Novelty distraction or serious sales driver? The corporations are Tweeting, ¡¥Facebooking¡¦ and working over the reviews pages. So should bleeping and blogging be part of your strategy to reach tech savvy customers¡¦ pockets?
Social media networks move at alarming speed. Its flexibility outstrips traditional advertising in responsiveness and, as a result, sales and revenues through social media strategies are growing.

Buyers for all business sizes

What’s interesting about social media is that it has the potential to deliver sales and public relations campaigns equally as effectively for the corner café or suburban travel agent as it can for corporations like Dell, Jetstar and Disney. They are all looking for the same result - ROI.

There are many ways of measuring this. Some companies are focused solely on sales or building loyalty amongst existing customers. Another may use it to create awareness of new products or services, or monitor what people are saying about them.    

One certainty is that your competitors are likely to be taking notice, if they’re not already participating. But just like any promotional tool, you need to decide on clear objectives.

Do you need a PR boost or to renew customer loyalty with more personalized contact?  Do you need to generate new leads or combat bad press? Do you just want to sell excess stock quickly?

The new coffee rush

Twitter works for community building when followers become your advocates or when you tap into the right mindset of buyers. Supporters’ praise can bring in new customers from peer networks, by their pre-qualified and credible endorsements.

US café, The Coffee Groundz, struggled to distinguish itself from several local competitors, As a casual Twitter user, the shop’s owner received a surprise order by ‘tweet’ from a contact. From there, a Coffee Groundz Twitter community started, with the café since becoming a gathering place for Twitterers. Sales and customer loyalty have soared, with a reputation for being a hip, tech-savvy meeting place. Twitter deals and in-store events are common, with an Obama inauguration party a highlight.

Take on your critics

A major part of Amazon’s long-term success has been to list both good and bad comments and low to high customer product ratings. This social media strategy has been adopted by other smart operators, particularly in the retail sector, who understand that by offering a forum for customers to express their criticism and complaints means less of them will be doing the same on public social media sites and blogs. And those issues can be responded to far quicker.
US, UK and European retailers surveyed in an E-consultancy and Bazaarvoice ‘Social Commerce Report’ stated that customer generated reviews greatly improved their credibility and trust, conversion rates and average order value. And with so many extra references to their products and services, their search engine ranking and traffic rose too.
Using social media for announcements or to address critics is another neat trick. A tweet, blog or online forum direct to your enthusiastic audience hits the target and through the dialogue it starts, could even make the headlines.

Destination: web traffic

As a prospecting tool, social networks like Facebook can drive traffic to your website in limitless creative ways, converting curiosity or interactivity to sales. Travel Channel created an online trivia game based on cities of the world where players score points by inviting friends to participate. The resulting click-throughs to the company’s travel website have soared.

Starting a conversation is a very effective social media PR objective that builds loyalty, allows exceptional feedback and brings web traffic. SMEs can use in-house bloggers, delegate to an agency, or “sponsor” an established media or peer blogger to start a conversation with a target audience.

Power shift

Social media first revolutionized how we socialize with the spin-off changing how we consume. The technology will constantly change, but the marketing power shift to buyers is here to stay. So, join in the conversation before your competition does and find out what your audiences are saying.  Next determine your objectives – sales, relationship building, PR, etc - then choose the social media tools that are right for you and how you will measure success.

With marketing budgets under pressure, business owners and managers are looking for ways to do more with less. One of the most effective ways to find new customers with minimal expense is cross promotion.

Cross promotion is simply when two or more businesses combine resources to market their products or services to each other’s customers. The main criteria for success in cross promotion are that the businesses serve the same types of customers but don’t compete with each other.

There are hundreds of ways businesses can work together to achieve this. Here are a few cross-promotion ideas that can help you expand your market on a small budget.

1. Two businesses can agree to display each other’s brochures. An example is a pharmacy that displays brochures for a therapeutic furniture store. In return the furniture store will display brochures promoting the pharmacy. This is a good match because both businesses serve people with health issues.
   Businesses can agree to put each other’s promotional materials in shopping bags when customers make purchases. Another option is to print promotional messages, or coupons, on each other’s cash register receipts.
2. On a business to business level, companies serving the same markets can include each other’s brochures when they send out invoices to their customers. For example, a commercial printer includes a brochure from a commercial photography agency that serves the same market. In return, the company providing commercial photography will include the printer’s brochure in its mailings.
3. Professionals can also benefit from cross promotion. For example, a financial planner, lawyer, accountant and insurance broker can produce a joint seminar where they speak about wealth creation and risk minimization. Each participant raises their credibility by speaking at the event, gaining access to new clients.

A key part cross promotion is credibility. By working with other respected businesses you instantly gain credibility amongst their clients. You also add value for your clients by letting them know about quality products and services you endorse.

If you haven’t done any cross promotion before, you can start by asking, “Who are my potential customers?” Once you have determined this, write a list of non-competing businesses that sell to the same types of customers as you do. You probably already know people in business who would be ready and willing to start a cross promotion alliance. First, it’s important you ensure that companies you cross promote with are reliable and offer quality products or services. Getting into an alliance with a company that doesn’t meet customer expectations can damage your reputation.

Once you have found a partner to work with, meet and brainstorm ideas on how you can best work together. Discuss the ways in which you currently make contact with your customers. Are there ways you can work together using these existing methods? If you have a retail business, you can focus on in-store promotions such as posters, displays, brochures and coupons.

If you are in a service or consulting business, you can promote each other in direct mail pieces, newsletters, on your website or in any other ways that you connect with your customers. As mentioned, joint seminars will raise the credibility of the speakers while giving them access to each other’s customers.

You don’t have to limit yourself to one business when cross promoting. For example, separate companies offering home renovation, interior design, painting, flooring, plumbing and electrical services can combine mailing lists and create joint promotions to send to their customers. These companies all provide home improvement services, but don’t directly compete with each other.

If you’re having trouble coming up with relevant cross-promotion ideas, here are a few more.

• Publish articles about one another’s businesses in the newsletters you send to your clients.
• Mention the benefits of each other’s products or services when speaking at local events, to the media, or to your customers.
• Promote your partner’s products during their slow times and ask them to do the same for you.
• Train your staff to promote your cross-promotion partner’s products or services.
• Give your partner’s product to your customers when they buy a large quantity of yours and ask your partner to do the same for you.

At the risk of sounding repetitive, the old adage that those who fail to plan, plan to fail is very true of franchisees. While you probably value being your own boss, you still need to pay the bills and make a profit – and that means understanding the financial drivers and performance of your business.

Work out your living costs
Unless you know what is the minimum level of income you are going to need to cover your essential living costs, then you can’t start to set a benchmark for your business.  Review all your expenses, rent, mortgage, insurances, groceries, utility bills, health care, children’s schooling costs and so on. This is the baseline return that your business must generate as a starting point.

Match the debt with the asset
Ensure that the term of your loan for the franchise is the same as the length of the franchise agreement you enter into. You don’t want to find yourself still servicing a debt for a business you have sold or left.  Take the same approach if you lease your business premises.

Personal versus business costs
Think carefully before you decide to put personal expenses through the business.  It might have some tax benefits for you such as increasing tax deductions or reducing tax on profits.  However reducing taxable profits will also reduce the ultimate sale price of your business. Businesses are bought and sold on their ability to generate profit, and so a business that shows little or no profit will be worth much less to a potential buyer than the price you as the seller would like. Talk to your accountant / business advisor before taking a step that jeopardizes your sale value.

Pay yourself an appropriate wage
Overpaying or underpaying yourself for what the job of running the business would be on the open market will distort your profit figure. This has serious implications for the perceived value of the business. Discuss it with your accountant before you take this step.

The magic of margins
Franchise fees are often calculated as a percentage of turnover, meaning franchisors often focus on the top line sales. But the variation in profit margins added can result in bottom line profits being wildly different between one operation and another. Identify the products and services that offer better margins and focus on those.

Control expenses carefully
Often the secret success factor between high and low-performing franchisees comes down to how effectively they manage expenses as a percentage of their turnover. Sometimes even the fixed costs (such as rent or labor) in one geographic location versus another can mean the franchise will be less profitable since the expenses are higher.

Master the art of selling
Your ultimate aim should be to predict likely sales increases from a given marketing activity. This takes a serious commitment to constant benchmarking so that you learn and understand exactly what works effectively with your target market.

It all comes back to getting the margins right, keeping costs under control and increasing sales. Even small changes in each of these three areas will result in exponential growth in profitability.

Speak to your accountant business advisor so that you can set up the right systems to benchmark, monitor and manage your business. The commitment and discipline will boost your bottom line.

Hint: it’s not threats and rewards!

The evidence of more than four decades of robust, global scientific research on human motivation shows categorically that there is a serious mismatch between what science knows motivates people, and what business does.

Dan Pink, successful business and technology writer reveals in his fascinating book Drive: The Surprising Truth About What Motivates Us that science has identified three intrinsic human motivators:

Autonomy: The urge to direct our own lives.
Mastery: The desire to get better at something that matters.
Purpose: The yearning to do what we do in the service of something larger than ourselves.

Ideas about successful management practices are not set in stone.  Management, points out Dan, is an invention after all, and the scientific evidence shows us that it is based on erroneous information. 

The gravy train has clearly derailed in the global economic collapse, so what better time for you to seek out new management solutions to building a profitable business?

What the evidence shows is that:

• When the work is largely mechanical and compliance in nature, then the carrot-and-stick style of management has some effect in improving performance. 
• Using a reward /punishment approach in most cases destroys creativity and problem solving ability – performance is actually worse. To put in another way, hundreds of scientific studies over 40 years consistently show that where there is any cognitive reasoning required to do the task well then the presence of rewards or threats has a negative impact.
• The secret to high performance is to tap into the intrinsic human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world.

Let’s look at one well known case which contrasts the two different approaches. Microsoft decided the market was ready for the online encyclopedia.  They employed the right people with the right skills and offered them incentives to develop Encarta, This is the traditional management model.  Some years later along came Wikipedia – put together for free, by people who volunteer their input for the love of it because they feel it has value.  Game, set, match.

Think about your own business and what you can do to change your approach.  Pay people adequately and fairly, that’s a must. Then focus on the nature of the task.  If it is merely mechanical, rewards and punishment might still have a place. Otherwise come up with strategies that encourage people think freely and autonomously and contribute in meaningful ways.

One SME digital agency we know gets its team members to take turns hosting regular meetings where they have to present a talk on some new concept, product, activity or idea not necessarily related to their work. Although they normally must account for every 15 minutes, time out to prepare the presentation is built in to their work schedules. They get to freely explore anything at all that interest them and the company reckons that the cross fertilization of ideas has resulted some of their best campaigns.
 
Forget about figuring out how to offer juicier carrots and poke with sharper sticks. Work with what really motivates people and watch productivity go up, engagement go up and employee churn fall.

Focus on quality, and remove as much risk as possible from the purchase. Give away for free something that demonstrates your offering but doesn’t cost you a whole lot, Try to up-sell users to a premium offering that adds unprecedented value.

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