CASH: NOW YOU SEE IT, NOW YOU DON’T

The first response to a cash crisis is usually to tighten up on expenses, cut back on something, or generally to make do with less. That may be necessary, but it is usually only part of the answer.

As shown in the diagram below, cash flows generated (or consumed) by any business are the net result of the inter-action of three related cycles. They are the expense, revenue and capital cycles. I will discuss the first two today, and conclude next Friday with the capital cycle.

A brief description of each follows, along with what I consider the most common problems within each cycle. All three cycles presuppose that you have the ability to measure and monitor its activities and results.

The expense cycle:

Let’s start with the expense cycle, the assumed “bad guy” for most small business cash problems. This cycle is largely what the name implies. It is also the easiest to fix.

The expense cycle involves the cash used to pay vendors, employees and others for the goods and services they supply. It also includes operating expenses such as rent and utilities.

The biggest obstacle to correcting expense cycle issues is one of attitude. Your goal is not to “pinch every penny” and second-guess past spending decisions. Experience teaches that it is too easy to miss the big picture while focusing only on inconsequential items. Reducing paper clip expenses by 80% will not save your company.

The focus of your expense cycle review should be to ensure that costs are planned and justified by their expected benefits. Ask yourself whether they are consistent with your business goals. If the answer is no, the appropriate action is to eliminate the expense. It is that simple!

Furthermore, expenses must be incurred within an environment of adequate internal controls. This control environment includes management tools such as monthly financial statements, a detailed budget and basic procedures such as a purchase order process with competitive bidding. Without these controls, it is simply not possible to manage expenses.

The revenue cycle:

The revenue cycle deals with money coming into your business. If only it were that simple!

Problems within this cycle are the most difficult to identify and analyze, especially if management lacks a solid grasp of the numbers. Consequently, the root cause of many business failures lies within the revenue cycle. They are unpleasant to address, since they ultimately affect customer relations. Two examples follow.

Money coming into a business always starts with a sale to a customer. However, it does not end there. If your business offers credit to customers, making a sale actually drains cash until you collect the receivable. This creates an inherent conflict between the desire to increase sales through generous credit terms and lenient collection procedures, and the need to maximize cash flow. Success in this area requires adequate internal controls including standardized billing and collection procedures, a balanced customer approval process, and sound treasury management.

One unpleasant aspect of squeezing more cash out of the revenue cycle is the prospect of having to raise prices. Perhaps the single most common mistake is under-pricing products and services relative to your cost structure. Correcting this challenge is even more difficult after you have established unrealistic customer pricing expectations, or if you operate in an especially competitive environment. People who do business with you primarily because you offer the lowest prices are unlikely to exhibit much customer loyalty.

We will finish this topic next Friday with a discussion of the capital cycle and a closing comment on cash flows.

© 2011 by Dale R. Schmeltzle

CFO America: Your Cash Flow Optimization experts

 

CASH IS KING, LONG LIVE THE KING!

 

 

Today’s title is an obvious parody on the old phrase, “The king is dead. Long live the king!” It dates to thirteenth century England. It conveyed the immediate transfer of power between a deceased monarch and the heir to the throne. More relevant to our purposes, it signified the continuity of sovereignty, or the supreme authority.

Future articles will explore where cash comes from, and where it goes, two critically important issues for every small business. For now, I will discuss the more basic question of why cash is cash king in today’s business world.

First, allow me to quote the experts. A 2005 study titled Small Business: Causes of Bankruptcy by Don B. Bradley III and Chris Cowdery of the University of Central Arkansas explained the supreme importance of cash rather succinctly:

“A lack of cash flow is often the biggest failure indicator. A lack of cash flow could cause a business to fall behind on wage payments, rent, and insurance and loan payments. A lack of cash flow also could inhibit the company’s ability to reinvest for future profits such as the ordering of products or supplies and marketing execution. When a company is borrowing to pay off past debts, it is usually a sign of disaster to come.”

They also said, “A significant shortage of cash flow limits the company’s ability to respond to outside threats. This is critical for fledgling businesses since new threats seem to appear every day.”

The only thing you can be certain of in business is that things will never turn out exactly as you planned. Adequate cash allows businesses to survive extended periods when sales, profits and cash flow are running behind plan, whatever the cause. Every business requires some level of cash to serve as a buffer against this uncertainty.

You could say cash provides sleep insurance. Constantly worrying whether a large customer will pay their invoice in time to meet Friday’s payroll, or whether you will have to turn away sales during your busiest season because you cannot stock sufficient inventory to meet demand is too often part of a businessperson’s everyday thought process.

Adequate cash levels are especially vital during the initial start-up period of a business. However, while the risks and challenges change as a business grows and matures, cash is supreme during any stage of a company’s life cycle.

For example, imagine that a 120-year-old company generated $1.2 billion in net losses. My immediate reaction is they certainly won’t be around to celebrate their 125th anniversary. That company is Alcoa. They lost $74 million in 2008 and a staggering $1.1 billion in 2009. Yet, Alcoa is still the world’s third largest producer of aluminum, and still trades on the New York Stock Exchange.

How is surviving such staggering losses possible? It was possible because during the same two years Alcoa generated $2.6 billion of positive cash flow from operations. As the old adage goes, “You can survive almost anything if you just have enough cash.” Businesses close their doors when they run out of cash to pay vendors and employees, period!

Here is an even more dramatic and current example of why cash is king.

AMR Corporation, the parent company of American Airlines, filed for bankruptcy protection in November 2011. During the previous 15 quarters, the company accumulated over $4.9 billion in net losses. Yet industry experts seem confident the company will successfully emerge from bankruptcy. Why? AMR has over $4.3 billion in cash on its balance sheet.

Far too often, the immediate response to a cash crisis is to tighten up on expenses, cut something back, to make do with less! That may be an appropriate tactic, especially if you have not scrutinized expenses closely in the past, or do not have a good handle on your cost structure.

However, cutting back is not the only tactic.

Next week I will begin a discussion of how cash flow generated (or used) by any business is the net result of the inter-action and proper management of three related cycles. They are the revenue, expense and capital cycles.

Until then, long live the king!

© 2011 by Dale R. Schmeltzle

 CFO America: Your Cash Flow Optimization experts

Reducing Fear and Uncertainty, Part 3

This week, I have been talking about the important marketing topic of decreasing consumer fear and uncertainty to increase sales. I conclude the series today with a discussion of introductory offers and giving away free service.

  1. Customers want to know approximately how much they should expect to spend in advance, without having to keep an anxious eye on the clock. This is often an issue for lawyers, CPAs and other highly compensated professionals who generally charge hourly rates. If this situation applies to your business, structure an introductory offer. For example, as an attorney with a billing rate of $250 per hour, you might offer to incorporate a new business, obtain all required permits and tax identification numbers and organize their corporate records for $499 including an initial consultation. If the project is completed within two hours, you earned your standard rate. If not, the introductory offer still works if you provide subsequent services using your regular fee schedule. You may also land full-price referrals because of your introductory offer.
  • As you complete assignments, you will likely find ways to reduce time and costs, lowering your breakeven point in the process.
  • The introductory price is independent of who performs the work. You can further reduce your costs if you can delegate portions of the assignment to your staff or outsource to lower-cost vendors.
  • For example, if you are a personal wealth manager, offer a free analysis of a prospect’s retirement investments. That is an important part of your main service. Your hope is obviously that some prospects will be so impressed with your knowledge and advice (or so unhappy with their current manager) that they will retain you to manage their portfolio. Other examples of providing a free service include a carpet cleaner who offers to clean one room free of charge, or an alarm company conducting a free home security analysis.
  • Jewelry stores illustrate an example of attracting customers with auxiliary services. They often provide free ring cleanings or replacement batteries for watches. With the highest gross profit margins in retail, very few prospects have to make additional full-price purchases in order to make the free service a successful strategy.
  1. My final suggestion under the topic of reducing fear and uncertainty to increase sales is an extension of the previous one. It is admittedly controversial. The idea is to provide free service in the hope of gaining new customers for full-price services. However, what you are giving away is neither the “2-cent sample” variety of the previous idea, nor the deluxe version of your service. It is somewhere in-between, probably closer to the former than the latter. Your free offering should be either a limited version of your primary service, or a less expensive auxiliary service.

I conclude the discussion of reducing fear and uncertainty to increase sales by reminding you of Monday’s quote by Mr. Ziglar. The next time you deal with an unhappy customer, take it as an opportunity to learn more about their needs while reducing their perception of risk. Remember also that helping them address their needs and concerns is critical to the ultimate success of every business.

Reducing Fear and Uncertainty, Part 2

On Monday, I introduced the topic of reducing consumer fear and uncertainty, and the distrust that often accompanies those emotions. I suggested that building a reputation for post-sale customer service and offering free samples might help overcome these marketing obstacles.

Today I will discuss offering satisfaction guarantees.

3. A self-described marketing expert once insisted I needed to offer a “100% money-back guarantee” to win new clients. It gets worse! He also suggested I guarantee savings of at least 10 times my fee. I had two major issues with the suggestion. First, in a profession where it was actually illegal to advertise only a few years ago, it sounded too much like an old-fashioned “snake oil” marketing approach. Secondly, all I do is counsel and advise clients. The value of that advice is ultimately dependent on their success in implementing recommendations in a timely fashion. I cannot guarantee the actions of others. Neither can you!

With that said, the concept of a money-back or satisfaction guarantee might have value to service providers within some narrowly defined parameters. Carefully consider the following matters:

  • At the risk of sounding like a cynic, get paid up front. Clients will be less likely to take advantage of your guarantee if they have to look you in the eye and lie about their dissatisfaction while asking for a refund.
  • Place clear and reasonable boundaries on what customers must do to qualify for a refund. Assume for example that I promise to develop your website and have it running within 60 days. That commitment must be contingent upon you providing a list of items like graphics and content, and on your timely approval of my work at various stages of completion. If your failure to perform those obligations is the primary cause of me missing the deadline, forget the money-back guarantee.
  • Consider offering a money-back guarantee on only part of your services. For example, weight loss centers advertise you will lose 20 pounds in 10 weeks for $20, or you get your money back. Since these centers cannot guarantee customers will follow the program, they cannot guarantee anyone will lose weight. They do not seem to fret much over that minor annoyance. Part of the weight loss program is that you eat their food for the entire 10 weeks. That will cost another $75 or more a week. No one can reasonably expect a refund for food they consumed, no matter how little weight was lost. Furthermore, some customers will simply be too embarrassed to admit their failure and ask for a refund. More importantly, for every customer who has their $20 fee returned, others will be so pleased with the initial results they will decide to lose 50 pounds. The extra 30 pounds are not at $1 per pound, and you still buy food from the center. This money-back guarantee is pure marketing genius.
  • Be aware that guarantees sometimes carry negative marketing connotations that can reflect poorly on your brand. That is largely due to all-too-common marketing promotions that border on deceptive advertising. I once had a client who previously developed a product marketed exclusively on late-night infomercials. You are no doubt familiar with the type of promotions to which I am referring. Everything is a huge value (whatever that is), yours for only $19.95 plus shipping and handling charges. The product always comes with a satisfaction guarantee. My client explained the rules of the game. The key phrase is “plus shipping and handling,” a greatly inflated sum that includes the actual cost of the product. That explains why infomercials frequently offer a second item “free” if customers pay separate shipping and handling fees. The $19.95 is pure gross profit! If a disgruntled consumer wants a refund, they must first return the product at their expense. The shipping and handling is not refunded. Therefore, the seller’s “worst-case scenario” is that the customer paid the full cost of the product and is now allowing them to resell it. Meanwhile, the refunded $19.95 was an interest free loan. I trust this deceptive practice is incompatible with your mission statement and value system. Do not risk long-term customer relations and reputation for the sake of short-term gains.

I will conclude this series with a discussion of introductory offers and giving free service. I look forward to meeting you here bright and early Friday morning.

Reducing Fear and Uncertainty

Let me give you a hypothetical illustration. You have a choice between two mutually exclusive investments. The first offers a guaranteed 3% return. The expected value of the second investment is 6.25%, more than double the first. It has 75% chance of returning 25%. However, it also has a 25% chance of losing 50% of your investment.

Which one do you choose?

If you picked the first one, you are in the majority. Physiologists tell us that the fear of losing what we already have is a powerful motivator. You picked a “sure thing” because the second investment’s higher expected value was not enough to overcome your fear of an uncertain outcome. In other words, you are risk adverse!

The same predisposition toward risk aversion applies to most consumers. Every business must recognize the fear of uncertainty, especially when marketing to new consumers or offering new products or services. Why, for example, would a prospect buy from you when they already have an existing relationship with your competitor?

You are the “uncertain outcome” in our investment example.

Uncertainties instill a level of customer distrust. Starbucks CEO Howard Schultz explained the reason for this distrust. “In the 1960s, if you introduced a new product to America, 90% of the people who viewed it for the first time believed in the corporate promise. Forty years later, if you performed the same exercise less than 10% of the public believed it was true. The fracturing of trust is based on the fact that the consumer has been let down.”

Your challenge is to overcome distrust and risk aversion. This week, I will discuss several ways to help you meet that challenge. Here are today’s suggestions.

1. Perhaps the ultimate way of overcoming customer perceptions of risk and uncertainty is simply by building a solid reputation for post-sale customer service. American author and motivational speaker Zig Ziglar said, “Statistics suggest that when customers complain, business owners and managers ought to get excited about it. The complaining customer represents a huge opportunity for more business.”

Statistics do indeed support Mr. Ziglar’s comment. The White House Office of Consumer Affairs reports that the average dissatisfied consumer will tell between 9 and 15 people about their experience. Approximately 13% will actually tell more than 20 people. Compare those prospects to the results of a survey by Lee Resources. They found that 70% of complaining customers would do business with you again if you resolve the complaint in their favor. Fully 95% will do business with you again if you resolve the complaint immediately.

2. We have all ventured out of our culinary shell from time to time and took a risk by ordering a new entree or dessert, only to discover we hated it. Ice cream shops have found a cheap yet completely effective way of eliminating this risk. They offer free samples on tiny plastic spoons. The sample (including the spoon) costs less than two cents. Supermarkets hand out free food samples in little plastic cups. Wine tastings accomplish the same objective.

Free samples, or alternatively a free trial period, may be the best way to encourage customers to try new products or services without the fear of having to pay for something that does not meet their needs or tastes.

On Wednesday, I will discuss money-back guarantees. Stay cool until then!

Showing Appreciation Without Spending Money

John Willard Marriott, the late founder of the hospitality chain that bears his name, summarized the ultimate reason why every business must energize their work force. He said, “Motivate them, train them, care about them, and make winners out of them. They’ll treat the customers right. And if customers are treated right, they’ll come back.” Given Marriott International’s $11.7 billion of revenue and 34% return on equity in 2010, I must assume Marriott employees are still treating customers right, 25 years after his passing.

One of the traditional motivational tools employers use is an employee benefits package. Unfortunately, it is a sad fact that most businesses cannot afford to compensate valuable employees as much as they would like to. Providing a competitive benefits package is even more difficult for small and mid-sized businesses. In a challenging economy, many do well just to be able to offer continued employment. I previously wrote about the value of offering discounts to employees. This is especially applicable in retail businesses that sell consumer products like clothing and jewelry.

Here is a variation of that idea that may help employers in your area while generating significant sales for you. Offer discounts or special services to someone else’s employees. I once worked for a 400-employee company that arranged (at my suggestion) a pickup and delivery service by a local dry cleaner. Another employer provided a weekly car cleaning service. Since employees paid for either service as they used them, both examples created a cost-free benefit from the employers’ perspective. The services created value since they allowed employees to complete personal errands they would otherwise have to address on their own time. More to the point, these examples also presented a large one-stop customer base for the service providers.

This strategy may work especially well as a means of extending a business-to-business relationship to your customers’ employees. For example, if you repair their employer’s computers, employees will already be familiar with your service and reputation. Offer them a discount for home computer service, especially if they can save you a trip by bringing personal computers to work.

Finally, if you have employees (almost 80% of American businesses do not), try to arrange similar on-site services and discounts from businesses used by your workforce.

Word-of-Mouth Has Gone Global-Part 6

Even if you use outside assistance to design and develop your social media platforms, generating fresh content remains your responsibility. Quite simply, no one knows more about your business than you do. Demonstrate that fact by sharing the body of material you accumulated in becoming a recognized expert. However, resist the temptation to share it all at once. Building a following in cyberspace is a marathon, not a sprint. As with blogging, develop a consistent conversational style and reporting pattern.

Here are a few pointers to get the most social media mileage out of your content and maximize its effectiveness:

  • If you have a document with multiple bullet points, break each into a separate post.
  • End each post by briefly telling readers what to expect in your next entry, and when it will be published.
  • Most content can be reformatted and repurposed as appropriate. For example, press releases and articles can be posted on Facebook and other sites as well as your blog. A 1,200-word article can provide a lot of content at 140 characters per tweet. Facebook status update fields have a 420-character limit. LinkedIn has a 700-character limit. Other social networks each have similar limits. With a little practice, you will probably find, as I did, that communicating your message within those limits is usually quite easy to accomplish.
  • You can supplement your original content with relevant quotes and articles written by others, or simply pass along helpful advice and suggestions you come across in your daily business. Numerous websites provide extensive quotes on every business subject. One example is www.brainyquote.com.
  • Timely material can be re-circulated or retweeted periodically.
  • Unless supporting a particular point of view is a deliberate part of your branding and marketing strategy, avoid expressing religious and political opinions or supporting controversial agendas that might alienate potential customers.
  • Have several people proofread and review your content. Check your pride of authorship at the door. Do not be afraid to use someone who will look you in the eye and tell you if you have “an ugly baby.” My son’s unbridled desire to correct his father makes him an extremely effective proofreader. Another friend’s frank comments often bruise my ego. I typically stew about them for a day, and then incorporate most of his suggestions.
  • No one cares about trivial matters like what you ate for dinner unless of course you are a food critic or Kim Kardashian. Maintain an air of business decorum and professionalism in your social media platforms.
  • There are numerous social networking tools available free online to help you monitor and simultaneously update multiple sites such as Twitter, Facebook and LinkedIn. Those tools currently include Tweetdeck, Hootsuite and Ping.fm. Most also provide upgraded versions for a fee. It is a truism of any free-market system that whenever a product or service becomes an undifferentiated commodity, those offering it can only compete on price. It is inevitable in the fast-paced world of social media that as soon as someone develops a new Internet-based service, someone else will figure out how to make money by offering it free. Therefore, periodically ask your social media active friends and network contacts whether they are aware of any new tools.
  • Finally, the ultimate purpose of social media marketing is to build business relationships. All relationships require two-way communication. Do not get so consumed in posting content that you neglect to respond to direct messages or DMs. Try to establish a dedicated time every day to answer your DMs.

I will conclude this series about social media marketing on Monday with some final thoughts. Enjoy your weekend.

Word of Mouth Has Gone Global-Part 3

This week, we are discussing social media marketing as a cost-effective marketing option for small businesses. Let’s pickup where we left off on Wednesday.

Evaluate social media marketing as a platform to build brand awareness and share content with your customers and target market. Use it as a vehicle to provide your customers with a voice. Encourage feedback. Social media marketing is all about consistent communication in channels selected by your markets. Avoid the trap of thinking it is about technology. Moreover, remember that ultimately you are connecting with individuals, not faceless companies and organizations. Consider these points:

  • Individuals all have birthdays, families, homes, hobbies and other personal characteristics and interests that they will occasionally mention online. Apply what Dale Carnegie said about making friends by being interested in other people rather than by trying to get people interested in you. Remember the personal stuff.
  • It is very likely that you will eventually attract hundreds and even thousands of followers on your social media platforms. It will not be possible (or even advisable) to attempt to develop relationships with all of your connections, especially since many will be in distant areas that effectively disqualify them as realistic prospects. However, for those online connections that are realistic customer prospects, cultivating an offline relationship greatly increases the prospect of a sale.
  • Try to exhibit a conversational style, but keep in mind that your conversations will be online and therefore accessible to virtually the entire planet.

Having decided to move forward with social media, the first crossroad you will come to in your analysis and evaluation of social media is whether to do everything yourself or hire experts. Make an informed decision. There are plenty of free or low cost resources available to you. Begin with an Internet search or by spending a few dollars on one of those 1,618 books and videos. Talk to your social media savvy friends and associates, perhaps starting with your “screenage” children. Having done my research, I decided that while I could muddle through the maze myself, the time saved and professionalism gained by hiring a consultant was worth the small investment. I should also mention that I met my social media consultants at a free seminar they sponsored. Look at what competitors and others in your area are doing. Make a list of what you like and dislike about each. Remember, imitation is the sincerest form of flattery. In this situation, it may also be the cheapest.

We will continue with this subject next week. Until then, have a great weekend.

Word of Mouth Has Gone Global-Part 2

On Monday, I introduced the topic of social media marketing as a low-cost, effective marketing tool for your business. Social media platforms currently include about 20 widely recognized platforms including Facebook, Foursquare, LinkedIn, MySpace, Twitter and YouTube.

Whatever platforms are chosen, they provide incoming or backlinks to your website and blog. This improves search engine results since the number of backlinks is an indication of the popularity and importance of a website.

Businesses use social media marketing to increase brand awareness and promote products and services. Businesses also receive feedback from customers and potential markets. Perhaps the best analogy I have heard was a comparison to a large, porous funnel. The various platforms cast a wide net to gather many followers into the funnel. As you continue to provide valuable and interesting content and develop relationships, some of those followers will eventually progress through the narrowing funnel to become customers and sources of referrals. Others will fall away.

Because these social media websites are available free to everyone with Internet access, they present inexpensive and powerful platforms for small businesses to get market feedback and conduct targeted marketing campaigns on a local, regional, national or even global basis.

How popular is social media marketing? I got a sense of the interest it generates when I searched Amazon for the phrase “Facebook marketing” and got 452 results. I got 1,618 hits when I searched “social media marketing.” Products included a cornucopia of books and videos ranging up to $1,200 and included 137 hits of “For Dummies” books alone.

Perhaps the real surprise is why there were not more results. According to Goldman Sachs, Facebook has over 600 million active users (defined as those who log on at least three times a week). Perhaps buoyed by the 2010 movie The Social Network, that is a 20% increase in six months. Those users include President Obama and Queen Elizabeth. According to LinkedIn’s Press Center, they have 100 million users speaking one of six languages in more than 200 countries. They add a new user every second. In September 2010, Twitter co-founder Evan Williams said Twitter is averaging 90 million tweets per day. They are gaining 370,000 new accounts daily, with 16% of them starting the service on mobile devices. I could go on, but you get the idea.

Social media marketing is simply too large to ignore, especially if your target market is under the age of 40, affluent and highly educated. It demands attention because of its size, growth trends and cost efficiency when compared to alternative marketing channels.

Today’s suggestion should be obvious by now. Evaluate social media marketing as a platform to build brand awareness and share content with your customers and target market. Use it as a vehicle to provide your customers with a voice. Encourage feedback. Social media marketing is all about consistent communication in channels selected by your markets. Avoid the trap of thinking it is about technology. Moreover, remember that ultimately you are connecting with individuals, not faceless companies and organizations.

On Friday, I will offer some specific tips to help you successfully implement that suggestion.

Word of Mouth Has Gone Global

Through your efforts to become a recognized expert in your field, you will accumulate an ever-growing body of material (articles, papers, program notes, PowerPoint presentations, research material, etc.) that can serve as content for the next group of ideas.

Social media marketing is all the rage. Embattled TV star Charlie Sheen set a Guinness world record on March 2, 2011. He reached 1 million Twitter followers in just 25 hours and 17 minutes. It took Mr. Sheen four days to reach 2 million followers. It remains to be seen whether he will catch Lady Gaga, who leads the pack with approximately 10 million Twitter followers.

Social media has influenced national elections and at least one guest host selection for Saturday Night Live. Viewers of Super Bowl XLV learned the Chevrolet Cruze can now read Facebook newsfeed content in real-time, affording drivers “the ability to send status updates and stay connected to social platforms.” Exactly what those other platforms are is unclear as of this writing. However, speculation is that it will likely include Twitter.

Moreover, as events of recent years have proved, totalitarian governments in many parts of the world think it is easier to control civil unrest online than in their streets. The first casualties of politically embarrassing protests are often these same social networking sites. Egyptian activist and Google executive Wael Ghonim was a leader of the early 2011 uprising that toppled President Hosni Mubarak. He told CNN, “I want to meet Mark Zuckerberg one day and thank him. I’m talking on behalf of Egypt. This revolution started online. This revolution started on Facebook.” I was fascinated to learn that the U.S. State Department starting tweeting in Arabic during the crisis.

The socio-economic and political impact of social media is a source of inspiration for some and fear for others. The statistics are impressive for all.

Let me provide a working definition of the term. Social media marketing relies on Internet platforms to provide content that attracts attention and encourages readers to share your message with their social network. Some of the more popular platforms are:

  1. Facebook
  2. Foursquare
  3. LinkedIn
  4. MySpace
  5. Twitter
  6. YouTube

Each has a somewhat distinctive set of demographics such as average age, gender, education level, membership size, U.S. and global traffic volume, length of average visit and so on. Visit www.alexa.com to find the best matches for your target market.

For the rest of this week, I will be offering suggestions to use social media marketing as a low-cost, effective marketing aid for your business.

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