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21 Posts authored by: Inc.

Big-Data-Thumb.jpgSmall business owners have unprecedented access to industry, market, and customer data. But a greater volume of information doesn’t automatically translate to a greater opportunity to compete. By learning to read and use “big data,” your small business can acquire the insights it needs to strengthen customer relationships, anticipate trends, and advance to new levels of growth.

 

Click here to download our guide "Big Data− Getting Granular"

by Geoffrey James

Take control of your online presence to create a memorable personal brand.

 

Personal branding has evolved since management guru Tom Peters defined the term way back in 1997. (He also provided some wicked quaint advice, like "sell the sizzle, not the steak.")

 

Today, your personal brand reflects the information that's available about you on the Web, mostly on social media platforms. This post explains how to create your personal online brand online, based on interviews with four of the smartest people in the branding business:

 

1. Know yourself and what you're good at.

Your personal brand reflect who you are, so you can't possibly brand yourself if you're clueless about yourself. This doesn't mean navel-gazing, but rather a realistic assessment of your strengths and weaknesses, what you love doing, and the skills that you've mastered or are working to master.

 

2. Create a memorable brand name.

If you've got a unique name, make that your brand name.  If not, create a brand name that's a hybrid of your name and your career direction. "You want people to find you, not somebody who's got the same name as you," explains Dan Schawbel, author of Me 2.0: 4 Steps to Building Your Future.  Remember, though, if you put your direction in your brand name you're tied to that direction. (That's why Step 1 is so important.)

 

3. Capture your online turf.

Buy the domain name that corresponds to your brand name and secure the Facebook page, Twitter account, Google+ account as well. If you find that your brand name is already "owned" create a different brand name. With LinkedIn, you'll use your real name, so put your brand name prominently in your profile.

 

4. Build a website for your domain name.

This is easier than you think. There's no reason to struggle with a complicate website editor when you can create a perfectly usable site using a product like WordPress. (There are alternatives but WordPress is the de-facto standard.) You don't want a traditional website anyway, since they have an "institutional" feel about them anyway.

 

5. Set up automatic updating.

To reduce the busywork of all those different social media platforms, set up an application that allows you to simultaneous post to all of them. For that past few months I've been using the free version of Hootsuite.com, but there are many alternatives out there both free and fee.

 

6. Share useful content on a regular basis.

Don't try to be a full-time blogger. Instead share "helpful tips relating to the products [you] sell, relevant news, and personal updates that build emotional connection and convey positive character, such as a philanthropic interest," explains Clara Shih, CEO of Hearsay Social, writing in the Harvard Business Review.

 

7. Get feedback from people you trust.

The advice and encouragement of others helps keep your "brand development" on target.  Philip Styrlund, CEO of The Summit Group, recommends setting up a "board of directors"--a few trusted colleagues who can assess your ongoing efforts and act as an informal sounding board.

 

8. Be authentic, even a bit risky.

As long as you don't come off like you're crazy or weird, a little opinion in your online presence is a good thing, according to Meg Guiseppi, author of the book 23 Ways You Sabotage Your Executive Job Search. "Don't assume that being authentic will turn people off," she explains. "Nobody is interested in working with a cookie cutter."


Article provided Inc.com.  © Inc.


Create Your Personal Brand: 8 Steps | Inc.com

by Derek Flanzraich

 

My company, Greatist, is the fastest growing health-and-wellness site on the Web. We wouldn't have that label without these tricks for using Pinterest.

 

Greatist, the website and company I founded, has been the fastest-growing health and wellness site on the Web since November of 2011--and that's thanks in no small part to our presence on Pinterest.

 

The super-popular pinboard site continues to be our No. 1 traffic referrer (to the tune of a whopping 30 to 40 percent of our total traffic). With more than three million unique visitors per month, we're working to build a trusted brand in our space--and we couldn't have gotten where we are today without Pinterest.


But, as many brands have already discovered, it's not just about sharing photos and waiting. Through much trial and error, we at Greatist have identified 10 Pinterest strategies that yield the best results:


1. Use Pinterest yourself.

Brands on Pinterest are no different from regular users--everything works exactly the same. Getting a sense for how people really use it is key--as with any social platform, familiarity is uber-important before wading into the dangerous waters of self-promotion. Reading articles (like this one) isn't enough!


2. Get great visuals.

Visuals are key because, well, there needs to be something worth pinning (and re-pinning and re-pinning) in the first place. When we decided to go all-in on Pinterest, step one was to go on a "find every awesome contributing photographer and illustrator possible" spree. We wanted not just good visuals, but the best--and now almost all of our content has original photography or illustrations (see our healthy recipes for example). Plus, each article has what we call a "header image" of some sort, one purposefully Pinterest-worthy and unique.


3. Follow small brands.

We'll get to the big brands in a second, but it's the small ones that will collectively move the needle for you. Brands see who is re-pinning, commenting, and liking their pins. So do those things--and they'll pay them back in dividends.

 

4. Befriend power users.

You don't need celebrities to succeed in social media. You need to re-think how you define "celebrity." On Pinterest, it's owners of Pinterest boards with over 10,000 followers. Making friends with them is easier than you'd think--most have their Twitter handles, blogs and other links readily accessible in their profile. Reach out to them, be friendly, and start cross-promoting.


5. Cozy up to big brands by showing off your content.

Most big, well-known brands suck at Pinterest. They may have a solid following, but they're still trying to figure it out. You can help them. If you're consistently sharing awesome visuals that lead to high-quality content on a topic that's relevant to their audience, they'll re-pin your stuff over and over again. Every major brand in the space has shared Greatist's stuff--because it's good and because, well, they need good stuff to share! Make it easy for them (then grab some of their audience members who are still just figuring out this Pinterest thing, too).


6. Put the article title in the description first.

The toughest challenge on Pinterest is getting a user to click on the pin instead of simply sharing it. It's easy to get frustrated when a lot of sharing is happening, but nobody is clicking through. The question to ask, then, is: "Did they know to click in the first place?" Make sure the description of your pin is crystal clear--and mentions what it's leading to.

 

7. Put the article title on the image.

Early on in our Pinterest experiments, we came up with a surefire way to make sure the pin descriptions didn't get overlooked: literally add the title into the "header image." (For example: 30 other satisfying 100-calorie snacks.) I'm pretty sure we were among the first on Pinterest to start doing this. Sure, it's difficult to do in a way that's visually appealing, but the truth is, it works. Almost all of our top traffic-driving pieces of content on Pinterest fall into this category.


8. Organize your pinboards.

Believe it or not, users may not want to follow every topic or category you cover (celebrity news and horse grooming, really?). Let them pick and choose. Don't have too many of them, either--if a user has to scroll to see more boards, they likely won't. Focus on well-curated boards with defined categories.

 

9. Name your pinboards wisely.

Don't over-complicate your pinboard names with clever names (e.g. "Happy Hollandaise!"). We made this mistake early--and the good news is it's easy to fix. Pinterest users make a split-second decision to follow or not follow...and then never return. That said, I wouldn't recommend going too generic either (e.g. "Food"). Somewhere in the middle is probably best, like "Snack Smart."


10. Optimize your pin's size.

Pinterest automatically resizes images into its pinboard grid, and rectangular images get it the worst. We've found that, for the most part, the longer the visual, the more re-pins--and it's probably because vertical pins are more prominent in the feed.

 

Article provided by Inc.com. ©Inc.

Inc.

4 new Pinterest tools to try

Posted by Inc. Feb 28, 2013

by John Brandon


If you're not yet tracking your performance on Pinterest, you should. These useful tools can help.

 

Want to get more out of Pinterest? Start analyzing your success: Find out who is clicking and repinning your images and track the results. Check out these four new tools designed to do exactly that:

 

1. Pinfluencer


This analytics tool is indispensible. It shows you who is clicking on which pins, and can help you refocus your Pinterest campaigns. Instead of randomly guessing which pins are working, you can track who is pinning the most and what kind of following they have. (A similar tool for Twitter, SproutSocial, allows you to track who is retweeting what you say and can gauge your influence.) Like Compete.com, you can also compare your pinboard to another to analyze which one generates more traffic and why. The new Promotions Platform helps you create contests and sweepstakes to attract customers.

 

2. Viralheat


Like many analytics dashboards, Viralheat lets you to track mentions of your brand. With Pinterest integration, the service goes beyond basic search data. You can track searches by specific pin name, keywords, descriptions, image name, domain, link text, and board name. You can see who is a "hot pinner" not just by searches but through multiple search avenues--the number of total pins, the pinners total reach, their unique pins, and their average number of likes. "Business owners can reach out to their top influencers and develop a relationship that can help with sales," says Courtney Kettmann, the community manager at Viralheat.

 

3. PinLeague


Tracking your followers on Pinterest might seem easy, but seeing trends is harder than you think. PinLeague puts some muscle behind the numbers. You can track repins from top followers, check your overall pin activity across your brand, and see who is following you (and follow them back). More than just a dashboard, PinLeague also lets you create marketing campaigns a la MailChimp to target top pinners, then track your success as it correlates to those campaigns.

 

4. Pingraphy


Ask any social networking guru what the secret is to making connections, and they will start telling you about scheduling. Most of us forget to pin new products every day, but Pingraphy lets you schedule your activity in advance. That way, you can make sure you have an active pinboard. You can also perform bulk pin uploads, see metrics on clicks related to uploads and schedules, and track follower counts.


Article provided by Inc.com. ©Inc.

by Hollis Thomases


Here's a basic checklist to quickly make sure your social media tactics are on the right track.

 

As a digital marketing advisor, my job is to help you avoid waste and self-sabotage. Look at this list below as audit points against which you can check your own efforts.

 

1. Secure your brand name for your account.


Don't let someone else squat on your brand name just because you're slow on the uptick. Get your branded social media account!

 

Furthermore, don't just let your account default to an unmemorable, cumbersome URL--on any social media--if a "vanity URL" is possible instead. For example, CBS in Baltimore signed up for this branded Facebook URL https://www.facebook.com/CBSBaltimore while ABC in Baltimore has this complicated, easily forgettable one http://www.facebook.com/pages/WMAR-TV-abc2newscom/51379687226.

 

2. Set up complete profiles.


All social media profiles enable you to give a lot of rich, useful information about your company. You can't rely on traffic coming to your in-depth website these days. Be sure to get the basics down on all your social media profiles, too!

 

3. Interact with your followers.


Too many businesses just use social media to push their own agenda--their news, special offers, event promotions, and the like. But that's not what social media is about. Not only will one-sided posting not do much for your marketing efforts (unless all your customers are bargain hunters), but it will turn most users off.

 

Here's an example of what you don't want to do:


4. Vary your posts on various channels.


Yes, there are social media management tools that now help you push out your message and content across multiple social media platforms, but if all you do is post the same exact content at the same exact time to all platforms with a push of the button, you will diminish its value on all of them. You could also potentially cause harm to your brand if such a push is triggered automatically, and no one is paying attention to the circumstances surrounding it.

 

5. Use discretion.


I often tout the 10-second self-censor rule. Before you--or anyone on your team--presses any button to upload your social media content, take another 10 seconds to review it and make sure it does not offend anyone or harm your brand.

 

6. Mind the ship.


With social media, you can't "set it and forget it." Social media requires constant care, feeding, and attention. An account that hasn't had any activity in weeks looks lame. And, if no one is paying attention to your social media footprint, a single negative post can turn into a firestorm before you know it.

 

Article provided by Inc.com. ©Inc.


by Kevin Daum


LinkedIn is a great tool if used with skill and purpose. Not every one does. Here are seven tips for getting a good return on your efforts.

 

While the longevity of commercial value with Facebook and Twitter continues to be questionable, there is no question that LinkedIn is here to stay.

 

It's perfectly reasonable. LinkedIn is designed for professionals to connect, so they can do business. Still, many struggle with using this amazing tool effectively. People gather connections like colorful Easter eggs and never actually have any sort of meaningful interaction. They join groups and never engage or read the feeds. Others are just intimidated by the volume of feeds, groups, endorsements, and constant interactions.

 

You don't have to be a social media maven to benefit from this (mostly) free gift of modern technology. Follow these simple tips and with little effort, make LinkedIn your new power broker for success.

 

1. Have clear purpose

 

LinkedIn is a tool and like all tools it serves a specific purpose. If you don't know what you're trying to accomplish, then the tool will be useless. You have to drive the process. Decide if you want to expand your network inside your industry or beyond. Are you looking to explore new careers or create new business development opportunities? Perhaps you are looking for mentors or peer groups? It's okay to want all of this, but the more you focus your efforts, the easier it will be to get a specific and successful return.

 

2. Refine your profile

 

Would you walk into a sales meeting telling your buyer that you are job hunting? Not unless you want them to believe you have no confidence in your company and will be leaving soon. Yet, this is the sort of inconsistency that appears in every LinkedIn profile that sounds like a job application.

 

Your profile is public and should send a message consistent with your description on your company website. It should demonstrate your background and experience in a way that exudes confidence and opportunity for people who might engage with you. It should be brief, engaging and accurate. It should show that you cared enough about it to fix the typos, post a thoughtful picture and be grammatically correct. Your profile is a first impression for many, and for those of you who don't take care it will be certainly be the last.

 

3. Pick groups that matter

 

There are three good reasons to join a group. First, to stay in touch with peers you are already connected to through organizations like fraternities, service, or alumni. Second, to learn about an area of interest. This could be academic, social, or trade. Lastly, to stay abreast of happenings in a particular industry or area of commerce.  Joining a group in hopes of promoting your services will be a waste of time and often offend other members.

 

There can be value in discussions, but any group has discussion hogs that clog the feed. It takes effort to sort through the noise; so don't spend a lot of time trying to keep up. Select truly relevant groups, set your digests for weekly and weed them constantly. Then you can spend 20 minutes on Friday and engage where you feel it's appropriate.

 

4. Use your network

 

Being on LinkedIn and having 500+ connections does not make you a networker. Solid networking is still done through face and voice contact. But LinkedIn can be a great tool for enhancing those lunches and meetings. Before your next lunch meeting, review the connections of the people attending and identify two or three of their connections you would like to meet. Ask your lunch-mates for introductions and watch the fun start.

 

They'll be pleased you took the time to explore their profiles and may be surprised at the people you mention. (Be aware, they may not actually know them.) Offer to connect them with anyone they find in your list as well. Make sure you both have specific purpose in mind and report back any benefit received.

 

5. Dig deep into your connections

 

Count how many meaningful interactions you have initiated with your connections. Every week, identify five connections out of your list that can bring you real value, and send them a brief but personal message to connect by phone. Look for ways you can help them in their journey. If they are local, grab a drink, or lunch and do what networkers do best, connect and create mutual benefit.

 

6. Personalize everything

 

Yes, I understand. Everyone is busy. It's nice that LinkedIn provides an auto-phrase for interactions, but it simply conveys you are too busy to be a meaningful connection. When requesting a connection, review their profile and tell them why it's worth their time. If accepting someone's invite, review their profile and suggest a simple way you can help them. You wouldn't be effective at a networking gathering playing a recorded, canned message. Don't do it here.

 

7. Be generous in your interactions

 

The upside of social media tools is that it's easier to connect than ever before. The bad news is that marketers have bombarded the channels with noise that makes everyone cynical. Be a giver in the community. Don't spam. Share information that truly has value to your connections. Ask yourself "Would I consider this to be thoughtful, relevant and presented with care?" If not, don't post it. When approached to connect, give of yourself selflessly and abundantly. If you can't, then don't connect. Build a manageable, deep network that you can service and cultivate, then the benefits will come back tenfold.


Article provided by Inc.com. ©Inc.

by Hollis Thomases


Hiring someone to manage your company's social media? Don't make the same mistakes everyone else is making.

 

These days, it seems like everyone's looking to hire someone to manage their company's social media presence. That kind of demand can lead to poor hiring decisions. Why? Well, you may be impressed when you see someone's extensive Facebook, Twitter, LinkedIn and Pinterest presence. But just because someone can use social media for personal benefit doesn't mean they know how to manage it for a business.

 

To help business owners better identify what to look for in a  social media job candidate, I recently interviewed William Ward, social media professor at the S.I. Newhouse School of Public Communications at Syracuse University. According to Ward, these are the seven most common social media hiring mistakes.

 

1. Don't conflate personal and professional. Ward says smaller businesses commonly make the mistake of confusing personal social media fluency with social media professionalism, and there's a notable difference. A social media professional should be able to describe how they select, curate and/or create content; how, who and why they select followers and connections; and how they integrate social media initiatives with other media.

 

You should ask what kind of professional social media training and certifications candidates have. Candidates with proper training and who demonstrate maturity, Ward says, make better hires.

 

2. Don't take their word for it. Instead of drawing assumptions about a candidate's social media experience, Ward stresses that you want them to log into their social media accounts with you--have them show you what they do professionally. "Do not rely on their word of mouth or resume," cautions Ward. Instead, have candidates walk you through the social media management tools they use and justify why they choose them. (Ward's program, for example, uses HootSuite to manage many of his students' social media activities).

 

3. Don't ignore inconsistencies. Ward advises employers to check out both the professional and the personal social media accounts of candidates you're considering; if you see breaches in social media etiquette or inappropriate conversations, posting or updates, that's a red flag. If someone is going to represent your business online, that person should also be able to demonstrate restraint and decorum in their personal social media accounts as well.

 

4. Don't shun mistakes. With the public nature of social media, it's almost impossible for someone experienced to not have made a least a minor mistake along the way. Ward says that every candidate should cop to some kind of faux pas, but more importantly, be able to explain what she learned from that mistake. What you learn from the confession can also help you, even if you don't hire that person.

 

5. Don't forget the point.  A social media professional should know how to track and translate their efforts into real world actions, how to measure the impact of these efforts, and how to refine initiatives based on performance. Ward recommends that you ask social media job candidates to describe campaigns in detail: which of their activities drove actions or sales and what their specific plans and outcomes were.

 

6. Don't forget the strategy. The person who runs your social media will bear large responsibility for the public voice of your company. It's up to you and other company leaders to establish the appropriate criteria and boundaries for your social media specialist. Don't just give your social media hire free reign to do whatever he wants. Your social media strategy should align with and support your business objectives, which this person will need to understand in order to develop and execute a strategy. "I'm not a big proponent of 'do not's' as much as I am of 'do's," says Ward.

 

7. Don't turn your back. If you expect a social media hire to perform to a certain standard, it's up to you to tell them what your campaign and job performance expectations are and what the consequences will be if they don't reach them. "To achieve this, you'll need to routinely monitor the activity your social media hire does on your company's behalf and have regular communications with him or her," explains Ward. In other words, don't just turn a blind eye and expect everything on social media accounts to run smoothly without your oversight.


Article provided by Inc.com. ©Inc.

by Karl Stark and Bill Stewart


These three avenues will help you focus on the core while capturing new growth opportunities.

 

Every business we know struggles with the tradeoff of investing in and maximizing the core business while trying to take advantage of growth in new, adjacent markets. It's generally easier (and more profitable) to focus on your core business. That's the place where you have all the advantages--key customer relationships, brand recognition, strategic assets like equipment or offices, and more assurance that growth investment will pay off.

 

However, every business that creates super-sized growth does so by extending its advantages into new, adjacent markets--new geographies, new product segments, new customer segments, or new sales channels.

 

How do we typically solve this dilemma? We try to balance a healthy mix of investment in the core and exploration and experimentation in new markets. Unfortunately, it's hard to build an organization that does both well. Which is why we typically segment the business (and individuals' roles) into one of three trajectories: maintaining business as usual, maximizing the potential of the core business, and investing in new adjacent markets.

 

Business as Usual

In any company, it's important not to take your eye off the core business. Each business should be expected to maintain a healthy growth rate--usually at or above the market growth rate--which extends the growth the business has comfortably achieved in the past. We call this the "business as usual" growth rate, because it represents growth the business could achieve without significant investment. Note that it's not a "manage for cash" position; the business still funds investment that is necessary to maintain growth. Put a team on this that is responsible for delivering "business as usual."

 

Maximizing the Potential of the Core Business

What would it take to get more out of the current core business without moving into new markets? This might result in achieving a certain level of market share in core markets with targeted profitability. There is likely some significant investment required to get there, above and beyond "business as usual" investment. Assign a team to execute this investment and make them accountable for achieving the growth above the business-as-usual growth--likely over multiple years.

 

Investment in New, Adjacent Markets

Every company has opportunities to create growth outside of its core by leveraging its key strengths and strategic assets. This might translate into entering a new geography or adding a new product line. Make a team accountable for this growth, distinct from the rest of the business. Let them focus on experimentation-style growth over a period of time, where investments are trialed and tested. It's important that you separate this investment from the rest of the business; otherwise, it's too easy for these funds to be poached for investment in the first two areas.

Breaking your forecast, mindset, and organization into these three distinct pieces will ensure that you balance investment across each of your growth horizons, giving you the best chance of maximizing growth of the overall business.

 

Article provided by Inc.com. ©Inc.


by Jeff Haden


The more sales training you've received, the more likely that you've forgotten the most important sales technique of all.

 

Every small-business owner, regardless of his or her formal role, is also involved in sales. That's why many small-business owners constantly seek to improve their sales skills.

 

But some sales training and strategies can do more harm than good, especially if the techniques you adopt take you away from doing what works best for you.

 

Here's an example.

 

My wife wanted a new car. She likes sports cars, so we went to a dealership to check out a BMW 135i. The salespeople were hanging out in the lot--as car salespeople without customers are wont to do--so they all watched us cruise through several rows of cars before parking in front of the 135is.

 

A younger salesman broke away from the pack and hurried over. It was obvious he had been trained to follow a sales-process checklist. "Qualify your lead" was first on his list.

 

That didn't go well for him--my wife isn't really into divulging personal financial information--so he moved on to "Determine customer needs" and asked what we were looking for in a car.

 

Without being rude (she has a real knack for a courteous deflection), my wife asked a few questions. He struggled to answer them, probably because he kept trying to reengage his sales process.

 

That didn't go too well for him either.

 

Then he surprised us: He stopped talking, took a deep breath, and said, "I'm sorry. I really suck at this. Wait here, and I'll go get someone who can actually help you."

 

My wife melted--as wives who are businesslike but also caring are wont to do--and said, "We don't need anyone else. You're doing fine." (He wasn't, but what the heck.) "Tell me," she asked, "have you driven one of these?"

 

"Oh, yeah," he said, brightening visibly. "They're really fast...and I probably shouldn't say it, but they handle better than an M3." Then he looked around to make sure no other salespeople were nearby and said, "Even if you don't plan to buy one, you should at least drive it. They're a blast."

 

She did. It was. And she bought one.

 

Initially, he tried to be a qualifying, relationship-building, features-and-specifications-spewing, commitment-gaining, close-the-deal-and-leave-no-money-on-the-table sales superstar.

 

That approach may work for some people, but in his case it meant giving up his biggest strength: He stopped being a young, enthusiastic, friendly guy who loves cars.

 

He stopped being himself.

 

Think about your sales techniques. Do they take you away from your strengths?

 

If you're naturally introverted, don't try to channel your inner Matthew Lesko. Where selling is concerned, listening can be even more effective than speaking.

 

If you're perceptive and have decent instincts, don't be afraid to skip the qualification process. In our case, we parked a relatively expensive vehicle in front of a row of 135is, so any salesperson could safely assume we had the means and the interest. (In fact, the car you drive onto a lot probably says more about your means than any of the answers you provide to qualifying questions.)

 

After "Hello," the salesman should have said, "Tell me which one you want to drive, and I'll grab the keys."

 

If you're naturally relaxed and informal, don't try to be professorial or authoritative. Speak the way you speak to friends. Be genuine, and your prospects will respond.

 

Play to your strengths. Don't try to be something you're not. Instead, focus on being a better, more effective version of you.

 

That's the best sales strategy of all.

 

Article provided by Inc.com. ©Inc.


by Tim Donnelly


Sales forecasts are by nature imperfect. But experts say there are ways to squeeze more value out of the projections you're making.

 

Any good business will have a system of sales forecasting as part of its critical management strategy. But most sales forecasts are, by nature, inexact. The trick, experts say, is to know in which direction they're wrong, and turn that into a picture of how your business is doing.

 

"People think the forecast is good or bad depending on how accurate it is," says Tim Berry, president of Palo Alto Software, which creates business-planning software and is—despite its name—based in Eugene, Oregon. "What I think is it's how well it breaks into meaningful assumptions you can look at later."

 

For a small business—say, a restaurant—those assumptions could mean mapping activity in the dining room and keeping track of how many meals are sold at certain times of day. For a larger business, that could mean plotting all activity across departments to see how your products are matching up to industry standards. There's a few ways to test the your sales forecasting to know whether you're getting an accurate read or just dabbling in expensive soothsaying.

 

1. Use separate numbers. One of the biggest misconceptions about forecasting is that there's one set of numbers that represents the "truth" for your business. In reality, multiple forecasts are necessary in order to represent the needs of different constituencies, says David Stephens, director of sales for Right90, a sales forecasting company based in Austin, which has done forecasting for Sharp and Bivo Networks.

 

Your sales team might have a forecast designed to meet its number, but product management is interested in the forecast of a specific product, operations is interested in finding out what it needs to produce and when, and finance needs revenue figures, he says. Someone at the top of the ladder needs to be prepared to put all those together and form a cohesive picture.

 

"Senior management requires the forecast be vetted from all perspectives in order to develop the confidence to make critical decisions," he says.


2. Develop a flexible process. It's impossible to use a single test that will ensure you can track the exact terms, time, and context of every sale. Instead, you should focus on developing a process that can be managed, reevaluated, and modified as conditions change, Stephens says.

 

"This requires discipline, beginning with ensuring that sales forecasts are updated on a regular basis," he says. That means managers have to understand the sales system, customer history, product delivery, and even the history of the individual salesperson to assess with some certainty the forecast's accuracy.

 

Big companies often make the mistake of thinking forecasting is just looking at the sales history and taking an average over time. Instead, they need to look at many additional factors as well, says Glen Margolis, president and CEO of Steelwedge Software, which is based in Pleasanton, California, and has forecasted for GE, DirectTV and Sara Lee.

 

3. Set aside time. Your forecasts won't do you much good if you aren't constantly keeping tabs on them. Berr says it's crucial for companies to set aside a specific time every month (or however often you like) to review the forecasts.

 

Berry says his company does this every third Thursday of the month: managers bring in lunches, review the data together, and make any work on any high-level decisions that may be called for. It's all part of the broader decision making of the company.

 

"If there's a set time, everybody involved knows," he says. "You look at, compare and plan for actual results…you start to see management happening."

 

4. Use a consistent model. Margolis says he believes there's no one model of forecasting that works best for every company. But one efficient method is sometimes one used by restaurant owners: matching this year's sales to last year's and making a guess for the future.

 

"That to me is the best model," he says. "That empowers people who are actually running business."

 

But the key is, whatever model is used—whether it is a weighted average over a few months or bare numbers-tracking—needs to be consistently applied over time.

 

"One of the biggest barriers is people saying 'I'm not qualified to forecast, I didn't take statistics,'" he says. "Well, I do have the degree, and I did take statistics, and still the educated guesses are what really drive the forecast."

 

Consistent application of the same model standardizes the format, and makes it easier to review year after year.

 

5. Don't get too complicated. Your business forecasting doesn't have to be a hyper-complicated process that involves high-level mathematics and projections.

 

"Most businesses are not necessarily very sophisticated," Margolis says. "They don't have a team of statisticians. It's someone with other day-to-day activities who also keeps an eye on forecasting."

 

Stephens says simple, specific software and applications are available for sales forecasting that provide an audit trail, a history of the forecast, and the ability to align the data with customer relations management. The programs also allow you to note changes to any perspective such as product, territory, customer, or salesperson, he says—much more so than just keeping a spreadsheet on your laptop.

 

6. Be democratic. If you aren't including all elements of the business in the forecasting process, you are likely to end up with skewed numbers. Margolis says that if people aren't involved in the process, they won't believe the numbers and won't use them, or will fudge the data to fit their personal expectations. A purchasing department, for instance, may up certain numbers so it doesn't run out of stock.

 

Margolis advocates making forecasting a collaborative process, as much as possible.

 

"There's ways to manage the collaboration so you're getting the benefit not the downside of it," he says. "Because everyone's participating and they feel like their voice has been heard, they trust it. They're more likely to trust it than to game it."

 

7. Focus on exceptions. You can tweak the details of the forecast to death, but your main focus should be looking at the exceptions: where the forecast line diverges from actual sales data.

 

"Don't loose track of the forest for the trees," Margolis says. "You're just constantly trying to improve." Improving forecasting doesn't happen overnight: analysts expect forecasts to include monthly data for about the next 12 months, Berry says, as well as annual data for year two and three. Anything more specific than that is "basically an academic exercise," he says.

 

Experts say it sometimes takes months of tweaking, adjusting and learning before you can have an accurate guess at how the forecasting will look in the future.

 

"There's constant elements and dimensions you can refine all the time," Margolis says. "It has to be a core competency, especially in the world we're in today that's very unpredictable."


Article provided by Inc.com. ©Inc.

Inc.

Online ads: 7 dos & don'ts

Posted by Inc. Jan 9, 2013

by Hollis Thomases


You don't need an agency to manage your digital advertising. But if you're going to go it alone, you need to understand a few ground rules.

 

While many businesses these days want to improve their online visibility, many don't know how to approach it other than to build a website and maybe do some search engine marketing.

 

Yet 14 years after the launch of the first self-serve advertising platform, GoTo.com, I'm still surprised how little many businesses still know about do-it-yourself online advertising opportunities available to them.

 

After all: Even though Google's DIY pay-per-click search, contextual and display ad networks create an 800-pound gorilla, and yet there are plenty of other places to try self-serve online advertising.

 

Why, you might ask, as an owner of a digital ad agency, would I want to tell you about self-serve advertising platforms? There are several reasons:

 

  1. Many businesses do not have the budget for the kind of large-scale advertising campaigns we plan and manage. That doesn't that mean they shouldn't have a shot at doing online advertising, however; some self-serve platforms have minimum buy-ins as low as $10!
  2. An  increase in total advertisers is good for my industry. The growing shift away from traditional, offline ad buys only helps to support improvements for digital ad technologies and for the publishers who post and monetize their content.
  3. Though I'm sharing this information with you, it doesn't come without a few warnings–and I want you to hear those too.

Dos & Don'ts of Self-Serve Ad Platforms

 

Do know that many self-serve ad platforms are networks, which means your ads will be shown across a spectrum of websites and on different placements on any given website page.  Many of these ad networks don't offer you a lot of control, transparency, or detailed reporting. You'll also have to trust the network that your ads did in fact appear somewhere in cyberspace.


Do understand the types of advertising and ad format you'll be buying, because you may need to produce ad creative to meet certain specifications.


Do understand how the payment and cost structures work. (Don't just "set it and forget it," particularly if you've entered your credit card as a payment method–you might have a rude awakening if you didn't set any limits to your ad budget.)


Do experiment. Start out with small budgets. Test different ad messages, and try sending users to different landing pages to compare impact.


Don't forget to develop compelling offers and present calls to action–such as "Click here," "complete this form," or "Buy now!"–to get users to do what you want them to do.


Don't go in with unrealistic expectations. Many of your early efforts will not yield fruit until you have a better understanding of what you're doing and have tested to find out what will work.

Where to Buy DIY Ads

 

As I mentioned already, there are alternatives to Google. Below is just a smattering of options. I've broken them down by category for you, to make things a little easier to digest.


Banner (Display) Ad Networks

 

Contextually Targeted Text & Display Ads

 

Networks Offering Multiple Ad Types

 

Social Media Ads

 

Mobile Ads

 

Video Ads

 

B2B-Focused Ads

 

If despite–or, perhaps, because of–this extensive list, you still feel uncomfortable entrusting your ad budget to technology platforms that will happily spend your dollars, don't feel you have to go at this on your own.

 

But whether you hire professionals or take the DIY route, always remember that if something looks too good to be true ... It probably is.

 

Article provided by Inc.com. © Inc.



by J.J. McCorvey

 

Our second installment of advice for small businesses on using social networking sites like Facebook and LinkedIn, and how to integrate these tools into the marketing and recruiting efforts of your company.


Social Network Promotions


Remember, it's called a social network, not a 'business network.' Coming off as a pushy or shrewd salesperson peddling a product could scare away your Facebook friends and LinkedIn connections. Remember to be genuine and personal.

Here are the things you should do when promoting your company or product through social networking sites:
1.    Make it benefit-based. Make the customer feel that they need to participate in the promotion. Is the product or feature available for a limited time? Are you offering exclusively to your followers on a particular network? 

2.    Talk about new or uncommon features. Even if you have a relatively popular product, there may be some things consumers don't know about it. What are some new or different ways it can be used?

3.    Include some discounts and savings. Offering discounts on products is usually a shoe-in to grab customers' attention. Krissman, of Outdoor Technology, says he posts promotional codes that users can fill out on the company's website and get up to 30 percent off a product. Not only does it drive more buyers to your product, but it also brings more followers to your page.

Here are the things you shouldn't do when promoting your company or product through social networking sites:
1.    Don't continually have sales-related messages. There are other ways to promote besides selling your product. Comment or ask questions about news or topics in your industry. 'They will easily ignore you or unsubscribe you if you continue to push a sale,' says Tobin.

2.    Don't set up an expectation, then cheat on it. If you announce to your followers that your purpose is to give advice, don't turn around and start selling. 'If you violate that expectation, people are going to get upset and they're going to leave,' says Tobin. Again, make the sale subtle – how can your product help them achieve the advice you're giving?

How to Use Social Networking Sites to Drive Business: Social Network Recruiting

 

Social recruiting is an effective way to utilize social networks to find the best candidate for any open positions at your company. While the past few years saw the rise of job boards like Careerbuilder.com and Monster.com, the growing prominence of social networks have transformed the way businesses build their best team. Instead of relying on the 'come one, come all' approach, the detailed personal information contained in profiles, such as interests and job history, allows businesses to employ social networking sites to target the specific audience or skill set they want to pull from.

 

According to an annual social recruitment survey published by Jobvite, an online service that helps businesses consolidate the resources of social media sites, 80 percent of companies used or planned to use social networking to find and attract candidates in 2009, with LinkedIn being used by 95 percent of the respondents and Facebook usage growing from 36 percent in 2008 to 59 percent in 2009.

 

'It's like what's happened to the ad industry,' says Dan Finnigan, CEO of Jobvite and former general manager of Yahoo! HotJobs. 'It used to be that you would buy a big ad to get the consumer's attention, but more and more companies are relying on online advertising software that puts that ad right in front of them based on data, like the other ads they click on. Social recruiting is analogous to that.'


The Benefits of Social Network Recruiting


Here are some of the primary advantages that social recruiting affords small businesses:

1.     Empowers your employees to distribute job information. These days, most, if not all of your employees probably have a profile on a social networking site. By enabling them to post information about open positions, you multiply your searching reach by the thousands.

 

2.     Helps you put the passive job candidate in your crosshairs. Job boards are mostly used by people who are proactively looking for positions.  But what about the perfect potential employee who may not be scouring Careerbuilder.com every day?

 

3.    A low-cost method of finding high-quality candidates. When looking for job candidates, it takes time to sift through resumes of unqualified applicants, and many job boards charge fees to post openings. Social recruiting helps you zone in on the best candidates, for free.

 

Tools to Help You Socially Recruit


1.    Custom searches. Searching only by name and location doesn't cut it when looking for the perfect employee. LinkedIn has one of the most thorough searches of all the sites, allowing you to sift through profiles by company, industry, college, and even how many 'degrees' you are from the person.

 

3.    Updating your status message. When you or your employees update your statuses, it pops up on your friends' home page, and sits atop the profile until it's changed. 'My company is looking for … ,' is sure to snag replies.

 

4.    Linking to stories and external content. Both Facebook and LinkedIn enable users to post external content to their profiles. By linking to articles and blogs that contain positive news about your business, you show potential candidates that it's not just your social network connections that adore your company.

 

How to Use Social Networking Sites to Drive Business: Privacy and Legal Issues

 

Though social networking can certainly be a fun way to help you expand your company, there are plenty of issues surrounding privacy and legalities that you should always be aware of when searching for employees, and even after you've hired them. 'The laws [regarding online privacy and or hiring online] generally apply the same [as existing state laws],' says Megan Erickson, an associate at Des Moines, Iowa-based Dickinson, Mackaman, Tyler & Hagan law firm and author of Erickson's Blog on Social Networking and the Law. 'But now that there are all these different kinds of social media, they combine to make it a very unique environment.'

 

Here are some of the most important things to keep in mind to help you steer clear of legal trouble when dealing with potential or current employees and social networking sites:

1.    Don't use fake profiles. Using a fake profile when adding employees to monitor their activity can constitute as an invasion of privacy, Erickson says. 'That's just asking for lots of trouble,' she says.

 

2.   Add a social media section to your handbook. Including language about social media in your personnel policy is paramount, especially if you plan on integrating it heavily in your company's operations.

 

3.    Beware of existing federal and state laws. It may help to prep yourself on the many federal and state laws regarding anti-discrimination and privacy, Erickson says, so that if you do come across an employee's wayward photo or disparaging status message, you'll be knowlegeable about how to proceed with disciplinary action.

 

Resources

To learn more about using social networking sites:

 

•    The Social Media Bible: Tactics, Tools, and Strategies for Business Success, by Lon Safko and David Brake, is a great guide for business owners and executives who want to use the power of social media to grow their companies. Visit the website, TheSocialMediaBible.com, to connect with other professionals looking to do the same.

•    Megan Erickson's blog, Erickson's Blog on Social Networking and the Law, posts up-to-date news on legal issues surrounding social media sites.

•    Mashable is a great resource for news, advice, and jobs concerning all things social media.

•    John Jantsch, author of Duct Tape Marketing – The World's Most Practical Small Business Marketing Guide, also runs a marketing blog for small businesses called Duct Tape Marketing. Check out what he says about the 7 Truths of Social Media Marketing.

Some sites to consider joining for social networking:

•    Facebook: The most popular social networking site, it allows you keep up with friends, colleagues, and classmates and features a stream-lined, easy-to-use interface.

•    MySpace: Geared toward the younger crowd, this interactive site lets you connect with friends and tweak your profile with extras like themes and music playlists.

•    LinkedIn: This site is strictly professional, and for good reason. You can keep up with colleagues, find employees, and network with others in your field.

•    Bebo: Another primarily social site for friends that allows users to express themselves through media and interactive environments.

•    FastPitch: This professional site serves as a great platform for growing companies to market themselves, allowing you to post events, press, and submit keywords to increase your profile's SEO strength.

•    Friendster: A social networking site for friends that promotes connections between international users and also boasts "Fan Profiles" similar to Facebook's.

•    I-Meet : A professional site where you can establish valuable contacts and potentially save money on event planning.


Article provided by Inc.com. © Inc.

by J.J. McCorvey

Advice for small businesses on using social networking sites like Facebook and LinkedIn, and how to integrate these tools into the marketing and recruiting efforts of your company.

 

Consider this: It wasn't until 1997 that the Internet reached 50 million users in the United States. Facebook gained over 100 million users in the U.S. from January 2009 to January 2010, marking a 145 percent growth rate within one year, according to research by digital marketing agency iStrategy Labs. If you're a business owner that hasn't embraced social media networking as a major component of your success strategy, it's due time to hop onboard.

 

'When you've got 300 million people on Facebook, that's a huge business watering hole,' says Lon Safko, social media expert and co-author of The Social Media Bible: Tactics, Tools, and Strategies for Business Success, of the site's global reach. 'The profile is like an index to your company.'

 

While Facebook has become the most popular social media site, there are plenty of others for your company to explore. LinkedIn, for example, houses 55 million professionals seeking jobs, employees, or basic business or networking opportunities. MySpace, which allows users to tinker with music, themes, and HTML code, is targeted toward youth and teens. All of these sites have one primary thing in common: the profile.

 

The user profile is generally what distinguishes social networking sites from other social media platforms. It helps set the stage for building relationships with people who share the same interests, activities, or personal contacts, as opposed to primarily disseminating or digesting information feeds. This also means social networks enable companies to invite audiences to get to know its brand in a way that traditional forms of marketing or advertising can't.

 

But what, exactly, are the methods that businesses should use to effectively leverage the burgeoning userbase of these sites as a tool to grow their companies? The following pages will detail what to do – and what not to do – in order to maintain a viable presence in the realm of social networking.

 

How to Use Social Networking Sites to Drive Business: Developing a Social Networking Strategy

 

Before opening an account and becoming active, it's important to consider what each site offers and how you can benefit from their resources. 'Take some time and really analyze what your existing social media strategy is,' says Safko. 'Figure out which tools are best for your demographic.' Without a fully developed plan for your social networking activity, you could end up meandering throughout the sites and wasting a lot of time.

 

Here are a few basic questions to ask yourself when forming your social networking strategy:

1.    What are the needs of my business? Hopefully, you're not putting your company name on a social networking account just to send messages back and forth to former high school classmates, so there has to be an impetus. Figure out what your needs are. Are you short-staffed? Is your advertising budget running thin?

 

2.    What am I using the site for? After you've established your needs, consider the primary goal of your social networking strategy. Do you want to recruit employees for a certain department? Do you want to market a new line of products? Do you want to connect to more people in your industry?

 

3.    Whose attention am I trying to get? Okay, so you want to market that new line of products, for example. You still need to know your target audience for that product, and with more than 300 million users on Facebook, you'll need to narrow your focus.

 

Got those answered? Good. Now, consider these questions:

1.    Which sites do I want to take on? If you have enough staffing power to handle multiple social networking sites, that's great. If not, it's important to focus on one or two, or you could spread yourself too thin and fall victim to the 'gaping void' perception, where you end up going days without activity. Your followers will notice.

 

2.    Who's going to manage my page? Would your social networking activity fall under a current employee's responsibilities, or do you need to bring on new talent? If you ever find yourself without the staffing resources to manage your page, don't stick your head in the sand, says Safko. 'Find some interns,' he advises. 'In most cases, they'll do it for free.'

 

3.    Who has access to my page? What type of trust level do you have established at your company? Will all of your employees have access to the social network account, or a select few? Take the time to assess the skills and character of those who can log into your page, or you may run into unsavory situations down the road – especially when dealing with former workers.

 

4.    Who's going to be the personality of my page? Does your company already have a public representative that usually handles speeches, press, etc.? It may be beneficial to rein in that person as the voice of your social networking site. 'People buy from other people, not from other companies,' says Safko. 'In order to solidify trust, pick someone to represent your brand.'

 

How to Use Social Networking Sites to Drive Business: Choosing Your Site

After you've answered those questions, you can choose which social networking site, or sites, would best fulfill the requirements of your strategy. Though many of the sites are similar in nature, they can all be categorized by the different purposes they serve. These are the basic types of social networking sites:

1.    'Free for all' social sites: Some sites that fall under this category are Facebook, MySpace, Ning, and Friendster. Each of these sites primarily serve as a nexus of friends and associates who want to socialize. Ning, for example, has become popular for connecting classmates and helping to set up reunions. The profiles are usually personable, inviting, and can be customized with add-ons and apps.

2.    Professional sites: Examples of these include LinkedIn, FastPitch, and Plaxo. The professional site can be utilized as an online professional contact database, or 'rolodex,' but it's also where people go to update employment information about themselves.

3.    Industry-specific sites: These sites allow you to connect to people who are in your industry. I-Meet, for example, is specifically geared toward event planners, while ResearchGATE is a community for researchers in the science or technology field. Industry sites help you to narrow your search when looking for services, or people with skills in certain fields. You may even want a particular department of your company, such as IT or advertising, to open an account on one of these sites.


How to Use Social Networking Sites to Drive Business: Setting Up Your Profile

 

Your profile is the online representation of your brand and company, so it's important to know what to add and what to avoid. Here are a few tips to be mindful of as you create your profile:
1.     Don't be afraid to get a little personal. Facebook profiles, for example, allow you to include things like hobbies, favorite music, etc. Including tidbits like these can make your page warmer and more personable. 'Some personal information is valuable, because it may create a bond with a customer,' says Safko.

 

2.     But not too personal. Don't be the 'TMI' poster boy or girl, (i.e. 'The wife and I are on our way to have dinner – kids are with the grandparents'). Create another page that's just yours, sans company activity.

 

3.     Share photos and videos. Adding multimedia to your page gives flair, and offers customers an exclusive look inside your company. LinkedIn even has an add-on that allows you to post presentations and slideshows.

 

4.     But no office party snapshots. Though the atmosphere of Facebook is still relatively laid back, you want to maintain the perception that you're serious about your product and customers. Pictures involving Santa hats and alcohol probably shouldn't be in your albums.

 

5.     Set privacy settings. On most of these sites, you can control what people see on your profile, such as pictures and blog posts, and you can even limit what other people post. Depending on the nature of your company, you should consider these restrictions. Are there any embarrassing pictures of you floating around that you might not want linked to your page?

6.    But don't be a blank slate. Imagine coming across the profile of one your favorite brands, and all that's there is a picture and headquarters location. A little disheartening, right? If and when you do enact some privacy settings, try to keep the page lively.


How to Use Social Networking Sites to Drive Business: Social Network Marketing

Marketing through social networks isn't as much about selling your product, as it is about engaging your followers. 'A lot of people have started Facebook fan pages with no clue to how it can benefit them,' says Jim Tobin, president of Ignite Social Media, a social media marketing agency based in Cary, North Carolina. 'You have to think above your product.' The goal of the community-based environment of social networking sites is to provide a platform for an open, honest conversation.

 

The companies that are most successful at converting followers into dollars are those who interact most with the users and frequently post content related to their brand. Facebook's Fan Page is probably the best example of how you should be marketing you company through social networking sites. The page acts as an upgraded user profile for brands, companies, and organizations to be as involved as the users, and has plenty of tools to help you do so. As users become 'fans' of your page, all of your activity appears in their News Feed each time they log on. There's also a useful feature called the Insights tool, which allows you to analyze page views, the demographics of your fans, and the number of people who view (or stop viewing) your News Feed posts.

Outdoor Technology, a Los Angeles-based manufacturer of clothing and gear for skiers and snowboarders, initially sold merchandise directly to retailers. But after the company began actively using their Fan Page last September, revenue from e-commerce went from zero to $25,000 in three months, says CEO Caro Krissman. The page has now amassed over 11,000 fans. 'We saw Facebook as sort of a sweet spot for where our target market is,' says Krissman. 'With the ability to target users in such a focused way, we felt like there really wasn't a better forum to go about [marketing online].'

'Fan' features your company should be using:

 

1.    Comment on other users' content or profile posts. By responding to what your followers post to your profile, you show them that you appreciate their interaction. If they know they have your attention, they'll keep coming back.

 

2.     Ask questions on your wall. Facebook users love to be heard. It can be surprising how many responses one question can elicit. 'It starts to snowball,' says Safko. 'What you'll find is that the conversation will branch off and start another one.'

3.     Posting links or threads. 'One thing fan pages lets you do that Web pages don't is encourage viral spread,' says Tobin. If you have any content that you want to circulate quickly, the fan page is the perfect tool.

4.     Posting relevant events. By posting upcoming events your company may be part of or hosting, you can help drive more attendees to the function. And for those who can't come, they get a glimpse at how active your business is within the community or industry.


Article provided by Inc.com. © Inc.



To create a compelling value proposition, you have to know your three C's: competencies, customers, and competitors.

 

by Karl Stark and Bill Stewart

 

A new school year has arrived. As teachers and students wipe away the cobwebs that formed over the summer, so too should we return to the basics of business: creating a compelling value proposition. This is the first topic on the first day of Business 101, yet the news is consistently filled with the stories of companies that have fallen out of favor because they have lost sight of how they provide value.

 

A gripping value proposition is important to a business at any stage, but never more so than at the start. In any new business venture, you are trying to motivate the most apathetic type of person: the consumer. You are either convincing them to move from a competitor or to buy something they did not know they needed. In either case, you have to provide them a reason to buy.

 

To create a compelling value proposition, you have to know your three C's: competencies, customers, and competitors.

 

Know Your Competencies

The first step in creating a value proposition is knowing what you are good at (and what you are not). These core competencies serve as the building blocks for determining how your business creates value. What will you provide customers that they cannot get today, and how can you provide it in a way that uniquely differentiates your business?

 

These competencies are the foundation of your value proposition, and you should consistently work to further develop and improve them to maintain a compelling offering.

 

Know Your Customers

Having competencies that differentiate your firm from competitors is not enough. You also have to have a market, which means you have to understand your customers, their needs, and how best to serve them.

 

We recommend an activity from the Business 101 playbook: describe your first customer. To really know your customer, you have to have a deep understanding of their life, what drives them, and what keeps them up at night.  Take time to describe who your first customer is and how you can couple your competencies to better meet their needs. Designing a value proposition around your customers' needs will better prepare you to move the apathetic consumer.

 

Know Your Competition

The final piece of a truly effective value proposition is knowing your competition. Markets and competitors tend to gravitate to the areas with the most distinguished and developed customer needs. However, these strategies limit differentiation and often do not represent the future direction of the market. Know your competition, their strengths and weaknesses, and develop a value proposition that meets the needs they are unable or choose not to address.

 

Example: Video Rentals

Ten years ago there was essentially one business model in the video rental market: retail stores. Today there are several models, including Redbox, Netflix, and a host of others in the direct to TV market, including cable operators and technology giants.

 

Each has a unique and differentiated value proposition. Each has identified a market need based on deep knowledge of the customer. Each developed competencies that have allowed them to meet that customer need, and each has done so in a way that differentiates them from competitors. While the future direction of the market is unclear, the compelling value propositions of these entrants has allowed them to develop successful businesses. It's the key to any successful start-up.


Article provided by Inc.com. © Inc.

by Tim Donnelly


Sales forecasts are by nature imperfect. But experts say there are ways to squeeze more value out of the projections you're making.

 

Any good business will have a system of sales forecasting as part of its critical management strategy. But most sales forecasts are, by nature, inexact. The trick, experts say, is to know in which direction they're wrong, and turn that into a picture of how your business is doing.

 

"People think the forecast is good or bad depending on how accurate it is," says Tim Berry, president of Palo Alto Software, which creates business-planning software and is—despite its name—based in Eugene, Oregon. "What I think is it's how well it breaks into meaningful assumptions you can look at later."

 

For a small business—say, a restaurant—those assumptions could mean mapping activity in the dining room and keeping track of how many meals are sold at certain times of day. For a larger business, that could mean plotting all activity across departments to see how your products are matching up to industry standards. There's a few ways to test the your sales forecasting to know whether you're getting an accurate read or just dabbling in expensive soothsaying.

 

1. Use separate numbers. One of the biggest misconceptions about forecasting is that there's one set of numbers that represents the "truth" for your business. In reality, multiple forecasts are necessary in order to represent the needs of different constituencies, says David Stephens, director of sales for Right90, a sales forecasting company based in Austin, which has done forecasting for Sharp and Bivo Networks.

 

Your sales team might have a forecast designed to meet its number, but product management is interested in the forecast of a specific product, operations is interested in finding out what it needs to produce and when, and finance needs revenue figures, he says. Someone at the top of the ladder needs to be prepared to put all those together and form a cohesive picture.

 

"Senior management requires the forecast be vetted from all perspectives in order to develop the confidence to make critical decisions," he says.


2. Develop a flexible process. It's impossible to use a single test that will ensure you can track the exact terms, time, and context of every sale. Instead, you should focus on developing a process that can be managed, reevaluated, and modified as conditions change, Stephens says.

 

"This requires discipline, beginning with ensuring that sales forecasts are updated on a regular basis," he says. That means managers have to understand the sales system, customer history, product delivery, and even the history of the individual salesperson to assess with some certainty the forecast's accuracy.

 

Big companies often make the mistake of thinking forecasting is just looking at the sales history and taking an average over time. Instead, they need to look at many additional factors as well, says Glen Margolis, president and CEO of Steelwedge Software, which is based in Pleasanton, California, and has forecasted for GE, DirectTV and Sara Lee.

 

3. Set aside time. Your forecasts won't do you much good if you aren't constantly keeping tabs on them. Berr says it's crucial for companies to set aside a specific time every month (or however often you like) to review the forecasts.

 

Berry says his company does this every third Thursday of the month: managers bring in lunches, review the data together, and make any work on any high-level decisions that may be called for. It's all part of the broader decision making of the company.

 

"If there's a set time, everybody involved knows," he says. "You look at, compare and plan for actual results…you start to see management happening."

 

4. Use a consistent model. Margolis says he believes there's no one model of forecasting that works best for every company. But one efficient method is sometimes one used by restaurant owners: matching this year's sales to last year's and making a guess for the future.

 

"That to me is the best model," he says. "That empowers people who are actually running business."

 

But the key is, whatever model is used—whether it is a weighted average over a few months or bare numbers-tracking—needs to be consistently applied over time.

 

"One of the biggest barriers is people saying 'I'm not qualified to forecast, I didn't take statistics,'" he says. "Well, I do have the degree, and I did take statistics, and still the educated guesses are what really drive the forecast."

 

Consistent application of the same model standardizes the format, and makes it easier to review year after year.

 

5. Don't get too complicated. Your business forecasting doesn't have to be a hyper-complicated process that involves high-level mathematics and projections.

 

"Most businesses are not necessarily very sophisticated," Margolis says. "They don't have a team of statisticians. It's someone with other day-to-day activities who also keeps an eye on forecasting."

 

Stephens says simple, specific software and applications are available for sales forecasting that provide an audit trail, a history of the forecast, and the ability to align the data with customer relations management. The programs also allow you to note changes to any perspective such as product, territory, customer, or salesperson, he says—much more so than just keeping a spreadsheet on your laptop.

 

6. Be democratic. If you aren't including all elements of the business in the forecasting process, you are likely to end up with skewed numbers. Margolis says that if people aren't involved in the process, they won't believe the numbers and won't use them, or will fudge the data to fit their personal expectations. A purchasing department, for instance, may up certain numbers so it doesn't run out of stock.

 

Margolis advocates making forecasting a collaborative process, as much as possible.

 

"There's ways to manage the collaboration so you're getting the benefit not the downside of it," he says. "Because everyone's participating and they feel like their voice has been heard, they trust it. They're more likely to trust it than to game it."

 

7. Focus on exceptions. You can tweak the details of the forecast to death, but your main focus should be looking at the exceptions: where the forecast line diverges from actual sales data.

 

"Don't loose track of the forest for the trees," Margolis says. "You're just constantly trying to improve." Improving forecasting doesn't happen overnight: analysts expect forecasts to include monthly data for about the next 12 months, Berry says, as well as annual data for year two and three. Anything more specific than that is "basically an academic exercise," he says.

 

Experts say it sometimes takes months of tweaking, adjusting and learning before you can have an accurate guess at how the forecasting will look in the future.

 

"There's constant elements and dimensions you can refine all the time," Margolis says. "It has to be a core competency, especially in the world we're in today that's very unpredictable."

 

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