A Startup Guy

Have you ever heard the term “Fair Weather Fan”? Those are the sports fans who love a team when they’re up and turn on them when they’re down. Funny thing! You often see the same thing in business. My grandmother was a loyal JC Penney customer for decades. Once she was on an extended trip to visit family (4 weeks) and during that time her Penney’s credit card bill came due. She didn’t get the bill because she was away. It was all of $3.50. Just before returning home she went shopping at Penney’s and learned they had cut off her account. She had spent thousands with them over the years and they cut off her card for a mere $3.50 that was just a couple of weeks overdue. I’ve even had a utility turned off because I mistakenly underpaid my bill by $2.00. I’ve heard of banks charging customers $35 NSF fees for $0.30 overdrafts.

I’m not suggesting that businesses should let customers run roughshod over them. And I’m not suggesting that customers should shirk their agreements. But sometimes, life happens and customers have a problem. And a little flexibility and loyalty on the part of a business could go a long way to earning long-term customer loyalty. And in this day and age, customer loyalty is getting harder and harder to find. In part, because it’s not returned by companies. I’ve heard the phrase “customer loyalty” used in business discussions for years. I can probably count on one hand the number of times I’ve heard businesses discuss loyalty to their customers.

So, how do you institute loyalty to customers? Here are a few ideas:
1. Love your customers: This one sounds a bit silly, but there are actually many businesses out there who don’t really love their customers. They realize they need customers, but they could care less if you walk through the door or if it’s someone else; just so long as a warm body comes in. I’d rather go somewhere they’re genuinely happy to see ME. In my town there is a great store just off the downtown square named The Country Gourmet. They LOVE their customers. They know us by name and they even save bubble wrap for my 4-year-old son who loves the stuff. I visit them often just to say hello… and I almost always spend money, no matter if I was planning to or not. I just love them!

2. Allow team members to use their judgement: If you can’t trust your team’s judgement, why did you hire them? Allow them to determine (at least in reasonable cases) if something should be handled a different way. “Uh, boss, are you sure we want to cut this long-time customer’s credit line off over $3.50?” Most of these issues arise due to strict corporate policies. “Company policy is….” If this statement comes up in your business frequently, you have a problem. Some company policies are necessary. Many are simply a crutch to give employees an excuse to not make a decision.

3. Figure out what your break even point is and don’t haggle about money below that: I used to work customer service for a major national book distributor. We had a standing rule there, if the customer is resquesting a credit under $5, just give it to them. The hassle factor, time needed to research issues and aggravation factor for customers cost way more than five bucks. It was cheaper for the company to just resolve the issue immediately, removed a workload that would bottleneck more serious issues and simply made the customer happier to just handle it. “You got a defective paperback in your shipment? Nah. Don’t waste money returning it. I’ll just send you a credit.” Problem solved. Compare that to my utility issue. I made a small error, and over $2 they cut off my utility, made me go through the aggrivation of aruging with them over it, made me wait to have it turned back on, then charged me a $40 reconnect fee. If utilities weren’t a monopoly, I’d have fired them that day.

How does your company practice loyalty to customers? Share your tips and ideas in the comments section.

Dyson image via Wikipedia

I love great products. I don’t mean products you want to tell people about, but products you HAVE to tell people about. I felt that way about the iPod Touch when I first tried one. I felt that way about my TiVo when I got one. You don’t find many products like that, but every once in a while one comes along.

My wife and I recently purchased a Dyson vacuum. It was expensive and, truth be told, I didn’t really want to spend the money on it. (Thankfully, we’d just received payback on our interest-free loan to the government. Read: tax return.) I’d read lots of great reviews online, but couldn’t imagine a vacuum being worth $500. Then I used it. Wow!

It cleans better than any vacuum I’ve ever used. It’s cleaned our house, removed tons of dust we thought we couldn’t get rid of – ever, and the house even smells better. Now, I can’t imagine how we did without it. It’s so great, I think it’s worth three times what I paid for it. (I couldn’t afford it at that price, but it’s worth it.) If you don’t own one, save y our money and buy one. You won’t be sorry!!

Here’s the challenge for the rest of us. What can you (I) do to make your (my) product a Wow! product? Talk to your customers, listen to the marketplace, really look at your product and think about what would make it zing. Don’t let good be good enough. A Wow! product is the best marketing you can invest in. Give people something to talk about… something they HAVE to talk about.

It may surprise some people, but even seemingly small things can affect how people see your business. A good example I see often is FedEx. At least once every other month, I see a FedEx delivery truck being towed off for repair. Alternately, I don’t recall ever seeing a UPS truck being towed. Guess which service I perceive as being more reliable? If I went back and compared delivery reliability for all of the packages I’ve shipped using both services over the years, they are probably fairly comparable. But I can’t get that towed truck image and the impression it makes on me.

What small things in your company are sending the wrong messsage to your customers?

Despite a virtual flood of blogs on the Internet, there are a lot of businesses that still don’t have a blog. Is that good or bad? The answer is an unmitigated YES!

Most businesses, if not all, could benefit from a blog. It’s a great way to communicate with the outside world, establish yourself as an expert on your subject matter and build a community. However, there are hurdles to implementing a good blog. You need to have time to write and to engage your visitors. You also need to have something to say. That sounds easier than it really is. If you post 3-6 times a week, that’s 150-300 posts in a year. It’s easy to start running out of things to say after a year or two. You need to be passionate about your subject matter and honest in what you’re writing.

So, what if you own a business, but you don’t want to blog. Is it OK to have someone else blog for you? Absolutely, under certain conditions. Anyone officially blogging for your company needs to be honest about who they are and why they’re blogging. Never let your PR folks blog in your name or, for that matter, let anyone blog as someone they’re not. Readers WILL find out and it will bust any credibility you have. One thing that’s worked well for many are team blogs. For instance, my friend Nicholas Holland has his team blog for his company centre{source}. Among the cool things about team blogs are: no one person has to write all the time; readers get to experience different ideas and writing styles from different people; and customers and prospects get a good chance to get familiar with your team. It can be very personalizing.

Does your business have a blog? What has it done for you?

Do you not have a blog? Why not?

Leave a comment and share with us.

P.S. These same principles apply for other social media such as Twitter, YouTube, Jaiku, Plurk and Facebook.

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"I love Twitter" photo from Lost Art of Blogging blog

OK. In my last post I noted what Twitter has done for me. But how do others use it to effect? One of the fun things to watch as Twitter has grown is how it’s gone from being a platform for marketers and techno-geeks to becoming a real communication tool for people from many walks of life. Early on (a year ago), we had lots of discussions about if people like CEOs would ever adopt Twitter. I had my doubts as there is (at least at this time) no measurable return on investment for using Twitter. Interactions online don’t generally directly yield sales. And CEOs are usually too busy to bother tweeting on a regular basis. Despite that, they’re coming online. And its fascinating to see how they’re adapting Twitter to work for them. Many people still don’t get it. There are a lot of marketers rushing to open Twitter accounts for their clients because they’ve heard that’s where they need to be. “You’ve got to be on Twitter. It’s the new frontier.” But many more ARE getting it. They understand that Twitter is for talking AT people, but for talking to them. And if you’re lucky, starting a conversation with them. Here are some examples:

Politics
Twitter was a breakout this political cycle. We saw congressmen and senators adopt the service. We saw a John McCain campaign staffer get in trouble for using the service to point people to questionable videos. But we also saw Barack Obama use the service as an outreach program. It was a big part of his grassroots organizing system. Obama became so successful at it that his was the first user account to garner more than 100,000 followers.

John McCain, on the other hand, never really got Twitter. His campaign had an account (opened by default by the Twitter folks simply to enforce a fairness policy), but only made 25 tweets and only picked up fewer than 5,000 followers.

Entertainment
Twitter may prove to be marketing gold for some people in the entertainment industry. Not as a push/sell tool so much as a community-building tool. Some accounts are actually set up and used by the entertainment personality. Many are set up by PR, marketing or agency people. In both cases, again, some people get the power of Twitter, many don’t. One case for the “don’t” category is county music star Aaron Tippin. He’s got great music, but his Twitter account proves a bit tone deaf. I’m sure it was set up by a label or PR flunkie, but it’s Grade A fail. Aaron’s account was set up in June 2008, follows no one and has only 28 followers. It also has a paltry 2 entries. One notes that they’re setting up a Twitter account. The other encourages people to go buy Aaron Tippin’s newest CD. No wonder there are only 28 followers.

On the other hand, there are plenty of celebrities using Twitter to build community and communicate with fans. Some follow back, like rapper MC Hammer, others don’t but are still very conversational, such as Heroes stars Greg Grunberg (there’s something fun about Greg posting photos of his chair on the set) and Brea Grant and Christian music artist Jeremy Camp. They don’t follow many people, but they do keep up with conversations about them and often respond to people who address them.

Business
Another fun trend to watch has been businesses getting on Twitter. They were slow to adopt at first, but they’re beginning to carve out strategies on how to effectively use Twitter. You can now contact Comcast (Comcast Cares), Zappos (a phenomenal online shoe seller, this Twitter account is actually manned by their CEO), Virgin America and The Home Depot (manned by one of their corporate communications people, but well run). Dell has become legendary in their use of social media to connect with customers, including their use of Twitter. They have some 23 Twitter accounts, including one that links to Dell employees who are Twitter users, some for work, some not. As always, some of these accounts are used well, some are just more places for PR people to push information.

In my opinion, Twitter works best when used as a communications tool. That means to put out meaningful information and respond to others as well. It also works best when it’s personal. You don’t have to be the CEO of a corporation or an entertainment star to use the “official” Twitter account (though it helps), but the communication needs to be personal. People need to feel a connection with whoever is talking for the Twitter account. Otherwise, it’s just a one-way conversation.

One final word of warning, be careful about fake users. There are plenty of people who have Twitter accounts claiming to be someone they’re not. It’s mostly done for fun, but that doesn’t make it any less painful to be tricked.

Additional info:
Jeremy Peppers’ rules for using Twitter
A list of companies, celebrities, governments and others of note using Twitter
6 Unual Entities That Tweet

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Image via CrunchBase

Do you Twitter? Twitter has blown past the three million users mark. People worldwide are checking out the benefits (and drawbacks) of microblogging 140 characters at a time. Yet, even as we begin to find new uses for the service, many people still have little clue what Twitter is and even less about how it can be useful. To help out, I thought I would write a little bit about what I’ve learn in my year on Twitter.

What is Twitter?
Twitter is a service that lets you communicate with other users online 140 characters at a time. The character limitations are a throwback to the old days of SMS when messaging (such as texting by cell phone) had the same restrictions. The hard part is it’s not always easy to say what you want in 140 characters. The good part is that it forces you to be concise in your communications. It also forces you to post comments that take more than 140 characters in more appropriate places, such as blogs. Or even to say nothing at all.

Twitter is social in that you may choose people to “follow” and people choose to follow you. Sort of like “friending” on Facebook. Then, you can choose to read the “tweets” (posted comments) of you and the people you follow. Originaly based on the simple question, “What are you doing right now?”, Twitter has evolved and now fosters not only comments on what users are doing, but conversations, obervations and helpful information.

What is Twitter Good For?
I have to admit that my first thoughts after joining Twitter were, “This is going to be a huge time sink.” and “Does this really have a productive benefit?” After a year online, I can confirm that the answer to the first item is “Yes, if you let it.” The answer to the second question is an overwhelming “Yes!” In the last year, I’ve used Twitter to help me find new acquaintances, meet the people on the cutting edge of the social media movement and get answers to questions. On several occassions, I’ve found my followers have been able to help me with mySQL and ASP.NET code challenges. When I went to Podcamp Nashville in the fall of 2007, I knew about 2 people there from past jobs and about 3 I had met through Twitter in the month or so I’d been on it. When I attended Barcamp Nashville this summer, I knew about 5 people from school and past jobs. I knew more than two dozen through Twitter or other social networks (or events I had learned about through social networks). Through Twitter, I’ve even made new “real life” (sometimes called IRLs or “in real life”) friends and possible future business partners.

Another cool use of Twitter is to observe “back channel” chatter during major technology events, such as Barcamps, Podcamps, Startup Weekends, and even SXSW. Attendees carry on conversation on Twitter to discuss presentations as they’re occuring. They also disseminate information to people who can’t attend, spreading the knowledge and fostering new discussion.

Oh, and the time sink thing? If you’ll push through the learning curve of how to use Twitter, you’ll develop a use pattern that you can use to keep Twitter from being a time sink.

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Image by Getty Images via Daylife

I definitely have a love/hate relationship with politics. After years of following “the game”, I’ve come to realized that I actually dislike politics, for the most part. Probably because politicians are frustratingly out of touch. But I do have to admit that I love the competitiveness of the races and the challenge to get your/my/our ideas out there and accepted by the public and by politicians. I also love to watch the plethora of marketing activities, both good and bad.

In some ways, I could see myself enjoying working for a political marketing firm – especially in the digital area, where so many campaigns are lagging behind in understanding. On the other hand, I think I’d be frustrated at the inability of campaigns to define and cling to their core values – something I think is sorely lacking in politics right now.

I actually followed closely the races to win the party nominations on both sides – Republican and Democrat. I discovered POTUS ‘08 on my XM radio and was addicted to it through the primaries. However, as soon as both parties had their candidates, I completely weened myself from the election. I wasn’t jazzed by either candidate and just needed a break. Here in the last 3 or 4 weeks, I’ve paid more attention again. However, mostly to watch how the campaigns carried out their marketing. With a quick disclaimer that I consider myself a libertarian-republican and don’t have an axe to grind for either side, here’s what I’ve seen.

Barack Obama has done a fantastic job all around. His message all along has been simple: Change. He forced Hillary Clinton to adopt that message to try and compete in the primaries, then beat her with it. Likewise, McCain tried to adopt the theme of change early when it was apparent it was ringing true with voters. It worked in the primaries, but he just couldn’t make it play against Obama, who originated the Change message in this election cycle.

Obama has a great website, both attractive and well built. When you enter, it focuses on their single message: Change, and then as you go deeper into the site it delivers more information. Obama has also done a pretty good job with onine tools such as Twitter. His is the first account to break the 100,000 followers (people following his online posts or “tweets”) barrier. (You can read more on Obama’s use of social media in the campaign here.)

No matter if you like or dislike Obama, you have to give the man and his team props for delivering to the American electorate a message that they so badly wanted to hear. And delivering it in a believable fashion. He’s managed to get in negative jabs when necessary, but still delivered an overwhelmingly positive campaign. He’s given enough specifics to make his message “real” and understandable for the average person without putting them to sleep. Even his infomercial grabbed people’s heartstrings and fired their imaginations and belief in him. Afterward, it seems so many people forgot this was a commercial, not a documentary. It was trying to sell something and viewers wanted to buy, so they went for it hook, line and sinker. From a marketer’s point of view, his campaign has been the poster child of the point of Seth Godin’s book “All Marketers Are Liars.”

On the flip side, John McCain abandoned the “Change” campaign message (more or less) when it was obvious he couldn’t compete with Obama on it. He still talks about changing Washington, but it’s not the tagline for his campiagn. His signs, stickers and website instead promote the message “Country First.” It’s a simple slogan, but not a simple message. It has a couple of problems. First, it plays into the Democrats charge that Republicans are isolationists. Second, it’s not a universal message. In a time when we have an incredibly unpopular president AND congress, “Change” means something (generally the same thing) to just about everyone. “Country First” is rather subjective and a bit unclear. McCain has a very attractive website, but the visitor is hit with too many messages from the get-go. There’s lots of great info and resources on the site, but a good website needs to “funnel” the user to where they want to go. There’s just too much info to process at once from the beginning of the McCain site. And McCain is on Twitter too, but only by default and someone else’s actions. (His campaign’s past indirect Twitter interaction ended badly.) That’s too bad because The Mac is missing out on a world of digital interaction. Talk about going “grass roots”!!

McCain supporter or not, objectively I don’t think you can give him and his team as much credit as Obama’s. He just hasn’t found a message that resonates with the people. He’s found a couple recently that resonate well with his base and may help bring a few defected Republicans back into his column, but mostly they’re too little, too late. McCain’s also gone negative, which is necessary, but he’s done it in a way that doesn’t leave you with a positive message from his camp at the end of the day. And I don’t think he’s given enough specific information about his plans. He’s given some, but they’re not things that people remember and buy into. Most of the statistics I hear people quoting from the McCain campaign are related to his attacks on Obama’s plans. It’s really hard to be FOR a guy who seems to mostly be AGAINST someone else. In the end, I don’t think McCain’s campaign has been “bad” per se, but they remind me of the Texas-Texas Tech football game last weekend. Obama and his team have simply outplayed McCain. Like Texas, McCain simply doesn’t look like a #1 team who deserves to win.

Setting a price for your products or services can be a real challenge for entrepreneurs. What’s a good price that will attract customers, but still deliver an attractive profit for the business?

In past decades it wasn’t quite as much of a struggle. Businesses would frequently just use simple formulas. Cost plus x% for profit margin gives you a price. Want to be the cheapest? Just price your product x% lower than your competitors (without taking a loss). Formulas can still be extremely helpful, but we have a myriad of additional options, features, prices, sizes, colors, flavors and even peer pressures to consider that weren’t as much of a factor in the past.

This is the challenge I’m facing right now. I’ve got a product I designed a year ago and put on the shelf, ironically enough, because of pricing issues. My profit margins appeared to be just pennies if I was going to price my product competitively. However, it’s such a fun product that I’m revisitng the business model again. Has anything changed? Yes, me! I’ve come to realize that I’m offering something different, so I don’t necessarily have to reflect the pricing structure of the big, established brands. In fact, not doing so will help to differentiate my product even further.

Another option would be to find a way to bundle my new product with some other product(s) that are inexpensive for me to buy, but carry a higher perceived value. We used to do this all the time at another company I worked for. We could package our products with cassettes or CDs that we bought for less than $1, but carried a list price of $9.99 & $14.99. Suddenly, our $20 product was worth $40 or $50 as a package, but our cost was only a couple dollars more than the single product alone.

So, with a couple more hurdles to leap, it looks like I may be able to finally roll out this fun product. So, what’s my pricing strategy going to be? I’ll be using both of the above strategies – x% markup initially and find items to bundle to improve value and profitability. Wish me luck!

One more thought, I’d rather price a bit to high initially than too low. Why? It’s harder to increase your pricing without a good reason for your customers – especially if your product is fairly new (see iPhone). Permanent price reductions (not temporary discounts) are always welcome by customers.

Do you have a set pricing strategy? Feel free to add a comment and share it with us.