatically import data from one app to another.

Each of the four services represent some pretty well-known brands. Here is a brief rundown:

  • Bill.com- Bill.com is a platform designed to ease your cash flow management by automating bill approval, payment invoicing and collections. You can also use the platform to create a three month cash flow projection and approve and pay bills securely from any device.
  • Outright.com- Outright is an accounting and bookkeeping application designed for small business owners and sole proprietors. It allows you to automatically import sales and expense data and organizing it into IRS-approved categories.
  • Cloudconversion.com- Cloud Conversion is a CRM solution that allows you to tap into the customer relationship management features of Salesforce.com. The result is that you will gain valuable insight about your target market, including why they make their purchasing decisions.
  • Constantcontact.com- Constant Contact is a well-known email marketing platform. It lets you create professional looking marketing emails from a wide variety of templates. You can manage your email list, make your emails more social, and analyze performance with an assortment of reports. The Paypal package allows you up to 5,000 email contacts or subscribers.

Paypal is currently offering a 30-day free trial of its new business add-ons package. After that, the full cost is $90 a month. Those who opt for the service will receive a single bill from PayPal for all the add-ons. According to PayPal, the cost of the package represents a 40% savings over paying for the services individually.

But the million dollar question is: will the average small business owner find this package valuable? Though relying on Paypal’s “recommendations” may save you some time shopping around for the perfect services, and the integration between the apps is also the plus, still this short list of platforms may not be suitable for many small business owners. Even the savings involved in this “packaged” approach may not be big enough to woo the vast majority of business users.

Another factor at issue is that many Paypal customers are actually not happy with the level of service that they are receiving. Anti-Paypal sentiment is actually pretty high, with many users being forced to seek alternatives. Given this, businesses that rely (unhappily) on Paypal may not trust the payment processor to be involved with other areas of their business. What if their account were limited? How would this effect the other services?

In short, though Paypal’s packaged approach to web-based services may look good on paper, in practice it may not be enticing enough to bring small businesses on board.

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Understanding the Basics of Inbound Marketing

The growing acceptance and implementation of inbound marketing represents a definitive shift in the way businesses are approaching sales and advertising. Instead of running after customers and looking for ways to make them open their wallets, smaller companies in particular have recognized the value of creating and sharing valuable content in order to encourage potential leads and to make current customers come back for more.

sales onlineIn other words, it’s a way of doing business that is based on “giving,” something that very much flies in the face of the traditional business model. For this reason, smaller companies are coming out ahead and leveraging content creation channels, such as blogging, videos, imagery, and even audio along side social media, to level the playing field against their bigger competitors.

If you are new to the ideas behind inbound marketing for your own business, then here is a rundown of the major themes:

Focus on Content Creation and Promotion. You create targeted content that answers your customer’s most pressing questions and needs, and you make a concerted effort to share that content in ways that will get it noticed by your target audience.

Marketing as an Organic Process. Your customers will go through stages as they interact with your company, and at each stage you need different marketing actions and approaches. It’s as if you want your marketing efforts to “grow” and mature with your customers.

The Power of Personalization. Without realizing it, many of your customers are already be getting bombarded with personalized content and promotional offers every time they go online. This trend cannot be ignored. As you learn more about your customers over time, you can better personalize your messages to fit their specific needs.

Multi-channel Efforts. Inbound marketing is inherently multi-channeled because it is based on reaching people where they already are, in the channel where they will most want to interact with you.

Big Integration. The platforms that support your content creation, promotion, calls-to-action, and customer support as well as the analytics tools you have in place to keep tabs on it all, must work together like a well-oiled machine. This allows you to focus on publishing the right content in the right place at the right time.

In short, inbound marketing is definitely a new way of doing business. But, it presents a great deal of opportunity to smaller companies that understand that in order to encourage the interest and investment of their customers, they need to give in order to receive.

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August 5, 2013

4 Power Tips To Generate Sales on LinkedIn That Most Users Miss

Over the past few years, LinkedIn has been growing in both it’s user base and it’s reputation. The social networking platform has practically become synonymous with the online resume and business hobnobbery and recently boasted over 225 million members across 200 countries.

LinkedIn-LogoBut, with so much happening on LinkedIn, getting noticed can be a real challenge. Add to this the fact that LinkedIn has chosen to discontinue several services and apps, such as LinkedIn Answers and Polls, that were quite popular among small business owners. For this reason, if you are just starting out on the platform, you need to do what you can to optimize your time and presence there.

To get you started, here are four LinkedIn success tips that are frequently over-looked, yet can generate a tremendous amount of interest in your business:

Include a call to action. You can have the most optimized profile in the whole of LinkedIn that’s generating tons of traffic, but if you don’t have any calls-to-action, it won’t do you much good. Instead of simply filling in LinkedIn’s generic “my website” or “my blog” links on your profile page, make the effort and to give your visitors reasons to click on your links.

Showcase your products, services, and expertise. There are several areas in LinkedIn where you can showcase your work. In your profile page, you can now highlight specific projects including media-rich documents. If you are maintaining a company page, then be sure to fill out the “Products and Services” section. Not only is this your opportunity to explain what you offer in a compelling way, individuals can recommend and share the products you list, becoming ambassadors for your brand.

Optimize your profile for search. With hundreds of millions of people searching LinkedIn, you want your company’s profile to stand out. When crafting your profile language, be sure to include keywords that are related to your business and industry to help improve the chances of your name appearing in LinkedIn’s internal search results. Think of these keywords as the words a potential client would type in when searching LinkedIn.

Use InMail and targeted updates. LinkedIn gives you the option of putting your updates and messages in front of the people who matter the most. LinkedIn’s internal mail system, InMail, can help you reach professionals that may not be so reachable elsewhere. Targeted status updates can be an effective way for business owners to tailor the content in their status updates to specific types of company followers. These can be accessed from your LinkedIn Company Page.

In short, when it comes to success on LinkedIn, you need to make sure that your presence is properly optimized. It gets your foot in the door to take advantage of all that LinkedIn has to offer.

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Should You Offer a Discount to Your Cash Paying Customers?

213546_credit_payment_3Under the terms of a $7.2 billion settlement reached last summer between credit card companies and retailers, retailers will be allowed to impose a surcharge on customers paying by credit card. The amount of the surcharge depends on how much the retailer pays in processing fees, but it can range from 1.5 to 4 percent of an item’s the purchase price.

If you are running a small retail operation outside of the states that have prohibited such a surcharge, then you may be the debating how to go about easing the fee burden of payments made by credit card.

Some retailers have opted instead to offer a discount or other incentives to their cash paying customers. But is such a move right for you? There are definitely some benefits over here, such as that shoppers may be more receptive to either receiving or opting out of a discount than they would be to choosing whether or not a surcharge is worth it. A discount just has a nicer feel to it.

Moreover, you may not want to totally alienate your shoppers who pay with credit. Many studies point to the fact that people tend to spend more when they pay with a credit card as opposed to cash.  A surcharge, even a small one, could be enough to discourage a credit purchase and any “extras” that may have been added to it. Credit cards are also more convenient for customers. Today, most people paying with plastic generally expect the option to do so without penalty. You could quickly elicit the angst of customers caught without cash and who may be annoyed that they have to pay more for pulling out the plastic.

So, the bottom line to this is that there are definitely some key benefits to offering a discount to cash paying customers instead of tacking a surcharge onto credit card purchases. But, you really have to be in touch with the needs and attitudes of your customers. If all else fails and you are unsure which way to go, you could always just as your customers or test out the response to each strategy.

Over to you… Do you run a retail business? How have you responded to the new credit card legislation?

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