“LIKE” IF YOU REMEMBER MYSPACE

MySpaceIs it just me, or has there been an explosion of people posting nostalgic photos on Facebook and asking you to click “Like” if you can remember a black and white picture of some fifties TV icon or a once popular consumer product from your youth? Time has a way of reducing our past to warm, fuzzy memories. Heck, show me a photo of a macho guy enjoying a cigarette on the back of a horse and I might even forget that three of the Marlboro Man actors died of lung cancer!

Digital media has done more than merely provide a medium to share the recollections of our youth. It has greatly diminished the time span during which products and services move from broad acceptance and popularity to distant memories. Allow me to offer two well-known examples.

Gutenberg’s 1440 invention of the printing press revolutionized communication. It made possible the sharing of ideas and information through the mass production of books. It took another 555 years, until 1995, for an upstart company named Amazon to start selling those same books using something that had been introduced just three years earlier. That something was the Internet.

It took another 12 years to popularize eReaders like their famous Kindle. Within four years, Amazon was selling three times as many eBooks as hard covers. Their success obviously does not include a plethora of competitors including the hugely successful Apple iPad. It seems almost certain the paper book will soon be a candidate for Facebook friends to ask you to “Like” if you can remember owning one.

Still, 600 years from invention to impending obsolescence is not a bad run! Now consider a more recent service life span.

MySpace was introduced in August 2003, six months before Facebook. Just two years later, it was the most visited social networking site on the planet. Rupert Murdock was so excited about its prospects that he paid $580 million for it in 2005. In 2006, it reached 100 million accounts, a level that required 1,600 employees to support.

Facebook over took it in April 2008.

In June 2011, Murdoch’s News Corporation sold MySpace for $35 million, a 94% loss on their six-year investment. With uncharacteristic understatement, Murdoch pronounced the purchase a “huge mistake”.

These examples illustrate three critically important points for all 21st century marketers.

  1. Communication trends change faster than businesses can anticipate. Most lack the resources to manage that change.
  2. Faced with a constantly expanding stream of free choices, your target audience no longer uses communications channels popular just a few years ago.
  3. Neither do your successful competitors.

The cost of failure is high. Even the most carefully designed marketing communiqué, be it a press release, an ad campaign, a newsletter, etc., will fail if it is not transmitted in the optimal channel.

The only way to avoid that mistake is to communicate a consistent message and single brand to over-lapping audiences across multiple channels. That is what successful digital media marketing is all about.

© 2013 by CFO America, LLC

We Have Meet The Enemy & He Is Us, Dealing with Entrenched Policies & Procedures (Part 2)

On Monday, I introduced the topic of inefficient and outdated policies, processes and procedures using the cartoon character Pogo, and the mid-twentieth inventor and cartoonist Rube Goldberg.

After coining a new acronym (RGP3s) and describing some common characteristics, I ended with the obvious question, what is a manger to do about them?

First, be open to the possibility of their existence in your organization. Every company has some areas that need improvement. You cannot assume that something is “best practices” simply because it worked in the past. If a department is unable to keep up with current workloads, there are only two possible reasons. Either they are understaffed, or they are operating at less than peak efficiency. Adding staff adds costs. Improving efficiencies is likely a cheaper and perhaps faster alternative.

All successful organizations eventually reach a size where managers are not expected to be familiar with the application of every policy, process and procedure. Even if they are, RGP3s can be virtually invisible to the familiar (or complacent) eye. That suggests one of two possible approaches.

The first approach is to constantly challenge and encourage employees to identify efficiency improvement opportunities. Maintain an open and direct line of communication through brief but regular interaction. Actively solicit employee input and implement at least one idea every month. Publicly reward accepted suggestions in ways they value. That may mean an employee of the month plaque in the lobby, a front row parking spot or an AMEX gift card.

Unfortunately, relying solely on employees’ willingness to point out flaws has a major limitation, human nature! People seem to have a tendency to accept most things as they are. Furthermore, asking questions and challenging the status quo may be viewed as career limiting in some corporate cultures. That is not to suggest people are by nature lazy or apathetic. It’s just how things are.

The second approach is to bring in a fresh pair of eyes. A while back, I shared a story about an experience in a new job. On my second day, I was reviewing a lengthy payment report when I spotted something unexpected. About every 20 pages or so, there was an entry with a negative amount. Based on my still limited understanding, there was no reason for negative numbers. To make a long story short, I had stumbled across an internal control weakness that allowed certain items to be paid twice.

The point is that other people who worked with the report every day had undoubtedly noticed negative entries before. Yet they failed to follow through with a few simple questions. If they had, they might have closed the control weakness years earlier.

In closing, let me clarify what constitutes a “fresh pair of eyes”. It may mean a consultant. This outside resource could be an expert in your field, or someone well versed in common business practices and operations. An auditor or independant CPA with other clients in your industry may be a valuable resource, especially if the area of concern is one they review as part of their evaluation of internal controls.

In my example, a fresh pair of eyes merely meant introducing a new employee into the mix.

Either way, the path to improved efficiencies in your business may be as simple as finding someone unburdened by the “But we’ve always done it that way” mentality.

That mindset, Mr. Pogo, is the real enemy.

© 2012 by Dale R. Schmeltzle

We Have Meet The Enemy & He Is Us, Dealing with Entrenched Policies & Procedures (Part 1)

Students of American pop culture will recognize the title of today’s post as a quote from Pogo, the swamp dwelling possum in the classic comic strip of the same name. I use it to introduce a discussion of an all-too-common business phenomenon.

Owners and managers are often their own worst enemies when it comes to recognizing what I call Rube Goldberg policies, processes, and procedures (RGP3 for short).

What exactly are “Rube Goldberg” policies, processes, and procedures? Rube Goldberg was a twentieth century cartoonist, famous for inventing complex devises to accomplish the simplest of tasks. He was the inspiration for the 1960s game Mouse Trap.

Michael Hammer gave a perfect example of a modern day business mousetrap in Reengineering Work: Don’t Automate, Obliterate. A company required that the “corner desk” approve all overseas invoices. The policy had been in place for many years. It turns out it originated back when many customers were French, and when an employee who was fluent in French occupied that desk. However, the employee had long-since left, and fluency in a foreign language was not a requirement for assignment to the desk.

In other words, the original value of the policy was lost long ago. All that remained of the legacy were unnecessary costs and shipping delays.

This example exhibits several common characteristics of RGP3s. Those characteristics may include:

  • They are overly complex for their intended purpose.
  • They involve outdated technology.
  • They are not integrated with other systems.
  • They involve manual input of paper records.
  • They are labor-intensive.
  • They are non-scalable and unable to keep up with demand.
  • They are poorly documented.
  • They have been in effect for as long as anyone can remember.

In other words, they are inherently inefficient and outdated.

Yet with all these negative attributes, RGP3s seem to enjoy a sort of sacrosanct protection. Decision makers are reluctant to identify, let alone change them. Perhaps like an old pair of shoes or a childhood tradition we cling to in adulthood, we take comfort in our inability to remember life without them, even if we outgrew them long ago.

Although my RGP3 experience is mainly in finance and accounting, I am certain they exist in all areas of company operations including production, distribution and customer service.

So what is a manger to do about them? More about that on Friday.

Until then, have a great week.

© 2012 by Dale R. Schmeltzle

I HATE TO SAY I TOLD YOU SO!

This is a sad day for long-time antique Kodak camera collectors like me, not a day to remind readers about the critical importance of cash flow to business survival.

Unfortunately, as demonstrated by the following timeline, the inventor and one-time “King of Cameras” has been reduced to a shadow of its former greatness. It was victimized by slow strategic decision-making and the dreaded negative cash flow.

Here is a brief summary of their 128-year history.

  • 1884: George Eastman developed film technology to replace photographic plates. He founded Eastman Kodak in 1892. With the slogan “You press the button, we do the rest” he introduced photography to the masses with cardboard box cameras that sold for $1, the equivalent of $24 in 2009 dollars.
  • 2009: With its market steadily evaporating since the 1975 invention of digital cameras, Kodak ended a 74-year run when it discontinued production of Kodachrome film. Their SEC filings reported a $210 million loss that year. Ironically, a Kodak engineer invented the digital camera.
  • January 19, 2012: The market for film cameras now virtually extinct, Kodak has witnessed its market value plummet from over $30 billion to $150 million. Today, they filed for Chapter 11 bankruptcy protection, having endured an operating cash drain of $750 million over the past twelve months alone. A company spokesperson said they “intend to sell significant assets” during the bankruptcy.

The moral of the story is this: few things in life are absolute. The laws of gravity and physics come to mind. Another absolute is the need for positive cash flow.

Almost everything else is negotiable.

© 2011 by Dale R. Schmeltzle

CFO America: Your Cash Flow Optimization experts

Keep It Simple, Sweetie!

One of the pitfalls of marketing is to “over-think” your strategy. With over-thinking comes the risk of over-spending, a quandary sure to draw my attention.

One of today’s suggestions is so simple and inexpensive you may have overlooked it, even though you have seen it used hundreds of times.

Put a bowl or attractive container next to your cash registers and invite departing customers and guests to drop their business card in for a chance to win a free meal, store gift card or something else of value. This suggestion can be very effective in adding names to your mailing list. It obviously works only in situations where customers visit your physical location.

A modern-day variation of this time-tested marketing tool is to allow participants to post their contest entry on your Facebook Fan page. This addresses the situation of not having a business where customers visit your facilities. The catch is that to post on your wall, they must first “Like” your page.

Contests can also be used to encourage customers to return to claim prizes. Create a sense of excitement. Promote them in your email campaigns, blogs, social media, etc. by announcing winners, next month’s prizes, and so on. A slight variation of this simple marketing strategy is to select winners from customers who complete evaluation or survey forms.

Above all, conduct your contest with flair and elegance, or do not do it at all.

What do Football and Chicken Wings Have in Common?

Today’s title sounds suspiciously like the opening line of a bad joke. Maybe a little later. Actually, it was inspired by last night’s start of the 2011 – 2012 NFL season. Green Bay defeated the Saints in a 42 to 34 nail biter. Therefore, I thought it was appropriate to start today’s blog with a football reference. Here it is!

Did you ever wonder why GMC is the “official truck” of the National Football League? It is not as if they haul injured players off the field on Sierra Hybrids. If they did, can we assume the trucks would be using Castrol, the “official motor oil” of the NFL?

An even bigger question might be why Wingstop is the “official chicken wing” of the Dallas Cowboys. For that matter, do the Cowboys really need an official chicken wing and if so, do they taste better than unofficial wings? I am guessing the nutritional value is about the same. Wingstop is not wondering about those questions. Executive Vice President Andy Howard reported Sunday sales for the 2010 season were up 15 percent in spite of the Cowboys’ disappointing 6 and 10 record.

Endorsement marketing is common in the insurance industry. For example, Hartford Insurance Company teamed up with the AARP to become the endorsed auto and home insurer to the AARP’s reported 40 million members. The AARP also offers life insurance products through New York Life, and long-term care products through Genworth Financial Group.

I am not suggesting you attempt to negotiate a deal with the NFL or a million-member national organization. Start small, on a state or local level. Identify organizations whose members use your products or services. Associations are usually eager to earn income from sources other than their membership. For the cost of an associate membership, an advertisement in their quarterly newsletter or a booth at their annual convention, you can probably find trade associations and similar groups willing to designate your company as the official supplier for your product or service. That in turn provides access to their membership directory, and perhaps speaking engagements.

  • A rule of thumb in the insurance industry is these marketing costs should not exceed two percent of anticipated revenue.
  • The best place to find organizations is your state capital where many will be headquartered.
  • If you are not prepared to market on a statewide basis, find out if there are local or regional chapters.

Do not overlook educational institutions and fraternal organizations as a source of endorsement sales. I knew a small business that was the preferred supplier of screen-printed and embroidered shirts for 50,000 students at Texas A&M University. How much is that endorsement worth? For the 2010 “Maroon Out” football game against Nebraska, one of many annual events the tradition-loving Aggies commemorate with shirts (I have paid for a closet full of them in recent years), the University’s student body, alumni and supporters reportedly bought over 55,000 shirts. My unofficial source tells me the supplier was paid $3.50 apiece.

Again, start small. You are more likely to land a profitable endorsement from a local high school sports team or a Parent-Teacher Association than from a major university. I also knew a one-shop sporting goods store that sold letter jackets for several large high schools. If you have raised a teenager in recent years, you know how expensive these customized items can be.

Let me end with one last football story.

The Seven Dwarfs were marching through the forest one day when they fell in a deep, dark ravine. Snow White, who was following along, peered over the edge and called out to the dwarfs. From the depths of the dark hole a voice returned, “The Cleveland Browns are Super Bowl contenders.” 

Snow White said to herself, “Thank God! At least Dopey survived!”

Would You Like a Beer With That Latté?

Alan Zell, author and retail marketing expert said, “Every business needs more business. That is an accepted fact. The unaccepted fact is that most businesses don’t use all the opportunities available that will bring them additional business. When one looks for additional business, the primary goal should center around getting second sales. What are second sales and why are they important? Second sales are add-on sales, repeat sales and sale by referral. They are important because they are much less expensive to get than first sales.”

I wrote about second sales, or up selling as it is more commonly referred to, last week. Today I will present two more ways to squeeze additional revenue out of your existing customer base. Allow me to begin with an actual example.

If you are a pet owner, you are aware of a powerful strategy veterinary clinics employ to drive sales and increase profits. That strategy is boarding facilities. Think about your experiences boarding pets. Chances are you also have them washed and groomed, and probably address checkups, shots and other recurring medical needs. Of the $65 average daily bill when boarding our Rottweiler, over half is for services other than boarding. I willing pay the $65 because it meets another important need. It buys the added assurance that if anything happens to my 12-year-old dog, she will be well taken care of until I return.

The point is that in addition to being profit centers in their own right, boarding facilities attract customers and generate revenue for other areas of veterinary services.

Ask yourself, “What is an equivalent up selling strategy for my business?” To be successful, it should be either complementary or counter-cyclical to your primary business. Here is an example of each strategy.

Complementary strategy: Starbucks announced a textbook example of a complementary marketing strategy in 2010. They began test marketing beer and wine sales at several Seattle locations. Designed to supplement a product line that holds diminishing customer appeal after the morning rush hour, alcohol goes on sale at 4:00 PM. Starbucks also announced their Starbucks VIA® Ready Brew coffee in 2010. It comes in four flavors, and is available online and through grocery stores and other retail channels. Not surprisingly, it was widely reported in 2011 that Starbucks has replaced Burger King as the nation’s third largest restaurant chain, a major accomplishment for a “non-burger and fries” chain.

Counter-cyclical strategy: Installing holiday lighting is big business in my town. Contractors spend most of November and early December installing lights. They spend January removing, repairing and storing lights for the summer. What do the installers do the rest of the year? I frequently see their trucks around town. I have also met several installers over the years. Everyone had a lawn maintenance or landscaping business that not coincidentally keeps them busy from March through October.

Finally, consider the capital investment (inventory, new equipment, sales training etc.) required for your new products or services, and the payback period expected before the strategy generates a positive cash flow.

© 2011 by Dale R. Schmeltzle

Dear Diary, I Lost Another Customer Today

It is easy to tell when my car needs gas. There is a gauge on the dashboard. If I am not paying attention, a light comes on when the fuel level gets too low. Finally, the car will simply stop when the tank is completely empty.

However, my car (unlike more sophisticated models) gives no warning when I need an oil change. Even if your car displays remaining oil life, you must first remember to scroll through the display periodically to check it. Jiffy Lube, Kwik Kar and other oil change franchises solve that problem by putting a small transparent sticker on my windshield to remind me at what mileage I need to change oil.

Doctors, dentists and veterinary clinics have long sent reminders when annual checkups are due. Same principle!

Most consumer products that require periodic maintenance or replacement give no obvious warning. Filters on furnaces and air conditioners, and batteries in smoke detectors and watches all come to mind. Many things around the home and office including HVAC equipment, computers, alarms systems, pool equipment and so on all need periodic service for optimum efficiency.

If you sell replacement parts or service on products that fall into this category, create a diary system, a sticker or something to remind customers to schedule a service call.

Here are some additional thoughts to keep customers coming back to you for maintenance and service work.

  • Have the customer indicate how they want to be contacted for a reminder when they initially purchase the item or sign up for service. Provide several options such as email and phone calls. Both are cheaper and more likely to solicit a favorable response than mailing a card. Whatever diary system you choose, it is sure to improve customer retention.
  • Create a sense of urgency by including a limited-time special offer with the reminder. A 15% discount, a free month of service or other incentive will discourage customers from procrastinating or purchasing services elsewhere.
  • Everyone who subscribes to magazines has received next year’s renewal notice within a few months of renewing the current year. In some cases, the marketing strategy may be to hope the subscriber forgot they still have 10 months remaining on the current subscription. However, the publisher usually offers substantial discounts to renew early, especially if pre-authorized to charge your credit card at renewal.

The same idea applies to remind clients to renew annual contracts, maintenance agreements and so forth. Do not wait for the customer to contact you, and do not risk losing a sale simply because you forgot. Again, offer customers a discount or an extra month on the contract if they renew by a specified date.

Enjoy the long weekend as we celebrate the unofficial end to summer and our 118thannual Labor Day. Thank you to our Canadian neighbors who came up with the idea ten years before Grover Cleveland copied it!

© 2011 by Dale R. Schmeltzle

 

SLIDESHARE, HOW DO I LOVE THEE? (PART 2)

On Monday, I began the first of a three-part article. It confesses my undying love for SlideShare, a free online slide hosting service. Part 1 discussed the first three of ten important things you should know about SlideShare, its demographics and norms. Today, Part 2 will explain how to embed YouTube videos and how to access SlideShare remotely.

Here are today’s suggestions.

4. SlideShare allows you to embed YouTube videos into slide presentations. Simply click the “Edit / Delete” button for the appropriate PowerPoint file on your “My Uploads” page. Next, click the “Insert YouTube Videos” tab at the top of the screen. Then paste the URL and select where in the slide sequence the video will appear.  Finally, click the “Insert and Publish” button. You are finished! Repeat the process to insert additional videos into the presentation. If you change your mind, videos are removable. Although I have not experimented with the option, you can also add sound by inserting an MP3 file. Video and sound cannot be inserted into pdf documents.

5. SlideShare is accessible by mobile devices at http://m.slideshare.com. This allows travelers to search, view and download presentations and documents. Bookmark the site for faster access.

6. Item #5 illustrates another endearing characteristic. By uploading Word documents as pdf files, I am using SlideShare as an article marketing service like EzineArticles. Although larger, EzineArticles has some complex rules about including URLs. I have failed their submission approval process on several occasions. The same is true of GoArticles.com. I have never encountered this issue with SlideShare. Furthermore, Twelve Things I Learned about SlideShare has received over 3,700 views on SlideShare compared to eight on EzineArticles and three on GoArticles during comparable timeframes. SlideShare’s marketing tag line should be, “No restrictions, just results!”

7. While I have not seen any definitive statistics, most seem to indicate the average time a viewer spends on an Internet page is only two to three minutes. That has significant implications to the amount of content presented. The average American adult reads between 250 and 300 words per minute. SlideShare viewers average seven to eight minutes per visit. That suggests that users are more likely to read longer files in their entirety.

8. Keyword tags help people quickly find information that interests them. SlideShare searches are keyword driven. They allow you to enter up to 20 tags per file. The top tags in 2010 were forecast, market, statistics, business, trends, industry, research, SWOT (an anachronism for Strengths, Weaknesses, Opportunities and Threats), report, company profiles, social media and marketing. Type and spell check your 20 tags in Word. Then paste them into SlideShare when you upload your file.

Saving the best for last, on Friday I will reveal the secret of the “60 minute Twitter boost.”

© 2011 by Dale R. Schmeltzle

You are Invited to my Party

Small business coach and author Robert Gerrish said, “For many, one of the greatest moments in business is the joy of attracting a new customer or client. In such circumstances, it is easy to get so caught up in the excitement that we forget to spend time on realizing the value of one of our business’s best assets, our existing client base.” For example, you may have heard banks criticized for offering free checking to new customers while charging existing customers for the same service.

As Mr. Gerrish suggests, all too often promotions only target new prospects. Show your appreciation of existing customers by holding promotions and events designed exclusively for them.

  • A special after-hours personal shopping event or trunk show, complete with entertainment, refreshments and “invitation only” discounts is an example. If your products typically require sizing or fitting (such as clothes), allowing a two day presale can create additional excitement. Customers select their purchases in advance, which you hold until the actual sale. This procedure also requires customers to visit your facility at least twice.
  • The luxury day spa I spoke of earlier invited my wife and I (did I mention she is one of their most loyal customers) to an art exhibit by a nationally recognized concert pianist. The event also included a wine tasting.

Another way to demonstrate your appreciation for existing customers, suppliers and employees is to hold an open house or reception. This is a great way to display your operations. It will also strengthen relationships between customers and staff that have not met. If your facilities do not include a suitable physical location, host it at your home, a nearby restaurant or under a tent on the front lawn. Moreover, while your open house or reception must be memorable, it does not have to be expensive. Class is not measured in dollars.

  • You may find network contacts are willing to help cater the event, print programs and menus, provide entertainment or other useful services at substantial discounts in order to promote their products and services to your customer base. Always take full advantage of your network and be ready to reciprocate by supporting and promoting their events.
  • Avoid scheduling functions on weekends or when likely to conflict with numerous holiday events. Use all of the communications tools and options previously discussed to ensure good attendance. There is nothing more discouraging than hosting a party when no one shows up.

A final caution about special event promotions is that in order to be truly special, you cannot hold them too often. Any promotional tool that is used too frequently runs the risk of creating customer expectations that will cause them to avoid full price purchases in anticipation of a sale or event that may never happen.

Next week, I will present an exciting 3-part series on my ongoing love affair with SlideShare.net. It picks up where a June series on this topic left off. I think you will enjoy it. Until then, stay safe and enjoy your weekend. You earned it!

 © 2011 by Dale R. Schmeltzle

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