- Sprinkling income using private corporations: draft measures include the extension of kiddie tax rules to adult family members, elimination of the Lifetime Capital Gains Exemption (LCGE) to minor kids, elimination of the LCGE to gains accrued by trusts, etc.
- Holding a passive investment portfolio inside a private corporation: draft legislation includes alternative methods to discourage businesses from accumulating excess funds taxed in the corporations at lower tax rates.
- Converting a private corporation’s regular income into capital gains: the proposed measures include the extension of the anti-avoidance provisions currently targeting income stripping transactions that take advantage of capital gains treatment (whether or not LCGE claimed).
Centre For Enlightened Business
Studies consistently show low levels of customer satisfaction with the ways in which businesses use emails. Too often, companies seem to be using email as a means of avoiding other forms of contact with their customers and their customers aren’t pleased. Their most common complaints include:
– No confirmation that their email had been received,
– No reply received from businesses,
– Late replies received from businesses,
– Inappropriate replies received from businesses, and
– Replies received that they can’t understand.
Email-based customer service has to date been a let-down for most customers. They expect their communications to be given the same attention as a letter or telephone call and instead feel that their emails have largely been ignored.
The Customer Respect Group Inc. say that only 69% of the 100 largest companies in the U.S. respond to online enquiries; the situation appears to be even worse for smaller firms.
BenchmarkPortal, a leading source of CRM best practices for contact centers, conducted a study that found that online customer service provided by SMEs is even worse than the service levels offered by large enterprises.
Conducted in early 2005 the study, sponsored by eGain Communications Corp, evaluated 147 SMEs across five sectors: retail, travel and hospitality, financial services, e-business, and hi-tech manufacturing. Some of their key findings were:
– 51% of the companies did not respond at all,
– 70% of the companies failed to respond within 24 hours,
– 79% of the companies responded with an inaccurate and/or incomplete answer.
Astonishingly, 40% of online-only businesses – a category that includes online recruiters and shopping comparison sites, failed to reply to customer e-mail inquiries!
And what do customers do when this happens? The answer is simple – they go away. Forrester Research studied customer behavior and found that 70% of online customers will go to a competitor if they don’t receive a timely response from a company. Only 22% of online customers return to a website after a negative experience.
There are thankfully some solutions that even smaller firms can implement to capitalize on the cost-savings and timeliness of emails without turning customers away.
1. Automatically respond to all emails received
People will be more willing to wait for a reply if their initial communication has been acknowledged. This email acknowledgement should include a statement that their email has been received, a commitment that it will be acted upon, and a maximum time by which a response will be sent.
2. Monitor email communications
A monitoring system should be set up that tracks progress of incoming emails and their responses. It should initiate an alarm for any message that hasn’t been responded to by the stated maximum time.
3. Have a suitable response structure
Emails are perceived by customers as being just as important as a letter or a telephone call. They should be answered in the same manner as any other form of communication – politely and with the intention of retaining the customer. Those persons responsible for preparing a response need both communications skills and the authority to resolve situations.
4. Consider webforms for use by customers
It’s simple enough to set up a series of webforms for customers to use, depending on whether their communication is a product enquiry, a complaint, a request for information about how to use a product, or for some other purpose. This make it easier for the customer and for the team members charged with responsibility for preparing a reply.
5. Make use of FAQs
It’s surprising just how many customer communications are for the same reasons; enquiries tend to repeat themselves. Create a database of your most common questions and answers that can be used to create an ‘FAQ’ (Frequently Asked Questions) section on your website. It can also be used as a source of content for those preparing responses to customer emails.
6. Analyze trends in customer communications
A sudden upsurge in complaints about a particular aspect of your company or a rise in enquiries about warranties can be pointers to important trends that are beginning to develop. Analyze all incoming customer communications to spot these trends and keep on top of them.
Email is one of our most valuable channels of modern business communications. It can bring real savings in time and money when applied in areas where customers and companies interact, but only if it’s used wisely.
Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=4142
If we don’t get paid, we go out of business. So with more debtors delaying payment in these tough times, taking action to collect money should be a top priority for small companies.
Few small businesses can afford to turn customers away, but being timid about stretched credit terms puts your own company in danger. If you’re not being paid on time it’s harder to find money to settle your own outstanding debts.
You didn’t start your business to provide a free credit service to suppliers. But how can you collect money owed, and at the same time, avoid bad feelings developing from previously reliable customers who are falling behind?
Try these simple in-house strategies:
1. Review payment terms
Re-assess your payment terms for the current market conditions. It could be time to offer additional payment options, such as PayPal, debit card, or to accept additional credit cards (with an appropriate added fee). Consider putting new clients on tighter payment terms on a trial basis with a review to follow, include a small discount for on-time payment if you can afford it.
2. Avoid firm tactics with regular customers
Your regular, normally reliable, clients deserve different treatment in debt recovery. Perhaps they came on board years ago with a handshake and now seem like ‘family’? Try co-operation and communication, rather than a heavy hand. A phone call from the director will strengthen relationships between valued but dawdling customers and is a chance to personally explain the impact of late payments on your own cycle and survival. Be ready with options for part-payment or a suitable suspension of supply. Be concerned, but stay firm enough to get the account settled.
3. Credit-check all new clients
It’s worth the fee to do a background check on new clients, despite the temptation to automatically take on anyone new when business is slow. The cost of your staff’s time chasing money and the potential price of debt collection later is not worth the risk. Besides, a reference check should be accepted as ‘company policy’ by new customers.
4. Focus recovery ‘power’ in the right hands
Avoid the trap of turning your sales people or service staff into debt collectors. Mixing messages about employee roles will do more harm than good in the long term. Give the job of bad debt follow-up to one person, along with a set of clear guidelines for action and your full support.
5. Set terms at the sale
The best time to get the message through about payment terms is when you close the sale. Outlining credit expectations early sets the right tone and foundations for later accounts follow-up if necessary. Make it a prominent part of the contract when customers place orders.
6. Empower your invoice
Instead of a monthly run, consider sending invoices as soon as a service has been carried out or when a product is supplied. Print the actual due date on the invoice, rather than a “within 30 days” instruction. These simple changes will speed payment, improve cash flow and identify problem accounts sooner.
7. Calculate average debt age
You run regular reports to check debt ‘age’, but how do you use the results? To measure average payments against your target terms, divide your accounts receivable by annual sales on credit (not cash sales) and multiply by 365. This shows how efficiently you are managing debts overall, compared with your goal, of say a 30- day payment cycle. A result of ‘55’ for example, will show you are averaging 25 days over your target.
8. Set a collection policy
The chance of recovering payment reduces the older a debt becomes. Establish firm rules for follow-up, such as: a phone call at 7 days overdue; a letter at 14; another call at 21 days; stop supply at 30; write a letter to your collection agency at 60 days. In line with this schedule, set suitable options at certain stages, depending on your relationship with the customer, like part-payment, an instalment plan and whether further purchases are allowed (and their value) if accounts remain overdue.
9. Collect information
Securing thorough information about a new account avoids obstacles to debt recovery. Collect as many telephone numbers and alternative contact names as you can and ensure all forms are signed. If possible, visit the customer’s premises. A personal visit gives a valuable impression of their circumstances that a phone call can’t reveal.
10. Be fearless and survive
Remember, uncollected income is just the most obvious impact on your cash flow. Prevention measures will save you the hidden wasted costs of time spent chasing payment. Don’t hesitate to ask firmly for due payment because you fear losing customers. Non-paying clients are not worth having.
Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=4346
Inventories have a way of growing. The justification is usually that ‘if we don’t have it we can’t sell it’, so a connection is made that translates as ‘the bigger the inventory we have, the more sales we’ll make’. If only it were so.
Inventories are usually made up of many types of stock. There are fast-moving and slow-moving products. There are products with a high profit margin and products with low profit margins. Some products are in demand and other products past their peak. To simply look at an inventory as having a single ‘value’ can be very misleading.
At the bottom end of the inventory process is a warehouse full of dead items past their prime and can’t be sold for anything like their cost of acquisition. It’s truly amazing how much of this ‘dead’ stock is retained on the books at cost price and lingers in the warehouses of so many companies, adding to the value of their inventories but doing nothing for their sales.
An inventory is a dangerous thing. If it’s not properly managed it becomes the equivalent of money that’s depreciating at an increasing rate and can actually drop below zero value. Be aware of the danger and don’t let this situation develop.
How important is inventory as an asset? It’s probably the largest asset of most SMEs, but it’s by no means the most valuable asset in the business. The most important assets are those that turn the inventory into cash – the sales team, the marketing and the business’ customer relationships. That’s what keeps the business ticking over, not just a bloated inventory waiting to be sold.
Some businesses manage to trade quite profitably without an inventory of their own. ‘Just in time’ manufacturing processes created a whole new outlook on parts inventories that made maintaining huge stockpiles of components obsolete and saved manufacturers a lot of money. This line of thinking can be successfully applied to just about every inventory situation.
This taught businesses the importance of accurate sales forecasting – knowing what the demand for a product would be and when it would arise. Orders for components could be placed according to the projected demand and the need to retain year round inventories was eliminated.
Most proprietors at least know their sales volumes and would no doubt like to retain them. The catch is how can they do this and at the same time operate with a reduced inventory? If every item in the inventory turned over at the same rate this might be a problem, but a careful analysis of what’s in any inventory will find some fast movers as well as some items that have a much slower path to customers.
Go through the inventory in detail. Look at the age of what’s in stock as well as how quickly each item turns over and the search will soon find some real opportunities to cut down on the number of items there. It’s also possible to discover some items in the inventory that haven’t moved for so long they’re virtually obsolete. So it’s not just the total value of an inventory that’s important; it’s what it consists of bit-by-bit.
Now look at the profit margins the business earns on each item in the inventory. Relate this to the turnover rate for each item and some surprising facts will emerge. Finding items that turn over slowly and generate low profit margins should ring a huge alarm bell that perhaps these products can be either dropped from the range or sourced from suppliers ‘on demand’.
Inventory on its own doesn’t sell itself. Certainly a business wants to be able to provide its customers with fast-moving, high margin items with the least possible delay, and that’s where the focus should be. In most SMEs the ‘80/20’ law applies to the products they sell – 80% of the turnover comes from 20% of the products. It makes sense to have those 20% of products dominate your inventory and find alternative ways to handle the less-important 80%.
If an organization’s inventory is made up mostly of those ‘80%’ products it’s time to do some housecleaning. All they’re doing is depreciating from year to year and that capital could be better employed in selling more of the 20% products. Even if items in the old inventory will someday be moved, wouldn’t it be better to let someone else have the joy of buying and stocking them? Liquidate them and free up the capital for more productive uses. They can always be repurchased when and if required.
Always remember that an inventory represents cash just sitting there. It’s not cash in the bank; it’s cash that’s been invested and on which needs to generate a return. Everything in an organization’s inventory has a cost attached to it – just acquiring and warehousing it can be expensive, and the longer it’s unsold the higher the costs become.
Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=4015
While there’s no escape from preparing the financial information for a business plan, a step by step approach will help make the task less onerous.
Similar to the overall business plan itself, the financial information should be divided into specific sections to ensure focus and relevance.
It should reflect short-term and long term strategies, be realistic and supported by sound research where applicable.
The data should cover areas such as the current financial position of the operation; forecast cash flow, profit and loss, and balance sheet; break even analysis; sources of finance; capital requirements; timing and stages of finance; and fixed asset requirements.
Much guidance can be gleaned from the numerous books and software packages that are available, together with professionals, such as your RAN ONE accountant, who specialize in the field.
However, you can’t escape from doing some of the hard yards yourself.
The more involved you are in the process (of gathering and presenting the financial information), the more ownership and control you have of the operation, says Richelle Moran, small business development specialist.
The financial section of a business plan all comes down to dollars and cents, according to a spokesperson from the Faculty of Business and Economics at Monash University in Melbourne, Australia.
“It is all about cash flow … one of the biggest problems for business is running out of cash,” he added.
To make a start, you need to do some “brainstorming” to identify the key financial information relevant to your operation and list these as sub-sections.
The next step is to gather the information, including tangible evidence to support projections, under the appropriate sub-headings.
At this stage, putting pen to paper and organizing the information in point form is advised.
This provides a basic framework from which to flesh out the information in more depth.
Moran warns that you have to be realistic in your projections and note that it is often safe practice to err on the conservative side.
According to Moran it is common for businesses to overestimate income and to underestimate expenses.
“It sounds obvious but it is not that obvious when you are doing it,” Moran said.
Pickett recommends a hard-nosed and independent “reality and credibility check” by an experienced person, such as your RAN ONE accountant, who stands outside the business and is not emotionally involved to objectively review the projections
“Listen carefully to their feedback without being defensive or trying to ‘sell’ or convince them that the projections are achievable,” Pickett says.
He noted that sudden increases in sales or other revenue projections relative to historical levels may be based on unrealistic assumptions or expectations.
Business should ruthlessly apply the 80/20 rule in which they focus on accurately forecasting the few “big ticket” items (the 20 percent) that usually account for most of the revenue and most of the costs (the 80 percent).
It is also important to distinguish clearly between financial profit and loss projections and cash flow projections.
The profit and loss statement is necessary to ensure your business is making acceptable profits; the cash flow statement shows whether or not cash is available to cover the timing differences between paying expenses and being paid for goods and services provided.
Another tip from Pickett is to clearly identify what, and for how long, additional funding will be required.
Also, it is good practice to have two sets of projections covering both the bearish and bullish ends of the spectrum.
While it is motivating to set challenging hurdles to achieve, it is also important to recognize the potential minimums.
Pickett says it is important to ensure that your team members responsible for achieving projections are committed and have been involved in the planning process in some way.
Devising simple performance measures can help provide early indicators of future trends and outcomes. These can include the number of quotations made or the value of forward orders.
As part of your financial blueprint, you also need to have some form of contingency plan for any unexpected event that may impact adversely on your operations.
Equally important is a plan for where to obtain emergency cash.
Moran cites the increasing cost of insurance premiums as an area often overlooked when gathering financial information.
“In such volatile times as these, it is important to get quotes for what it is going to cost for insurance for the next 12 months,” Moran says.
“It is no good just adding 10 percent to the previous year’s premiums.”
One of the problems facing some small to medium sized businesses is that they do not have the resources to employ the financial expertise required.
Some owners try to be jacks of all trades but are masters of none.
Money spent on professional assistance should be viewed as an investment in the future.
A sign of a good business plan, and that includes the financial information section, is one that is dog-eared and full of scribbled notes.
It proves it is used regularly and reviewed.
Article courtesy of RAN ONE: http://www.ranone.com/press_room/news.asp?ID=3868
It happens every so often – you’re called upon to give a presentation and suddenly stage fright begins. Relax. There are lots of things you can do to make your next public speaking job a winner and once you’ve learned them presentations will never be a problem again.
Start preparing for the presentation by making an outline of every point you want to make. Think about any questions that may arise in the minds of the audience and be sure to answer them all. If you’re going to make an assertion, back it up with facts.
Next, turn the outline into a speech. It has to flow smoothly from start to finish and be appropriate for your audience. Imagine yourself having a conversation with a member of the audience to whom you want to communicate everything in your outline.
The best presentations are made naturally, as if it were a one-on-one discussion speaking as you usually do. This helps your self-confidence and avoids the danger of sounding pompous or artificial. End a sentence with a preposition if you usually do. The people out there want to hear you, not a textbook.
The word “you” is magic one. It’s always a good idea to involve the members of your audience on a personal level, and wherever possible work them into the presentation you’re making. “You wouldn’t want that to happen” is a lot better than “One wouldn’t wish that to happen”.
Part of any successful presentation is gaining and keeping your audience’s attention. This is done by creating interest and being entertaining, all of which means that your speech has to contain some elements that will be news to your listeners.
Plan a beginning that’s interesting. Start with a question or a statement that will immediately gain your listeners’ attention. You may have 45 minutes of presentation time but your audience will make up their minds about you in the first minute or less, so get off to a good start.
The central part of your presentation will be where you communicate the bulk of your information and take your audience step-by-step towards your conclusion. Keep the pace moving right along and refer back to your central theme as often as you can.
As you work through your speech identify those areas where visual or other aids will be needed. A well-constructed graph can be worth a thousand words of explanation, and for dramatic effect a vivid photograph can really help make a point.
Begin a buildup as you approach the end of your speech. The end has to be as strong as you can make it, drawing the audience to the point you want them to reach. Go through a quick recap of your main points and give a verbal signal that you’re about ready to end the presentation – “In conclusion…” is often used.
There are several forms you can use to record your notes for the presentation. If you print it out on a letter-sized sheet use large type and at least 1½ spaces between the lines. Better still, have it printed out on index cards that you can flip through as your presentation progresses.
Do not try to read your speech while you’re giving it. These are notes only and you’re going to prepare so well that they’re only useful as reminders, not as a complete script.
If possible visit the venue where you’ll be making the presentation and find out a few important facts. How well can the speaker be seen? How will the audiovisual aids be presented? How effective is the public address system? This information will help you get all the elements right and will also enable you to better rehearse your presentation before you actually make it.
Now it’s time to rehearse. This step is the most important part of ensuring your presentation will be a success. You don’t actually memorize your speech; you learn it through practicing it over and over until it becomes something you know as well as your address or telephone number.
Practice it aloud. Read through your full speech just once, then start using the notes you’ve prepared. If you come to a place where you don’t know what comes next refer back to the full speech, but do this as little as possible. You’ll soon be working off the notes alone.
It will help to have a volunteer sitting in front of you while you’re practicing. This helps you work out such subtle details as your hand movements and your speech timing. Encourage criticism now because you don’t want it when you’re giving the presentation to your intended audience.
When it comes to the real thing you can be confident you’ve learned your material and the presentation will go well. But you’ll probably still be a bit nervous because most people are when it comes to public speaking. Focus on how well you know the material and take some deep breaths. Let your whole body relax from your head down just before going onstage.
Now for a final tip – always maintain eye contact with the audience. Don’t jump around too quickly, but be looking at someone every time you speak. When you’ve reached the end of your presentation thank your audience for their attention and they’ll let you know how well you’ve done.
Article courtesy of RAN ONE: http://www.ranone.com/Press_Room/news.asp?ID=3921
One way or another, business is all about selling. We have to sell to our customers, to our banks and other sources of funds, and even just when we’re meeting people for the first time in a social situation. ‘Selling’ really means just being yourself in a way that’s interesting to your audience.
That’s why to make the right kind of impression on others when selling something you can’t just commit a sales pitch to memory and deliver it; you have to sell yourself by being yourself. You have to open up to people and let them see who you really are so they know they can trust you.
Think about the last time you encountered a ‘real’ salesperson. You sensed they were simply delivering a pitch and trying to sell you something rather than trying to get to know about you and find out what you really wanted. The impression made by somebody trying to sell something rather than trying to satisfy the needs of a customer is generally a negative one.
Now think about a salesperson you’ve met whom you really liked – someone who left you with a positive impression, even if they did manage to part you from your money. Chances are pretty good that they didn’t just try to sell you something, but rather that they spent at least the first part of your time together getting to know you. And when you’d completed the transaction you walked away feeling you’d got to know them as well.
What had really happened during your conversation? During that time they’d sold themselves to you before they’d tried to sell you anything else. They got to know you well enough to discover what it was you were after and then matched up your needs with what they had to sell.
This isn’t to say that you don’t have to keep business in mind when you’re trying to sell something. Customers expect you to know about your products and to know about the industry you work in. They often come to you for your knowledge as much as they do for a product or service; especially if they’re unsure about exactly what it is they need to solve a problem.
But subconsciously, what they really want to do is to learn something about you and to feel that you want to learn something about them. They want to connect on a personal level and make the occasion one in which they’ve met a new acquaintance, even if the ultimate result is that they buy something from you. People don’t want to deal with strangers and will always prefer to purchase something from least someone they feel they know.
How can you become this special kind of person when you’re trying to sell something? It’s not difficult and it will be something you enjoy doing; just remember these four things:
Get your knowledge up-to-date
Remember that people come to you for knowledge and information they don’t possess. It’s up to you to prepare yourself for their questions by learning all you can about your products and how they relate to people’s needs. Anticipate what it is that customers will want to know and be ready with the answers. This will enable you to be a lot more helpful and reassuring.
Create an outline of the sale
This is not as hard as it sounds. Most selling situations go in a fairly similar, and therefore predictable way. They always begin with a greeting and an introduction, then move on to questions and answers, finally ending with a close and hopefully a sale.
Customers are on your territory and probably expect you to control the situation to some degree, so even before you greet a customer have in mind how you want the sale to go. It will make both of you more comfortable if there’s a structure to your conversation.
Get to know the other person first
Make the first part of every conversation about them, and not about you or what you’re selling. Make a point of finding out some personal details, starting with their names and what sort of work they do.
The most important thing to find out is just what they want from you. It may well be just advice at first, or possibly information about your product. Before you give a definitive answer probe for a bit more information about their needs; if they ask a question it’s an indication that they are aware of a need and hope you’ll be able to satisfy it.
Relax and let things happen
You’ve prepared for this conversation, you’ve researched your knowledge base, you’ve outlined how things will go, you’ve got to know the other person – now just relax and let the sale take place. Take the lead but don’t push, and be confident that you’ve got something this customer wants. If not, you’ll both know it and no harm done.
And most important of all, be yourself. Don’t try to become someone who’s the perfect salesperson or has ‘personality plus’. They want to meet someone who’s genuine and sincere – someone who’s just like them but with more knowledge about something they need. That’s you!
Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=4154
A lot of people hate meetings. They have too much experience of long meetings that meander on forever and never seem to reach any conclusions that can be acted on.
Team members may resent meetings because they are already working to deadlines and the last thing they need is an ineffective meeting that takes up their precious time.
However, a well-run meeting can actually save time. It can make sure that everyone is working in the same strategic direction. And a well-run meeting will serve as a way to either solve problems or to deal with issues before they become problems.
To keep a meeting on track and productive, you need to plan ahead. Consider what issues you want to deal with. Set the issues out in an agenda and circulate the agenda for comment and modification before the meeting.
You can also consider having two-minute conversations with each participant before the meeting. This will help ensure that everyone understands what you broadly expect the meeting to achieve.
Somebody needs to chair a meeting. The chairperson’s role is not to dominate discussion. Rather, they need to keep the meeting on track and to elicit the best opinions from the participants. If you decide to chair a meeting yourself, you should restrain your impulse to declare too strong a position on any issue.
Try to use the meeting as a problem-solving tool – a way to shed new light on issues and generate unexpected viewpoints. A well-run meeting can arrive at conclusions that no individual would have reached by themselves.
Intervene where you sense that the meeting is going astray. Find tactful ways to step in when people are repeating themselves or missing the point. Try to remain positive, recognizing the good points that people have made.
Also make sure that some participants do not stifle ideas by shouting people down or hogging the floor. Actively seek views from everyone and make sure they get a chance to speak without suffering excessive interruptions.
As you are the ‘boss’, be aware that you can kill off a discussion by expressing your views too early. Hold back on a decision until all viewpoints have been discussed and then be clear about why you favor one viewpoint over another. Show respect for all viewpoints, so that people will feel they have contributed something even you resolve against following their advice.
You not only need to keep a meeting on track. You need to make sure that it is not going on any longer than it needs to. Be aware of how much a meeting can cost. Try estimating the average hourly pay rate of the people who need to be at a meeting. Then add up how much it will cost you to have them all in one room talking for an hour. You could easily find that a meeting is eating up over $500 per hour.
With this in mind, include time limits for each agenda item. This will encourage people to make their points succinctly. And if a meeting runs ahead of time, don’t hesitate to finish early.
You can also try to build up a momentum in the meeting. Try scheduling the most straightforward issues at the beginning so that participants get into a rhythm of dealing with agenda items and then moving on.
Ask yourself if everyone needs to be present for all parts of a meeting. If some people need to be present for only half the time, try blocking issues together so that they can come in when needed and leave when they have made their contribution.
This strategy can be undermined if people show up late. So be clear about the importance of punctuality. As people don’t react well to public reprimands, talk to stragglers in private.
Finally, appoint someone to take minutes. Minutes should focus on the way agenda items have been resolved and they should be circulated soon after a meeting. This will help reinforce the conclusions you arrive at. It will also help ensure that decisions are implemented.
Article courtesy of RAN ONE: http://www.ranone.com/press_room/news.asp?ID=2422
When someone makes a purchase they buy more than just a product or service. At the time the product or service is probably the most important element, but they also buy a range of benefits that can over the long-term become their reason for being satisfied or dissatisfied with their purchase and with your business.
These are called ‘added’ benefits because you add them to the products or services that you sell. They can make a big difference in how customers see your business and be an important differentiator between you and your competitors.
Make a list of the added benefits you provide. These can include:
– A product guarantee or warranty that reassures customers
– The service given by the sales team during a purchase
– The availability of your backup service – 24 hours, 7 days?
– The speed with which your company fills customers’ orders
– The follow-up from your business after the purchase
– How your location suits customers – is it convenient?
– Their perceptions of your business – stable, efficient, friendly?
– The quality of your product offerings – all your products and services
– Manufacturing locally – appeals to their sense of patriotism
– Your premises – attractive, clean, bright?
Some added benefits cost you nothing or very little. The way your sales team treats customers is a function of staff selection and training, and that doesn’t add much to your total wages costs. Others, such as the condition of your premises can be as costly as you want to make them.
It’s up to you as the manager to determine how far you’re willing to go to deliver the best package of added benefits with everything you sell.
Once you’ve listed your own added benefits, list the added benefits provided by your competitors. If they’re more successful than you at selling the same or very similar products the reasons could well be their added benefits package.
Conduct some simple research using groups of your own customers, and those of your biggest competitors if possible. Let customers tell you how they value the benefits you add, and how your benefits compare with your competitors’. Ask them for their suggestions as to what additional benefits you could provide to increase your sales.
Incorporate their comments with your own perceptions and analyze every added benefit that you and your competitors provide. Note why these benefits are attractive to customers and whether each is expensive or inexpensive to provide.
Are there some that are impossible for you to match (for example, location)? Which are you now providing but capable of improving? Which are you not now providing but could provide with minimal additional expenses?
Remember, you’re trying to put together the best package of benefits and probably won’t be able to match the competition in every category.
Now be creative and devise some new added benefits that aren’t on your lists. These can be time-related – offer a free inspection or service in twelve months, financial benefits – a guaranteed trade-in value on the old one when repurchasing, or an add-on such as ‘spend $30 more and get $100 worth of genuine accessories’. Add some benefits nobody else is offering and stand out from the competition.
Once you’ve worked out the full contents of your added benefits package you have to find a way to communicate them to your existing and potential customers. Start by educating every member of your team – not just salespeople but everyone in your business. Give each person a list of your added benefits so anyone receiving an enquiry is familiar with all of them.
Summarize these benefits for customers. You could put them into your monthly invoices, display them on the walls of your office, use them in your advertisements, or include them on the calendars you give away at Christmas. Just be sure your customers know what else comes with every purchase they make.
By putting together a really attractive package of added benefits and making sure everybody knows about them you’ll be able to increase sales at the expense of your competitors.
Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=3963
Businesses considering exporting their products often talk themselves out of it because they think it’s all too difficult. But exporting is a lot easier than most businesses at first imagine, providing that a few simple ‘rules’ are observed. First, let’s remove some common myths about exporting.
Myth number 1 – You have to be big to succeed
The majority of companies exporting have fewer than 100 employees and are classified as ‘small businesses’. There are many factors more important than a company’s size that will determine whether or not it will succeed as an exporter.
Myth number 2 – It takes a lot of specialized staff
It’s easy to get into exporting through a third party that specializes in exporting products on behalf of manufacturers. This is a good way to ‘test the waters’ and gain an idea of the product’s export potential.
Myth number 3 – It has to be a high-volume product
The product’s volume is irrelevant as long as it’s sufficient to meet the needs of the marketplace to which it’s exported. Quality, pricing and dependability of supply are much more important. By exporting to a country where the level of competition is significantly lower than in the ‘home’ market a rapid growth in volume can be achieved within relatively short time.
Myth number 4 – Business is transacted in foreign languages
A surprising number of people in most other countries are competent in English. More important, however, is that document translations are readily available and language is no barrier to exporting. Using correct language is usually an essential only for packaging and instructions for use.
Myth number 5 – It takes a special kind of product
If a product is successful in its home market it has a good chance of succeeding elsewhere without modifications. Even products past their market ‘peak’ at home can sell well in countries where the market’s at a less mature stage, making it possible to greatly extend a good product’s life cycle.
Having put these myths to rest, let’s now take a brief look at what it takes to do to become a successful exporter. The first thing it takes is a commitment in terms of both management time and money. A business that exports is not just expanding its current market; it’s entering a new one.
A company that wants to export its products must first clearly define its goals and develop a comprehensive marketing plan that covers every detail of the proposed operations, including selection of overseas sales representatives and distributors. Especially important is to be sure to allocate an adequate part of existing resources to support the overseas sales efforts.
Next it has to undertake a study of the markets into which it intends to export. It shouldn’t try to take on the world all at once; it’s more important to concentrate on getting established in just one or two overseas markets before trying to expand further.
It should consider using an export management company that can help with all the issues concerning research, promotion and distribution of products overseas. They can make an entry into foreign markets a lot easier and more than offset their expenses with sales success as a result.
Governments at state and federal levels are also glad to help exporters enter overseas markets, so they should be contacted when making export planning decisions. Any business wanting to export products to other countries will discover there are many sources of assistance for every step of the way.
There is one especially critical area that causes many export ventures to fail and that’s currency transactions. Exchange rates can fluctuate and make the actual value of a contract significantly different from when it was signed. Businesses should seek expert advice in how to cover themselves against these fluctuations before concluding any financial agreements.
Article courtesy of RAN ONE: http://www.ranone.com/Press_Room/news.asp?ID=4013