I think many businesses don’t value their customers enough. Customers are a precious resource that needs to be treasured. I will be the first to admit that there are some customers that you do need to get rid of. There are those that are plain toxic to deal with. Then there are those that won’t or can’t pay you. Many times patience and persistence can turn these into good customers.

There is another group. Those that take more of your time than you can justify for what you are being paid. What about these? Rather than fire these customers, consider raising your price.

Raising Price Rather Than Saying No

I go back to a time early in my career over 30 years ago. I worked for an aluminum sporting goods company. The owner of this company was also a great mentor to me. His philosophy was to increase the price rather than turn away a customer. Here is the story.

They did precision tube drawing for outside firms on the same equipment that produced the aluminum products. An aerospace company brought in a job for us to do every year. This was tight tolerance stainless steel precision work that was used in military projects.

Many of the employees and managers complained because the jobs were difficult to do and the company lost money every time. They wanted the owner to “fire the customer”. Instead the owner went back to the customer and told them the price would be double on the next order.

The next year, the customer came back and ordered again. We produced the order. We then doubled the price again.

The next year the customer came back. We doubled the price.

Again the customer came back. By this time the job was highly profitable. The customer was happy because the price they paid us was only a small fraction of their overall cost. Quality and precision was more important than price.

With increased revenue we developed new and better methods to produce this product even easier. This new process allowed the company to develop a new line of products that had a better performance.

The lesson I learned was to increase prices if capacity was scarce or a type of job was too difficult. It is better to have a customer not order from you due to price than for you to refuse to do business with someone. Many times your own prices may have been set too low and that is not the fault of your customer.

Recessions may create unemployment, but they also create opportunity. New businesses are being started by those that have lost their jobs. The web is where most new businesses are investing their marketing dollars to attract new customers.

How can a new start-up business best lever the power of the Internet?

1. Strategy: This is your “who, what why” for your marketing. Decide who are you trying to market to? How do they make their buying decision? What are you marketing and how is that different and better than what your competition offers? Why should they buy from you? If you know the answers to these questions, you are ready to create a “focused” marketing campaign.
2. Branding: Choose a domain and business name that matches. This makes your business name more memorable. The domain should be a .COM. Over 73% of all domain names in the US are .COM. To appear credible, you need a .COM.
3. Website: Put up a website that gives your business a credible image, The look and feel should be consistent with your industry. Your website needs to answer the questions your potential customers are searching for. Put yourself in your visitor’s shoes. Why did they come to your website? They came looking for answers. You should supply these answers.
4. Mobile: Your website needs to render well on cell phones, smartphones and ipads. Test out your site. You may need to display a mobile version of your site when it is being accessed by a mobile device. This is easy to do if you have a knowledgeable web company building your site.
5. Google Places: These listings are free for any business that has an actual physical location. These are the 7 Google Map listings that appear when doing a search for local businesses. More on how to create a Google Places listing.
6. Local SEO: Apply local SEO to your website so it will come up quickly when someone does a search for you on Google. Usually this means optimizing your website for your “city + a broad keyword phrase”. More on how to optimize your website for local search.
7. Social Media: FaceBook is and will continue to be the #1 social networking website on the web. According to Alexa, it is the #2 most visited website in the World (after Google). The impact of this is that any business engaged in social media marketing, should have a presence on Facebook.

How likely are your customers to give your name out as a referral? A good measurement of this is called the Net Promoter Score. Net Promoter Score (NPS) is a customer loyalty measurement. NPS measures how likely are you to recommend a product or service to a friend.

Net Promoter Score was created by Satmetrix, Bain & Company, and Fred Reichheld. The concept was first popularized through the book “The Ultimate Question”, and has since been used by many as the standard for measuring and improving customer loyalty.

Net Promoter Score is a client loyalty survey that centers on just a single question. How likely are you to recommend something to a friend or colleague? This something could be a company, a brand, a product or a specific service.

The responses are collected on a 0-10 scale where 0 is extremely unlikely to recommend and 10 is extremely likely to recommend. Someone giving a 9-10 score is considered a promoter. Someone giving a score of 7-8 is considered Neutral (or Fence Sitter). A person giving a score of 0-6 is considered a Detractor. “Detractors” are unhappy customers that feel trapped in a bad relationship.

The Net Promoter Score is simply the percentage of Promoters less the percentage of Detractors. Knowing your percentage is an easy way to understand how you stand in your customers’ eyes.

Outstanding firms will have 50-80% scores. Average firms seem to fall into the 5-10% range. Poor firms will have negative scores.

This is something any business can do. Just send out an email with every completed order with a link to a one question survey. Survey tools like Survey Gizmo already allows you to calculate NPS using their surveys.

You want to rename your business, but will you lose your customers? This is a common dilemma that many businesses struggle with. I faced this with my own company and this is my story.

I originally started my company doing business consulting back in 2002. I named it Doug Williams and Associates. Working on my own website, I became very good at doing search engine optimization. My consulting clients soon wanted help with their websites and my business grew in this direction.

Six years later, I had a dozen employees and my company became a thriving Internet marketing business.  I struggled with our name because when people first heard it, they wondered if we were an attorney firm, or possibly accountants? They never suspected we were an Internet marketing company.

I decided to rename our company name to Alesco Marketing and brand ourselves as a full line Internet marketing company.  Alesco is Latin meaning to grow or increase. Now the hard part, how to change my name without losing customers. Here is what I did.

Start with a DBA. I wanted to start by using Alesco Marketing so my current customers would start getting used to the new name. I went to our state and set-up a DBA and began using the new name alongside our Company name: Doug Williams and Associates, Alesco Marketing.  I also trademarked Alesco Marketing , which you can easily do online.

New Corporation. After a year of this, I set-up a new corporation, Alesco Marketing, Inc. On January 1 of this year we became Alesco Marketing, Inc officially. I still work to create and association between the old name and the new name by referring to ourselves as Alesco marketing Inc, A Doug Williams company.

Other things you can do:

1. Forward your old website URL to your new one.
2. Send letters, postcards and emails to your customers telling them about the change and why you did it.
3. Send out press releases to help spread the word.

Even though we did all of the above,  I still confused my customer base and people are still learning the new name. Our new name is building its own reputation and its own following. Within a year, this change should become a distant memory.

Did I make the right decision in changing my company name?  Absolutely.

Branding is how you make your company memorable. Your logo is a visual icon of your branding. You use your logo on your website, business cards, letterhead, brochures and in your email. A great logo is memorable, creates a visual impact and helps your company become easily remembered. So, what makes a great logo?

It is simple, distinctive, represents the company and has the illusion of action.

1. Simple means that it is not overly complex, can be reduced to a small size on a business card and doesn’t have many complex and competing elements. Simple also means good contrast and a bold look.
2. Distinctive means being unique and memorable, graphic (not just letters), not being cluttered in look and something that has a unique look. The colors, shape and font should be used in combination to help the business stand out and not blend in.
3. Represents the company and is meaningful and appropriate for the company.  It should have permanence so it won’t have to be changed.
4. Illusion of action means the logo has the appearance of motion and doesn’t just sit there. The challenge here is to keep it simple while still showing action.

A simple great logo may not be easy or quick to create, but it is powerful in your company’s branding for marketing strategies or Internet marketing.

Online

1. Turn your website into a lead generation website with an email capture form.
2. Use A/B split testing to improve your website and PPC conversions.
3. Offer your prospects a free ebook or report if they opt in
4. Interact with website visitors by supplying valuable information using auto responders.
5. Add a clear call to action on your website such as “Request a Quote”
6. Do educational email marketing to your list.
7. Publish a weekly newsletter with “how-to tips”
8. Market new products to existing customers and to your email list.
9. Purchase leads from other lead generation websites
10. Optimize your website for more targeted traffic.
11. Advertise on the search engines (PPC advertising)
12. Write a blog (business blog marketing).
13. Write articles and post on article syndication sites.
14. Put on educational events through the Web (webinars)
15. Advertise on other websites using affiliate marketing.
16. Encourage past customers to write testimonials on Yelp, Google Maps, etc.
17. Encourage WOM advertising through social media (Twitter, a Facebook page, etc.)
18. Utilize social bookmarking on Reddit, Dig, Delicious, StumbleUpon, etc
19. Participate in forums to build authority, relationships and leads.
20. Video marketing is a great way to connect with people.
21. Advertise on Facebook.
22. Develop followers on Twitter.
23. Be an educator on Linked-In Answers

Offline

1. Use multiple sources for acquiring leads.
2. Direct mail post cards or sales letters
3. Follow up with existing customers every 90 days.
4. Use a follow-up tool such as a post card or note card
5. Hire a commission only sales force.
6. Speak regularly at business or trade events.
7. Put on a seminar or workshop
8. Print advertising (newspaper, magazines, trade journals)
9. Advertise on local cable TV.
10. Advertise on radio by purchase cheaper remnant advertising
11. Join a lead referral group
12. Be active in professional associations and your local chamber of commerce.
13. Encourage referrals from current customers.
14. Develop strategic Alliances and referral channels.
15. Offer payment for referrals to partners in related industries.
16. Customer complaints can, and should be treated as opportunities.
17. Publish regular press releases
18. Make cold calls
19. Distribute door-to-door flyers.
20. Become a community volunteer.

Every business strives to be better than average. It is the American way. So, what is “average” for a business? I wanted to identify some benchmarks of what “average” is… so I went searching on Google for facts about businesses and this is what I found.

1. Average annual sales are $4 million. The average business has $4 million in sales. According to the US Census Bureau (2007 data published 2009) there are 7.2 million businesses in the US. The two largest sectors of these businesses are retail (15%) and Professional services (12%).
2. The average annual revenue of a small business is $3.6 million according to Entrepreneur. The average annual revenue of a small business with a website is $5.03 million. (entrepreneur)
3. The average business has no employees. Although the average across all businesses large and small is 16 employees. About three quarters of all US business firms have no payroll. Most are self-employed persons operating unincorporated businesses. So the average business has no employees. This is according to US Census information.
4. The average small business doesn’t have a website. According to a WebVisible and Nielsen Online study, only 44% of small businesses have a website. The percentage increases with the size of the business. Of businesses with revenues of $10 Million to $500 Million in size, 84% have websites.
5. The average small business operates at a loss for the first three years of its existence. (from wiki.answers.com)
6. The average and median age of company founders when they started their current companies was 40. (kaufman.org)

Totaling up numbers to come up with averages may give a distorted view of what is actually going on, but they are fun to look at.

How should a business owner decide on how much money to spend on advertising? What is considered normal? Advertising costs are a completely controllable expense but they should create a return on your investment. How much advertising is enough?.

Each industry will tend to spend a different amount of their sales revenue on advertising. To stay competitive, you tend to follow what is typical for your industry. Companies with higher profit margins will tend to spend more. New start-up companies will need to spend more to get noticed.

The three common methods for advertising budget setting:

1. Percent of sales based on industry averages
2. Percent of sales based on gross profits
3. Based on last year’s advertising expense

Industry Averages: Find out what is typical for your industry. Schoenfeld & Associates consultants of Lincolnwood, Illinois published their study on typical advertising spent by industry. Numbers are a percent of sales revenue.

• 1.3 %    Grocery stores
• 4.0 %    Lawn/garden
• 5.0 %    Education
• 5.1 %    Computers
• 5.3 %    TV, radio, electronics
• 5.7 %    Catalog, mail order
• 5.8 %    Retail stores
• 8.6 %    Investment advice
• 10.4 %  Cosmetics
• 11.0 %  Memberships
• 14.2 %  Toys
• 14.5 %  Cleaning supplies

Gross Profit Margin: Many businesses will allocate their advertising budget based on their gross profit. The following are typical retail store spending on advertising (% of sales) vs. gross profits.

• 1.5%  21% gross profit
• 3%     30% gross profit
• 5%     41% gross profit
• 7%     50% gross profit

Last Years Budget: Established companies tend to estimate next years advertising budget based on what happened last year and what they need to change for the coming year. If you have new products to launch, factor in expenses for these campaigns. You can also shift your marketing mix from traditional media to more cost effective Internet marketing.

To battle rising advertising costs, many companies are shifting their marketing efforts over to the Internet. According to a Forrester Research study 60% of marketers surveyed will increase their Internet advertising budgets by shifting funds from traditional media. Direct mail was cited by 40% of marketers as being one being cut, outranking newspapers (35%), magazines (28%) and television (12%).

Dare to be different and break out of the “plain vanilla marketing” trap that so many businesses fall into. You will never be able to beat your competitors if your customers can’t tell you apart.

Try this… take the marketing message of your 5 top competitors and remove just their name, logo and any brand names. Compare them. I’ll bet they all sound almost identical. If you can’t tell the difference, think about how confused your customers are.

You have to give interested prospects a reason to buy from you. Find key differences between yourself and your competitors.

If you don’t see any real differences, create them. Think about what your customer is seeking that your competitors do not offer. What is your USP (unique selling proposition)? What are ways you can make your company unique and different?

1. Offer an unconditional money back guarantee. Use this to remove perceived risk. Couple this with an A+ BBB rating and you create trust.
2. Deliver faster: Figure out your industry standard and then develop a way to beat this. Ideally you would want to have the fastest delivery in your industry.
3. Free shipping: Offer free shipping or a free upgrade to next day shipping.
4. 24/7 customer service: Offer accessibility so you are reachable anytime your customer need you. It is about meeting their convenience and needs.
5. Offer more: Give more in a package, include bonus offers or give something extra. Costco is a master of this.

If your product is superior, then tout the differences. The key is to stand out in a crowd.

Figure out how to be a leader in your market. What is it that you are best at that would be important to a prospective customer? Market this difference(s). People will buy based on the important differences.

Now is the time to grow your business while others are just waiting for the tough times to pass. Opportunities abound with many of your competitors going out of business or at least in deep hibernation. You just need to understand that yesterday’s tactics no longer work in today’s marketplace. These are the steps you should follow.

Reassess: Your market has probably shifted. Which of your products, markets and customers are the most profitable and have the greatest growth potential? This may mean getting rid of services and products or even customers that are not profitable or ones that consume large amounts of your time without a payoff.

Shift: Focus your marketing budget on advertising that provides the greatest value and results. For most businesses this means shifting away from traditional advertising to online advertising. Update your existing website or add a new niche website for a business segment you want to focus on.

Optimize: Where ever you are spending your marketing budget, optimize for maximum results and return on your investment. Optimize your website for organic search. Optimize your PPC campaigns with landing page design and test different ads. Optimize radio ads and measure leads from each commercial.

Create a Buzz: Promote your business using non-advertising methods. Build your own PR campaigns to announce new products or company directions. Publish your own press releases on sites like prnewswire.com. Start a blog. Add your company to Facebook.

Measure: Your bias has to be toward results. The nice thing about the web is that everything is measurable. Don’t be afraid to try new things as long as they don’t require large investments and long term commitments. If something doesn’t work, then stop and try something else.