Tips For Offering Discounts

There's a great article in Small Business Weekly offering tips on when to offer discounts:

Think before you slash. That's the advice John Quelch, a professor of marketing at Harvard Business School, gives to business owners tempted to cut prices. "You don't want to give away your profit margin to customers who still would have paid full price," he says.

Whether they're following Quelch's advice or acting impulsively, nearly 30% of small business owners say they have lowered their prices, according to a February survey by the National Federation of Independent Business. "They're struggling and asking, 'What can I do to save my business?'" says Martin Lehman, an adviser with the New York offices of SCORE, a nonprofit business counseling group.

If sales are hemorrhaging or customers are flocking to deal making competitors, discounting might be necessary. That's especially true if you've already exhausted other options, such as offering consumers extra perks or improved service. But chopping prices is not without risks, including a cheapened brand image and customers who will never pay full price again. And if there's no demand, even signs that scream "Lowest Price Ever!" won't draw customers.

To discount successfully, you need to take a look at what your competitors are up to, then analyze your company's previous experience with promotions. If discounting is uncharted territory, you might experiment with a short-term sale to test the waters or, if you can afford it, bring in a research firm to gauge customer responses to proposed price cuts.

Read the full article here.

Workers On Twitter and Facebook

Internet trends can change faster than the weather in any given state. But like it or not, Twitter and Facebook are the hot place to be. Some birding companies realize that a value is there. If companies like Starbucks or Dunkin Donuts didn't think a social networking site like Twitter was worthwhile, would they waste time with having profiles and regular updates? Take a look at the number of followers they have--that's how many people have signed up to receive updates from them--their followers have said, "Yes, I would like to know what you have going on."

Some birding companies you can find on Twitter include a Wild Birds Unlimited in Upstate New York, a bird artist called Birdorable who sells bird t-shirts, mugs, and magnets, and a company called BirdHouse Outlet trying to get their online retail shop some business.

If you as a store manager or owner are not comfortable delving into the world of social media, look at your employees. Are any of them already plugged into the online world? Consider recruiting them to help you get your company message out. If they are already familiar with it, understand it, and enjoy doing it, why not tap that resource?

Companies are seeing the value of younger employees working on the Internet, even while engaging in personal use on the job. For many young people, it's how they interact with the world. Consider this article from The Salt Lake Tribune . It describes Marty Kotis, who owns a real estate development firm in Greensboro, N.C. He discovered on the company's monthly wireless bill, that staffers were racking up the charges with text messages. One employee alone had 2,500 messages, while two others had 800 and 700. But, he didn't reprimand the employees, because he realized that the ones with the highest text messages were also the ones who were the best at their jobs and worked extra hours.

Kotis noted that activities like texting and using Facebook and Twitter are more likely to be done by younger staffers, who use these tools to communicate with the entire world. That means they're probably using those communication channels for work, too. Kotis said one of his employees "pretty much did a deal through text."

Read the full article here, it's enlightening and also a realization that social media is not just something for staff to waste time on (although, that's not to say some staff will not abuse it on the job). But rather than fearing it and keep staff away from Twitter and Facebook, harness that power to your company's advantage.

Dos and Don'ts of Twitter

Maybe you saw Sam Crowe's article in the current Birding Business about using online resources or maybe you've heard everyone else out there talk about, but the hot social media site right now is Twitter.

Twitter is based on you having a profile on their site and updating a "micro blog" or your Twitter post (aka Tweet). A Tweet cannot have more than 140 characters including punctuation and spaces. When you start to follow different people on Twitter, others may follow you. If you write a Tweet that is funny or interesting to followers, they may pass it on or "ReTweet" it and hopefully you will get a bigger following.

But Twitter is not just about putting something out there, you also need interact with your followers. If someone wants to reply to you, they will put @username at the start of their Tweet. For example, my username on Twitter is birdchick. When a follower wants to reply to me or just ask a question, they will start their Tweet with @birdchick. I can check my @replies box on my Twitter Home Page and see if anyone asked a question or replied--even if I don't follow them. This makes Twitter more interactive, more fun for your readers, and a more effective marketing tool. If you don't want to interact on Twitter, do not expect a large following.

If you are just starting in Twitter and would like to know some basic etiquette, there's a good article on the Do's and Don'ts at PC Magazine to help you out.

Some New Year Tips For The Small Business

From Small Business Weekly:

Investigate your lender. Few banks are increasing lines of credit, but if your financial institution itself is in bad shape, "open up discussions immediately," says Allan Tepper, a CPA and finance consultant to small companies. "If they're not there for you, consider alternative lenders." You might also approach a credit union: Their lending is up 36% over last year.

Tighten your belt, but make sure the cost-cutting measures don't show. Make Internet calls instead of using traditional phone carriers, and e-mail documents (in a secure file format) instead of printing and mailing them. Save energy by turning off computers and printers. In northern climes, program the thermostat to fire up the heat just before the workday begins and shut it off an hour before it ends, suggests Jennifer Kluge, president of the National Association for Business Resources, a membership association in chilly Warren, Mich.

Barter. Elizabeth Donley, CEO of Stemina Biomarker Discovery in Madison, Wis., barters with her software consultant: He does statistical and Web site work for her company, and in exchange, she lets him run his business out of her excess office space. That's netting her company $50,000 in savings over the length of the 15-month contract. If you can't work it out on your own, examine organized barter exchanges and networks (there are hundreds). Just be sure to put all agreements in writing and record them for tax purposes.

Liquidate inventory. "Call it a 'The Economy Stinks Sale,' " says Lenzer Kirk. Most business owners know what it would take to make an offer "that customers would find impossible to refuse," Rice says. If doing so can garner enough of a reaction, it just might hold you over for the short term.

Let customers know this isn't a normal business practice, which will make it easier for you to raise prices later. But bear in mind that, in commodity businesses, some customers will disappear when prices go back up.

Read the full article and all of the great tips here.

MySpace Advertising

From Small Business Week:

Justin Esch and Dave Lefkow, founders of gourmet seasonings maker Bacon Salt, went out on an advertising limb. Typically, the Seattle entrepreneurs used MySpace and Facebook profile pages or small text ads placed next to Google search results to promote their line of seasonings. Then MySpace encouraged them to test a new ad service tailored to businesses like theirs, so Esch and Lefkow shelled out $500 for a trial campaign.

To their surprise, blog buzz about their product picked up, site traffic doubled, and online sales jumped 30% over the past month. "We've seen really good results," Esch says. "This experience taught us there is more that we can do to get word of mouth out there."

MySpace is hoping more small businesses will see the light. On Oct. 13 the social network owned by News Corp. takes the wraps off MyAds, a new approach to advertising that allows small businesses and individuals to create their own banner ads—illustrated messages in fixed places on a Web page. The service, initially available in a test phase, also will let advertisers decide who they want to target on MySpace and then track the results of the campaigns. MySpace is aiming at advertisers who want to spend under $25,000—though marketers can start by laying out as little as $25.

MyAds is an offshoot of Hypertargeting, a service MySpace launched a year ago for Madison Avenue and big advertisers. Hypertargeting sifts through all the information people publish on MySpace, be it age, gender, hometown, or a preference for Coldplay vs. Rhianna. Hypertargeting uses that information to create 1,100 buckets, or target audiences, ranging from basketball fans to people who read Chicken Soup for the Soul books. MyAds puts those and other tools into the hands of individuals. With MyAds, the Bacon Salt founders created a banner ad using their site logo and tagline, "Everything Should Taste Like Bacon." Then they sifted through MySpace's buckets, picking categories such as dining, restaurants, and of course, bacon, and targeting people in cities and states, including Atlanta and Ohio, where Bacon Salt was launching in Kroger (KR) supermarkets.

Read the full article here.

Making The Most Of Online Sales

Business Week's Small Business Section has two interesting articles on selling merchandise online. From the article Determining Where To Sell Online:

"There's no one-size-fits-all answer, though e-commerce experts tend to agree it's worth listing on multiple sites. The e-commerce market is huge, with $60 billion worth of goods traded on eBay alone in 2007, according to the company. More than 85,000 businesses primarily operated as electronic or mail-order retailers in 2006, according to the latest U.S. Census data, and 77,000 of them had no employees. Finding the best platforms for your company depends on what you sell.

You also need to consider how today's Web has changed since the early days of e-commerce: It's much more social (BusinessWeek.com, 2/20/08). Setting up a storefront alone and listing on marketplaces may not be the most effective way to generate sales. Instead, Amy Joyner, a former eBay seller and author of The Online Millionaire, an e-commerce guide, suggests that those serious about selling online write blogs and comment on others, join social networks, and participate in online communities. "If you're out there and you're delivering content and interesting information, there's no way it can hurt," she says."

You can read the entire article here. Did you catch the link to the Feb. 20, 2008 article about social e-commerce? Here's an excerpt from this interesting article:

"First, a few numbers. There are some 9 million blogs out there, Yes, there were 9 million, but how many of them were active? Probably only a fraction. In early 2008, says Technorati Chairman David Sifry, the search company indexes 112 million blogs, with 120,000 new ones popping up each day. But only 11% of these blogs, he says, have posted within the past two months. That means the active universe is closer to 13 million blogs."

Blogs are different. They evolve with every posting, each one tied to a moment. So if a company can track millions of blogs simultaneously, it gets a heat map of what a growing part of the world is thinking about, minute by minute. E-mail has carried on billions of conversations over the past decade. But those exchanges were private. Most blogs are open to the world. As the bloggers read each other, comment, and link from one page to the next, they create a global conversation.

Picture the blog world as the biggest coffeehouse on Earth. Hunched over their laptops at one table sit six or seven experts in nanotechnology. Right across from them are teenage goths dressed in black and thoroughly pierced. Not too many links between those two tables. But the café goes on and on. Saudi women here, Labradoodle lovers there, a huge table of people fooling around with cell phones. Those are the mobile-photo crowd, busily sending camera-phone pictures up to their blogs.

The racket is deafening. But there's loads of valuable information floating around this cafe. Technorati, PubSub, and others provide the tools to listen. While the traditional Web catalogs what we have learned, the blogs track what's on our minds.

Why does this matter? Think of the implications for businesses of getting an up-to-the-minute read on what the world is thinking. Already, studios are using blogs to see which movies are generating buzz. Advertisers are tracking responses to their campaigns. "I'm amazed people don't get it yet," says Jeff Weiner, Yahoo's senior vice-president who heads up search. "Never in the history of market research has there been a tool like this."

Read the full article on Social Media here.

Tips From MarketWatch

From The Wall Street Journal Online's Market Watch come 10 tips for surviving the economic downturn. Most are pretty common sense tips, but here are couple that offer some food for thought.

 4. Really get to know your customer. Rip out your answering machine, step up your
service and ask what they need. Understand how your target customer has evolved. In
general, "It's best to target high-end or budget buyers, the middle is gone," Steppe says.
"Do something fast or you're about to go out of business. People will be buying what
they need and cutting back on their wishes and wants."

5. Embrace the current economic reality, Part I. "The bottom of the cycle is a really
good place to start a business," says Wuensch, "because when you start off on an up
cycle, your assumption is that this (level of profitability) is going to go on forever." Those
who have studied the history of business will be comforted by the knowledge that
downturns always eventually go up.

6. Embrace the current economic reality, Part II. Competitors' failed businesses present
an opportunity. "If the fundamental need of their business didn't go away, people who
understand this can exploit it (often by buying the failed company or hiring top
employees left without a job)," Steppe says.

You can read the full list of tips here.

Tips For Navigating Advertising With The Economic News

Some advertising tips from Steve McKee of Business Week:

Don't Panic

The problem with panic is that it leads to bad decisions. While everybody else is selling, Warren Buffett, the second-richest man in the world (and soon to be the first), is buying. The reason? He always keeps his head. He understands the economic cycle. He knows that while things have gotten way out of whack, the laws of economics have not been repealed, and there are still real companies creating real value out there. While nobody can see a clear way out of these economic straits, acting out of fear will likely make things worse. That's as true of advertising as it is of investing.

Advertising panics usually take one of three forms. The first is cutting back the budget—sometimes to zero. Smart companies are careful about how and where they cut back, so they don't sacrifice the future on the altar of the present (see "Five Don'ts for Marketing in Tough Times" (BusinessWeek.com, 7/11/08). The second is giving away the store, which is almost always a mistake (see "Low Prices Are Not Always Your Friend" (BusinessWeek.com, 4/14/08). The third? Following the politicians down the poisonous path, trying to build yourself up by taking your competition down.

We're already seeing an increase in competitive advertising. Just this weekend I witnessed Burger King (BK) go after McDonald's (MCD), Prestone take aim at its smaller competitors, and Microsoft (MSFT) fight back against Apple (AAPL). The good news is that so far, these companies have resisted the urge to get nasty.

It's Eerie With No Ads

Think about the power of advertising. In the days following September 11, the networks temporarily suspended all commercials, and advertisers only slowly made their way back into the market. Watching television during that time was, in a word, eerie. We may not realize it, but the endless drumbeat of ads that are normally in the background helps assure us that the world of commerce is buzzing along as it should.

A similar phenomenon may happen in the days and weeks to come. Advertising won't stop as it did after 9/11, of course, but its tone could become noticeably more strident. If so, it will send a subtle signal that something isn't right. And will fuel consumers' continuing unease.

If you're considering targeting your competitors or changing your tone, stop and think about it. Consider other ways of accomplishing your goals, including using humor, a terrific way to dispel fear. Be as optimistic as you can. Above all, make sure you're not reacting out of panic.

As an advertiser, you can contribute to the fear or you can help diffuse it. The more consumers perceive you going about your normal course of business, the more normal things will feel to them. And the more quickly we can all get back to normal.

Read the full article here.

Getting Creative With A Nervous Ecomony

From Market Watch:

KNG announces that when the stock market drops like it did last week, small businesses feel the impact immediately. Sales start to drop after the first internet reports of large losses on the stock market. And sales continue to drop off faster and faster as the stock market losses and the number of articles about the losses increase. "By the end of the day on Monday orders had slowed to a trickle," said Matt McDonagh (Marketing Director for KNG).

The company decided to take advantage of the situation by starting a stock drop discount program. For every 100 point drop in the DOW for the week KNG will give a 1% discount for customers using coupon code ST8918. "We are not able to make up for all the lost sales due to the decrease in consumer confidence, but at least we can make up part of the sales," says McDonagh.

Four Tips For The Holiday Retail Season From Business Weekly

From Business Weekly:

1. In whatever market they're targeting, small retailers need to court their best customers this holiday season. "During the next three months they need to maximize the one-on-one personal relationships that they have with customers," says Daniel Butler, vice-president for retail operations at the National Retail Federation. "That is the secret weapon that small independents have against big national chains. If I'm savvy and communicate with my customers well, I can draw loyal customers into my store before they go into the national chains," Butler says.

One way to do that is through affinity discounts that encourage loyal customers to spend more, rather than trying to attract new business by cutting prices across the board, says the University of San Francisco's Muscat. "They're going to their customer base, and they're mailing out to their best customers targeted discounts to get them into the store. That's a lot smarter than putting a"70% Off" sign in front of your store," he says. Through affinity programs, retailers can strengthen their relationships with their best customers and appeal to those shoppers' bargain-hunting mood at the same time.

2. Beyond customer service, retailers need to keep inventories lean to keep costs down. Butler says store owners should be especially vigilant in refusing late orders and watching for overshipments to avoid having merchandise they won't be able to sell. In addition, small retailers can take a cue from large chains that display as much merchandise as possible on the floor, rather than holding inventory in the stockroom. "National chains don't have any inventory in stockroom," he says. "They want it to be out there where the customer is."

3. Likewise, stores should watch their staffing levels to control costs. "They want to be able to staff to the peak hours as much as they can," Butler says. That means mostly in evenings and weekends, as most two-income families have little time to shop during the day. Businesses might decide to open later in the morning and extend hours at night to reach more customers without needing to staff more hours.

4. Retailers that sell both online and through physical stores should coordinate their Web and brick-and-mortar strategies, especially in anticipation of "Cyber Monday," the post-Thanksgiving shopping day that's been deemed the online equivalent of Black Friday. Many people browse in stores the weekend after Thanksgiving and then make their purchases online. "If you have a Web site and do business online, you want to make sure you're cross-promoting your Web site with your in-store traffic and vice versa," Butler says. Still, retailers may not be able to count on strong Internet sales. While TNS Retail Forward predicts Web sales will grow 9% this year, that's down from 19% in 2007 and the first single-digit growth rate since 1999.

Read the full article here.