Category — Small Business Advice
On the surface, it sounds crazy, but these days various types of businesses are experimenting with a format where customers are allowed to pay whatever they want for a service or product.
The trend has been going on for years, as can be seen in this 2007 Springwise trendspotting article about restaurants in cities including Denver, Salt Lake City and Vienna allowing customers to choose their own prices (and sometimes even portion sizes).
Today, it looks as if each of those restaurants is still going strong, which is some accomplishment in the unforgiving restaurant industry, especially in a recession.
Some of the restaurants in question do seem to have combined the pay-what-you-wish concept with progressive social activism, which may help them attract a clientele willing to engage in good faith and support the concept rather than freeloading and mooching of the proprietors.
In any case, the concept is not limited to restaurants. The best known example of pay-what-you-wish might be the opaque pricing site Priceline.com, where customers can bid for hotel rooms and rental cars by offering to pay whatever price seems fair to them.
Of course, Priceline is not a true pay-what-you-wish concept since there is a hidden price for each city or category below which rental car companies and hotel chains will not provide inventory. You can offer to pay $5 for a 4-star hotel in New York City, but the hotel is under no obligation to accept.
On the other hand, Priceline does seem to have carved out a sustainable niche that allows customers access to good deals while also simultaneously giving hotels and car rental chains the ability to dispose of excess inventory without eroding prices across the board.
The question of course is whether pay-what-you-wish pricing makes sense in the big picture. A recent article on Inc.com’s Retail blog by Tom Szaky, co-founder and CEO of TerraCycle, shows that the concept may have relevance for the general retail world. Szaky reported on his blog that TerraCycle had moved from a pure dot.com model into the brick-and-mortar retail world by opening a pay-what-you-wish retail store.
In defending/justifying his decision, Szaky pointed out that the concept has worked in other industries, including music where bands like Radiohead have managed to make money by selling digital albums and letting users choose whatever price they think is fair.
The model may work best where the incremental costs of each additional product sold are very low or even non-existent (i.e. digital content) or where brand loyalty (rock bands) is high.
On the other hand, one could argue that auction sites like eBay prove that retailers don’t need to set prices to make money. As long as buyers are operating in a situation of perceived or real scarcity, they will compete among themselves to set a price that may in fact be higher than what a retailer would get if he/she had set the price to begin with.
What do you think? Would you ever let your customers choose their own prices for some of the products or services you sell? Have you participated as a seller in any auction sites such as eBay? Share your thoughts and experiences in the comments section below!
January 25, 2010 1 Comment
Last year the government’s Cash for Clunkers program got plenty of attention for giving individuals financial incentives to trade in gas guzzlers in exchanger for newer, more fuel efficient replacements.
Cash for Clunkers was then followed by in many parts of the country by other programs that promoted energy efficiency by giving rebates that encouraging consumers to upgrade from old appliances to more efficient Energy Star-rated models.
Why should government support efficiency programs? The idea is that everyone wins when the government helps consumers trade up to newer models of cars or appliances. Consumers get lower electric or fuel bills. Manufacturers are able to move products that would otherwise be harder to sell in the current economic climate. Governments benefit in a couple of ways. If manufacturers can stay in business, the government has fewer unemployed people to support. And if overall energy or fuel usage declines, the government feels less pressure to build new power plants or fuel refineries.
So how does all of this help small businesses? Well, as a recent article in the Small Business Trends blog pointed out, businesses too can benefit from government support for energy efficiency upgrades. The article highlights benefits in several states including:
- California, where Pacific Gas & Electric Company offers rebates of $10 to $125 for installing high efficiency light bulbs.
- Indiana, where Duke Energy gives small businesses up to $50,000 in annual rebates for high-efficiency improvements to HVAC-type systems.
Even if a power company won’t subsidize the actual cost of upgrades, it might still help businesses figure out how to make improvements. That’s what Minnesota’s Xcel Energy does by covering most of the cost of heating-optimization studies.
The important thing for small businesses is to check for special offers and promotions in your state, city or local community. For instance, small business owners in Austin, Texas not only qualify for a general commercial rebate, but also an additional special 30 percent bonus rebate, plus a lighting program that covers up to 70% of installed costs.
Rather than hunting all over the Internet, you can save yourself time and energy by using the handy guide from Business.gov that provides links to state and local energy efficiency programs for small businesses.
And remember, in addition to up front savings from rebates or other forms of assistance from government and utilities, any energy efficiency improvements you make to your business should end up helping your bottom line by reducing recurring expenses.
If you really go all out and achieve superior efficiency to the point where you’re powering your business with solar or wind energy, your efficiency could even become a marketing point among Green-minded consumers. It’s a message that has worked for businesses from New Belgium Brewing to Horizon Organic.
Has your small business benefited from any government or utility-sponsored energy efficiency program? Or have you seen bottom-line savings from energy efficiency improvements. Share your experiences in the Comments field below!
January 11, 2010 No Comments
Sure, it would be fantastic if your small business was featured on Good Morning America or in the pages of People magazine.
But let’s be realistic — the odds of getting covered in such a mass-market publication are low simply because of the massive level of competition for scarce pages or airtime. Good Morning America‘s producers need to attract the maximum number of viewers and if it comes down to a decision between an interview with you or Brad Pitt, well, let’s just say that the bookies won’t be taking bets in your favor.
But these days there are lots of other ways to get exposure for your business, especially online where more and more people are turning to business blogs for information, news and advice.
John Jantsch from Duct Tape Marketing has put together a good article for American Express’s Open Forum called “5 Tips for Getting More Exposure from Bloggers, Tweeters and Fans.”
John shows that with a bit of effort, your odds are good of getting covered in a respected, well-read business blog. One of his best ideas involves using sites like Digg, Stumbleupon and delicious to try to find up-and-coming blogs that aren’t yet inundated with pitches.
When you do find these blogs, John warns against simply firing off a press release and hoping for the best. The Internet is all about interactivity, participation and relationship-building. A far better approach would be to become a regular reader of the blog, subscribe to its RSS feed. If a blogger has a Facebook page, join her fan group. If a blogger uses Twitter, start following him.
One of the best ways to show a blogger that you are an engaged reader is to make useful comments (not promotional fluff) and help stimulate conversation on her posts.
Finally, when you have established yourself as a credible and engaged reader, that’s the time to pounce and send along a brief pitch for a story, explaining why your idea would be a perfect fit for the blog and its readers.
Sure, such a strategy takes an investment of time and energy, but it could be worth it to establish yourself as a go-to source for a rising-star blogger. These days, the line is thinner than ever between traditional media and the blogosphere. Bloggers are invited to participate in White House news conferences and cover political campaigns. Blogs sometimes break major news stories that have offline papers scrambling to keep up. And since bloggers have an insatiable need for content, getting known as a valuable source of good story ideas could lead to extensive ongoing coverage for yourself and your business.
Also note that blog exposure can be especially valuable for companies that sell products or services direct to consumers via the Internet. A consumer reading a blog that mentions you or your company is just a few clicks away from making a purchase…
Have you had any luck getting exposure or sales through a blog? If so, what strategies did you employ to get noticed? Share your advice and help establish yourself as a respected source right here at Dollar Days Blog by leaving a comment below!
December 28, 2009 No Comments
One of the best parts of building a company is hiring great people so that your business can benefit from their skills, their ideas and their enthusiasm.
But as Merrin Muxlow has pointed out over at the Resource Nation blog, recruiting new employees involves a host of tricky legal and ethical issues including background checks and employment law compliance.
Maxlow makes useful recommendations about getting an applicant’s consent before running a background check, being careful about accessing an applicant’s social media profiles, knowing all the applicable anti-discrimination laws (Federal, State and local) that apply to hiring procedures, and taking the time to verify necessary licenses, credentials and employment eligibility. Maxlow suggests that E-Verify can prove useful for this last task.
Need more advice before bringing a new hire on board? Guidestar published an article earlier this year that contains lots of good advice on Avoiding Common Hiring Pitfalls. For instance, Guidestar notes that it’s vital to properly define the position you’re trying to fill before seeking candidates. If you’re too ambitious in defining the scope of the position, you may have trouble finding applicants who contain all the skills and competencies you’re requiring. Guidestar advises being realistic in defining the position and making sure that you budget a salary sufficient to attract the caliber of employee you’re seeking.
Like the article in Resource Nation, Guidestar emphasizes the importance of checking references and not rushing the hiring decision. That doesn’t mean that you should dawdle either. Instead, create a timetable and then stick to it. Proceed at a deliberate pace while acting with consideration toward the candidates and trying to envision the process from their perspective.
If all these seems awfully challenging, you might enjoy Will Helmlinger’s look at hiring “Pitfalls and Pratfalls” on Inc.com’s website. Helmlinger has some great advice in this story, including a suggestion that the hiring manager should let candidates do most of the talking during the interview process and to avoid misinterpreting what candidates say.
For instance, Helmlinger offers the hypothetical scenario in which a hiring manager asks if an applicant is willing to work overtime. If the applicant says “Yes,” the hiring manager may assume the applicant is willing to regularly burn the midnight oil. But Helmlinger notes that the hiring manager has no grounds to jump to that conclusion without first asking how often and how long the applicant might expect or be available to work beyond regular hours.
Phew! That’s a lot for an employer to remember. But investing some time and effort up front in finding and vetting the right person for the job will prove invaluable to building a stable, loyal and enthusiastic team of employees all pulling together to help build your business.
How do you handle tricky hiring tasks? Do you perform background checks yourself or outsource the procedures? How do you ensure your company doesn’t run afoul of anti-discrimination hiring rules? Share your thoughts, experiences and suggestions in the Comments below.
December 14, 2009 No Comments
Unless you have some sort of exclusive patent, chances are that your business competes on quality.
This means that whether you run a dry cleaning company, a restaurant, an office supply retailer or a gardening business, your customer has a number of choices on where to go to buy essentially the same product or service.
So how can you stand out from the pack? Obviously, you should stake your reputation on quality, friendly customer service, professionalism, good prices and so forth.
But in addition to all that, John Jantsch, author of the Duct Tape Marketing blog, believes you also need a ‘Free Soup Strategy‘.
For Jantsch, ‘free soup’ is shorthand for an unexpected bonus that exceeds your customer’s expectations and leaves her not only satisfied, but so impressed that she raves about your business both online (email mesages, social marketing sites, review forums) and offline (conversations with her friends and family, casual recommendations to people who need a similar service).
In some cases, this unexpected bonus could literally be ‘free soup’. That’s what happened with Jantsch and his wife when they ate at a local restaurant and received a complimentary unexpected pint of soup to-go along with their bill.
In the comments section of his Duct Tape Marketing post, some of Jantsch’s readers chimed in with examples of ‘free soup’ strategies they use themselves or have experienced as customers – a house inspector who gives his customers a free re-inspection, a web design company that provides its customers with a bonus favicon as a surprise at the end of the project, a home decor company that gives soaps and candles to its clients.
Your ‘free soup’ doesn’t need to be expensive or elaborate, but it should relate in some way to the products or service you provide. If you sell bicycles, maybe you could provide a free 6-month maintenance offer that would have the added benefit of bringing your customers back to your store. If you do outdoor landscaping, you could give your clients a bonus potted plant for indoor use.
It’s also important to know the surprise factor in the ‘free soup’ strategy. If you sell bicycles with a 6-month maintenance offer bundled in, that might be an attractive offer, but it’s not exactly ‘free soup’. ‘Free soup’ is giving the customer something unexpected after the purchase so that he or she feels a sense of satisfaction at getting what he or she has paid for and more.
What are some of the ways you go above and beyond expectations for your clients? Do ‘free soup’ strategies impress you as a customer? Tell us about your experiences on both sides of the ‘free soup’ equation in the Comments section below!
November 16, 2009 No Comments
What makes a great business leader in your opinion?
The ability to inspire passion and excitement among colleagues and employees?
Amazing insights into what customers want and need?
An uncanny ability to discard background noise and identify important trends in the marketplace?
His favorite was the one that a defined a leader as a person who “empowers his people to do their best by believing in them, guiding them and being an example.”
Other readers said an exceptional entrepreneur should lead, earn the respect of his team members, demonstrate flexibility and not be afraid to take risks.
Looking for some other ideas on leadership? Business Pundit has 12 quotes from Hall of Fame basketball player and coach John Wooden. Highlights include “A coach is someone who can give correction without causing resentment,” and “Failure is not fatal, but failure to change might be.”
Several business blogs, including Small Business Trends, are also buzzing over Susan Scott’s Fierce Leadership book. From the reviews, it sounds like Scott makes the case that leaders need to employ radical levels of honesty and transparency in dealing with their employees. In a brief interview on Amazon’s website, Scott notes argues that “If you want to become a great leader you must gain the capacity to connect with your colleagues and customers at a deep level.”
Finally, in her Power Speaker blog, Suzanne Bates talks about leaders can use storytelling to share leadership lessons. Bates says that stories can be a great way to communicate such lessons – as long as leaders avoid telling stories that meander, are too vague or go on too long. The goal is to keep stories brief, clear and to the point. If you’re having trouble developing the story, Bates suggests telling the story outline to a friend or partner who can ask questions and help you clarify the most powerful leadership lessons.
What do you think are the essential characteristics of a great business leader? What are some other leadership skills you admire in others or try to cultivate in your own leadership role? What are some of your favorite business quotes? Have you used stories as a leadership tool or been in the audience when a speaker delivered a great leadership story? Speak your mind in the Comments section below.
November 2, 2009 4 Comments
These days, pretty much every small business owner knows the importance of having a functional website.
But of course not all business websites are created equal. Some are better than others – and naturally you want your company’s site to be among the best in its category.
You can go a long way toward creating a useful, functional and attractive business website simply by avoiding four common site errors that Lisa Barone identifies on the Small Business Trends blog -
1. Bad design. Your site doesn’t have to look fancy, but it should look professional. Just as with the decor or signage for a brick-and-mortar store, you want to invest a little time and resources on your website to get good results.
2. Lengthy conversion funnel. The “conversion funnel” is marketing-speak for the process your site visitors go through when they want to buy anything through your website (presuming that you offer sales and not just information through your site). Barone is correct in saying that you want to make the purchase process as simple as possible. That’s why sites like Amazon.com pioneered 1-click ordering for repeat customers.
3. Strategy before design. Think before you build. What are the major goals that you want your site to accomplish? Just as you wouldn’t start building a house without having a blueprint and a plan, similarly you should have some detailed website objectives and strategy in mind before you start creating your business website.
4. Lack of dynamic content. Barone accurately points out that too many business websites have static content (address, phone number, basic information) that never changes. Your website gives you an opportunity to engage visitors and create some brand loyalty. Think of new material with which you can periodically update your site. If you run a restaurant, maybe you can post the weekly specials online or send out a recipe of the month to a list of email subscribers. If you have a pool supply company, you can create a blog with testimonials from satisfied customers, seasonal coupon codes or information about the latest and greatest pool supplies and chemicals. The exact content and techniques will vary according to your specific business, but the point is to publish new content at regular intervals that brings visitors back to your site for repeat visits.
How did you overcome these problems in building your own small business website? What content do you use to attract customers to your website for repeat visits? Tell your story and share a link to your site in the Comments section below.
October 19, 2009 2 Comments
Drew Carey tells a joke about work that goes: ”You hate your job? Why didn’t you say so? There’s a support group for that. It’s called Everybody, and they meet at the bar.”
Of course, not everybody really hates their job. In fact, if you’re an entrepreneur or business owner, you might bound out of bed on a Monday morning thrilled to start another exciting work week.
But Clint Greenleaf, author of the By the Book blog at Inc.com, admonishes entrepreneurs to remember that their coworkers or employees may not share quite the same level of excitement and anticipation when the weekend comes to an end.
Greenleaf recommends Roxanne Emerich’s book Thank God It’s Monday!, which he says makes the argument that creating a fun workplace is closely linked with having a successful business.
In essence, Greenleaf and Emerich suggest that if you and your coworkers/employees enjoy being at work, you’ll do a better job and therefore make your customers more satisfied.
Intuitively this makes a lot of sense. And remember that keeping your employees and coworkers satisfied and engaged will probably have the added benefit of increasing their loyalty to the company, reducing turnover and making it easier to retain your most valuable team members.
Do you think creating a happy, fun workplace is important for business success? What are some strategies you’ve used to get people excited and energerized about coming to work on Mondays? We’d love to hear your ideas in the Comments section below.
October 12, 2009 No Comments
Ken Burgin and Elizabeth Walker have an interesting article on the Business in General blog arguing that too much businesses make the mistake of focusing on what they would like to offer rather than what customers would like to buy.
So how do you figure out what customers want?
Burgin and Walker have some specific suggestions for matching your sales and marketing effort to customer needs. For instance, they suggest writing down the questions your customers ask so that you can be sure to answer those questions in your marketing materials.
Another good suggestion is to probe beyond a customer’s questions to find the motivation behind the questions. Burgin and Walker suggest you should find out what your customer thinks constitutes good customer service before you start talking about how great your customer service is.
Successful businesses excel at identifying and meeting customer needs and wants. If you can take some of the guesswork out of the equation and determine exactly what your customers are seeking, you could be light years ahead of the competition.
How do you find out what your customers want? Do you have an inspiring (or cautionary) story about meeting (or misreading) market demand? We’d love to hear your stories in our Comments section below.
October 5, 2009 5 Comments
One of the hardest things for a small business can be just getting noticed. Giant corporations like Coca-Cola, Apple and Nike can spend millions of dollars advertising on the Super Bowl to a worldwide audience while you struggle to let people in your immediate community know about your products and services.
Hopefully you have at least a small budget for some targeted advertising – perhaps via direct mail, online methods like Google AdWords or respected community newspapers.
But even if you’re trying to get noticed on a shoestring marketing budget, there’s one kind of advertising that won’t cost a penny but is worth its weight in gold.
We’re talking about Word of Mouth advertising – the kind of exposure you get when a customer has such a good experience with your products or services that she rushes right out to tell her friends, both in real life and in online social networks like Twitter, Facebook and MySpace.
It’s hard to quantify and track word-of-mouth advertising. You can just look at click-through or response rates, although you can try to find out if new customers heard about you ‘from a friend’.
Meanwhile, business blogger Alan Yu points out that the best way to generate word-of-mouth buzz is simply to deliver excellent customer service and superior results to your customers.
Yu also notes that many of your customers and your friends may assume that your business is doing fine and doesn’t need any extra help. Be sure to encourage people to spread the word if they like what you have to offer. Maybe you could even offer them some sort of discount or bonus if they refer a new customer?
Have you had success with word-of-mouth advertising? Or have you struggled to generate conversational buzz? Either way, share your stories below in the Comments section.
September 28, 2009 4 Comments