Grow your small business with Information Technology

You Can Grow Your Small Business Using The Right Technology

Dan Katz of PSK Supermarkets, a Mount Vernon, N. Y. based chain of Foodtown grocery stores, knew he had a problem: His customers were making fewer trips to his stores and spending less money each time. Facing intense competition for customers from both traditional competitors and newcomers like FreshDirect and Whole Foods, he needed to increase customer loyalty fast. But how?

Dan started with his in-house point-of sale system. The system stores records of all purchases and ties the data back to the individual customer and the SKUs (shopkeeping units, or products) they buy. Using the shopping cards he issues to his customers, Dan created a targeted loyalty program focused on his best customers.

Here’s how it works: customers are divided into 12 loyalty levels, with 1 being the most loyal and 12the least loyal (measured in terms of dollars spent per month). The best customers are rewarded for their purchases with S&H Greenpoints which can be redeemed for merchandise. In the first six months of the program, Dan boosted the average purchase per visit more than 20%; a year later, Dan constantly monitors customers across the 12 loyalty levels. He offers incentives to retain his best customers and watches for “downward migration” if customers suddenly start shopping less so he can send out targeted promotions to bring them back into his stores.

PSK’s strategy is a dramatic example of how business is changing the way it interacts with and markets to customers and prospects. A few important trends make it easier than ever for any company, large or small, to catch this wave and reap tremendous rewards. Data storage costs are lower than ever, and Internet usage is widespread. Most importantly, there are now powerful software programs that can capture, track, manage and analyze customer data. Microsoft Office includes Excel, a spreadsheet program many small companies use to store data on their customers.

Users who upgrade to Microsoft Office Professional for a few hundred dollars more can take advantage of the power of Access, an expandable relational database that can store data on many thousands of customers. There is also software for rent available on the Web from SalesForce.com that can keep track of sales interactions with customers for less than $100 per month per user. In short, a variety of powerful, easy to use, customizable tools are available that can help companies store and capitalize on their customer data.

Any company now has the ability to track the behaviour of every customer and store enormous amounts of data on purchase history, transactions, demographics and interactions. The key to building revenue and profits, though, is to use that data to provide a more personalized, interactive and service-oriented customer experience. How can you get started right now to take advantage of these trends and keep up with your competitors?

Here’s one “big idea” you should come away with: Learn who your best customers are. You’ll maximize revenues and profits by paying attention to your most valuable customers and targeting your marketing and business development efforts toward satisfying their needs. Below are ideas for getting better acquainted with your clients.

Keep track of all your customers. You can start with a simple Excel spreadsheet, or move to a more sophisticated Access database. If you have a large number of customers and want to track transactions, interactions, purchase history, demographics and other data, you can move to an industrial-strength relationship database management system.

Use the Web to interact with and learn from your customers. Think of the Web as a two-way street to gather and transmit information — from your website, via e-mail or in a blog. Give customers a reason to register on your website (to receive a newsletter or take a quiz) so you can capture names, addresses and e-mail addresses. You can then use a program such as Constant Contact to send e-mail on a regular basis to customers. Another idea is allow customers to “chat” or instant message in real time with, for instance, a sales rep, during certain hours.

Calculate a monetary value for each of your customers and update it when additional purchases are made. This can be as simple as updating an Excel spreadsheet once a month with purchase data from your point-of-sale system. If you have it, update your customer history with data on your cost of goods sold, so that you can calculate a net profit per customer. Over time, you can get an idea of how much your best customers are spending with you and a sense of what the “customer lifetime value” is for each of them.

Keep track of how often your customers buy from you (frequency), when was the last time they purchased (recency), and how long they’ve been with you (longevity). Together with the monetary value you’ve calculated, these will help you refine your definition of “best customer” and allow you to concentrate on maximizing total value over the customer’s lifetime.

Ask your best customers how you can do better: If you ask, they’ll tell you. What new products or services can you develop? What changes can you make to your existing products or services to provide customers with a reason to stay with you and bring you more business? If you listen carefully, you’ll learn a lot about what it takes to keep and grow your best customers. One great resource for surveys is Zoomerang.com, which will conduct a survey and analyze the results for you. The company currently offers a small scale study for free.

Tailor your services and products directly to your customers’ expressed needs. Use the customer intelligence you gather to change the way you do business. Focus on the specific products, services and ways of doing business that matter most to your customers. For instance, say your survey showed that customers felt your product was too expensive. Perhaps you could consider manufacturing a version with fewer features and selling it for less money.

Concentrate your efforts first on your top-tier customers, then the next tier, and so on, until you reach your least profitable customers. You’ll be able to spend your product development, marketing and sales dollars on your best customers and not on the customers who aren’t making any money for you.

When you’re looking for new business, attract prospects who are similar to your best customers. This makes sense, doesn’t it? You already know how valuable your best customers can be, so try to tailor your new business development efforts to attract prospects who have the potential to become just like them. If you know where your best customers live, you can target new customers in the same zip code or an adjacent one. Consider purchasing demographic data from a vendor such as Donnelley Marketing or Experian.

Above all, just get started learning more about your customers. Start small, and do a little more each day. Soon you’ll be working with true customer intelligence to build your revenues and profits.

Brought to you by the Darrin Jackson

Written by Tony Correto

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Why your website is probably money wasted?

To begin this discussion we must first determine a website’s purpose. There are two types of a web presence the first is a presentational website. This type is to give information to prospects about what it is you do and what you can do to help them.

The second type is an e-commerce website this site is to sell products. There are the variants, those that do both, usually a service based business will go with the variants. Ultimately, no matter which website you use it is a marketing tool. If you cannot gauge its effectiveness and measure its results then you have wasted your money, period.

Let us take this conversation to marketing for a split second. Many of us drive down the multiple highways in beautiful America. On virtually every highway, there are more billboards then we can count. Occasionally you will look at one that will grab your interest. Well now, here is my question, have you ever stopped your car on one of these highways to write down the number of the company you just saw on that billboard? Probably not, but if by some slim chance you did, did you ever pick up the phone and call them again probably not.

Interestingly enough, companies spend millions on these billboards and ultimately they do not work. That is, if you are gauging the effectiveness of how well these billboards work, by how often they make your phone ring. This is because these billboards are for brand awareness not to increase immediate sales which is why only the large corporations with money to burn should even think about using this form of marketing

That story was to help you see what many of the SOHO websites are like. They are nothing more then billboards on the information highway. This problem is easily fixed once recognized, but our web designer is usually concerned with his Michelangelo masterpiece, not the effectiveness of your website. The SOHO owner understands the need for a web presence but usually does not stop to think about how his/her client will use the website.

A web site correctly designed, is designed from the client side first not from the business side first, allow me to explain. Client side first simple means what we want our client to do once the get to our site. Many sites show off the company, this is what was meant by business side first. When a client comes to you website they are listening to WIFM RADIO (what’s in it for me... radio). As business owners, we are usually very proud of our business, especially if it is profitable, so much, so that sometimes we forget we are to be of service to our clients. The point is, when you go to a website are you looking for a company or a product? Chances are your clients are looking for a product too. With that being said, spend more time showing off the products and trying to retain precious client information i.e. name, phone, and email. Then displaying the pretty pictures of the office building, the conference room, and your exquisite staff because ultimately your clients don’t really care. All they care about is getting the service that you offer as cheap as possible with as much quality as you present it to be.

Web Traffic- More then likely as a small business you will have to generate your own web traffic with all the information on the web and all your competition on the web, it will be difficult for you to get to the top 10 ranking without a sizable investment (don’t worry all is not lost keep reading ). So what do you do? You begin by redesigning your website to become a functional marketing tool not just a billboard. As an example if you were an insurance company give them the opportunity to request a quote by filling in there vehicle information (lead generation). If you were a real estate agent have a form for there information so you can call back with apartment availability. This will produce a functional website, one that you can capture prospects information and enhance your chance of turning a billboard into a functional marketing tool!

Drive Your Web Traffic – Chances are you are already engaged in some form of marketing for your companies’ product or service. What we do now is push our marketing efforts towards our web campaign. To drive web traffic, in our previous example of the real estate agent, all of his marketing pieces should now read “go to www.someoneneedsrealtor.com for free apartment availability search” now anybody looking for an apartment in his area will be able to put there information in and check availability while you, as the real estate agent will have generated a new lead.

In conclusion, if you are a small business you will need a web presence no question. The only question you should have is, what is the website for and how will it be used? Once you have answered those questions then you can have your web designer create his Michelangelo and your marketing tool.

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www.Darrinjackson.livejournal.com

Information Technology and Marketing Synergy

How to find more clients you already have?

This is an interesting topic of discussion one of the things that intrigues us is if you have been in business for any stretch of time and already have a customer base, one that you have gradually generated over the years, and then it has cost you a sizable amount of time and capital to create. Yet as business owners we invest so much time trying to generate new customers instead of cultivating new sales from current customer, (you guessed it here come one of those examples again).

One of our clients maintained that our solution simple could not work for him because he has a real estate company. His view was once he puts a customer into a home or apartment the deal is complete there is no up sell for his particular product so at the close of deal, the bond with the customer also closes. We quickly showed him the error in that thinking, now we will show you his solution.

We explained to him the first thing he had to do was, acquire all the necessary data at the beginning of the customer relationship and have it in a usable format for later data mining. Remember know how to use your tools.

In his situation, the instrument is contact management software, by implementing contact management software, we were able to show him how to acquire the correct data for further sales with the same client or create a referral base from his existing client base. This is how we implemented it. First, we paid careful attention to his renter’s client base they are a potential for home ownership if cultivated properly. We designed a new informational chart for potential clients to fill out (only adding email address, level of desired home ownership, future career plans, schools, upcoming tests i.e. computer certification, health care certification , or relocation). The value of this new form was to determine the client’s projected financial growth in the next 2 -5 years. As for real estate brokers and mortgage brokers, you have clients that are fixed in a location for two- or more years (new lease), so they are definitely a captive audience. (Easy to keep in touch with).

The next step was to help him channel his marketing dollar. Our client never thought of a small cost effective house-warming gift. Have you ever had your realtor generously give you a house-warming gift? In this case a his and hers monogrammed towel set was the desired house warming gift. Cost to customer $30(that he recoups twice once from the office fee he charges second from the referrals and return clients).

The last step was to explain to our client how to mine the data for possibilities. Once completed it looked like this to our client.:

If the realtor's client was an apartment renter he had enough information to determine when and if his client could become a potential homebuyer (mortgage sale). The house-warming gift established awareness in the buyers mind (word of mouth sale). Every 3 months we advised our client (the Realtor) to send an email or postcard to his customers (lessees). We also showed him how to pay attention to his leases since he knew exactly when the lease would expire for each of his clients (future sale or apartment rental) which enabled him more return business. In the scope of 1 year, our customer increased his sales revenue by a little over 50% literally doubling his earnings.

Most importantly some reading this may assume this method would be incredibly time consuming and hard to implement. In all actuality, our client has more time on his hands now then when he was earning less. Why? He understood how to use his tools. Contact management software or a CRM solution are like gold to a small business it makes data management simple yet effective. You do not have take our word for it do your research and determine for yourselves, it will definitely if implemented correctly improve your bottom line.

http://www.voltagepc.com/