Friday, September 24, 2010

Why Acquisitions Fall Apart

Serial entrepreneur John Warrillow speaks with Beringer Capital's Perry Miele about what drives a buyer to walk away from a deal. By John Warrillow

Sep 24, 2010 http://ow.ly/2JsUG
Recently I wrote about how the private equity firm Riverside Company closed on only 15 of the 4,228 acquisitions it considered last year. That means there were a lot of deals that fell apart.  Why such a high failure rate? I turned to Perry Miele, the chairman of Toronto-based Beringer Capital, for his opinion. Miele makes his living buying, selling and occasionally investing in companies in the marketing, communications and media industry.

Missing your numbers

“The number one reason deals fall apart is missing your numbers leading up to closing day,” he says.

Miele shared the story of a client who was keen to fetch top dollar for his company. The founder and CEO put together an ambitious set of growth projections for the year, forecasting his company would generate $2 million in pre-tax profit on $7 million in revenue.

Beringer shopped the company to a number of buyers. Given its recent growth and profitability, Miele had several interested companies make attractive offers. The CEO agreed to one offer and entered a 90-day period of due diligence during which the acquiring company had exclusivity to investigate the CEO’s claims without other companies making bids.

As it turns out, the CEO was well behind on his numbers and was actually on track to deliver just $1.3 million of profit on roughly $6 million in revenue. Surprisingly, the acquirer was still interested but adjusted down its offer price to reflect 35 percent less profit than was promised in the CEO’s forecast.

The seller had already become attached to the higher offer and was insulted at the last-minute discount. He walked away. By that point, the other bidders were long gone. And so the deal died.

What is Miele’s advice to sellers? “Leave yourself a cushion when doing your forecasts for the year you are planning to sell. The only surprises a buyer should have when they dig into your numbers are pleasant ones.”

Gross margin erosion

Next up in deal killers: shrinking margins.

“Top-line revenue growth is often the price of admission in selling a company,” says Miele.

But in Miele’s view, it is not acceptable to grow at any cost. You need to grow sales while simultaneously maintaining or growing your profit margin.

Miele shared a story of a client of his running a successful company generating $2.4 million in pre-tax profit on $12 million in sales.

The company generated lots of initial interest when Beringer put it on the market, but one thing in the financials stopped each buyer short of making an offer: the company had been buying new business. Despite growing revenue at an annual rate of 5 percent per year, its profit was stuck.

The prior year, the company had generated $11.5 million in sales and $2.4 million in profit. In fact, despite growing sales each year, the company’s profit was frozen at around $2.4 million for six straight years.

Potential buyers saw the profit margin erosion and walked away, reasoning that the industry had become too competitive to grow and the company had not differentiated itself to the point of having any pricing power.

Perry’s advice? Make sure your top line is growing but also ensure your profit margin holds up in the process.

John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He writes a blog about building a sellable company at http://www.BuiltToSell.com/blog. You can also follow him on Twitter at @JohnWarrillow

Kevin Brown - www.kbsinsight.blogspot.com

Friday, September 17, 2010

When Should You Nickel-and-Dime Your Customers?

By Rebecca W. Hamilton, Joydeep Srivastava and Ajay Thomas Abraham September 8, 2010 MIT Sloan Management Review http://ow.ly/2FUqR

Every manager who’s ever set a price has had to wrestle with whether to “partition” the elements — charge separately for such things as shipping, installation or warranties — or to bundle everything into one price. Here’s how to decide.

If you’ve spent time at an airport recently, you’re likely to have overheard a conversation between a surprised non-frequent flyer and a ticket agent about fees for checked luggage. That exchange may have been a loud one if the airline was charging $25 (or more) per bag. Although charging separately for luggage allows airlines to advertise lower ticket prices, potentially increasing sales, incorporating baggage fees into the ticket price might increase the satisfaction of customers en route as well as raise the retention rate of check-in counter agents. And therein lies the rub.

When should a company “nickel-and-dime” customers by charging separately for various extras, and when is it better to keep things simple by combining all of the charges into one total price?

Before answering, consider another example: The price of wall-to-wall carpeting may or may not include the cost of installation or delivery to the customer’s home. Given that most customers neither own a vehicle large enough to transport a living-room–sized piece of carpeting nor have any desire to rent one, delivery is, for all intents and purposes, a required component of the purchase. If nearly all customers will be buying both carpeting and delivery, should the price of the carpeting include delivery or should the company charge for it separately?

On the one hand, assigning a separate dollar value to the delivery component would decrease the price per square foot that the company charges for their carpeting, making its prices appear more competitive when customers comparison shop. Charging separately for delivery also might increase the perceived value of the delivery service to customers and discourage absenteeism when the delivery truck is scheduled to arrive. On the other hand, if delivery is something customers really dislike paying for (like other shipping and handling charges), they might be much happier with the overall transaction if delivery charges were included in the price. Including free delivery could even increase the likelihood that they become repeat customers.

Although standard economic theory dictates that customers should be just as willing to purchase carpeting priced at $500 plus delivery priced at $100 as they are to purchase carpeting with free delivery priced at $600, recent research suggests that price partitioning — the manner in which a total price is divided into components — affects customers’ price perceptions, their willingness to purchase and even their likelihood of repurchasing from the same vendor. The challenge is that when it comes to price partitioning, unfortunately, one approach does not fit all. Whether the strategy of nickel-and-diming your customers or the strategy of “keeping things simple” is more effective for a specific transaction depends on a variety of factors, such as whether customers comparison shop; whether customers are more sensitive to the prices of some components (delivery) than to others (carpeting); whether the price of one component is small or large relative to the others; whether the company controls the costs and quality of a particular component; and which components are most central to what the customer wants.

In this article, we provide managers with a decision framework for price partitioning. We start by assuming that a decision about the total price has already been made, based on both the costs and market demand for components, such as carpet and delivery services. Our focus is on the next step: whether the cost of the individual components (carpet and delivery) should be broken out separately or whether the customer should be presented with just one price, with one of the components (delivery) being offered as “free.” Our decision framework provides a step-by-step approach for managers to decide whether it will be more effective to highlight specific components by pricing them separately or to minimize the focus on specific components by charging less for them or including them in a combined total price.

Before presenting the decision framework, let’s summarize the advantages of partitioning prices, the advantages of combining prices and the strategy of benefits-based price partitioning.

Nickel-and-Diming Customers: The Case for Partitioning Prices

If you’ve looked closely at your phone bill recently, you’ve probably observed that your fee for monthly service isn’t all you’re paying. In addition, you’re paying various taxes and charges that the phone company adds on. In the United States, these include a 911 fee, state and federal taxes, and a federal subscriber line charge.

Similarly, many online retailers charge separately for the products you order and for shipping, even when they know with almost 100% certainty that you won’t be coming by their warehouse a few states away to pick up your purchase. These are examples of partitioned pricing, in which the total price of a product or service is divided into two or more mandatory components. Although the customer is required to pay for all of the components, a separate price is listed for each one.

Research suggests several reasons why the phone company and other sellers might use a partitioned pricing strategy rather than quoting their prices using a single combined price. First, consumers tend to focus on the base price they are quoted (the monthly phone service fee) rather than the ancillary fees that boost the total price. And the research suggests that consumers mentally process the base price more thoroughly than they process other components, such as taxes and fees. Thus, when consumers try to recall the total price (the combination of the base price and other components) after seeing a partitioned price, they tend to recall the base price accurately but forget about the other components, thereby remembering a lower total price. That is especially true when the base price is much larger than the other charges, which seem minor in comparison.

A second reason partitioned pricing may be attractive to sellers is that pricing components separately may position their products more favorably when consumers comparison shop, especially when they shop online. Although hotel bills often spill onto multiple pages at checkout with the long list of fees and taxes added to the room price for each night, consumers usually decide where to stay based on the room price that’s quoted to them online or over the phone. Because the norm within the industry is to quote partitioned prices, hotels using partitioned pricing rather than combined pricing are — all other things being equal — likely to attract more guests when consumers comparison shop. If one hotel chose to quote a combined price, including the room price and all of the mandatory taxes and fees, while its competitors quoted the room price without taxes and fees, this hotel’s prices would be perceived as higher.

Finally, a partitioned pricing strategy may help sellers avoid being blamed for charging high prices. The airport taxes and fees that are added on to your airline ticket price are not perceived to be going into the pocket of the airline but into the airport’s coffers. Especially in a tough economy, using a partitioned pricing strategy may help companies recoup their costs when it’s not easy to justify raising prices. When fuel prices go up, a specific fuel surcharge helps to facilitate a “we’re all in this crisis together” mentality rather than the perception that the airlines don’t care how much their prices are squeezing consumers. Partitioning makes prices seem more transparent to consumers, potentially increasing the degree to which they trust the retailer and the perceived fairness of the transaction.

Keep It Simple: The Case for Combining Price Components

So the advantages of price partitioning imply that, as a manager, it’s better to offer a low base price and then hit consumers with a litany of small fees at checkout, right? Not so fast, say researchers who study a phenomenon called “shipping-charge skepticism.” Experimental research shows that some consumers strongly dislike paying for shipping. For those consumers, offers that include shipping in the total price are more attractive than offers that partition the price of the product and shipping into separate components. Data from customers using shopping bots (computer programs that search Internet commerce sites for the best prices — Google Inc.’s Froogle, would be an example) — to purchase books online has demonstrated the same effect. Customers were found to be almost twice as sensitive to changes in shipping charges as they were to changes in the price of the books they were purchasing. This analysis suggests that combining shipping charges and the price of the books makes consumers willing to pay more for the bundle, making combined pricing more advantageous than partitioned pricing.

Under what conditions do combined prices make consumers more satisfied or willing to pay more than partitioned prices? In contrast to the examples of partitioned pricing (telephone and hotel bills), the prices for two different components of a product or service are often combined: Books or shoes ordered online may be shipped for free, new kitchen countertops are sometimes sold with free installation, and new cars may come with a five-year/50,000-mile warranty. The fact that combined prices are common in the marketplace suggests that, under some conditions, it must be advantageous for sellers to take this approach.

One reason for combining prices is to avoid highlighting components such as shipping charges that consumers would rather not think about, or a warranty that might make reliability more of an issue. For example, research conducted by one of the authors shows that when a consumer is considering the purchase of a refrigerator, partitioning the price of a warranty raises more concerns about the appliance’s reliability — hurting purchase likelihood — than partitioning a different component, such as an icemaker.

Another reason for combining prices is to be upfront with consumers and avoid surprising them later with fees that may upset them, ruining customer goodwill. A resort stay that costs a lot more upon checkout than the customer expected may not be remembered favorably the next time the customer goes online to make reservations. Resorts like Club Med offer all-inclusive prices to help consumers relax while they’re on vacation. In a sense, this combined pricing strategy decouples the pleasure of consumption and the pain of paying, allowing consumption to be savored more fully. The price of a stay at Club Med may be high, but repeat business is good because consumers know the price upfront, and they aren’t reminded of the costs every time they enjoy a resort amenity or surprised at checkout by a long list of charges for the amenities they already enjoyed. This kind of goodwill may be why Southwest Airlines Co. recently advertised its “Freedom from Fees” policy, differentiating itself from airlines that add on fuel surcharges and charge fees for checked baggage. (It also eliminates all that yelling at the ticket counters.)

A Contingent Approach: The Strategy of Benefits-Based Price Partitioning

Although most managers are familiar with the concept of selling benefits — not features — in their marketing communications, this concept hasn’t been adopted as widely in the area of pricing, and particularly price partitioning. In this section, we describe why the approach of benefits-based price partitioning — pricing components based on customers’ sensitivity to the price of each component — can be a win for both managers and customers.

One of the reasons cost-plus pricing has continued to be popular among managers is that it has the advantage of being perceived as fair by consumers. Research indicates that customers believe companies are entitled to a reasonable profit margin and that cost-based price increases to preserve a company’s profit margin are fair, but they feel morally outraged when companies opportunistically increase prices to increase their profits. A classic article by Nobel Prize winner Daniel Kahneman and his colleagues illustrates this principle by showing that customers believe a cost-based increase in the price of snow shovels is fair, but a demand-based increase in the price of snow shovels during a snowstorm is unfair. Similar to cost-plus pricing, when managers use cost-plus price partitioning with a uniform profit margin across components, it is straightforward to justify why a specific price is being charged for a particular component.

However, keeping your profit margin constant across price components may not maximize either profit or customer satisfaction. Recent research we conducted shows that customers are more price sensitive for components that they feel provide them with less benefit (“low-benefit” components, such as installation or shipping) relative to components they feel provide them with more benefit (“high-benefit” components, such as auto parts or books). In other words, customers are happier to pay for some components (auto parts or books) than for others (installation or shipping). Thus, for customers buying books online, a price partition in which the profit margin on shipping is low — or even negative — and the profit margin on books is high will be systematically more attractive to customers than a partition of the same total price in which the profit margin on shipping and books is the same. Taken to the logical extreme, this strategy suggests that customers prefer combined pricing in which a component they don’t like paying for is included in a single total price, rather than partitioned pricing in which they pay some proportion of the total price for each component.

In contrast to a strategy in which the same profit margin is expected for each price component, benefits-based price partitioning suggests that profit margins should be higher for components for which customers are less price sensitive and lower for components for which customers are more price sensitive. By holding the total price constant, research shows that customers will be more likely to buy when components they don’t like are de-emphasized (either by decreasing their profit margin or by combining them into a total price) and components they do like are highlighted (either by increasing their profit margin or by partitioning them from other components). It’s hard to argue against a strategy that improves outcomes for both the seller (by increasing customer purchase intentions) and the customer (via greater customer satisfaction and perceived value) while keeping the total price constant.

A Decision Framework for Benefits-Based Price Partitioning

Given all this, a manager who is responsible for pricing products may ask which is the better approach: partitioning prices or combining prices? In this section, we provide guidelines based on empirical research with consumers for deciding which will be the more effective approach for a particular case. Important decision factors include whether consumers tend to comparison shop; whether competitors partition or combine prices across components; whether any of the components evoke negative emotions (such as anger inspired by shipping charges or worry triggered by charges for a warranty); whether the delivery, quality and costs are controlled by the company; and whether the components are aligned with specific goals of the customers being served (such as meeting the need satisfied by a new product or providing compensation for a beloved used car being traded in).

The discussion that follows is based on the numbered decision points in the decision tree.

Decision 1: Is the consumer already committed to making a purchase from you?

Yes: If consumers have already committed to making the purchase from you, price partitioning will have less influence on their decisions. For example, in the case of long-term customer relationships, research on customer satisfaction shows that more- satisfied customers are less price sensitive. However, price partitioning can still affect the consumer’s satisfaction with their purchase. Go to Decision 6.

No: If the consumer has not yet committed to making a purchase from you, and is likely to comparison shop, price partitioning is much more critical. Price partitioning creates lower price perceptions than combining prices, making comparisons with competitors more favorable. Go to Decision 2.

Decision 2: Given that the consumer will engage in comparison shopping, do competitors partition prices?

Yes: There are often norms within a particular industry or even a particular purchase context concerning which components are priced separately. For example, the cost of shipping a book to the customer is typically partitioned when a customer buys a book from Barnes & Noble Inc. online, but the cost of shipping a book to the store is typically included in the price of the book when the customer buys from a local Barnes & Noble retailer. These norms serve as customers’ internal reference prices for specific components. Customers’ internal reference prices will affect the prices they are willing to pay for specific components, the price they believe it is fair to charge for these components and their perceptions of the component’s value for the money.

If the industry norm is to partition the price of a component, as in the case of the airline industry’s and hotel industry’s almost universal partitioning of taxes from fees for services, pricing components separately will position products more favorably when consumers comparison shop than using a combined price.

However, when consumers strongly dislike paying for certain components, it can be a good competitive strategy to include fees for these components in a combined price. Breakaway companies like Amazon.com Inc. were among the first to offer free shipping on at least some orders, and many companies have followed their lead. Knowing that consumers don’t like paying extra fees for baggage and other airline services, Southwest Airlines has bucked industry norms with its “Freedom from Fees” campaign. Go to Decision 5.

No: If the industry norm is to combine prices, as when family-oriented restaurants sell entrees with side dishes included, partitioning may be perceived as nickel-and-diming customers, even if the partitioned prices appear more attractive relative to competitors’ prices. Go to Decision 3.

Decision 3: Is the price of the component small relative to the price of other components?

Yes: If the price of the component is small relative to the price of other components, consumers do not seem to weigh the price of the small component as much as the price of a relatively larger component. For example, research shows that eBay Inc. bidders do not bid significantly less when the required shipping charges for an item are high than when they are low, suggesting that they are not fully accounting for shipping costs. Moreover, when asked to recall prices, consumers tend to underestimate the total price when the prices of the components are partitioned relative to when the prices are not partitioned. Recommendation: Nickel-and-dime your customers by partitioning prices. END.

No: If the price of the partitioned component is large relative to the price of the other components, partitioning becomes less effective than when the price of the partitioned component is small relative to the other components. For example, when study participants compared a $49.95 product price + $5 shipping charge with a combined price of $54.95, they preferred the partitioned price. In contrast, when they compared a $49.95 product price + $25 shipping charge with a combined price of $74.95, they preferred the combined price. Put simply, large partitioned components are less likely to be ignored than small partitioned components. Go to Decision 4.

Decision 4: Do consumers react negatively to the partitioned component (shipping, warranty, labor)?

Yes: Suppose that the partitioned component is one that consumers feel very negatively about, such as shipping. Many consumers find paying a separate price for shipping more aversive than paying a higher combined price with “free” shipping. Online measurement company comScore Inc. reported that free shipping influenced more than 40% of e-commerce transactions during the end-of-year holiday season in 2009. In an empirical study of consumers using shopping bots, consumers were almost twice as sensitive to changes in shipping charges relative to changes in the price of the books they were purchasing. Another empirical study of real purchase decisions showed that purchases increased more when consumers were offered free shipping than when they were offered a monetary discount of the same value. Greater sensitivity to the price of shipping than to the prices of other components indicates that combining the negatively regarded component with other components should increase purchase intentions relative to partitioning the component.

Which other components are perceived negatively by consumers? Recent research suggests that charges for labor, such as installation, are also perceived negatively. The logical conclusion? Decreasing the price of these components relative to the prices of other components makes prices more attractive.26 (One caveat, though, is that consumers’ perceptions of labor can be changed by describing labor as providing more benefits to the consumer, such as by highlighting the importance of fine craftsmanship.

Other components might remind consumers of issues you’d rather not have them think about at the point of sale. For example, charging a separate price for a warranty can make a consumer think more about reliability than including the warranty in a higher combined price, making partitioned prices less attractive than combined prices. Notably, even a lack of information indicating what the surcharge is for can make consumers perceive it as unfair. A recent study showed that although partitioned pricing led to higher purchase intentions than combined pricing when the surcharge was attributed to a specific purpose, combined pricing led to higher purchase intentions than partitioned pricing when a surcharge of the same magnitude was simply described as a “surcharge” and was not attributed to a specific purpose.

In summary, if the component is one that consumers perceive negatively, consumer reactions are likely to be more favorable when this component is combined with other components rather than partitioned. Recommendation: Keep things simple by combining prices across components. END.

No: Paying a separate price for a desired benefit, such as an extra feature on a product, is not as aversive as paying the same separate price for a disliked or unwanted component. For example, in one study, partitioning the price of an icemaker from that of a refrigerator had a less negative effect than partitioning the same price for a warranty. If consumers do not react negatively to the component, there are some conditions under which partitioning will be more effective than combining the price of the component with other components. Go to Decision 5.

Decision 5: Does your company control the costs/quality/delivery of the component?

Yes: If the delivery, quality and cost of the component are under the control of the company, the company cannot blame others for the costs or for service failures. Whether partitioning or combining prices is more attractive depends on the compatibility between the component and consumers’ goals. Go to Decision 6.

No: If the delivery, quality and costs of the component are under the control of someone else, it may be more effective to partition the component so that the costs can be attributed to a third-party provider. In the case of components like taxes and fees, partitioning can make the base price look smaller in addition to making it clear that the company is not responsible for the charges. Recommendation: Nickel-and-dime your customers by partitioning prices.

Decision 6: Does the partitioned component satisfy a goal for consumers?

Yes: Consumers are more sensitive to the prices of components that are not consistent with their goals than to the prices of components that are. Thus, to maximize price satisfaction, components that are more consistent with consumers’ goals should be larger than components that are less consistent with consumers’ goals. If the component is aligned with a specific goal of the customers being served, such as being compensated for a used car being traded in, partitioning the component will make the overall price more attractive. Recommendation: Nickel-and-dime your customers by partitioning prices. 

No: If the component does not satisfy a goal for consumers, they will be more sensitive to the price of this component than to the price of other components that are more central to their goals. Recommendation: Keep things simple by combining prices across components. 

Summary

When should managers nickel-and-dime their customers by charging separately for various extras, and when is it better to keep things simple by combining all of the charges into one total price? Our analysis of research on partitioned pricing suggests that it’s better to nickel-and-dime customers when the partitioned component is consistent with customers’ goals. Consider that consumers who head to a restaurant hungry for pizza would rather pay $15 for a pizza and get a free order of buffalo wings than pay the same price for an order of buffalo wings and have a “free” pizza thrown in. It can also be better to nickel-and-dime customers to signal that the price of a particular component is under the control of a third party rather than under your control, as in the case of taxes. Finally, nickel-and-diming can be more effective when the size of the partitioned component is small relative to the size of the other components, because consumers tend to focus on the base price rather than on small surcharges. Just be sure that you don’t ruin your customers’ rosy view of the relationship later by hitting them with a litany of unexpected fees.

However, there are several conditions under which keeping things simple by combining price components into a single total price can be more effective. If a component does not relate to the consumer’s most salient purchase goals, it is often better to combine prices across components than to highlight the component by partitioning it. If customers have a negative reaction to a component like shipping, delivery or installation, minimizing this component or combining it with other components can increase purchase intentions as well as customer satisfaction.

Clearly, there are situations in which partitioned pricing is more effective than combined pricing and vice versa. The trick for successful managers is to be aware of the conditions under which one strategy is more effective than the other. The benefits-based partitioned pricing framework and decision tree provided in this article equip managers to make more informed decisions that result in increased purchase intentions, greater satisfaction, and more positive customer attitudes toward the company.

Rebecca W. Hamilton is an associate professor of marketing, Joydeep Srivastava is a professor of marketing and Ajay Thomas Abraham is a PhD student in marketing, all at the Robert H. Smith School of Business at the University of Maryland.
 
Kevin Brown www.kbsinsight.blogspot.com

How to Use Social Bookmarking for Business

Social bookmarking sites can help save you time, energy, and keep you ahead of your competitors.
Here's how you can take advantage of these sites.
By Lou Dubois
Sep 16, 2010 http://ow.ly/2FSRl- Inc Mag
Isaac Marion was a Seattle-based blogger and writer who was largely unknown in 2008, until his short story I Am a Zombie Filled With Love was distributed on his website and purchased by about 100 readers. The story was also reviewed by a lot of users on the StumbleUpon network, and it was so highly rated that Cori Stern, a Hollywood screenwriter and producer, literally stumbled upon the story and instantly thought it would make for a great movie.

Stern reached out to Marion and told him he should convert the short story into a longer novel, which turned into the recently published "Warm Bodies." From there, Stern introduced Marion's work to her colleagues Laurie Webb and Bruna Papandrea (whose past projects include movies with Sydney Pollack and Milk) and the story was so good that it turned into a movie deal with Summit Entertainment, the same production company behind The Hurt Locker and the Twilight films.

Had Stern not stumbled upon the story, none of this would have been possible. The story speaks to how powerful social bookmarking and crowd-sourcing sites can be. But what is it? Social bookmarking, at its most basic form, is a simple way to organize all of the best content from around the web based off your interests, all in one place. While the Internet created an unprecedented level of access to all content, many users found it difficult to sort the relevant from the irrelevant, according to their interests and the value of the information provided. And perhaps most importantly, the bookmarks are transferable between computers and locations.

Which social bookmarking site you use is all a matter of preference, and partially based on your usage patterns and interests. Some of the most popular social bookmarking sites are Delicious, Digg, Reddit, Technorati, Google Bookmarks and to a certain degree Twitter and Facebook. According to Delicious, probably the most popular site of all-time in the space, social bookmarking "means you can save all your bookmarks online, share them with other people, and see what other people are bookmarking. It also means that we can show you the most popular bookmarks being saved right now across many areas of interest."

"No matter what computer you're on, at your place of business or at home, you have your bookmarks stored," notes Justin Levy, the director of marketing, business development and corporate strategy at New Marketing Labs, a new media marketing agency outside of Boston. "The social side of it is that these bookmarks are hooked into a directory of other bookmarks that are being saved by other users, so you can filter the content based off your interests, whether that's for personal or business purposes."

In this guide, we will explore the different social bookmarking options and which you should use and also explore how social bookmarking sites can help your business.

How to Use Social Bookmarking for Business: A Look at the Competition

The ten most popular social bookmarking sites, in terms of inbound links or in other cases monthly visitors (though not listed in any particular order) are: Twitter, Digg, Yahoo! Buzz, Tweetmeme, StumbleUpon, Reddit, Technorati, Delicious, Google Bookmarks and Mixx. Here is a quick overview of each:

Twitter, while known more as a social networking site, also is the most-used social bookmarking site on the Internet. If you consider how many people retweet and share links, it's a great place to find content.

Digg, despite recent struggles due in large part to a recent site redesign, allows users to give content a thumbs up or thumbs down (though their "bury" feature was recently taken away). Based on those opinions, news can be pushed to the top or bottom of a newsfeed, making popular pieces more popular and less read pieces floating more into obscurity, or becoming "buried" if you will.

Yahoo! Buzz allows editorial control for users to link to sites, stories, and more by therefore raising their "buzz," and unlike many of the other sites actually allows the user to edit the content. Tweetmeme is the most popular retweet website, and is the simplest way to share a story once you've found it on a website. Many users of popular news sites are already using the Tweetmeme button when they recommend an article, and many without even knowing it.

StumbleUpon is a self-billed "intelligent search engine" that sorts news based on your community and your interests, so you can literally stumble upon news that is relevant to you. It has a free toolbar that is integrated into your web browser, so when you're on a website you literally can give it a thumbs up or down. Reddit, the only site owned by a major news corporation (Condé Nast), puts all of the power in the user's hands. Everyone rates up or down what they find, so it's all about each individual user submitting quality content. The most successful links will gain prominence by reaching the front page.

Technorati is an open source software services that originally contained mainly blog content. Today, it measures a site's standing and influence within the blogosphere. Google Bookmarks utilizes Google's existing reach to let you access data wherever you are with your existing Google accounts. Mixx is quite similar to Digg, asking users to submit their favorite URL's while rating the recommendations of other users. The more in-depth you're reviews and recommendations, the better results you get.

Delicious, the preferred form of social bookmarking for Levy, uses a non-heirarchal classification system where users can tag their bookmarks with index terms and sort them into folders. Websites can tag their own content to improve their search engine optimization, as can users. Additionally, stories are arranged according to the tags posted on your entries as opposed to the topics they cover.

"Besides using Delicious to solely save bookmarks that I find interesting or use often, I use the tool to create libraries of information that I then can share with others," Levy says. "Personally, I can consume hundreds of articles every day, so sorting and organizing the ones I think are the most useful in a carefully chosen set of tags is great. I own a restaurant as well, so I have tags all around recipes, but those tags wouldn't be relevant for my other work, so that works really well."

Social Bookmarking for Business: Using Social Bookmarking in Marketing and PR Campaigns

From an individual consumption perspective for Internet readers, social bookmarking can make great sense to filter your news and information all into one place. But it also makes great sense for businesses to utilize these tools. There are a few different ways that businesses can do that to increase site traffic and grow brand recognition. The best ways are by curating information, sharing of testimonials, tracking for individual projects, and as an add-on for your public relations campaigns.

Many consider content curators the gatekeepers to information for businesses and individuals. As a company, curating, or aggregating the best content from around the web, can make you an industry leader through your marketing campaigns. And for companies you already work with, showing that you are on top of the news in your industry gives a certain level of credibility.

"I'd agree that curating content is a good way to utilize these sites as a business," Levy says. "I think serving as a resource to your community and keeping that trust is a very simple way to show customers and clients that you care about not only them, but their time."

Similarly, if you think of it from the perspective of businesses who you don't already do business with, you're going to be seen as a resource for information. Making it more likely for that client or company to be attracted to working with you. In both cases, this relevancy can show real concern for customer service and retention.

Another way to utilize these tools is by pulling together all of your best testimonials from customers. Every business has heard the question from potential business partners and clients that asks, "What have others said about your work?" Rather than directing them to a Yelp page or sending an email, how much easier would it be to direct that potential partner to a site that has all of the testimonials for your company organized in one place, in a simple format?

Lastly, for individual projects and campaigns, the creation of folders and tags within social bookmarking sites can make it very easy to track success. If you've recently launched a campaign and want to see what stories, blog posts, Twitter notes and more have been written about it, you can very easily refer to your social bookmarks, where again all of the information is gathered in one place.

If you're just starting out, there are a few steps you can take as a business to get the most out of these sites:

1. Start by creating accounts on the sites you want to be on, and by filling out a complete profile about you that includes a company profile and a link back to your webpage.


2. Download the different tools and buttons and add them to your website and/or blog so users can utilize them within your community.

3. Create lists and categories to arrange specific information, whether that is for different types of clients or different types of content altogether.

4. Submit URL links to the site and write reviews, rate other stories, etc. The more active you are in the communities, the better your reputation will get and the more trusted you will become.

5. Start networking with other people in the community who share similar interests. You'd be surprised how easy it is to find some of the other users who are recommending many of the same stories you

Social Bookmarking for Business: What Social Bookmarking Sites Should You Be On


If you've decided that social bookmarking can help your business, there are plenty of aforementioned options out there. But breaking it up by client or project is a good reason to test out different networks. There are plenty of competitors trying to dominate the social bookmarking marketplace. As a company, its best to just experiment with different services and see what resonates best with your community and customers.

"You never know who will win this battle, but it might make sense to create different accounts on different sites and then utilize them differently," says Levy. "You need to fish where the fish are, so if the users you're trying to reach are on a particular network, that's where you need to be. The biggest site traffic-wise is Delicious, so that wouldn't be a bad place to start."

While some networks have taken criticism and struggled in recent months, Su.pr, a part of the StumbleUpon network, has had substantial success in 2010. According to Internet marketing company BlueGlass, StumbleUpon has had a 118% increase in users since 2009 and ranks first among social media traffic sources in the United States. Part of that success may be due to struggles for other competitors, but as described internally, they consider themselves more of a Pandora-like service for users than a crowd-sourcing site.

"We do see Digg and some of the other sites as more crowd-sourcing sites while we've always focused more on individual recommendations by your peers and not as a popularity contest," says Katie Gray, a spokesperson for the StumbleUpon and Su.Pr networks. "In terms of why we've grown, I think we've seen great success with the Stumble bar. So you don't have to download something or go to a site to recommend something, you can just recommend a page while you're on it."

Whatever service you ultimately decide upon is up to you and your company, but it's also all about how you utilize it. Do your research, figure out where your community exists and do some experimentation. Regardless the size of your company or the type of business you are in, social bookmarking can be a useful tool for just about anyone.

Kevin Brown www.kbsinsight.blogspot.com

Monday, September 13, 2010

Ask The Wise Guy: About Finding Start Up Investors-Guy Kawasaki on startups

Sep 10, 2010 - American Express OPEN Forum http://ow.ly/2DtCU
Question: We have a well-researched product with plenty of upside potential. We are out of cash, but we are two techie geek dudes who are confused by the venture capital world. Some people tell us we must have a high-profile management team before we go to raise seed capital. Others tell us outside investors will fund a great product and help us recruit the team after investing. What do we do first: build a team or find an investor?

Answer: You need to understand that venture capital is like cocaine: It makes you feel good for a while, but it can kill you and involves dealing with unsavory characters. To the extent possible, you should delay, or even avoid, raising venture capital and instead bootstrap your company.

With Open Source tools, cloud-based infrastructure, Facebook and Twitter for marketing, and virtual employees (that is, no office space), it’s cheaper than ever to start a company.

If you ask most venture capitalists, they will tell you that they invest in teams, and they’d rather have an A team with a B product than vice versa. There’s only one thing wrong with this theory. The great, and I mean truly great, companies didn’t have proven teams at your stage.

Think Steve and Woz, Bill and Paul, Jerry and David, Larry and Sergei, Bill and Dave, and Mark Zuckerberg. None of these guys were proven compared to, say, Webvan’s team of seasoned executives.

The very first thing you should do is build a great product. The second thing you should do is get it to market. Then if all goes well, you will never need venture capital, or if you do, you will be in a position where you have the upper hand because you will need capital to expand a growing business as opposed to finishing a prototype. If your business is growing so fast that you need adult supervision, then by all means hire one (aka, your “Eric Schmidt” or “Meg Whitman”) at that point.

It’s very hard to get a definitive “no” from venture capitalists. There are two reasons for this: First, they lack the courage to be candid. Second, there’s little upside to saying “no.”

It’s smarter to use one of the standard turndowns like “When you have a world-class management team, come see us,” or “When you can show us traction, come see us,” or “If you get Sequoia or Kleiner, Perkins to invest, come see us.” This way they’ve left the door open in case you do take off like a rocket, and you’re dumb enough to circle back to them when you are the next Facebook or Twitter.

Whenever venture capitalists utter these classic lines, they are saying “no”instead of “not yet.” And believe me, if you showed up the next day with a world-class management team, they would find another excuse not to invest. So to make myself perfectly clear, the answer is to finish your product and get sales. If your company takes off, venture capitalists won’t care if you don’t have a window-dressing management team. And if your company doesn’t take off, it won’t matter if you do.

You might ask, “What if we don’t even have enough money to finish the product?” The answer to this is “Find a way” where a way = friends, family, fools, and angels. If entrepreneurship were easy, more people would succeed at it.

Kevin L. Brown www.kbsinsight.blogspot.com

Friday, September 10, 2010

How and Why Facebook Users Interact with Brands

Sep 08, 2010 - American Express OPEN Forum http://ow.ly/2CpWm

While much of finding what works for your business on social media sites is a process of trial and error, recent stats from email marketing firm ExactTarget (which recently acquired social CRM platform CoTweet) shed some light on how the Facebook population uses the site and how it interacts with brands.

First, the good news: based on its study of 1,500 Facebook users, ExactTarget concluded that 38 percent of online U.S. consumers “Like” (formerly “Fan”) a brand on the social networking site. And the average fan Likes nine different brands, giving you plenty of opportunity to find your way into potential customers' news feeds.

The news that presents a challenge to businesses looking to benefit from Facebook, however, is that just because someone has liked you doesn’t mean they’re ready to see your promotional messages. Citing an earlier study, ExactTarget reports that 70 percent of consumers don’t think becoming a fan equates to opting in to marketing.

Fortunately, ExactTarget didn’t stop there, and did some research into what motivates users to Like companies on Facebook. The results offer some insight into what you can do as a business to keep the fans you accumulate engaged and not hitting the “hide” button in their news feeds. Here’s the breakdown of why users might “Like” your brand, illustrated by the percentage of respondents who said that they use Facebook for the listed activity:

40 percent to receive discounts and promotions

39 percent to show my support for the company to others

36 percent to get a "freebie"

34 percent to stay informed about the activities of the company

33 percent to get updates on future products

30 percent to get updates on upcoming sales

29 percent for fun or entertainment

25 percent to get access to exclusive content

22 percent someone recommended it to me

21 percent to learn more about the company

13 percent for education about company topics

13 percent to interact

On the surface, some of these findings seem to conflict with the idea of users being resistant to marketing messages. But the real takeaway is that users like brands for a wide variety of reasons, and the mix of content you post to your Facebook page should reflect that.

There’s a bit more to it than that, however, if you dive further into some of ExactTarget’s findings relating to demographics and usage patterns. For instance, 65 percent of Facebook users only access the site when they’re not at work or school – typically meaning early morning or evening. That means that if you’re making social media only a part of a 9 a.m. to 5 p.m. work day, you might be missing out on connecting with consumers during the times they’re likely to be online.

There are also differences in how men and women use the site, with women indicating that their primary focus on the site is on maintaining relationships (by a margin of 63 percent to 54 percent), implying that they have less time for engaging with businesses.

Hopefully, by combining some of these broader findings with your own analytics and anecdotal successes and failures, you can refine your strategy to grow both your fan base and your levels of engagement.

Kevin Brown www.kbsinsight.blogspot.com

Thursday, September 9, 2010

6 Thoughts Inside the Mind of a Venture Capitalist

Whether you're looking to raise capital or not, understanding how this special breed of investor thinks can improve how you run your business.
By John Warrillow -INC Mag http://ow.ly/2C73S
Sep 9, 2010
Recently I asked Sam Ifergan, a venture capitalist who invests in tech companies, fresh off his $75-million exit of Visualsonics, to detail what goes on inside his head when he is asked to invest in a business. You may not have any plans to raise money for your business but understanding how these consummate capitalists think can sharpen your entrepreneurial skills. Here are six thoughts he offered up:

1. "Why you?"
The first thing Ifergan tries to understand is whether you are uniquely qualified.

"If you’re a teller at the bank and you’re pitching me on starting a new bank, we’re not going to have a very long conversation," he says. "I’m looking for people with deep expertise and experience in their field."

By contrast, Ifergan explained what got him interested in Visualsonics, a technology company that improves the resolution of the typical ultrasound machine. With Visualsonics’ technology, rather than grainy images that can (usually) reveal a baby’s gender, highly detailed pictures can uncover abnormal patterns of blood flow in the brain.

When Stuart Foster, co-founder of Visualsonics, pitched Ifergan on creating a business that would improve the clarity of ultrasound images, he was interested because Foster had dedicated his life to imaging technology: he has a Ph.D. in the field, pioneered high frequency ultrasound, is a professor at the University of Toronto and teaches at Sunnybrook Hospital.

"Foster is the world’s leading expert on the subject. I’m going to listen to a guy like that," says Ifergan.

2. "Should your concept really be its own product?"
Next, Ifergan tries to understand if your idea is really a good product or if it’s simply a new feature for an existing product.

Ifergan was recently pitched by a start-up that claims to have developed some technology that helps e-mails move more quickly through corporate networks.

"I didn’t spend much time with the guy," Ifergan said. "If he truly has a subtle improvement on e-mail routing, he should go license it to [Blackberry maker] Research in Motion or Cisco. It’s a feature on an existing product, not a company."

In contrast, in the case of Visualsonics, Ifergan saw that an entirely new company was needed to go after new markets for imaging technology with a product line of different ultrasound machines.

3. "How much will it cost to get someone to buy your product?"
Third, Ifergan tries to understand the demand for your product and how much it will cost to reach the market.

For example, one company that pitched Ifergan wanted to take U.S.-based teaching materials, translate them into Mandarin and sell them in China. With a billion Chinese people eager to join the middle class, Ifergan was interested enough to write up a term sheet for the company.

However, during due diligence, Ifergan discovered the distribution for educational materials in China is heavily fragmented. There are thousands upon thousands of small retailers, none of whom have enough coverage to reach a meaningful portion of the market. Ifergan walked away from the deal, reasoning that, while some Chinese people may be willing to buy the product, the cost of getting it to them would be prohibitive.

4. "Can I protect your idea?"
Once he likes your business idea and believes in you as an entrepreneur, Ifergan wants to know how easily a competitor can copy your idea.

Most VCs like to invest in technology businesses that have some intellectual property that cannot be easily replicated. It’s why Ifergan does not invest in retail concepts: "Retail businesses rarely have IP (intellectual property), so if something works, it’s copied by competitors in six months."

By contrast, Ifergan became interested in a company called Tri-Link that was an early leader in developing the technology that allows phone calls to be made over an Internet connection. The founding team of 30 engineers had spent a year and a half creating the technology. Ifergan reasoned it would be difficult for a competitor to catch up on so much research and development, so he invested in Tri-Link and eventually orchestrated a successful sale of the business.

5. "How much money do I need to invest before your company will be worth more than it is today?"
Ifergan avoids investing in companies that have business plans featuring internal engineering milestones such as creating a beta version of a new product by a specific date.

Instead, Ifergan looks for "value creation milestones" in a business plan relating to external achievements that increase the value of the company (e.g., revenue, profitability or number of customers).

For example, with Tri-Link, Ifergan invested only after it was agreed that the company’s goal was not an engineering milestone but to get 12 enterprise companies to use its product. Ifergan reasoned that once a dozen big companies were using Tri-Link’s product, it would become a more valuable company.

6. "Can I fill the holes on your management team?"
Clearly, a business needs good leaders. As such, if you are located in a city where the talent pool is shallow, Ifergan won’t invest.

He learned this one the hard way by investing in a media company based in Columbus, Ohio. Ifergan took the company public but was never able to get the right talent to move to Columbus, and the business languished.

By contrast, Ifergan found Toronto to be a great place to recruit the Visualsonics management team, given the region’s extensive network of hospitals, universities and technology infrastructure.

While every venture capitalist no doubt has their own set of investment criteria, I have found most have Ifergan's focus on scalability. You may not need or even want venture capital, but running your business to their high standard can help you think through big decisions, investments and new ideas.



Kevin Brown - www.kbsinsight.blogspot.com

Tuesday, September 7, 2010

Hire Great Guessers

Hire Great Guessers-http://ow.ly/2AEnQ Harvard Business Review (repost)
8:30 AM Thursday September 2, 2010
Analytics are now king. And they should be. (If you're not already convinced, read Competing on Analytics, one of the best HBR articles I've ever read). It's so much easier to collect and digest numbers on your business than it was even ten years ago.

No less than 5% of your payroll should go toward data analysis. Who is your customer? What is she buying? How often? After what event(s)? Which version of the product sells better? At which price point? Which version of the packaging is more appealing? Which salesperson is more effective with which customer cohort? What zip code is responding most to your ad? How quickly/reliably/effectively does your product accomplish its stated goal, or your vision for it? How satisfied are your customers?

Your analysts should be setting up systems to collect these data streams and then chugging through the numbers to help you drive the company.

However! Test a bad premise, and your analytics will be pretty useless. If your entire question is wrong (e.g. "Do customers prefer the 200-ounce burger to the 250-ounce burger?"), you'll get bad answers.

Marty Cagan, a thought leader on product development, wrote a piece distinguishing "product discovery" from "product optimization". He explains that product discovery — prototyping, user testing — is the right way to identify "significant new functionality" and product optimization — analytics-based A/B testing — is the correct way to "optimize the user experience and/or business results of an existing product." His implicit point is that analytics about the customer experience are a waste until you have some early feedback on the product or feature idea to know whether you are even in the zone of test-worthiness.

Marty is right. (Full disclosure: he advises my company, ReputationDefender.) However, there's more to it than his essay suggests. The jump from discovery to optimization requires good guesses. Without good guessers, the project is doomed. Good guessers know what is worth investigating in the first place. And they have strong instincts — usually coupled with a knack for scrappy, lightning-fast research — into where the best bets lie. They are great not just at product dev, but at hiring, market development, strategy, vendor selection, advertising, and market segmentation and definition.

Take our burger example. Let's imagine three versions of the story:
Version 1. A bad guesser may actually entertain the notion that a 12-pound burger will have market appeal. Fire him politely but immediately. The focus group he wants to set up will drain time and resources.

Version 2. If we modify the scenario and call it a repositioning exercise, in which a giant patty is tested as a "family burger," to be ordered and consumed like a family-sized pizza, it might be worth a second look. But it's still not an obviously great guess.

Version 3. But what if the idea was to make a twelve-ounce burger with small ridges at the edges, so that the condiments don't slide out quite as easily? That could be worth testing.

The bottom line is that, if you start with a B- premise, even the best testing, optimization, and iteration on the idea will only ever get you to a B+ result. You need A premises to get A++ outcomes. And the double bottom line is that you need people with great instincts — great guessers — to get you A-level premises.

This idea is getting some scientific traction. Sanjoy Mahajan has taught a course at MIT on guessing and published a more serious tome on the topic, appealingly called Street-Fighting Mathematics. He teaches that analysis paralysis kills effective and timely solution-finding and that intelligent estimation is key to unlocking problem-solving speed and, ultimately, accuracy. Ask him or his trainees a question like "how many burgers are sold in America?" and they'll rapidly come up with a few simple minor premises and calculations to generate a pretty good answer. It's sorta like the McKinsey interview, but with some MITness mixed in to make it more believable.

Even if you can case-interview your way to identifying good guessers, finding the best ones is going to be subjective, a matter of guessing. You're going to have to trust your own instincts, and that you have good instincts in the first place. Finding great guessers is the essential first 10% that makes the remaining testing-and-analytics 90% radically more or less effective. And while it's possible to teach the rigor of testing and analytics, it's harder to teach great guessing, which is more like trying to teach someone how to be romantic or creative. Though I run my company on analytics, most of the time, if forced to make a choice, I'd hire a great guesser.

Michael Fertik is a repeat Internet entrepreneur and CEO with experience in technology and law. He founded ReputationDefender in 2006 with the belief that citizens have the right to control and protect their online reputation and privacy. Michael recently co-authored Wild West 2.0 which quickly gained acclaim as an Amazon.com Number 1 Bestselling Internet book. He has been named a World Economic Forum Technology Pioneer for 2011

Kevin Brown www.kbsinsight.blogspot.com

Friday, September 3, 2010

7 Ways to Measure Your Social Media ROI

https://www247.americanexpress.com/MoblOpenWeb/articles.do?TargetID=7-ways-to-measure-your-social-media-roi-steve-strauss
Steve Strauss (The Strauss Group, Inc.)Sep 02, 2010

People love social media for different reasons. For some, it’s all about the networking. For others, it's the branding. Whatever the case, the downside to social media is that it is sometimes difficult to know if your time with it is well spent.

So, as with the rest of your business, it is important that you periodically review the ROI of your social media efforts. How do you do that? Here are seven ways, some quantitative and objective, others qualitative and subjective, but all useful to some degree or another.

1. Money: If all of your tweeting and posting and blogging and updating is not making you more money, why do you do it? Yes, there are other indicators (below), but a prime and main one should be the bottom line.
It’s called social networking for a reason, and the point of networking is to meet new people and get new business. Are you?

2. Traffic: Here is another quantifiable result. One way to know if your social media efforts are paying off is if you can see a significant uptick in traffic, and, even better, conversions.
Traffic can mean many things. It can be unique visits to your website, page views, actual traffic in the store, increased sales, more blog readers and more comments on your site. The important thing is that, however you measure traffic, your social media efforts can elevate it.

Here are a few tools you may want to check out for measuring your online traffic patterns:

· Google Analytics: Allows you to track incoming links, sites, etc.
· Wordpress: You can add Google Analytics to your dashboard with a plugin.
· TweetMeme: If you have re-tweet buttons on your site, TweetMeme Analytics are very useful.

3. More fans and followers: Having Facebook fans and Twitter followers is great and certainly creates some brand equity and online bragging rights – but here’s the but – those followers better be doing more than stroking your ego for you to say that your social media campaign is a success. Are they re-tweeting your links, for example?

4. More real relationships: The woman who opened my eyes to social media taught me that the point of it is to meet people with whom you can do business. By tweeting smart, she did just that. She created relationships with people she otherwise would not have met, and, as a result, boosted her business 34 percent in one year.
But she didn’t do that by playing a cynical numbers game, looking to just create as many Facebook fans as possible. She did it by engaging people online in such a way that they wanted to do business with her offline.

5. Increased brand awareness: This one is a little more amorphous, but maybe no less important. Social media is fantastic for building your brand and getting you and your business better known. So this is one area where getting more followers for its own sake is in fact OK – the more people who learn of you by following you, the better.

How do you measure this sort of brand awareness? I suggest three ways:
1. Followers, fans, and connections. As indicated, for this purpose, more is better.
2. Re-tweets and similar links: People re-tweeting your tweets or linking to your blog or other posts is the ultimate compliment online. It means they like you, they really like you.
3. Positive online mentions: Products like Viral Heat and Twendz can help you analyze online mention of your business and where those mentions are coming from. As such, you will be able to see, for instance, if all of your tweets twanslate into positive online buzz.

6. Budget savings: Ideally, your social media efforts may lead to a reduction in other marketing expenditures. If your social media efforts cause you to spend less on marketing, that is a tangible and valuable ROI.

7. Better customer relations: Again, this is much harder to quantify, but as Supreme Court Justice Potter Stewart famously wrote in a case seeking to define obscenity: “I know it when I see it.” It is no secret that companies are turning to Twitter in a bid to handle online complaints in a better and more timely manner. So if your social media efforts mean fewer complaints and happier customers, congrats. That’s real ROI.

While it may seem as if the ROI on your social media is difficult to calculate, in reality it’s just like the rest of your business. You need to track it, analyze it, and tweak it when necessary.



Email: That's Not Selling, That's Typing

http://www.allbusiness.com/reports-reviews-sections/interviews/15057480-1.html
Sales CowboyTuesday, August 31 2010

What a great interview with Kasper Rorsted, C.E.O. of Henkel, in last Sunday’s New York Times (“Corner Office,” by Adam Bryant). When asked about his leadership style, Rorsted replied, “I do less e-mail and a lot more of being present. I think e-mail is very often disruptive in corporate cultures. You sit next to people and send e-mail to each other instead of walking over or making a call or just trying to look for the personal interaction.”

Right on, Kasper—so much so that I just had to call you today.

“Hi, it’s John Mongillo. Is Kasper in?”

“What’s this in reference to?” asked his assistant.

“His interview in the New York Times.”

“What about it?” (She had not read the interview I learned later.)

“It was excellent. This isn't a sales call or a prank call. I just wanted him to know how much I enjoyed the piece, especially his thoughts on email.”

Turns out that the C.E.O. is based in Germany, not in Henkel's North America office, but I left my number with his assistant.

Excessive email in the workplace is partially to blame for the poor economy. Corporate America’s fingers are a little too happy. How many hours are wasted each day on email when the better use our time can be spent more efficiency on the phone? People insist on going back and forth with "War and Peace" text about matters that are best handed by picking up the horn.

“I’m sending Joe an email. How does this sound to you? …Hi Joe, blah, blah, blah … ”

How does this sound? Are you kidding me?

Do C.E.O.s want their workers wasting time on email? And isn’t it strange that those loud cell phone conversations you hear when you’re trapped on the train, or standing in line for coffee, are almost always pleasure calls, never business calls? I never hear, “Hey, Sally, let’s close the deal with Bill today.” I never hear anything close to that, but the next time I do I’m going to call Kasper and tell him that I found a person that’s a good fit for Henkel.

“That’s not writing, that’s typing,” Truman Capote famously said about how Jack Kerouac composed “On the Road.”

You could say the same thing when it comes to email and sales: “That’s not selling, that’s typing!” Very few deals, if any, are exclusively done via email. There has to be some audio involved. Voices need to be heard. Human interaction needs to take place.

Are salespeople guilty of sending out too many messages over the course of day? Probably. Certainly sales managers would have a good idea if they bothered to look into the matter, and they should. I’m not advocating Big Brother and tracking your team’s every email, but a manager should know how their salespeople are spending their time. After all, it's pretty easy. Just listen. If hear more typing that human voices then you have a problem.

I’m not against email. There is certainly a place for it, and more and more people are becoming email people. But it should never dominate a salesperson’s day—it shouldn’t even come close. As Kasper rightly points out, “E-mail can’t replace human interaction.”

No, it can’t, but it’s trying awfully hard.

- Posted using BlogPress from my iPhone

Wednesday, September 1, 2010

Facebook Places: Here's What Your Small Business Needs to Know

Aug 31, 2010 - OPEN Forum http://ow.ly/2y1TV


Facebook recently launched a new feature called Facebook Places, which lets Facebook members tell each other where they are, what they're doing, and who they're with.

The impact for local merchants and small businesses is that you're now more likely to be included in the conversation among Facebook users, because they'll be able to automatically tell each other where they are, not just what they're doing.

The good news is that there are opportunities to use Facebook Places in your marketing strategy. But it will require some work.

What is Facebook Places and how does it work?
Facebook Places is a new addition to Facebook's iPhone app its mobile website, which lets users "check in" from their current location, using the location signal from their phone. A message goes out to the user's Facebook friends, including the name of the venue they are at -- a restaurant, bar, store, museum, park, etc. And depending on users' privacy settings, it may include the names of people who are with the user. (For more details about how Facebook Places works, and a step-by-step guide to using it, click here.) This is similar to existing apps you may have heard of, including Foursquare and Loopt.
How does this affect local merchants and small businesses?
For starters, the name of your business will now be included in more messages on Facebook, so more people may be aware of your establishment. (This could be great word-of-mouth marketing, but because it's private, people may also be describing negative experiences -- be aware.)

Facebook also creates a "Local business" page for each of the Places that are listed in Facebook Places. Whenever someone "checks in" to your business, it will include a link to the Facebook page for your business in the message that gets blasted out to their friend.

For example, here's a link to a page for a Starbucks Coffee location in New York. On the page is a map of the location, aggregate information about the total check-ins, and for users who are logged in to Facebook, information about their friends' check-ins at that location.

What do you have to do to participate?
Facebook is letting merchants "claim" their pages by clicking on the "Is this your business?" link at the bottom of a places page. If you already have a Facebook page for your business, you'll be able to merge it with your new Places page.

If you claim your page, you'll be able to manage your Place's address, contact information, business hours, profile pictures, and some other settings; get some aggregate information about how your page is used; and you'll be able to blast messages onto your page.

Here are a few examples of local businesses that have claimed their pages: Brits, a shop in Lawrence, Kansas and The Booksmith, a bookstore in San Francisco.

You'll also be able to advertise your Place on Facebook, which is one of the reasons Facebook is so excited about Places. Facebook's goal is to get local merchants to care as much about their Places pages as they care about their reviews on Yelp and their Places page on Google. (For more information, check out Facebook's Places for Advertisers FAQ.)