Archive for May, 2011

Is Your Business Ready for Emotion Reognition Software?

May 9, 2011

by Doug Smith, President, The Woodhaven Group, LLC

Every business owner is looking for the next marketing technology breakthrough that will bring more sales and cash flow into their business.

At one time that breakthrough was the advent of television.  Running spots on the evening news or prime time meant increased sales and more cash coming in to invest in new business ventures.

Then along came the computer with the opportunity to communicate the brand through optimized websites, email marketing, and social media.  The benefit of the internet has been the ability to track results and more effectively target the marketing message to a segmented audience.

Now, technology may be ready to go to the next step.

For years, companies like Sony and Google, universities like MIT, and even law enforcement groups like Homeland Security and Interpol have been experimenting with facial recognition software.

Different areas of the face can be monitored for a change in emotions from happiness to sadness to fear to many more feelings of the moment.  Based upon these behavioral responses marketing experts can do a better job of getting feedback from focus groups and individual customer interviews.

This technology may not be ready to use for the average business just yet.

But imagine the possibility of the future……….

A consumer’s web camera on their laptop is monitoring their current emotions as they search a topic on Google.  Based upon their emotion and historical response, ads could be populated in the sponsored ads section or in the display ad of a website.

I am sure the consumer advocates concerned with privacy will have something to say about this approach.

But the thought of increasing business cash flow from a more productive use of marketing is an intriguing thought to consider.

Advertisements

Do Not Forget To Use a Call To Action When Running An Ad

May 8, 2011

by Doug Smith, President, The Woodhaven Group, LLC

Many companies forget that in marketing the key to increasing sales and business cash flow is an effective call to action, often times referred to as a CTA.

I have had many business owners and CEOs ask me why their advertising was not performing.  They had beautiful graphics or photos.  A great job was done of listing features and benefits.  Lots of money was spent on a beautiful logo.

But, what was missing?

Very simply, what was missing was a failure to include a call to action which is a reason for the prospect to act and take the next step in the buying cycle.

It may be saying “click here” on an e-commerce site but more often it is an offer the prospect cannot refuse. Here are a few examples that have worked for me:

  • Buy 2 get 1 free
  • Free shipping or delivery
  • 50% off the regular list price
  • A specific sale price also showing the regular price and the savings realized by the buyer
  • A free service such as free alterations with the purchase of a suit

There are 2 important tips to a winning call to action:

  1. The offer has to be real, legitimate and have a perceived value in the mind of the buyer.  Never inflate the regular comparable price just to make the offer look better.
  2. There has to be a deadline to act in order to create a sense of urgency.

Regardless of the marketing channel used, the next time your business runs an ad, in order to increase cash flow and sales, make sure to not forget an effective call to action.

10 Good Reasons to Use Email Marketing

May 7, 2011

by Doug Smith, President, The Woodhaven Group, LLC

As a CEO, I wish that 30 years ago I had this extremely productive tool to communicate with my customers and prospects.

If your business is not using email marketing, then you need to make it a part of your marketing mix going forward.  What benefit will your company get from email marketing?  Here are 10 good reasons:

  1. It will increase your business cash flow:  Email marketing costs less than direct mail, television, radio and other forms of purchased media.  This means more cash for your company to use in other areas of the business.  Executed properly, over both the short-term and long-term email marketing will have your highest return on investment of any marketing channel in your business.
  2. Can segment your customer base:  Instead of a general message to a mass audience you can tailor your message to a segment of your customer base that has shown a desire for information on a specific topic, product or service that you offer. Relevant targeted content is at the heart of effective email marketing.
  3. Can build a 1 on 1 relationship:  This is not possible with television or radio.  Each email can be personalized with the recipient’s name, they can reply to what you have sent and you can directly respond to their comments or questions.  
  4. Can review response history of the individual:  Did they open the email?  Did they click-through to a link? Did they buy? Compare this to newspaper or television where you have no idea  whether your customer even knew the ad or 60 second spot even existed.
  5. Allows you to use triggered emails:  Based upon response history, you can automatically target future emails to their area of interest.  For example, if you are an attorney and your prospect clicked on an estate planning article, you can follow-up with an email on trusts.  Triggered emails can be set up by date such as birthdays, anniversaries of a successful completion of a job, for  holiday messages and many other ways.
  6. It lets your customer be in control:  Marketing has changed. The consumer now controls the relationship.  With email marketing the consumer can choose what part of the email to read, when to read it, if they want to respond to an offer and even opt out of receiving future emails if they conclude that your information is not relevant to them.  This is a good thing. The best performing company will win. Make sure its your company. 
  7. Email marketing can be synchronized with other marketing channels:  Email marketing does not have to  stand alone. You can use other channels like social media or direct mail to sign up prospects to receive emails about your company. By identifying a specific area of interest, a key person can respond with a personalized letter or phone call and not waste your prospect’s time.
  8. Can utilize education-based marketing:  Email marketing is not a sound bite or tweet.  It allows you to dig deep into a topic and educate your consumer.  Better yet, your company can send a series of emails weekly on a topic of interest.
  9. Builds brand:  A consistent ongoing message can build trust and credibility in your company. When the time finally comes to make a buying decision you will have built a reservoir of goodwill that will give you a chance to close the sale. 
  10. Can link to your website:  Your website should be treated as if it was another location of your company that is used to strengthen the relationship with a prospect or customer.  Linking to different parts of your website from an email can educate, sell, and communicate what makes your business unique.

There are some who say that email marketing is on the decline and is being replace by social media.

I disagree.

Email marketing continues to be at the core of an integrated marketing strategy that can build sales and profitability increase the cash flow of your business over the long-term.

I would be interested to know what your  experience has been with email marketing.

Help New Young Employees When They Make a Mistake

May 6, 2011

by Doug Smith, President, The Woodhaven Group, LLC

As a 30 year CEO, I truly believe that employees always want to do the right thing and not make a mistake.

I also remember as a young new employee many years ago that I believed I would be fired if I made a mistake of any kind.

Well, mistakes happen.

And they are probably going to happen more often with new young untested employees.  And, yes, these mistakes may have a short-term negative impact on your business cash flow.

If there are not some mistakes being made then the new employee is probably not learning and growing.  I don’t want an employee who is so afraid of making a mistake that they are unwilling to attempt anything new.  That is not how superstars in your company are developed.

Here are tips on working with new young employees that will benefit both them and your company:

  1. Make sure they clearly understand the job description of what they are to do.
  2. Give them solid initial and ongoing training in their scope of work.  Make sure there is plenty of time  for them to ask questions and follow-up questions.  Don’t just have them look at an online video and call that training.
  3. Make it clear they will be accountable for the results of their actions. Most top performers want to be held accountable.
  4. Assign someone to work closely with them.  Call this a mentor if you want.
  5. Proact by setting a time each week to let them ask questions regarding areas they do not understand or are having a problem with.  Don’t wait for the employee to come to you.
  6. When a mistake occurs ask them to go thru the steps or process and if they would do anything differently.
  7. Make sure they have victories to celebrate.  When there is a success let them get the credit.  That is part of being accountable.
  8. Add more responsibility as they earn it. Otherwise, what are victories for?
  9. Through all the steps make sure you listen to what the new young employee is actually saying and not what you may think they are saying. Read between the lines if  you have to.  
  10. When the new young employee becomes a success let them mentor their own new employee.

Retaining employees, reducing mistakes, and building teamwork will be obvious by happy customers, increased sales, and more cash flow to grow your business.

Now, go hire your next superstar.

Use Top Performers for Recruitment of More Talent

May 5, 2011

by Doug Smith, President, The Woodhaven Group, LLC

Nothing uses up cash flow in a company like the turnover of poor performing employees.

The amount of time and dollars to run ads, interview, train, give exit interviews and start over again can kill a company.

Does this sound familiar?

Need a solution?  Try this suggestion.

Tap into your top performers to help recruit others.  It is common knowledge that winners do not like to hangout with losers.  Your best people will know others who are friends, acquaintances from prior companies, or maybe someone they went to school with that will be a success in your company like they are.

You can reward the top performer with a cash bonus, a trip, extra time off, or some other perk that motivates them.  Just make sure you tie the incentive to the new employee being with the company for a certain period of time like 3 months.

So the next time you are looking for someone, keep your superstars in mind and conserve cash flow.

Will Groupon Increase Business Cash Flow?

May 4, 2011

by Doug Smith, President, The Woodhaven Group, LLC

I have to admit that I have not used Groupon or the other coupon sites from a seller standpoint at this time.

But I am intrigued by the potential these sites have to offer.

I know there are businesses that love what coupon sites do to sales and return time and again to using Groupon and sites similar to it.

Having said that, here are a few questions an owner or CEO should ask themselves before taking the online coupon plunge:

  • Who is your customer?  What do they really want and expect from your company?  While everyone likes a deal, do they expect you to be selling your products or services at 50% off?  Are they more price driven or value driven?  Any new prospect you attract should be similar to your existing loyal customer.
  • What is the impact on your brand?  What message do you want prospects and customers to hear from you?  Is the coupon call-to-action aligned with the value proposition your company has invested time and money in developing?
  • What is the cost to acquire a new customer?  You should know this.  What % of the coupon users will return to buy the next time at full price?  Run scenarios to see if you like the cost of customer acquisition.
  • What is the profit per sale and are you comfortable with that?  Run the numbers on gross margin and overall cost of marketing.   If the coupon site takes 50% upfront, what will you be left with after the sale?  
  • What is the impact on your existing customer? Will they expect the same offer even if they do not act on the coupon?  If you offer them the same discount as the coupon, would they have purchased anyway but at full price?  Do their expectations of your company change going forward?

Those are just a few of many questions to consider prior to using the online coupon channel of marketing.

Lastly, I would talk to businesses similar to yours who have used Groupon and similar coupon sites.  Ask them what worked and what they would do differently.  The beauty of Groupon and others like it is that you can learn from the experiences of others.

What do you want to accomplish from using online coupons?

Profitably increasing your business cash flow should be at the top of your list.

5 Signs Your Business is in Trouble

May 3, 2011

by Doug Smith, President, The Woodhaven Group, LLC

Here are 5 critical early stage signs that your company may be in trouble.  They all have to do with poor cash flow. If you are experiencing 1 or more of these,  as owner or CEO, you must act immediately:

  1. Vendors are reducing your credit limit:  This may be due to failure to pay on time, a poor credit report, reduction in the amount ordered or simply rumors about your company from other suppliers.  Are they asking for payment before they will ship the next order to you?
  2. Top people leaving for other companies:  When a company is in trouble the weakest performers will be the last to leave.  The top people will notice problems and find reasons to change companies.  Be concerned if this starts happening as the top people in your company will be talking to each other.
  3. Your accounts receivable balance is increasing:  This is the cash your company needs to live on.  If sales are not increasing but the accounts receivable balance is going up then you need to find out why and fix it.  Are there quality problems?  Are invoices not being mailed on time?  Do you have a couple large customers in financial trouble?  Is anyone assigned to work slow payers?
  4. Inventory and accounts payable are increasing but sales are down:  Is someone ordering inventory as if there is a big sales increase occurring?  Who is approving purchase orders?  Get with key suppliers and see if you can return inventory and get a credit off the next invoice.
  5. Gross margin is dropping:  This is cash not available for the company to use.  Is there a quality problem requiring replenishment of goods sold?  Was there a price increase from a supplier that was not passed on?  Is the sales department giving price breaks just to get orders?  Are competitors offering a better product and sales is cutting price to compete?

Management must maintain a dashboard of key indicators that are monitored daily or weekly.  This will allow the management team to identify problems early on and take action.

9 Tips to Improve Yourself and Your Business

May 2, 2011

by Doug Smith, President, The Woodhaven Group, LLC.

As an owner or key person in management you must grow your business and increase the cash flow needed to achieve the goals of the company.

I have found most owners do a good job of addressing both the short and long-term needs of the company.

However, there is one area that usually does not get addressed. That is the failure of the key person to take care of himself.  If the top person does not take care of himself then the success of the company is in jeopardy. I know.  I have been there and learned a few tips I want to share:

  1. Maintain good mental health:  It is too easy to get fixated on day-to-day crisis management.  At some point this can affect your ability to focus and solve problems.  The best solution I have found is to have friends outside the business that you can use to unwind with.  It might be a weekly golf outing or attending a ballgame.
  2. Maintain good physical health:  This means exercise.  Not only will exercise help keep the blood pressure in line, it will also help alleviate stress.  The best way to exercise is to treat it like a meeting.  Schedule it into your day at least 3 times per week.  Also, don’t forget that annual checkup.
  3. Educate yourself:  This can be on business or nonbusiness topics.  If nothing else, we all can spend time staying current on how the latest developments in internet marketing affect our sales!
  4. Pay yourself first:  You deserve to make a fair return on your time, effort and risk that you are taking.  Pay yourself enough dollars that you have money left over to spend on something frivolous for you or your family.
  5. Set aside dollars for the long-term:  Make sure you are allocating money for the long-term needs of your family such as retirement or that vacation home.  Your company has long-term goals that need funded.  You should also have personal long-term goals that get addressed.
  6. Stop beating yourself up:  There has not been a CEO or owner yet that is right all the time.  Stop stressing over that past decision that did not work out.  Keep looking to the future.  You will more than make up for old mistakes with the wise decisions you will make going forward.
  7. Hire the best, pay them, and get out of their way:  Do I need to repeat that?  Make your job easy by hiring people better than you are.  That means you will have to pay those key people good money and then do not micro-manage them.  Some of the most fun I have had as a CEO is watching managers develop and being there to help them when they stumble.
  8. Don’t procrastinate! Make the decision:  Failure to make a key decision such as closing a branch or letting someone go can hurt the company, sap cash flow that is needed for projects to grow the company and destroy morale.  For the good of the company, don’t put off doing what has to be done. It goes with the job title.
  9. Ask for help if you need it:  Many owners and CEOs let their pride get in the way.  If you are not getting the results you need ask someone from outside the company to help.  It might be another CEO, a consultant in your industry, or a retired business owner.  They can take a fresh unbiased look at your problem.

Remember, your business can not grow if you are not on top of your game.

Take care of yourself while taking care of your company.

 These tips have worked for me. I would be interested to hear from others who may have tips to add to this list.