In this issue, you will find our thoughts on local search marketing. Our interview is with Rob Warlow. The articles are:  

1. Customer Loyalty Programs And Customer
Rewards Increase Long-Term Profitability

2. 7 Tips For Ensuring That Staff Performance
Standards and Customer Feedback Are Always
Linked

Our Thoughts on Local Search Marketing 

Interview- Rob Warlow

1. What is the most common reason small businesses fail and what can be done to prevent this?

 

There are a number of reasons as to why small businesses fail, each unique to each business, but there are a number of reasons which are common to all. Let me give you what I see as the three main reasons. 

Firstly, and perhaps the most common, is a problem with cashflow. Many business owners think that businesses fail because of falling sales, and whilst this is one reason, one of the most common underlying reason is a collapse in cashflow. Cash is the lifeblood of a business. You can have a huge sales turnover which increases year-by-year by a double digit figure but if you are selling on credit and have a problem collecting money owed to you, then the sale is worthless to you. 

A slippage in the number of days it takes to collect your account receivables, even if only by a matter of days, can have a devastating impact on cashflow. Without a regular flow of cash a business can quickly find problems in settling its own bills, and so leading to a dramatic downward spiral. 

So, watch your cash; know who owes you and vigorously chase them; constantly review your terms of trade to match your own cash requirements. 

The next fatal problem most small business owner’s encounter is the ‘I have to do everything myself’ syndrome. Inevitably, during the start up phase, this is how it’s likely to be; limited budgets and the desire to keep costs low means staff are an unnecessary luxury. 

But the mistake business owners make is they forget that it doesn’t always have to be this way - as the business grows they have to be aware that they cannot continue doing all the tasks necessary to run a successful business. There will come a point when they don’t have enough time to complete everything in sufficient detail and so the saying ‘Jack of all trades and master of none’ comes alive – lot’s of activity but poor output or even worse no output at all.  

Taking on an extra pair of hands will increase costs but you will be surprised at how much time will be saved, so allowing you to do what you do best – perhaps getting the business in, or developing new products. 

The third reason, and I think one which is very pertinent in today’s tough climate, is not keeping in touch with what’s going on in your market. Too many businesses fail just because they have not kept up with the times. 

In a tight money environment people’s spending habits change; they want more for less; quality can be forsaken for a price reduction; they may be happy to buy in bulk in return for a discount; they may want to buy a lower volume even if it means a slight increase in cost per unit, just as long as the cash outflow is less. 

Business owners should be constantly speaking to their staff and customers to find out what is happening on the ground. It’s too easy to get distracted by the day-to-day routine and crisis matters and so forgetting to see what the competition is up to or how your customers wants and needs are changing. 

2. How do you get a customer back that you lost?

 

The answer to that question is first of all to go back a step and ask yourself ‘why did I lose them in the first place?’ 

Customers don’t just walk away from doing business with you without a good reason. Was it your pricing, your service levels, product quality, the fact that you weren’t stocking what they needed? You need to find out what disappointed them about their experience with you. 

Again, this needs to go back a step. You should be engaging your customers on a regular basis to find out what’s on their mind. You can do this simply by picking up the phone and asking a few questions you have prepared in advance. You could also go the whole hog and engage a professional firm to undertake an annual survey. 

You should never be in a position where the loss of a customer comes as a total surprise – you should have identified the problem before it became a problem and put it right (if you want to of course – there may be customers that you are happy to lose). 

But if you are in the position where you are taken unawares by a defection, then to get them back you may have to do what it takes! Pick up the phone, go and see them if they are a big client and ask the important question – ‘why did you leave and what can I do to get you back?” 

3. Why should a business follow up with their customers?

What distinguishes a great business from a mediocre business is the follow up. I guess I can count the businesses which have followed up on a purchase I have made on one hand, and yet it’s such a powerful relationship building technique. 

Nothing tells a customer how important they are to you by your action of picking up the phone or sending a follow up letter. So this is the first reason for follow up – it cements your relationship with your client. 

Secondly, despite what we may think, not all our customers have the courage to complain! If they are disappointed with your product or service many will simply shrug their shoulders and never come back to do business with you again. Just because you didn’t know, you will have lost a client, or never have found out that one of your products isn’t up to the mark. A follow up would have solved this problem. 

Another reason to have a follow up system is that it’s an opportunity to sell another complementary product. The real profit is any deal is not the first sale, it’s in the subsequent sale where all your initial acquisition costs have been covered; the follow up sale is pure profit. This is why you should ideally have a back-end product identified for your entire product range. What can you sell that complements your first sale? Not sure? Then go find one! Don’t leave cash on the table. 

Following up can be immensely profitable and yet so simple. 

4. How can a business get plenty of referrals?

You can sum this up in two words – ‘just ask’! That’s all it takes and yet it’s amazing how many businesses can’t be bothered with this easy method of getting new clients. 

Referrals from existing clients is a way you can leverage more profit out of them by tapping into another business or individual – all without spending a penny on advertising. Referrals can be very powerful because they carry the stamp of approval for your business from the referrer. 

If you are confident about the quality and value of your product then asking satisfied customers for a referral should not be a daunting task. If you don’t feel comfortable then you first of all must ask yourself why – do you secretly know that your product is not up to scratch? If so, sort that out first! 

Don’t expect referrals to come to you without asking. You have to be bold and come out and ask your customers for them. If you have doubts and are unsure about going down this path, realise that requesting a referral is a great opportunity to show your customer that you really value them. Asking for a referral demonstrates trust and builds loyalty between you and your customer.  

Here are some tips on getting referrals. 

• Only ask for referrals from customers whom you know are totally satisfied with your service. You have to be selective in who you approach. Don’t embarrass yourself or your customer by asking when you just messed up a major order. They have to be on your side and sufficiently fully clued up on your product or service such that if the referred customer calls them up they can immediately vouch for you. If you have your service and product quality right then they should not hesitate in referring you to their colleagues. So, don’t be afraid to ask, after all, they can only say no!  

§         When asking for a referral set the scene. Describe what type of prospective customer you are looking for – size of business, typical set up, possible order size. In describing exactly what you are looking for, your aim is to ensure you don’t end up with a bunch of names that would never buy your product. 

§         Another reason for setting the scene is to guide your client down a specific route while he is ‘searching’ for a name. Not giving them any guidelines will only lead to a complete ‘blockage’ and nothing will come out. Say to them, “John, you are a member of the local Chamber of Commerce. Can you think of anyone who may benefit from …” This way you have given them one specific area or group of people to focus in on and so you are more likely to get what you are looking for 

• Once you have a few names double check that the referrer is up to date with your business. If necessary take him through your sales material again; offer him a tour of the business; if they are willing to promote you via e-mail to their clients offer to write a short piece for them. Just make sure they can effectively represent you 
• Ask permission to use their name when you are speaking to the referral. When speaking to the referred company or individual using their name helps to establish credibility and breaks down the first barrier you could encounter – they don’t know you and so are likely to pay little attention to what you have to say 
• If you have a good relationship, ask the referrer if he will make the first phone call to say that you will be in touch. This will put your prospective client on notice so your call does not come totally out of the blue! It warms them up ready for you to do your stuff! 
• If your customer is happy (and you know he is if you followed the first point) ask them to specifically endorse your product. A comment along the lines that they use your widget-fixer and they have found it has saved thousands, will enhance credibility and put the prospective client in the right frame of mind 
• Ask if you can leave your brochures or cards in their reception or waiting area. Can they include your material the next time they mail their clients? Can they include your material when they are sending out invoices, or newsletters etc? 
• Whilst this is not a direct name-based referral, this type of referral should be explored 
• Offer a discount on a future purchase if any of their referrals turn into buying customers. You may want to be very generous and offer a discount for a referral on its own! You may feel this comes across as a bribe but it’s not. You are merely thanking the customer for doing something for you. Incentives reinforce the message that you value their assistance 
• Even if you can’t afford to offer some sort of reward, at least send a letter thanking them for the referral. If you wish, you could even advise them whether the lead generated any sales. This is an important task. It provides feedback, which we all crave, and demonstrates how importantly you value their input 

Asking for referrals is cheap and yet deadly effective. Not only are you saving a huge amount of time in researching names and telephone numbers, but you are also getting the benefit of a most powerful tool - personal endorsements. 

5. When using direct mail, what makes for a successful sales letter?

 

There are a number of elements which make up a successful sales letter but it all starts with the one key point – it has to be written with the reader’s problems in mind. The letter should clearly highlight the problem you are solving. Just putting together a list of product features will do nothing to prompt the customer to buy. 

The purpose of the sales letter is to first point out to the customer that they have a problem (just in case they weren’t aware!). The problem could be falling or static sales; not knowing how to find new customers; an inefficient way of tracking sales. What ever your product or service does, you must first show what problem it solves. 

It’s become a cliché but one that is true – you have to tune your customer in radio station WII FM – ‘What’s In It For Me’. 

Having positioned your sales letter here are some specific things to think about: 

• A strong headline – your letter has to start with a bold statement or question which draws the reader into reading further. You must have a ‘shock’ factor which stops the reader in his tracks 

• A sub heading which further strengthens the point you have made in the heading 

• Use lots of sub headings, bullet points and paragraphs to make it easier to read and giving the reader no excuses to stop and throw your letter aside 

• A strong ‘call to action’ – state clearly what action you want them to take: pick up the phone; visit your website; fill in the order form 

6. How can a small business owner implement new great ideas? 

If you are an ‘ideas’ person then new ideas are never in short supply. What is usually missing though is the desire to take action. Ideas are great, but with no action they are worthless. I’m sure that like me you have met many people who claim to have thought about a new product years ago and yet never did anything about it but complain when someone else makes a success out of a similar idea. 

Taking action is what separates successful entrepreneurs from the not so successful ones. 

Implementation of ideas is about weeding out the ones which aren’t going to go anywhere and then focusing on the ones which have potential. Set down on paper each of the small steps which need to be taken in order to achieve the bigger goal of seeing the idea in action – breaking the task into smaller tasks means you can ignore the killer of all great ideas … procrastination.  

Just get on and do it! 

Rob Warlow runs Small Business Success which is a resource dedicated to helping small business owners be more successful. If you are looking for a regular flow of ideas and tips then subscribe to Small Business Success the free weekly newsletter, which provides you with small business tips, ideas and articles. 

Visit http://smallbusinesssuccess.biz  for more details on how to subscribe. 

Also check out the Small Business Success blog at: http://www.smallbusinesssuccess.biz/forum/blog.php?u=2  which will give you a daily dose of news and views on small business issues. 

Customer Loyalty Programs And Customer

Rewards Increase Long-Term Profitability

Customer loyalty programs can function as the promotional

linchpin that drives your company's long-term

profitability. They are an essential tool for improving

customer retention. By offering your customers digital

incentives, such as music downloads, skins, and an

assortment of mobile promotions, you can dramatically

increase the lifespan of each customer. Not only does this

create an enormous level of goodwill, but customer loyalty

programs also encourage customers to respond to your

ongoing marketing campaigns.

In 2001, noted authority on customer loyalty programs, Fred

Reichheld, released his book, "Loyalty Rules." Within its

pages, Reichheld explained the influence customer retention

rates have on the overall value of your customer base. A 5%

retention rate can translate into a 75% improvement in the

value of your customer inventory.

Below, we'll explain how customer loyalty programs can

produce these results for your company. We'll also describe

the difference between these programs and customer rewards

programs - each has a vital function to fulfill. You'll

also discover how to leverage music download promotions,

skins promotions, and mobile promotions to increase the

loyalty your customers feel toward your company.

How Customer Loyalty Programs Generate

Stunning Results

Your customers want to feel valued. They want to know that

your company perceives them as a critical factor in your

success. Too often, companies treat their customers as

disposable commodities. This has produced a legion of

consumers who shop primarily based on price, all but

eschewing brand loyalty. Customer loyalty programs help

eliminate price as the deciding factor and instead,

transform your customers into fans. By offering them

digital incentives, you can cultivate their loyalty while

creating a more memorable brand experience.

That sharply increases the lifetime value of your customer

inventory. It not only inspires them to return, but it also

encourages them to tell others about your company,

generating a new wave of customers.

The Difference Between Customer Rewards And

Customer Loyalty Programs

A lot of companies make the mistake of thinking customer

rewards and customer loyalty programs are identical.

They're not. Each has a distinct promotional role to play.

Customer rewards are a powerful lever that you can use to

trigger a response and gather customer data. By collecting

information about your customers, you can launch a sequence

of marketing initiatives that build brand awareness and

gradually influence their purchasing behavior. In doing so,

you'll be able to better identify which customer segments

are the most profitable for your company.

Customer loyalty programs fulfill a different function.

They improve your customer retention rate, which Reichheld

showed to have a dramatic effect on long-term

profitability. By giving your customers a variety of

digital currency incentives, you'll encourage them to

return to buy your products.

Music Download Promotions Can Spearhead

Customer Loyalty Programs

Music download promotions and mobile promotions are

cost-effective platforms from which to launch your customer

loyalty programs. Because they can be delivered digitally

to consumers' phones, PDAs, and other mobile devices, their

effect is often instantaneous. They trigger an immediate

response from your customer base.

Music transcends gender, culture, and age to reach a broad

audience. Your customers, regardless of their backgrounds

and musical tastes, will gravitate toward the artists they

enjoy. You can provide your entire customer base with a

catalog of millions of songs from which they can choose or

you can target certain segments by genre.

Mobile promotions, such as instant win games and digital

coupons, can also trigger an immediate response. Your

customers can enjoy playing instant win games the moment

they receive your promotions. Then, they can receive

instant notification regarding whether they have won a

prize. Mobile coupons can be redeemed just as quickly.

When leveraged to spearhead customer loyalty programs,

music download promotions and mobile promotions can

generate a new wave of sales while strengthening your brand

loyalty.

Customer Loyalty Programs And Skins

Promotions Complement Each Other

Skins promotions are a unique type of incentive because

they are delivered digitally, yet physically adorn

consumers' phones, PDAs, and laptops. They are a perfect

complement to your customer loyalty programs for two

reasons. First, the skins promote your brand not only to

your customers, but to every person who observes your

customers' mobile devices. Second, skins promotions serve

as a perpetual reminder to your customers about why they're

loyal to your company. The skins generate a lot of goodwill.

Customer loyalty programs remain one of the most potent

promotional levers for increasing your company's long-term

profitability. They allow you to lengthen the overall life

cycle of your customer inventory. If you're not currently

taking advantage of customer loyalty programs, now is the

time to reconsider.

----------------------------------------------------

Promotional Currency (PC)

http://www.promotionalcurrency.com is a digital promotions

firm that specializes in entertainment promotions.  PC

merges digital technology, artist licensing and promotional

risk coverage to deliver turnkey, fixed-cost solutions.

Among product offered are: entertainment promotions, unique

customer loyalty programs, promotional incentives, online

promotions and mobile promotions.

7 Tips For Ensuring That Staff Performance

Standards and Customer Feedback Are 

Always Linked

Summary. We should design customer feedback to include

measurement of staff performance. But we don't. We're so

anxious to discover what customers think of us, we fail to

ask them what they think of our performance standards. It's

so simple, we forget to do it.

1. Feedback and Performance: Not Form Filling. No one likes

filling out forms. Your customers are no exception. So

don't ask them. If you must use a form for customer

feedback find an inducement so that they'll complete and

return it. A brief personal talk or a phone call will gain

you more useful information than a form.

2. Show Customers You Are Serious. Leaving a blank form in

a "prominent" place and doing nothing else tells customers

you don't really value their opinion. Form design is

important too. It's easier for customers to tick boxes than

to write statements. A telephone or face to face interview

shows your genuine interest.

3. Ask The Right Questions. You want your customers to tell

you four things * what they enjoyed about dealing with you

* what they didn't like about dealing with you * how you

could improve the transaction * whether your staff met your

performance standards

The meeting or not of performance standards may also be

part of the first three objectives.

4. Be Specific. However you ask your questions, be

specific. Say "Did the technician wear a clean uniform?"

not "Was the technician clean and presentable?"  or "Did he

clean up to your satisfaction?" not "Did he leave a mess?"

To make things easier for the customer, you could use

Yes/No responses or seek "percentage" answers e.g. "If you

were rating the serviceman on a 1-10 scale, what score

would you give for keeping you well informed?" Avoid

generalizations.

5. Doing It. List the performance standards that customers

should experience. Write questions relating to each

standard. Be careful to include all standards even if they

seem small. What's small to you may be big to customers.

Prepare a script incorporating the questions. A script is

essential. Determine what you want your staff to say, the

exact words to use, questions to ask and the order in which

they should ask them. Get answers to all your questions.

And before you conclude, always ask customers if there's

anything else they'd like to say.

6. Using A Form. If you do use a form, still seek answers

to specific questions. But leave plenty of room for "Any

other comments". Remember, leave plenty of room not two

lines squeezed in at the bottom of the page.

7. Review. If you've prepared your questions well and

phrased them carefully, you'll obtain very valuable

information. Use it prudently to improve staff performance,

review and improve performance standards and as a basis to

reward staff. Never use it as a "blunt instrument to beat

people over the head with".

Conclusion. In a nutshell, performance standards make good

business sense. They also help to ensure that customers get

what they want. It makes sense to involve customers to help

you assess staff performance. It also shows that in your

business, staff  performance and customer opinion are

closely related.

----------------------------------------------------

Leon Noone helps managers in small-medium business to

improve on-job staff performance without training courses.

Some say his ideas are too unconventional. Find out for

yourself by reading his free Special Report “49 Practical

Tips For Better People Management In Small-Medium

Business”. Simply visit http://www.leons7secrets.com and

download your free copy now.