Archive for June, 2011

Top Ten Reasons Why Small Businesses Fail, part four: Clients

Thursday, June 9th, 2011

Clients

Every Small Business owner, operator or employee should be aware that it costs much more to acquire a new client than retain existing ones.  But old or new, client management is essential to your Small Business economic health.

A key reason Small Businesses fail is that they fail to appreciate the distinction between clients and customers, or they take their clients for granted, chasing after the sale but never following up after the payment clears. Yet there are a few simple, low-cost activities that can help you turn customers into clients, and find new business with your existing clientele, such as:

1. An informative, interactive website
2. Customer satisfaction surveys
3. Email campaigns (and autoresponders)
4. Cross-promotions and value-add upselling
5. Favored client discounts
6. Client loyalty cards, coupons or programs

Business is about relationships – court your clients like a romance.  Remember: there is much more to client management than the sale. Otherwise, it’s just a customer relationship. A well-established brick and mortar shop can survive on “one and done” customer relationships; a service business, a startup or an online venture must attempt to capture clients – those people (or companies) that will do business with you on an ongoing basis.

Clients will support your business, well beyond spending their money with you once, and moving on to your competition (usually, without notice). To cultivate such a connection, you must get to know your clients’ needs. Examine your financial records, invoices and communications to determine:

1. Who your best clients are
2. How much business they do with you, on average
3. What goods or services they purchase most
4. What related goods or services might appeal to them.

“Customer service“, even though we’re really talking about clients, is one of the single most important overlooked practices of Small Businesses. We’re not just talking about handling complaints, and correcting the occasional error in order fulfillment. This is about developing lasting relationships that can make the difference between prosperity and bankruptcy.

These relationships BEGIN with the sale, but do not end there. If, for you, a successful purchase is the end of your active concern… that may be why your client retention rates are lower than they could be.   Just as your relationships with family, friends and loved ones can go cold from neglect, you must put a sincere effort into nurturing your client relationships.

Find new ways to relate to them, but be careful of crossing into the “spam zone“.   You want them to appreciate the constant contact, not dread and avoid each new phone call or email. Focus on the value you add to their lives and businesses; it’s okay if this takes some time and effort.

What have you got to lose — except opportunity, revenue… and clients

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Series inspired by “Top Ten Reasons Why Small Businesses Fail” by: Connie Holt, E.A. cholt@henssler.com
The Henssler Financial Group Position Paper
© 2004 The Henssler Financial Group | www.henssler.com

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Cornell Green is Your Open Source CIO, guest blogger for KikScore. Visit him at https://opensourcecio.blogspot.com

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Archive for June, 2011

Sealing the Deal (Part I of II): Ensuring Legitimacy

Wednesday, June 8th, 2011

You Know You’re Not a Thief, But Do They?

By nature, people are cautious about who they associate with. As if this wasn’t enough, people become even more wary of others when in an online setting due to the lack of face-to-face interaction. Many people can be very extroverted in online settings such as Facebook and Twitter, but what about when they want to find a trustworthy business? This issue can make the seemingly simple task of promoting oneself very complicated. However, looking at this through the customer’s point-of-view, can we really blame them for being skeptical? Of course not. No one wants to do business with a complete stranger.

According to this alarming statistic, “90% of the users would leave your website within 5 minutes if they won’t find any kind of trust seal – especially if your business is unknown and new.” No business begins with popularity and definitely not with legitimacy. However, this issue of trust doesn’t mean game over. Instead, it is simply a break in communication that must be connected. To mend this break, those in new businesses must understand this: Although customers may be unnecessarily worried that your business can’t be trusted, you don’t necessarily have the credibility to refute such a claim. Because of this unfortunate fact, new businesses must make it a top priority to show customers that they are making safe and appropriate choices when paying for your products and services. This has brought about the need for online trust seals.

Why Use a Service Seal?

We all need help sometimes, and growing a business is no exception. That’s why a concept known as a service seal has quickly become so popular. Service seals, which function as trust seals for non-ecommerce websites, are useful because they show customers that a business has been impartially evaluated and deemed reliable by a third party.

We all enjoy seeing billboards that advertise various products and services, but many times we need more than a catchy slogan or an inspiring picture. When a business agrees to put a service seal on its website, it is making a powerful statement that says, “We have nothing to hide.” Such a statement provides assurance to customers and makes them feel safe. In fact, we have found that 86% of customers feel safer using a website that features a trust seal or similar mark of authenticity than one that doesn’t. Where establishing legitimacy through online networks has become a serious problem, many people have come to see service seals as a new and innovative solution. What do you think? What, if any, experience have you had in dealing with service seals and the websites that use them?

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Archive for June, 2011

Identity Theft is at a Record High: What This Means in the World of Online Commerce

Tuesday, June 7th, 2011

The News:

According to the Government Accountability Office, taxpayer identity theft has increased fivefold since 2008.  This has become an absolute nightmare for the IRS, especially its criminal investigations division, the division responsible for investigations of of identity theft.  However, even the IRS admits that they “pursue criminal investigations of suspected identity thieves in only a small number of cases.”  In other words, the majority of identity thieves are not prosecuted.  Identity thieves are faced with far too few obstacles and therefore, their crime rates will continue to rise.   And indeed they have risen: there were 248,357 incidents in the 2010 fiscal year, in comparison to the 51,702 in 2008.

The Implications:

The identity theft counts are more than just a mere statistic: these numbers make up a trend that affects more than tax returns.  The rise in identity theft rates mirrors that of other cybercrimes.  Online trust concerns are a direct result of the inability of security solutions in keeping up with rapidly developing technology.  The changing face of technology and cyber commerce make security much more complicated than the situation shown in the comic above.

Giving away any information at all online can pose a risk.  The recent Sony Network breach is proof that even larger, established companies can’t always protect customers’ information.  Personal information obtained from Sony included the names, addresses, email addresses, birthdays, PlayStation Network and Qriocity passwords and user names, and online user handles, of over 70 million customers.

Naturally, people have become more protective of their financial and personal information.   This poses unfortunate challenges for small businesses who are trying to make their mark in the seemingly endless web of the internet.  Customers are extremely reluctant to give away their personal information to lesser-known companies, and therefore, online businesses suffer.  In fact, more than 63 percent of shoppers leave transactions uncompleted because they are concerned about online security.  At an average of $109 in abandoned goods per transaction, online businesses lost $21 billion in the year 2008 alone.

Recent events make it even more imperative that small businesses, consumers, and the government all work together to create a safer shopping environment.  The practice of online commerce is here to stay, so we must all take steps to protect our own information and the information of our customers.  What are you doing to improve online trust concerns?

Image: BrickHouse Security Blog

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Archive for June, 2011

The Right Side of the Law: An Interview With Gregg Hand

Friday, June 3rd, 2011

I recently had the pleasure of talking to Gregg Hand, founder and owner of the exciting new law firm Hand Law Offices. Friendly and embodying the entrepreneurial spirit, Gregg is a great guy who has much to say and just as much to teach. After our interview, I feel that it is a privilege to share his wisdom with both the potential and current small business owners out there. I hope that you all get as much out of Gregg’s words as I have.

What areas of the law do you focus in?

I focus on small business counseling and litigation. This mainly involves small businesses that don’t have their own inside counseling centers and need help with issues such as how to handle certain customers and deal with lawsuits. You can think of me as an adviser who is there to come up with answers to these types of problems.

When and why did you start Hand Law Offices?

I started Hand Law a little over one year ago in January 2010. In the past years, I have worked in many large D.C. law offices and I’d finally had enough of them. I don’t mean to say that I disliked what I was doing. My problem was more a matter of how these big businesses are run. I didn’t like being told what to do, being constantly monitored, and having to report up the corporate chain even when they didn’t care what I was reporting. I really wanted to do things on my own.

What was one of the biggest challenges you faced and overcame in launching your law firm?

Actually, there were a few challenges I had to go through. Although I am a member of the D.C. bar, I wanted to do my work in Maryland, where I live. But since there are different licensing requirements for every state, I had to take a whole new bar exam to practice here.

Another challenge I had was more of a mental one, which was the fear of ‘Can I start my own business?’ There are so many company decisions that we take for granted until we have to make them ourselves. What computer should I use? What internet should I use? How should my business cards look? In the end, though, you just need to stir up your courage and take a leap of faith.

Probably the main hurdle I had to get over was figuring out how to find customers. With so many options out there, I needed to figure out how to do my website. I also had to figure out if I was going to just do a website or also create a blog for it. I had to decide how I was going to stand out and market myself. These are just of few choices I had to make. That being said, it’s kind of fun. After all, by being your own boss, you get what you want.

How do you advertise yourself to get your clients?

Other than my website and blog, I have Facebook, Twitter, and Linkedin accounts. Of course, most people are more likely to Google you than anything else. However, I think it’s most important to keep in touch with my contact groups. I prefer to get the bulk of my customers through referrals from past and present customers. After that, it’s more a matter of figuring out how to supplement word of mouth through social media.

Have you found that demonstrating your law firm’s trustworthiness to potential clients and website visitors has been a challenge?

Actually, the trumping card for me is just the opposite. Sometimes the referrals I get can be duds. My website is not really for online service so much as it is to allow potential customers to find my contact information and let them know a little bit about me. I like to try a more trustworthy and conservative approach. I mainly want the customer to feel comfortable talking to me over the phone or in person.

What do you do in your down time to relax that allows you to recharge your batteries?

I have three kids, so that keeps me kind of busy. I also like to play the guitar and am taking lessons. The thing is that, with a startup, you’re usually going to be doing more than a nine-to-five workday. The fear of failure to succeed in a startup is definitely a good motivator that keeps me going. However, my schedule is more flexible than if I were still at a big company, so I can take the time that I need to get other things done like if I need to pick up one of my kids from school. Other than that, I enjoy doing what I do.

What trends do you see in the business world that you think are important for small businesses to take note of?

Lately, there has been a shift in the business world. With the internet, things have become a lot more favorable for small businesses. Since people now have the ability to compare businesses with one another, startups have been given a fair chance to compete against large companies because they can operate from around the world just like everyone else.

If you had two lessons that you’ve learned from your business that you could pass on to others about opening their own service businesses, what would those be?

My first lesson is that good enough is fine. Sometimes you simply don’t have the resources to be perfect. You’re better off taking a leap of faith and seeing how it turns out rather than spending forever agonizing about it. Don’t spend too much time over-analyzing everything. After all, it’s not like you’ll make some sort of intractable mistake. What does your gut say? Go for it!

My second lesson is that, in general, people have good intentions. Sometimes people need help and propping up along the way. For example, if a customer has not payed your bill for a while, it doesn’t mean they are trying to stiff you. You need to realize that, even if this is your most important bill, it isn’t necessarily theirs. You should take the time to remind them of it, but understand that everyone has their own priorities.

Just before we wrap up, do you have any parting thoughts or guidance for our readers and the small business community?

The most important thing is to let everyone know that you’re starting out. Don’t be afraid to tell people about your new business. If people can help you out, they will! In fact, I’d say that this should be put even before the hard stuff like setting up a website. Plant your seeds early.

Thanks to Gregg Hand for a great interview! If you have any questions for Gregg, feel free to leave a comment below.

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Archive for June, 2011

KikScore SmallBiz Interviews’ Greatest Hits & Top Strategy Tips for Entrepreneurs: Part I

Thursday, June 2nd, 2011

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