Birthday Marketing….

So today is my birthday…and I’m having  a lot fun!!

It is nice to have one day a year to feel special and do something completely out of the ordinary.  It is also a great time to review what happened during the previous year…achievements, personal growth, disappointments...  and plan for the coming year.  I always enjoy celebrating with family and friends…also hearing from people that I’ve lost touch with.  It seems birthdays are a good time to renew and strengthen relationships.   This year several major retailers tried to build their connection with me as a consumer by celebrating my birthday with me!

About three weeks ago I started receiving beautiful cards from many of the retail stores where I shop.  These are stores where I either belong to their loyalty club or signed up for email updates.  Each card included some sort of enticement to get me into their store (or to sign into their on-line store).   Anthropologie sent a card with a ‘birthday candle” necklace and 20%  off coupon. BCBG went one step further allowing 20% off each sale for the entire month of April.  Compared to these stores, Brooks Brothers gift was a bit meager offering a $20 off one item coupon.  

In the cosmetics department, Lancome was the big winner.  They gave five full-size products with any purchase in honor of my birthday.  This seemed much more generous than the small birthday sample that Sephora gave me.  The Clarins counter in Bloomingdales did not send me anything in advance, but when I mentioned to the cosmetician that was my birthday she filled a shopping bag with many full size products and samples.

So, is sending birthday presents to loyal customers a worthwhile marketing strategy.  I say resoundingly YES.  First, these retailers successfully got me into their stores, which gave them at least a chance to make a sale.   Offering a discount on everything in the store including new merchandise was an incentive to make a purchase.  Most new summer items probably will not go on sale until mid-summer so I was able to get them immediately at the sale price.  But perhaps most of all, these companies made me feel appreciated and I in turn am now a very loyal and happy consumer that will certainly return.

The companies that sent me birthday presents made me think about the companies that did not.  Nobody (not even my trainer) at the exclusive health club where I am a member said happy birthday even though the date is clearly highlighted in my profile.  Nor did the expensive hair salon I frequent made mention of my special day.   I will not give up my gym membership or change stylists, but I do feel less connected to these places than I did before.  In contrast, the retailers that did send me birthday wishes and presents in most cases got me to make a purchase I probably would not have made had I not gotten the birthday card.  They definitely strengthened my loyalty and connection to them.  

Know Your Customer

Every business knows that to survive and succeed it needs customers.  Unfortunately too many businesses treat their customers like secondhand citizens who are merely their means to an end….turning a profit.   Businesses frequently enact policies that negatively impact the consumer and cause such bad feeling that the client closes down the relationship and the business not only loses a customer, but also has its reputation tarnished.  A company’s success is contingent on providing excellent products (or services) and also making sure customer needs are satisfied in a positive and pleasant manner.

An exclusive hair salon in NYC recently found that many of its long time clients were cancelling their regularly scheduled appointments.  Each week they were serving fewer customers and most of these were first timers.  When they called the BizBuilding team to help them figure out and fix the problem business was already down by 40%.

The first question asked was did the salon recently alter its business model  or pricing?  The salon owner insisted that nothing had significantly changed.  Our  team decided to do a customer evaluation with former clients of the salon.  They all gave a similar response:  They loved the services they got at the salon and the stylists were all top quality.   Most of these consumers said when they left the salon after a haircut or color service, they felt special and looked great.

Then a few months ago the salon instituted a new policy:   there would be an extra surcharge of $60 ($75 for long hair) to get a blow dry after a service.  The customers were outraged.  They did not want to spend the extra money for a process they thought should have been part of the already expensive service.  When the salon owner finally acknowledged this change in policy, he explained that the blow dry process took too long and a stylist could see three more customers per day without having to do it.  The surcharge made up the margin.  He had not considered that his customers would have such strong feelings about this change in service practice and pricing.

The BizBuilding team came up with a solution that increased the profitability of the salon while satisfying the needs of the customers.  The salon hired two style assistants who were solely responsible for complementary blow-drying.   This freed up the  senior stylists to see more clients.  The increase in customers paid for the new hires and increased revenue.  All clients in the salon database were sent a letter explaining the new procedure and offered a 20% off discount.  They returned and business at the salon is better than ever.

Customer surveys and evaluations should be a standard part of business practice.  Understanding customers changing needs and if they are happy with the way you do business is vital to keeping a business lucrative.  Decisions to make strategic changes in the business practice must be reviewed with respect to consumer tolerance of these changes.  Ultimately having satisfied and happy customers is the best way to achieve profitability.

Micro-Loans 101: A Credit Solution For Small Businesses

When people hear about micro-loans they automatically assume it is an advantage for small businesses  in developing countries.  But the reality is that these small short-term loans are available in the United States.  These loans are especially helpful during times of economic stress and often carry a business thru a few months of difficulty allowing it recover and even come back stronger.

The information below contains all the facts you need to know about micro-loans and hopefully will be a starting point to helping some entrepreneurs get through the current credit crunch.

What are micro-loans?

Micro-loans are small, short-term loans made to people who do not have access to more mainstream lenders such as banks.   Making and servicing a loan involves administrative costs for lenders, therefore they will often refuse to make loans that are too small, to people that lack collateral, or to people that do meet their risk standards. 


Micro-loans were originally designed to help the very poor in developing countries get access to enough funds to build a business, but the concept also filled a lending gap in the developed world and today most countries have one or more micro-lending institutions. Although there are many different types of micro-loans, most micro-lenders are non-profit organizations that emphasize helping the poor.

Micro-loans in the United States

Although the concept first gained traction in the developing the world, it was soon realized that micro-loans could also help small businesses without access to bank loans in the United States. The first major micro-lender in the United States was ACCION USA, http://www.accion.org which is still the country’s largest micro-lender and has loaned about $210 million to more than 20,000 small entrepreneurs.
ACCION USA is a non-profit organization that offers very small loans to small American businesses that do not qualify for traditional loans. The average ACCION USA loan amount is $5,300 and the loss rate is very low compared to traditional loans. Because micro-lenders are typically non-profit organizations, most micro-loans have very reasonable interest rates, as well.

Micro-loan borrowers

Mico-loans are generally targeted to very small businesses run by one or two people, such as independent child-care workers, caterers, small restaurants and food businesses, and small specialty shops. Independent contractors – like construction workers or craftsmen – are also frequent recipients of micro-loans. Micro-loans are also popular short-term bridge loans for slightly larger businesses, to help with immediate cash flow issues.
  Many micro-lenders focus on lending to entrepreneurs in immigrant communities who cannot qualify for mainstream loans.  Small businesses in poor or depressed areas also tend to receive more micro-loan attention than those coming from affluent areas.

How can you qualify for a micro-loan?

There are currently more than 250 micro-lenders operating in the United States, each with its own focus and minimum loan-qualification requirements. Small business loans from ACCION USA require the applicant to have a credit score of at least 575, not to have filed for bankruptcy in the previous twelve months, to be current on all bills and expenses (especially rent or mortgage payments), and to have less than $3,000 in outstanding debt. Small businesses must also be operational, have all licenses and permits necessary to conduct business, and have a regular cash flow sufficient to make monthly loan payments. Other micro-lenders have other standards, some of which are considerably less stringent than those of ACCION USA.

Micro-loans and the current economy

Not surprisingly, the recession and credit crunch have seen a large increase in applications for micro-loans. Although the default rate on micro-loans has increased some, it has not come near the levels seen in most other lending sectors. Most non-profit micro-lenders receive a significant portion of their operating capital from the government (via the Small Business Administration and a separate fund administered by the Treasury Department), so they have remained active lenders throughout the crisis. While larger loans – those of $10,000 or more – have become less common, small loans of between $3,000 and $8,000 have become easier to obtain. The loans are small, but they are often more than enough to solve temporary cash flow problems or to launch small business start-ups.

To Be Or Not To Be On-line: Is It Important To Small Businesses?

For most of us, what we do in business is a compromise, between what we would like to do, what we should do, what is practical for us to do, and what we can afford to do. Indeed, in striking these balances we strive to make the right decisions about what is most important to the business.

Why should you take your business online?

Think of it as a meal.  There is (often) a difference in what we would like to eat, what is good for us and what we can afford to eat. I still think the same precept holds true. If you are short of funds you might take a sandwich to work rather than go out and buy a Big Mac.

In the context of this discussion the critical decision is "do we really need a website and if so, what kind?"Will our customers use the Internet or do they prefer to have the face-to-face contact? Even with a strong customer base, the Internet allows us to expand our market to those people who make a majority of their purchases online. Now that more women than men are using the Internet, a business owner must ask this question, “Who are my primary customers?”  In the majority of businesses it will be women as they are the prime purchasers of most products.

In addition, when it is cold and wet outside most people would prefer to shop online than have to expose themselves to the elements.  This is not to say that they would have bought from the Internet as most people like to feel, touch, smell or taste what they buy as it all adds up to the shopping experience.  But if the store had offered a special price reduction to buy online with a guarantee that offered satisfaction to the purchaser, might not the customer be tempted, especially if they were having cold weather?

An added factor is that email marketing (customer relationship marketing) helps the business owner create and strengthen loyalty with its existing customers. Whatever the term, building stronger relationships with existing customers is simply good business practice. It's a lot cheaper to keep existing customers than to find new ones.

What are the essentials you need to participate in the Internet market?

You need a website and that is where a number of small companies hesitate as they believe that a web- site is too expensive for them to develop and too technical for them to maintain.  A website does not need to be too expensive or too technical. There are excellent pre-prepared websites or software that allow you to build your own.

Consider your website to be your shop window for local business.  You would dress your window at least once a month, or more often, to show passers-by what you have to offer.  So should your website present information to advise your Internet visitors about what you can help them with/  Internet Visitors are looking for answers to the problems they have. Your information must help them to resolve these problems. Promote your website address (URL) so that newcomers to your area will recognize it as a sign of quality products, good business practice,  and great customer service.


Ellen Rosen Singer, MBA, Managing Director, BizBuilding Inc. and Executive Director, WomenTeachingWomen.org - 917 678-8937 ellen@bizbuildingstrategies.com

Essentials For Marketing Your Business

A good marketing plan is essential for a business to be successful. It doesn’t matter if you are a small business or a major Fortune 500 company, there must be a plan in place that plots out the marketing tactics and strategies for the year ahead. Not only does a marketing plan plot out a direction for the marketing campaigns that will be in place throughout the coming year, but it also allows a company to look back on the plans from previous years to see what worked and what did not.
The foundation of any marketing plan is having a good idea of what your company does, the products it produces and the services it provides.  If you don’t understand who you are and what you do then it is almost impossible to target the right people who need or could benefit from your business.   Targeting your market will allow you to focus your marketing efforts on a specific group of potential customers that in turn will result in more sales.  If you are targeting too many different groups, or the wrong groups you will be wasting your time and your marketing budget.
Once you have figured out who you are as a company, or what your company does, you must develop a ‘Unique Selling Proposition’ (USP) that tells your potential customers the specific benefits they will get if they buy your product or service.  Your USP must be one that your competition does not, or cannot, offer. It must be strong enough to attract new customers.  This is the basis for all your marketing and advertising efforts. It is the unique advantage you have to sell your business. The USP must be dramatic and memorable. It needs to stand out and attract new business. It should also generate word-of-mouth excitement to drive referrals.

After you’ve built the foundation of your new marketing plan, you need to put together a detailed profile of your target market. With this profile you can identify the perfect customers for your products or services.   Your marketing plan must answer three key questions….

• What types of people make up your customer base?
• Where are they?
• What motivates them to buy?

Few businesses ever take the time to answer these - and other - critical questions about their target market in any detail.  This information will put you in an excellent position to redirect your advertising and promotional efforts and money, refine your sales methods and tailor your marketing to the specific segments most likely to buy your products or utilize your services and will give you a significant advantage in the marketplace.

Changing Direction

 


     A few weeks ago I visited a former client  I  helped start a business several years ago.   At the time, I stood by him while he nurtured his ideas into a great concept and  then helped him build this concept into a thriving business.  We worked together on writing a business plan and putting together financing.  Once he had the money to  start the business I helped him find a location, set up operations, build  inventories,  develop financial systems and so on.

     When this talented entrepreneur finally opened the doors to his upscale store it took off with lightening speed.  After only one year it was profitable and it seemed as if it would continue to grow as the years went by.  That was five years ago.  When he called me two weeks ago to come visit, I was excited to see how things had progressed, to see if he met all the forecasts we cautiously had written into the business plan five years earlier and to see how he was facing the challenges of these difficult economic times.  Little did I know that I was in for quite a disappointment!!

     Nothing had changed in all the time that had gone by.  Just about all aspects of the business had remained the same over the years.   The  same customers frequented the store,  the same vendors were used, and  they used the same marketing materials we had designed at the beginning.   When asked why, this supposedly savvy business owner said there did not seem to be a need to change.  His customers were loyal and happy.  They spent lots of money in his store and for a while  increased their spending to the point that he was exceeding his goals.   Things were so good he saw no need to make a change… that is until the economic hardships that hit the USA a year ago started to impact him too.  All of a sudden his loyal customers could not spend as much as they did at the beginning and many just stopped coming in.  He was having difficulty paying his suppliers and everything seemed to be spiraling downward.

     This business-owners story  highlights the fact that a business needs to continually develop just like people do.  Nothing ever stays the same.  It is great to have loyal consumers, but it is essential to constantly grow your customer base because circumstances change.    A business plan is a fluid document and the goals it sets forth must be reviewed systematically to assess their achievability.   As goals are retired, new ones need to take their place.  If goals are not being met the reason needs to be found.   Marketing plans also need  to reflect the changing consumer base and culture.  This is especially important during difficult economic times.

     So it does not matter if business is good for you, or not, find that business plan you did ages ago, read it over, and map out the next direction going forward…..