Sales and Marketing

Radical Sales And Marketing For Your Small Business

SBOCTeam — Tue, 22 Jul 2008 15:30:00 GMT

The meaning of the adjective radical is "not bound by traditional ways or beliefs." Here are the "must dos" of a seasoned business unit's radical salesperson and marketer.

by Profit_Repair

No stone goes unturned in your search for new leads and clients; no sales idea is too silly or stupid to try; you sell to everyone, every day, no matter what their size; you sell more than you market; you utilize yield management techniques; you just do not leave collateral, you collect a database for follow-up; you go down swinging and then get back up for another round; you are always in "selling mode;" you network, not just talk to people; you are "it," no one but you can make it happen; when you fail, you succeed by learning from it; you start your day with a goal and focus on its achievement; you look for ways to sell to prospects that others are not; you carry your business cards with you everywhere; wherever you go you see a future client; no matter how many no's they have given you, you write down phone numbers from passing businesses on the street; you see customer obstacles as an opportunity to get testimonial referrals from them by meeting their expectations; you work on the probability theory; you radiate confidence and bring direction to clients; you take ownership of your sales 100%; you are out finding new revenue generation that your competition never knew existed and selling to them before they do; you see doors of opportunities, not slammed ones in your face; you are asking for the sale every time, in all possible ways, with each client you communicate with; you are a relentless "door knocker" and grass roots marketer; you look at your sales reports for new business that purchased from you; you drive the desire and passion for each sale with every presentation; you fight tooth and nail to retain a client and make new ones every day when you come into work; you smile until it hurts just to go to bed and wake up to attack your business leads all over again tomorrow.

Are you ready for the challenge? Are you ready to become a radical salesperson and marketer for your business unit? Why not? Are you afraid to get a little emotional about your sales and marketing? Only emotional selling sells to clients on a regular basis with consistency. No one wants an order taker in their sales department; your product line is not that special to afford you that luxury. If you are not emotional about the product line that you represent, your sales will never reach full capacity.

Keep it (sales and marketing campaigns) simple (KIS theory) for the biggest bang with the fewest bucks! Oh, by the way, the above sentence is the longest sentence in this blog. Do you know the reason why? Because it is aggressive and unconventional and "not bound by traditional ways or beliefs," just like what a radical sales and marketer for your business unit needs to be.

Go be radical today!

http://theprofitrepairman.com/

Dedicated to the Mission!

Tom Marquardt, The Profit Repairman®
(239) 561-2591
(239) 561-3589 (fax)
tomm@theprofitrepairman.com
http://www.theprofitrepairman.com

Green-ward To Success

SBOCTeam — Tue, 22 Jul 2008 14:00:00 GMT

There are more resources than ever available to America's eco-friendly entrepreneurs. Take advantage and help your green business stand out from the pack.

By Max Berry

It's common knowledge among small business owners that going green has a positive effect on the environment. Perhaps less known is how to successfully manage your green business in a world where more and more entrepreneurs are laying claim to the word. The secret may lie in the acknowledgement that words alone will only get you so far. "Anyone can say they're green," says Joel Makower, Executive Editor of Greenbiz.com. "These days, to gain marketing penetration to a significant level, you have to have a system as well as a standard."

Indeed, with so many businesses branding themselves as green, simply wearing the color is no longer enough for those looking to stand out. You need to prove, to your employees and associates as well as your customers, that the green you wear is more than just fashion.

The first step to success in any business, green or otherwise, is a devoted team. And a little green never hurt morale. "[Going green] is valuable when it comes to attracting talent," says Makower. "People want to work for a ‘good' company, and they can get frustrated if their employer isn't doing all that they can." Doing all that you can is one of the surest ways to earn the loyalty and respect of your employees. It's also a way to build a valuable network of connections in your field.

Green Networking

Whether you're new to the world of green business or a seasoned pro, making yourself known to your eco-business brethren is never a bad idea. There are countless industry-specific associations committed to introducing, educating, and uniting green business owners. The Organic Trade Association (ota.com) bills itself as an "association for all sectors of the organic industry, from farm to retail, and for all other types of products." The International Ecotourism Society (ecotourism.org) is a non-profit organization providing similar services for the most eco-conscious members of the travel industry.

There are also more general resources available for those with earth-conscious business models. Green Options Media (greenoptions.com) provides a network of blogs focused on sustainable businesses in all industries. Makower's own Greenbiz.com offers blogs, case studies, and environmental news for all forms of green businesses.

Taking advantage of services like these-or taking part in any other activity that helps you stay in touch with like-minded entrepreneurs and keep abreast of the latest green innovations and trends-will supply you with ideas to help you maintain your own patch of ground on the green landscape.

Getting to the Customer

Once you've surrounded yourself with a reliable network of cohorts and colleagues, the next order of business is the customer. And there are just as many resources available for green-minded consumers as there are for eco-friendly entrepreneurs. Green J (greenj.org) and Eco Firms (ecofirms.org) are search engines designed to connect consumers interested in greener products and services with the businesses they seek. Also available are similar industry-specific services. Eco Hotels of the World (ecohotelsoftheworld.com) is, as the name would suggest, a database of the world's greenest hotels. Green Home Guide (greenhomeguide.com) provides the same service for those looking for eco-friendly home and garden products. Registering your business with a consumer service like this will make it easier for the green-minded customers you're after to find you. Taking the time to associate your business with this sort of network will also be an indication to consumers that you are serious about your commitment to sustainable business.

B2B: Consider Certification

Business-to-business firms face even more pressure to prove their commitment to sustainable business practices, as their clients, considering the needs of their own end consumers, are becoming more aware of the demand for environmentally safe goods and services. "In some industries, being green is table stakes, says Makower. "It's the price of entry, so you have to say it. But in a B to B, you have to prove it."

The problem then becomes how to go about proving it. As Makower concedes, "We don't have a definition of green business. We don't have an answer for how good is good enough."

One way to assure your buyers of the ecological integrity of your product or service may be to have it certified as environmentally sound. OneCert (onecert.net) is a certification service, accredited by the USDA, which gives an official stamp of approval to qualifying organic agricultural products. This kind of federal certification does not exist for every industry, but many local governments offer similar certification programs for green businesses. As Makower points out, all nine of California's San Francisco Bay Area counties offer certification programs for sustainable businesses.

As a nation, we have not yet reached the point where this type of certification is federally and comprehensively regulated. But seeking some form of certification (greenj.org offers a list of certifiers) will, in the worst case, show you ways in which your business can do more to help the environment. And bearing the endorsement of an outside agency will demonstrate to customers that you are serious enough about your commitment to greener business to invest the time in proving it.

Fwd: to Sales

SBOCTeam — Thu, 10 Jul 2008 21:11:00 GMT

Using promotional emails and newsletters to market your small business

By Chris Freeburn

Few technologies have yielded as much benefit to small business owners as the Internet. Beyond the obvious benefits of e-commerce and professionally designed websites that can make a small business look like a big player in its industry, the Internet permits small businesses an unprecedented opportunity to use email to sidestep expensive marketing campaigns and stay in touch with customers long after a sale is made at a tiny fraction of the cost of traditional mail or advertising campaigns.

Indeed, according to a recent study by the Direct Marketing Association, email marketing campaigns returned as much as $57.25 for each dollar spent, compared to $22.52 for each dollar spent on non-email internet marketing campaigns and just $7.09 for each dollar spent on printed catalogs.

Email marketing is one of the strongest potential tools in your small business's marketing arsenal. It offers a cost-effective way to keep your business securely in your customer's minds even when they are not considering a purchase. Using email, you can advise customers of new products, promotions, sales and discounts, or company news, for just pennies per message. Your business can reap the value of email marketing campaigns regardless of whether your company conducts ecommerce or not. An email marketing campaign can also permit you to gather demographic information about your customers for far less than the cost of hiring a marketing firm to do that for you.

Determining the fit

"Including email in your marketing mix isn't as simple as transferring traditional message formats into electronic formats or abandoning more expensive mediums in favor of email delivery," warns John Arnold, author of E-Mail Marketing for Dummies. Determining how email marketing best fits into your business's overall marketing strategy, and how well it compares against other parts of that strategy requires a certain amount of trial and error, Arnold says. "Delivering your messages by combining different mediums is an effective way to market your business, but you'll probably find it more affordable to lean on a few communication mediums where delivering your message results in the highest return."

It is important to consider each of the marketing elements in your current campaign to determine how email can compliment them. Obviously, email cannot completely supplant other advertising mediums, like print or even Internet advertising, which are important for drawing new customers to your business. Email campaigns are best used to target existing customers and to build and enhance brand loyalty to your firm by fostering a personal relationship with your customers.

Putting together your email list

In order to use email effectively, your customers must provide their email addresses and allow you to send them email. Sending unsolicited commercial emails is illegal, and is known as spamming (CAN SPAM Act). Be sure to seek legal council to ensure that you're in compliance with this law. Getting your customers to part with their email addresses, and perhaps a little demographic information, can be relatively easy.

Create a form on your website that allows customers to sign up to receive promotional emails.
Offer something to induce customers to provide their email addresses - a small discount on products or services, or a free sample or item.
Try to collect more than just the email address. Ask for names, zip codes, gender, and age range. This is important demographic information that can be used to aid your entire marketing effort. But keep the questions general and few in number. Don't ask for too much information, or for highly personal information, like exact ages, since that may annoy some customers, causing them to abandon the effort. Also offer customers the option to skip the questions altogether, which will likely result in more actual email addresses obtained.
Offer value. Let your customers know that signing up to receive your emails will give them something useful, like special discounts, or early notice of events, or sales at your business.
Allow subscribers to your company emails to easily unsubscribe from your list. A stream of unwanted emails will alienate potential return customers, and anti-spamming laws require you to remove people who no longer wish to receive your company's emails from your email list.

Beyond simple selling: E-Newsletters

Company e-newsletters are a good way to promote your business while providing useful information about a subject your customers are already interested in. An e-newsletter differs from a standard promotional email by offering news, advice, or information that isn't strictly sales related. Customers are more likely to read something that they believe is providing useful information instead of just trying to sell them a product or service.

A garden supply company, for instance, might offer a quarterly e-newsletter with seasonal tips on planting and gardening. While this may require more effort to create than a simple promotional email, it will go a long way toward cementing the relationship between your business and your customers. If customers come to see your business as a source of helpful information, it will help build brand loyalty and encourage repeat business.

Things to keep in mind

Before your launch your company's promotional email or e-newsletter campaign, make sure to follow a few guidelines:

Make sure your company's name is part of the email address from which the email is sent. For instance, mike@mikesautorepair.com. Many people receive a lot of email every day and have developed a habit of simply glancing at the sender's email address and deleting emails from source they do not instantly recognize.
Make sure your company name is in the subject line and clearly visible in the text of the email. This also insures that customers receiving your email will easily identify you as the sender and associate your company with the email.
Use the same company logo in your email or e-newsletters as you do on other promotional materials, like business cards, printed brochures, print ads, receipts, mailings, invoices, or your company's website. Consistent use of your company's logo reinforces your brand.
Make sure that your email or e-newsletters use consistent fonts and layouts that are easily readable.

The Beauty Of Branding

SBOCTeam — Sun, 09 Mar 2008 08:45:00 GMT

If you're not defining how your customers feel about your small business, who is?

Mention "branding" and successful marketing campaigns from the world of Big Business things like Nike's ubiquitous Swoosh symbol or Coca Cola's catchy "Have a Coke and a smile" slogan almost immediately spring to mind. And though few small businesses will ever find the need for a jingle that gets customers to "sing in perfect harmony," more and more of them are finding out just how critical branding can be to their survival and to their bottom line. But without extensive expertise, many small business owners embrace the concept of brand building only to find themselves confused about how to actually go about it.

In his book, Emotional Intelligence: How Successful Brands Gains the Irrational Edge, Daryl Travis argues that many businesses mistakenly focus their energy on the tools of branding, rather than on the more essential branding task of understanding their customer's feelings and purchasing experiences. Companies that tap into these feelings have an edge over competitors who simply appeal to a customer's pocketbook, he believes, because "we develop an emotional response to the brands in our lives that is deeper than our rational minds can fathom."

At the small business level, this emotional connection is usually tied directly to the small business owner. "Small business branding is not a good logo, a rhyming name, or special font," agrees Yaro Stark, an Australian entrepreneur who also runs the blog smallbusinessbranding.com. "It's the wayrelationships are built and maintained, the way a person does business and treats other people."

David Waxman, co-founder of Spot Runner, a southern California based TV advertising firm that caters primarily to small businesses, says that once you've identified these feelings and experiences, it's imperative to start actively conveying them to your customers through marketing and advertising. As an example, Waxman points to one of Spot Runner's clients, the threeman law firm of Lapidus & Lapidus. "This small firm competes against a lot of larger, well established law firms in Beverly Hills," he says. Consequently, the company wanted to instill concepts like trust, authority, and permanence as part of their brand. By choosing to develop a more traditional, serious television ad, Waxman explains that Lapidus & Lapidus furthered their branding goals because, "TV lends an enormous air of credibility to a small company, and it allowed them to look bigger than they are."

Indeed, recognizing how different advertising media work is critical to making a branding campaign effective. "TV, magazines, and radio what we call ‘push' media are typically about discovery; they're where companies introduce customers to something new," notes Waxman. "In ‘pull' media, like the Internet and the Yellow Pages, customers often already know what products or services they want and are turning to these media to compare prices." A well balanced brand campaign, then, might feature a dramatic photo of a product in a magazine ad complemented by a detailed list of that same product's technical specifications on the company website.

In the end, branding comes down to making and fulfilling a promise to your customers. And though it might seem like a daunting task to do this on your own, Waxman says small business owners actually have one major advantage over the Cokes and Nikes of the world. "Big businesses use big ad agencies to do their marketing, but those people don't have their feet on the ground, they don't see who the customers are, where they come from, and why," he notes. "But small, local business owners interact with their customers every day." And armed with all that invaluable market insight, small business owners should take heart when it comes to branding and "just do it."

Staying Sticky

SBOCTeam — Sun, 09 Mar 2008 08:13:00 GMT

How to hold on to your customers and their critical revenue

By Chris Freeburn

Attracting customers is one of the hardest tasks a small business owner faces. Keeping them can be just as tough. Unlike large businesses, which can sometimes sustain a high turnover in customers, small business owners often don't have the luxury of large marketing and sales budgets to continue to acquire new customers. "Businesses succeed or fail based on their ability to bring people through the door and convincing them to spend money once they are there," says John Tschohl, president of the Service Quality Institute. "How the customer is treated once inside determines if they will ever come back."

Incentives
One way to generate repeat customers is to give them a specific reason to come back. "If the consumer feels that he or she is getting something concrete whether that is in terms of savings on an item they want, or some sort of added good or service that may be enough to draw them back to your business, and hopefully to get them to spend some money," Tschohl says. Incentives can come in a variety of forms. Discounts are always a good draw and can be customized to fit a variety of needs. Try handing out cards offering discounts on specified items to customers whenever they purchase something. Small gifts with certain purchases are also a good idea. It's also a simple fact of human nature: People like to win things. So in store contests that offer interesting prizes are a good way to draw customer interest as well.

Give your best customers the best rewards
It seems obvious, but many businesses, both large and small, do not expend the effort to offer a graduated reward system. Without different levels, your low and high value customers are treated the same way, leaving your best customers feeling under appreciated. With only one level of award, there is also no incentive for low value customers to aspire to a higher tier by continuing to purchase. Setting up a system that begins with a simple "Thank you for your business" personalized note and progresses though periodic coupons, up to permanent discounts or automatic service upgrades can be easily accomplished by businesses of almost any size.

Referrals
One of the most power ways to advertise your business is by word of mouth. Potential customers are much more likely to visit a business that has been recommended to them by a good friend, family member, or colleague. You can convince your customers to spread the word about your business by rewarding them for doing so. Those rewards can take the form of discounts on specified goods or services or small gifts for each new customer they bring to your business.

Make the Experience Count
Keeping customers happy is the best way to bring them back. A satisfied customer is a hundred times more likely to come back than a customer who had a so so or negative experience. The keys to success in customer experience are simple. Keep your place of business clean, professional, and attractive to the eye, and keep customer interaction with your employees easy and cordial. "Be attentive to customer complaints and be willing to go the extra mile within reason to handle any problems," advises Tschohl. Make it easier for your customers to do business with you than with your competitors. One of the best ways to find out how your customers feel about your business is to ask them. What do they like? What don't they like? Are there any products or services they need that your business doesn't provide? You can ask customers their opinions at the time of sale, or provide them with occasional questionnaires for their feedback. Making changes based on customer input can keep existing customers coming back.

Reach out and touch your customers
Another critical means to draw customers to your business is to make sure they keep you in mind. Your small business may not be able to afford a radio or TV marketing campaign and even newspaper ads can be pricey. Nevertheless, most businesses can afford a mailing campaign, targeted at their most frequent customers. Sending out discount coupons or news of recently added products or services, or community activities in which your business participates is a good way to remind customers about your business and prompt them to come back. Email is also an extremely cost effective means of reaching your customers. Many small businesses use email to alert customers to discounts and promotions, or provide ongoing information about products or news about the business itself. Such emails can keep your business in your customers' minds, even if they aren't considering an immediate purchase.

Make It Easy for Customers
A sure way to keep your customers coming back is to make it as easy as possible for them to purchase goods and services from your business. Increasing the number of ways a customer can access your business is a good start. Do you have a website? Can your customers order goods or services and pay for them through that site? Since most customers begin the product research on the web, your company should have at least some sort of web presence. But just having a website that advertises your business on line won't cut it anymore. Increasingly customers expect to be able to research and purchase online. If your website isn't able to handle ecommerce, then you have already lost potential customers. Setting up an ecommerce website is relatively easy; your web hosting company or ISP (internet service provider) can usually walk you through the process of turning your website into an online storefront. The frenetic competition between traditional phone carriers and new players, including cable and Internet companies offering VoIP (voice over Internet protocol) telephony options, has lowered the price and range of services available to small businesses. Adding a professional phone network to your business, or a 1-800 number, is now relatively inexpensive. Companies that advertise 1-800 numbers are more likely to attract customers, who may infer a larger sized business from a toll-free number.

Fighting For Sales

SBOCTeam — Tue, 15 Jan 2008 15:57:00 GMT

Did last year's sales lag behind your projections? Here is some solid advice to get you going in 2008

BY MICHAELA CAVALLARO

When Jennifer Younge joined New York City marketing communication and design firm Ross, Culbert & Lavery Inc. in late 2001, the company had a long established method of drumming up sales: It sent prospects a portfolio of work it had done for other clients. The message, says Younge, was simple: "Look what we did for this company; we can do something even better for you." That method worked well when the economy was humming. But in the downturn after Sept. 11, the portfolios lost their magic. In part, Younge says, that's because the approach was essentially passive. "Once a potential client has the package in their hand," she says, "they have no reason to meet with you." The downturn was obviously bad news for the newly hired Younge, not to mention the company's owners and staff. Desperate for a more active way of engaging prospects, Younge began cold calling the professional services firms that were Ross, Culbert & Lavery's target. The problem? "I had no clue what I was doing," Younge says, laughing.

That's where Wendy Weiss came in. Weiss, a New York sales trainer who specializes in what she prefers to describe as "introductory" calling, bills herself as the Queen of Cold Calling. "Most people know how to talk on the phone to friends, but they don't know how to get a perfect stranger's attention on the telephone," she says. "Selling is a very specific communication skill. The more skilled you are, the better your results will be." Younge worked with Weiss to construct a new strategy for contacting potential customers. Younge now uses cold calls to set appointments for introductory meetings, and she's made a crucial mental shift: Rather than assuming that she's interrupting or bothering prospects, Younge acts and speaks as though she's helping them do their jobs better. "Even if they don't hire us, it's still in their best interest to know what's going on in the marketplace and what their competitors are doing," she says. "People pick up on that authority and confidence in my voice and conclude that they want to hear what I have to say." The result?
Today, the majority of the firm's clients come from Younge's cold calls a vast improvement over the send a portfolio and cross your fingers days. More efficient cold calls are only one way to drive sales and boost a company's bottom line. We asked sales experts both consultants and entrepreneurs to tell us what they've learned about how to approach sales. Here's what they told us:

Believe in what you're selling.
Many entrepreneurs worry that they will come across as a stereotypically pushy salesman who won't take no for an answer. But, says Weiss, "If you've got that in your head, you've got to get it out, because it's going to make you ineffective."
Take a cue from Younge and shift your mental picture:
Rather than worrying that you're manipulating people or asking them to do something they don't want to, consider the ways in which your product or service will help them, professionally or personally.
Don't try to be everything to everyone.
Many small business owners are reluctant to define their best customers, or their most profitable markets, for fear of turning away paying customers. But it's difficult to focus your sales effort if you don't define your market. Ardath Albee founded Einsof, a small Minneapolis firm that develops online marketing and sales portals, in 2000. Albee believed she needed to define the industries Einsof served but she was afraid to rule any industries out. As a result, the company's sales effort was haphazard and unfocused. In addition, turnover among the sales staff was high, meaning that Albee had to devote more of her already scarce time to hiring and to managing existing customers' accounts during the transitions. Those results were ironic, considering that the firm aims to help clients improve their own marketing and sales efforts. More recently, Albee has come to realize that the defining factor in choosing her clients should be a potential client's needs, which might not be determined by its industry. A solid prospect, she says, posts annual revenues of $80 million to $100 million, has already worked with a Web developer, has a functional website, and needs a better website that enables two way communication with customers. Of course, defining the market in this fashion makes sales reps' jobs initially a little harder than, say, simply calling all of the health care companies in the Yellow Pages. There is no directory of firms pondering a move from static to interactive websites. Still, the extra work is worth it. "We've closed far more clients so far this year than we have in any other year," Albee says.
Hire sales reps that fit your business model, are confident, and love to sell.
For Albee, defining her best prospects also helped clarify the characteristics required of a successful Einsof sales person: "We need sales reps that can call in at the VP and director of sales level," she says. "They have to be self starters. We need people who can organize themselves, work a network, and get themselves in the door." As Albee's example attests, your sales reps may need skills specific to your industry or your company's mission. Beyond that, successful sales people share self confidence and a positive outlook. "Passion is the single hardest thing to teach," says Bob Waks, president of The Training Center for Sales & Business Development in Lafayette Hill, Pennsylvania. "If a rep doesn't have that desire to sell, they're unlikely to develop it within your company or in a class."
Develop a sales methodology.
For many companies, this means starting with your goal and working backwards. Let's say you want to produce $1 million in annual sales. You will need to know how much revenue a typical contract brings in. If that typical contract is $50,000, then you need to sign 20 contracts a year, or roughly one every two and a half weeks. You'll also want to build in room for error, in case a client unexpectedly goes under or the economy goes into a tailspin. Let's say you typically have to meet with five qualified prospects in order to get one signed contract. Now you know that you'll need to have 100 meetings (five prospects multiplied by 20 contracts) over the course of the year, or about two a week. And if you usually have to talk to six prospects in order to get one that's qualified, that means you need to have 600 conversations a year, or about 11 a week, in order to keep your pipeline filled. "This is the stuff nobody wants to talk about," says Waks. "But it's the discipline you need."
Don't discount the power of referrals.
"A prospect who comes to you by referral or recommendation from somebody who knows you is infinitely more likely to actually become your customer than someone who comes to you from any other source," says CJ Hayden, whose San Francisco firm, Wings Business Coaching, specializes in sales and marketing strategy. That doesn't mean you have to sit around waiting for referrals to roll in; quite the contrary. Hayden recommends actively building word of mouth about your business by networking with other business people who are likely to know when someone needs your product or service. One of Hayden's clients was able to use this technique as she started a graphic design firm whose primary target was other startups. The designer thought systematically about what other professional services startups need attorneys, printers, accountants, bankers, and so on and set about getting to know competent and reputable people in those categories. She started with the professionals she knew and trusted, then asked friends and colleagues for the names of professionals they would recommend. Ideally, she would ask the professionals to refer clients to her, and if she felt comfortable doing so she would agree to do the same for them. In the end, the exercise helped the designer get her business off the ground and develop her own sales process. "Now my client knew where to network, who to approach, and how to go about prospecting," Hayden says.
Remember the value of the personal touch.
Ralph Roberts, a real estate broker in Warren, Michigan, is the author of Walk Like a Giant, Sell +Like a Madman and 52 Weeks of Sales Success. He's a firm believer in the shotgun approach: Make sure everyone you meet knows what you do, and pass your business cards out everywhere you go. "If you're out to eat, leave a card for the waiter along with the tip and a note that says, ‘Thanks for the food and great service,'" Roberts says, joking that if the meal was lousy, you can just leave the card. Roberts also swears by handwritten thank you notes, which he sends after hearing from a prospect by phone or in person, and he is all for gimmicky tactics like buying a box of old 45s and sending them to clients with a handwritten note that incorporates the title of the song. "It suits my personality," he says. You'll want to come up with your own gimmicks, of course. A good rule of thumb: If you wouldn't feel comfortable using a particular sales tactic on a friend, then find another way to approach your clients.
Don't overemphasize closing...
"The sale does not begin at the end, when you're asking for the business," says Hayden. "It begins back at the beginning, when you first interact with the client." Hayden doesn't advocate the "always be closing" style of sales made famous in movies like Glengarry Glen Ross. Instead, she and other experts favor a more consultative approach that involves asking potential clients lots of questions about their needs. "All the focus should be on the client and his or her problem," says Bob Waks. In practice, that means you first need to be sure that you're talking to a person authorized to make a decision about buying your product or service. Your conversations should focus on gaining a thorough understanding of exactly what the potential client's problem is. You also need to determine, fairly early on, whether the prospect's firm has the funds available to invest in a solution. "By the time you get to the point where you would normally make a big presentation, the sale should pretty much be done," Waks says.
...but don't forget to come right out and ask for the sale.
You can forgo the contract signing ceremony with the fancy pens but at some point you do need to get your prospect's commitment to doing business together. "When you think the time has come, you might want to summarize where you are and see if that's where the other person thinks they are, too," says CJ Hayden. Whatever response you get from your prospects is fine, because it gives you information. If they want to see more samples of your work, provide them. If they're ready to do business with you, then go ahead and get to work.

The David and Goliath Approach

Small companies often gaze wistfully at the names on the Fortune 500 list, pondering how great it would be to get a piece of that business. Yet most small companies never even try to fulfill that dream and that's a mistake, according to Jill Konrath, founder of St. Paul, Minnesota based SellingtoBigCompanies.com. That said, getting in the door at a multibillion dollar corporation isn't easy and it may require tactics different from those you use to sell to small firms. Here are a few of Konrath's tips for breaking into the big time:
Be persistent. Getting through to corporate decision makers takes multiple attempts. Most people, says Konrath, give up after five tries, but it's not at all uncommon that you'll need to make contact likely via a combination of phone, e-mail and snail mail 10 or more times before you get a response.
Think small. Don't necessarily start with the corporate purchasing office. "The best way to get into the corporate market is get a client in a department of a division of a business unit of the enterprise," Konrath says. Finding the right person will take some work, but your prospect may have a bit more time to entertain your pitch than her counterpart in the corporate office.
Still, understand that the biggest obstacle to your success is the status quo. "Corporate decision makers are so busy that the mere thought of change is painful," says Konrath. "They will stay with vendors or systems that aren't perfect just so they don't have to change." That means your sales message should spell out in precise and appealing terms the business results you can provide. For example, when pitching her own services to a corporate client, Konrath's message is "I help companies shorten time to revenue on new product introductions" rather than "I do sales training."
Spin your company's size as an asset rather than a liability. This can be as simple as pointing out that your firm's low overhead makes your prices more reasonable. It might also be worth noting that since the contract would represent a significant portion of your annual revenue, you will have the incentive to provide top notch customer service.

Michaela Cavallaro is a freelance writer whose work has appeared in Down East, Mainebiz, and the Industry Standard's Grok Newsletter.

Firing a customer

CommunityTeam — Fri, 05 Oct 2007 20:06:00 GMT

The customer is always right, right? Wrong.
By Reed Richardson

Ordinarily, a statement like this might seem like heresy in the business world, considering all the time and effort spent pursuing and landing customers in the first place. But to Larry Selden, business professor emeritus at Columbia University, this is exactly the kind of radical approach more businesses should be adopting.

"This doesn't fit the way most managers run and measure-and thus think about-their businesses," he acknowledges in his 2003 book Angel Customers and Demon Customers. But Selden, who co-authored the book with Fortune senior editor-at-large Geoffrey Colvin, writes that based on their research almost every company "consists of both profitable and unprofitable customers-angels and potential demons. Some customers are making your company more valuable while some are draining value from it."

The costs from these "demon customers" can be staggering. In his book, Selden estimates the bottom 20 percent of customers can often generate losses totaling more than 100 percent of a company's profits. At the same time, many business experts note the existence of an "80/20" rule with regard to "angel" customers, whereby roughly 80 percent of a company's profits come from the top 20 percent of its customers. But the first step toward improved profitability involves differentiating between the "angels" and the "demons."

Perhaps the most effective way to do this is through activity-based costing. Rather than using traditional accounting methods that tend to distort cost information by heavily weighting labor and materials over support operations, the ABC method traces all costs back to individual product lines or services. Most small businesses make the mistake of only looking at how much an account or customer brings in, instead of assessing the their true net value.

Once you begin to determine your customers' true worth, then you can start to tier your services to match profitability, focusing greater support to your top level of customers. What to do with the bottom 10 or 20 percent of your customers, however, remains controversial. Some business experts advocate ruthlessly cutting those customers loose, while others, like Selden, believe you should at least attempt to "exorcise" those "demon" customers first, using tactics such as discouraging returns or upselling.

Still, the best opportunity to identify "angels" and "demons" occurs before they become customers. By properly sizing up prospects, your business can expend less energy and make more money without having to "fire" anyone.

THE RIGHT WAY TO LET THEM GO

Below, we've identified four categories of bad customers that can suck the life and profits out of your small business. For each one, we've also suggested a corresponding strategy for ridding yourself of these "demons" that's more nuanced than just telling them "You're Fired!"

1. Exceptions to the Rule. These are customers whose needs don't line up with your small business's areas of expertise. Often, they're either pushing you to provide new services before you're ready or they're still clinging to an old product line and haven't recognized that your business's focus has changed.

How to "Fire" them: Schedule a face-to-face meeting and patiently, but firmly, explain the gaps between their needs and your company's capabilities. If they are uninterested or incapable of switching over to your current products or services, refer them to a reputable business that can satisfy their needs and extend your current business arrangement for a few more weeks to allow them a smooth transition.

2. More for Less-ers. This customer focuses solely on price and is constantly pressing you for more while at the same time expecting to pay less. The only value they see in your company is measured in how good a deal you're giving them.

How to "Fire" them: Rather than just hit these customers with an up-charge that they're sure to bitterly reject, give them a choice between accepting a price increase or adding on other premium services offered by your business. If they accept the latter, you might still be able to convert them into a loyal, profitable customer. Even if neither offer appeals to them, chances are they will leave on good terms, feeling like it was their decision to go, rather than yours.

3. Whiners and Beefers: Some customers live to complain and feel like the "customer is always right" mantra is an excuse to act rudely and make ridiculous demands. Even if they seem like profitable clients, there are often hidden costs-like increased customer service calls and lowered morale-that make them worthy of getting the boot.

How to "Fire" them: Explain to the customer that, based on the frequency of their complaints, it's apparent that your small business will never be able to satisfy them. So, as part of your commitment to providing them the level of service they desire, politely let them know that you're referring them to another company. (Let your competitor deal with the headaches.)

4. Indecisive Wafflers: These customers promise big payoffs or lots of sales, but rarely follow through. And when they do commit to a purchase or a project, they often ignore your advice and end up disappointed or ask for endless changes and abandon the project before it's finished. If you're not careful, their dithering can ruin a hard-earned reputation for having satisfied customers.

How to "Fire" them: In the retail world, notifying your customers upfront about your returns policy and then strictly enforcing it can often weed out perennial browsers and serial complainers. In a professional practice or b-to-b environment, requiring both potential and current clients to commit to written, contractual deadlines as well as ongoing payments can help prevent them from becoming afflicted with constant "what if" syndrome.

Reed Richardson is a writer/associate editor for Business 24/7 magazine.

Time Management Solutions

CommunityTeam — Fri, 21 Sep 2007 20:05:00 GMT

Need more time back in your day?
By Michaela Cavallaro

If so here are some simple steps you can take to save more time each day, be more efficient and concentrate more on the core of your business. You spend all your time putting out fires. When management is busy dealing with the crisis du jour, there's no time to figure out how to prevent the problems in the first place. Key employees burn out, and the business loses its way. Owners and managers who spend all their time putting out brush fires often overlook more fundamental issues that can threaten a business. "We can pay so much attention to getting the product out the door that we don't notice the product was in its death throes," says Jamie Walters, founder of San Francisco-based Ivy-Sea Inc., a consulting firm that focuses on leadership and entrepreneurship. Walters also is author of Big Vision, Small Business, a book about the role of vision in small businesses.

Solution:
Revisit your vision for your business. Walters has great empathy for the demanding schedules entrepreneurs face-she's one herself-but she maintains that it's crucial to schedule time for what she calls a "vision checkin." The idea is to take time to ponder and shape the priorities and direction of your organization. Run the results past trusted advisors, who might point out blind spots. That done, you can work on specific strategies (several of which we'll address below) to get your work-life back on track. Owners and managers spend their time doing jobs someone else could do as well or better.

Ashlyn Gomez, who runs a Dalton, Pa.,marketing firm called Inkwell Business Writing, is reluctant to hand off responsibility to even the most trusted employee. "Entrepreneurs tend to be do-it-yourselfers, so it takes time to learn to actually trust and value the contributions of others,"she says. She's right about that. But business owners and managers who underestimate their staff and fail to delegate often find themselves overwhelmed. The results can be hard on your firm's bottom line-not to mention your mental health.

Solution:
Delegate. The first step is to decide which tasks you should delegate. Mark Ellwood of Pace Productivity, a Toronto consulting firm, recommends pondering two questions: First, how does your business make its money? Second, how much of your time are you spending on the tasks that are directly related to that goal? For example, let's say you are a partner in a law firm that makes its profits finding clients and performing their legal work. You probably should focus on those tasks, not on administrative jobs that an office manager can easily do or oversee.Many entrepreneurs claim they can't afford to pay someone else to do a certain job-or they insist that no one else will know how to do the work right. Chances are, neither claim is true, but such errors of judgment can lead to dismal results.

Ellwood's verdict: "Delegation is where entrepreneurs are most likely to fail." You might start by delegating tasks such as administrative work and Web site development. Ellwood himself hires a specialist to implement his concepts for his website. He could certainly learn HTML, but it's far more efficient to pay someone else to do it while he focuses on meeting with new clients.

What if your employees are too busy to take on more work? Consider hiring a new person, or outsourcing some of the work. That way, Ellwood can do the work for which clients pay him: analyzing the results of their time studies and recommending how they can be more efficient. This kind of letting go isn't always easy, but it can be very liberating.You overlook or underestimate ways to use technology to make your company more efficient. That knowledge can be an important resource as you work to help your employees become more productive.

Solution:
"A lot of what we see is small business owners either misusing or not taking advantage of software to streamline what they do," says Dave Waldrop, director of business development for Microsoft. Waldrop and others on his team do this by emphasizing the right applications for the right job and encouraging small businesses to link them all together. "For example, if a small business owner is using an Excel spreadsheet to manage payroll, it's functional, but it's not really what the program was designed to do," he says.

As an alternative, he recommends to his clients that they start using more comprehensive small business accounting software, which can now be used to track cash flow from the point-of-sale as well as automatically link to your payroll provider. "This can save you lot of time and it reduces the chances for mistakes," Waldrop points out, "because you're not having to re-enter financial data several times over." In addition, more and more small business owners are combining accounting programs like Microsoft's Office Accounting Pro or Intuit's QuickBooks with small business management software suites like those offered by Microsoft, NetSuite, or Hyperion Solutions to create helpful "business dashboards." The purpose of these dashboards is to distill all of a small business's sales, inventory, and financial data down into a single page of real-time, key performance indicators which, in turn, can be used by an owner or manager to make better informed, more timely decisions.

Focusing on the big picture rather than getting bogged down in the details is the real goal, here. Or, as Waldrop puts it: "We want to prevent small business owners from always getting stuck in the back office, we want to keep them in the front office." Whatever your strategy for enhancing productivity, it's helpful to lead by example. Case in point: If you interrupt whatever you're doing to respond immediately to employees' emails, they'll get the idea that they should do the same. Similarly, employees who see you making time to meet with your advisors about the company's strategic direction, communicating your goals clearly, and delegating or outsourcing appropriate tasks, are likely to follow suit. Chances are, your company will be the better for it.

Michaela Cavallaro is a freelance writer. In 2005, he was named the National Small Business Journalist of the Year by the U.S. Small Business Administration.

Keep the Customer Satisfied

CommunityTeam — Thu, 20 Sep 2007 23:05:00 GMT

The latest management theories all support one basic conclusion: Happy customers come back.
By Chris Freeburn

It's a truism that keeping customers happy keeps customers coming back. But what are the best ways to maintain customer satisfaction, beyond providing the best product or service you can? How can small businesses maximize customer satisfaction and translate that into repeat business and good word of mouth?

According to John Tschohl, president of the Service Quality Institute, "Ninety-five percent of all business owners believe that their companies are exceeding customer expectations in terms of service." That, Tschohl says, is far from the truth. Indeed, lousy service and poor communication ranks as one of the top consumer complaints, he adds. In a competitive economy, becoming a customer service leader is one of the least expensive ways of improving performance. In fact, in today's highly competitive business environment, Tschohl calls good customer service "a matter of survival."

For Abacus Plumbing, based in Houston, Texas, customer service has become a driving focus. According to company vice president Alan O'Neill, Abacus incorporates customer service into every aspect of its business, focusing heavily on training and customer feedback. "Our motto is: do what you say you are going to do, when you say that you're going to do it," O'Neill says. In addition to training all new employees to be responsive to customer needs, Abacus maintains constant communication with the customer during every stage of the sales process. This includes calling the customer before and after sales and servicing calls to gather the customer's feeling about the experience. This attention to customer service resulted in Abacus receiving a Houston Better Business Bureau's 2006 excellence award.

The First Step
Tschohl emphasizes that the first step in improving customer service is understanding how critical it is to your business. "Small business owners are much worse than large business when it comes to addressing customer concerns," Tschohl says. "Too many operate under the idea that there are an infinite number of customers and if someone doesn't like how they run their business, too bad." This is a serious error, he says. "If you want to take your small business and become a big, profitable company, you need customers to be satisfied. You need them to keep coming back, and you need them to tell their friends about your business."

Coupled with this is the problem that few small business owners understand how customers actually experience doing business with their company. "Most business owners have no idea how their customers see them. They don't know what it's like to do business with their own company, because that's not a situation they've ever observed first hand."

This lack of understanding can lead business owners to misjudge the efficacy of their own sales and customer care practices. Tschohl recommends asking your customers directly about their experience with your business. "Sit down and ask them about their experience," Tschohl advises. "Don't wait for a complaint. Ask them for suggestions on how you could do things better. Or what they don't like. Talking directly to your customers is the fastest and cheapest way to gauge how your company is doing customer service-wise. Customer surveys are effective. He also advises providing a means for customers to give feedback at the time of purchase. "A little card at the sales desk, or a postage paid postcard that arrives with a delivery," he suggests. "Anything that lets your customers let you know how they feel right away."

Handling Complaints
Dealing with dissatisfied customers is one of the most important and delicate interactions a business faces. "Ninety-one percent of unhappy customers who made a big purchase will never come back," Tschohl warns, citing a study by the Technical Assistance Research Programs Institute. But even among small-item purchasers, 63 percent will go elsewhere if they feel dissatisfied with their experience, Tschohl adds. This can have a dramatic impact on a business's bottom line. Tschohl cites research indicating that reducing non-returning, dissatisfied customers by just five percent can double a company's profits.

"The most important thing in handling a customer complaint," Tschohl says, "is making sure that the customer feels that he or she is being heard." Nothing increases customer anger more than the impression that the company doesn't care. "Whether it's the business owner himself or a salesman or representative talking with the customer, it's important to make sure the customer knows that someone is listening." Tschohl advises empathizing with the customer and reassuring him or her about the importance of their complaint and their continued business with the company.

"Suggest alternatives," Tschohl says. "Provide a variety of options for resolving the complaint." He also suggests apologizing to the customer in a way that doesn't blame anyone for the problem. "Say your sorry that they've had a bad experience and that you want to make things right. Just saying you're sorry-even if you admit no blame-goes a long way toward cooling off someone who's upset." Shifting the blame elsewhere won't work and may only further antagonize the customer.

Finally, come to some resolution. "It's better to lose some money settling a customer complaint than to lose additional business," Tschohl says, "because 87 percent of angry customers will tell their friends about what happened, and that could cost you a lot more in potential business."

Recovering From Mistakes
No company gets it right all the time. Mistakes happen. A customer gets sent the wrong order. Errors occur in billing. Two clients are accidentally booked for the same time slot. Preventing errors is an important task for any company, but dealing with mistakes is equally critical, says customer service consultant Peggy Morrow, principal at Peggy Morrow & Associates.

"How you handle a mistake will directly determine whether you ever see that customer again," Morrow says. "Most customers are perfectly willing to overlook a mistake on your part so long as they feel you've truly apologized for the error and offered them something in return." Compensating the customer for a perceived loss-their time or convenience, for example-goes a long way to smoothing ruffled feathers, Morrow says.

"Always offer the customer choices," Morrow says. Depending on the context of the mistake, that can be anything from a discount on future purchases, a full refund, a service upgrade, or a preferred change in scheduling. "Angry customers usually feel a loss of control. By giving them a range of options to make up for the error, you are putting them back in control of the situation," she advises. That will mitigate any annoyance the customer feels over the mistake and leave the impression that your company greatly values its customers.

Customer Relationship Management
Business experts have transformed the basic art of customer service into a management strategy in the form of Customer Relationship Management (CRM). In the 1990's CRM became a buzzword in business management, spawning a legion of CRM experts and software applications meant to automate the CRM process for companies. CRM specialists have defined the entire sales process as critical to maintaining customer loyalty and satisfaction. "Implementing a CRM strategy begins with planning your business operations based on customer desires rather than on predetermined business goals," says Bob Thompson, president of CRMguru.com. "The idea is that for your business to succeed, it must be customer-centric. That means that every aspect of your business should be concerned with ensuring the satisfaction of your customers all the way through their interaction with your company."

Opening an informed dialogue with your customers is a critical element in constructing a functional CRM strategy, Thompson says. "Listening to what your customers have to say about their experience and about what they want to see your company do is the bedrock on which you begin to mold a CRM plan for your business."

Once you have determined what your customers want from your company, you must evaluate every aspect of your organization to determine how each department works toward satisfying those goals, Thompson says. And you must be prepared to reshape operations to fit the CRM strategy. "This can mean retraining employees or altering major parts of the business structure," Thompson says, "but it is crucial if the CRM strategy is to succeed. Thompson strongly recommends retaining a CRM consultant to assist with designing and implementing a CRM strategy for your business. "Experience in implementing CRM concepts is essential to effectively reorganizing a business," he says.

A wide variety of CRM software applications exist to help companies collect, analyze, and manage data about their customers and the effectiveness of their CRM strategy. But Thompson warns that too many companies simply purchase the software without implementing a company wide CRM strategy first. "Much of the disappointment with CRM software comes from company's that didn't do the organizational preparation first," he explains.

But choosing the right CRM software for your business is also critical. The variety of CRM software applications, designed to work with virtually any sized business, can bewilder the small business owner. Thompson suggests working with a CRM consultant to select the software that best fits your business's structure and needs. "The key is not to make the mistake a lot of companies did early on," Thompson adds, "which was to see the software as the heart of CRM. It's not. Software can give you valuable information on your company's performance with customers, but the key to successful CRM is developing a strategy based on input from your customers and then tailoring your business to meet those needs. Buying software is secondary to having the right strategy to begin with."

CRM meets CEM
According to Thompson, if CRM was the buzzword of the '90s, a new term, "customer experience management" (CEM), is the favored catchphrase among business management professionals in the 21st century. Whereas CRM focuses on maintaining the relationship between businesses and their customers, CEM focuses solely on mapping, analyzing, and improving the customer's experience with the business. "The ideal of CEM's proponents," Thompson explains, "is to turn a company's products into desirable experiences." He cites Apple's iPod and Starbucks coffee as examples of products that have been effectively transformed into something more than a mere MP3 player or overpriced cup of coffee. "People buy these products-at a premium-not just for the item itself, but for the experience of having it."

According to Thompson, CEM should be part of CRM, but often isn't. The critical difference is that CRM focuses on a customer's value to the business, while CEM identifies the business's value to the customer. CRM is functional, while CEM is emotional, Thompson says. They are closely related, but subtly different, he adds, noting that 80 percent of CEM practices mirror CRM strategies. Still, Thompson cites a recent study conducted by his group that found that only 22 percent of customers thought that companies provide a "an excellent customer experience," and another study revealed that companies that scored higher in implementation of CEM strategies had markedly higher profit growth.

Training Employees to Aid Customer Happiness
Whether you decide to implement a comprehensive CRM or CEM strategy, or simply take steps to improve your company's interaction with customers, customer service experts agree that the most effective thing you can do is to make sure your employees reflect this goal.

Keith Kirk, owner of St. Paul, Minnesota-based Greener Pastures and Seasonal Lighting, discovered the financial benefits of training his 22 employees in customer service. Facing slowing sales and high office costs he instituted a customer service training program for all employees at his company. When his first group of salespeople didn't respond as well as he hoped, he fired them and recruited a new team. "You have to find people who are willing to go the extra mile to take care of customers," Kirk says, adding, "not everyone's cut out for that." Kirk says that the better trained staff handle much more work and keep many more customers coming back.

"Creating a customer service-oriented culture within your business is extremely important," Peggy Morrow advises. "Share the results of customer feedback and surveys with your employees so that they can see how customers are responding," she suggests, "and cultivate a sense of group responsibility for performance."

Morrow also suggests rewarding employees who "go the extra mile" to make customers happy. Such rewards can take the form of a bonus, or an extra vacation day, or even a plaque or mention in a company newsletter. "It's also important to be very clear about the way employees are to treat and interact with customers," she says, "but employees need to have enough flexibility when dealing with a customer-especially a dissatisfied customer-that they can handle a customer complaint without frustrating the customer any more."

Finally, Morrow notes that there are some people who are simply not suited to interacting with customers. "No amount of training or company culture will overcome this," she says. "If you have an employee who does not show any desire or motivation to please customers, it is better to remove that employee," she adds, noting that a surprising number of companies tolerate customer service representatives who show disinterest toward customers. "It certainly doesn't win them any new business," she says.

TIPS FOR IMPROVING CUSTOMER SERVICE

Make customer service a focus from the top down. Don't just rely on your sales people or customer representatives. Senior managers and company owners must be just as focused. Lead by example.

Hire carefully. Not everyone is temperamentally suited for dealing with customers. Make sure the people you hire are capable of dealing with upset customers without losing their cool. Remove any employees who are inattentive to customer needs.

Train your employees. Make sure your employees know your customer service goals and have been fully trained in how to handle dissatisfied customers. All company policies for dealing with customer issues should be clearly stated and understood by employees. Your employees must understand how important customer service is to the company's success.

Know your customers. Talk directly with your customers about their experience dealing with your firm. Find out who they are and what you can do to improve their experience with your company. Provide methods for them to leave feedback.

Communicate feedback to your employees. Customer responses should be distributed among your employees, so that they can understand the customers' experience. Deal with complaints quickly. Customer dissatisfaction will only grow the longer it takes you to respond to a complaint. A fast response, and a willingness to work with the customer, can turn an upset customer into a repeat customer.

Chris Freeburn is an associate editor/writer for Business 24/7 magazine.

Giving Away The Store

SBOCTeam — Tue, 11 Sep 2007 18:13:00 GMT

If your customers find your products or services antiquated, why don't you?
By Reed Richardson

Last fall, retail giant Wal-Mart announced it would end its 46-year-old layaway service for its customers. Once a popular way of buying big-ticket items, layaway was now costing Wal-Mart more than it was worth, tying up precious warehouse space for months while forcing stores to track small, often infrequent, payments. In addition, executive vice president for Wal-Mart store operations, Pat Curran, noted that in an era when nearly everyone can get approved for a credit card of some kind, "demand for layaway service has declined steadily." In fact, many other retailers long ago abandoned their expensive and under-utilized layaway services. So the real question might be: What took Wal-Mart so long?

To be fair, Wal-Mart is by no means alone. Many businesses, both big and small, often fall victim to a kind of business version of Newton's First Law: A service or product line on sale tends to stay on sale, no matter what the customer wants. But succumbing to this inertia, either by ignoring flagging sales or by not being attentive to consumers' evolving habits, can end up costing your small business time, energy, and resources. So, instead of waiting until your small business runs off the cliff of obsolescence, consider these five tips to ensure your goods and services don't fall victim to the blahs.

1. Measure true value. If it's a product, analyze its production and marketing costs versus its sales revenues to determine if it's really adding to your bottom line. If it's a service, include it on a survey to see whether your customers value it, ignore it, or hate it.

For decades, both national and local banks alike took the time to mail back every original check to their customers, despite the fact that many customers saw little value in this service and some even considered it a nuisance. Years after the technology existed to efficiently mail scanned copies of checks or, cheaper yet, electronic copies via email, banks continued to stick with this tradition. It wasn't until two years ago that banks finally realized that this "service" wasn't earning much, if any, loyalty from their customers and they stopped it, thus saving an estimated $2 billion a year in sorting and mailing costs.

2. Watch your competition. There's rarely a good outcome for a business if it is the last in its market segment to accept a significant change. Keep up with industry best practices and any changes in your competitors' marketing and advertising.

3. Stay on top of technological changes. If a new product comes on the market that could make yours obsolete or a new service becomes available that could render yours quaint, it might be better to accept the change early on-by either upgrading or phasing out your product or service-rather than cling to an old-fashioned technology that could cause your business to lose market share in more promising areas.

By 2002, DVD players were far outpacing VCRs in U.S. consumer sales and it was evident this new, more versatile technology would supplant the VCR. Despite this, and the fact that the price point on DVD players quickly equaled if not undercut VCRs, companies like Pioneer and Philips continued to build stand-alone VCRs through 2004, selling many of the units at little or no profit and dedicating valuable production time in their factories to a rapidly dying technology.

4. Be attuned to changes in customer behavior. If more of your hotel guests are asking where to find the nearest Wi-Fi connection than the closest shoe shine stand or post office, its time to ditch the old electric shoe buffers and hotel stationery from each room and instead install high-speed Internet access.

5. Send the right message to the right customers. Carefully examine what kinds of signals your products and services are sending to consumers. If they're geared toward a market or demographic your business is moving away from, you might be better off making a clean break rather than muddying your brand by trying to squeeze out a few more quarters worth of diminishing sales.

Another reason Wal-Mart dropped its layaway program was that the change fit in with its ongoing brand restructuring program. Buffered by claims that its products were of increasingly poor quality and lacked cachet-Wal-Mart shoppers have an average household income of $30,000 to $35,000 a year, while customers from one of its main competitors, Target, have an average household income of between $50,000 to $60,000 a year-the retail giant has begun moving more aggressively to court customers with a higher income and more readily available access to credit.

Reed Richardson is managing editor for Business 24/7 magazine.