November « 2008 « Indianapolis Small Business

November 2008 Articles

Add-on Services or Products – bundle or package your products or services

Tuesday, November 25th, 2008

By Scott Manning
Manning Methods, LLC

Every great profit maximizing company has become masterful at getting its clients EVERYTHING they can possibly need or want in relation to their products or services. These companies do not leave money on the table or things to be desired from their clients.

The concept of the “add-on” is one that is elementary to sales people, a foundational method for increasing sales. This is the most basic level and probably one most companies teach and use within their sale process…the ultimate question; is it maximized and does it really generate additional profits?

I believe the a la carte style ordering is really unjust in most businesses. If you want to be a Client Service Expert and keep your people coming back for more, you’ve got to give them what they NEED, which is seldom satisfied by just providing what they WANT. The method I am alluding to is packaging and/or bundling products or services to increase the size of transactions.

Understanding that, you spend a certain amount of resources to acquire clients and get them to “raise their hand” to do business with you. Capitalizing on EVERY transaction level, whether initial, basic, or upgrade products or services is what all ridiculously profitable companies do. Maximize EVERY transaction.

First things First – Take a look at your products and service and evaluate the things you know your clients need to effectively and completely utilize your service or product. Begin with your initial sale, or your core business, and start adding.

Keep in mind that add-ons are not necessarily the end-all of the sale, just an option that you (and your sales people if they are on the ball) know that every client should walk out with in addition to their additional purchase or they will be unjustly under-served! When you adopt that seriousness, you will come across in a way that is sincere and believable
and your clients should feel as strongly about getting the add-on as you do about convincing them to make the purchase.

I will give two sets of examples, the blatantly obvious and then some to think about – finally I will explain how to implement and maximize this usually common-sense method of increasing your sales. Keep in mind that we’re not looking at this only in the way the common business does – add-ons are easy, typically done in all businesses, just not to the level you will be using this valuable marketing method.

Reminder: two things on which we base everything.

1)Are we doing everything possible to do what is right for our clients and doing it in a way that goes overboard on service and blows away their expectations?
2) Is it going to be crazily profitable and a consistent, systematical integration to your business?

Examples—Blatantly Obvious:

Hair Salon:
$20 cut and style (standard) + $15 gel to style with (add-on)
$50 perm (standard) + $30 color (addon)

Restaurant:
$10 regular meal (standard) + $5 dessert or appetizer (add-on)

Bookstore:
$12 book (standard) + $2 bookmark (add-on)

Car Maintenance:
$30 oil change (standard) + $20 tire rotation (add-on)

Some to think about it:

Hair Salon:
$32 cut, style and gel product (standard) + Mirror, styling, comb, neck trimmers.

Restaurant:
$13.50 meal and appetizer + dessert special to take home

Bookstore:
Buy 2 books – get bookmark of your choice free

Car Maintenance:
Pick: Option 1 – oil change, car cleaning
Option 2 – oil change, car cleaning, tire rotation
Option 3 – everything that’s needed, no questions asked!

Put it together
By now you should be feeling much more in control of your business – so many business owners spend time thinking about everything, all the little details, etc. – just never paying
any attention to the things, the main things that are responsible for your mere existence – revenue generating activities

All the details are important, but not if you aren’t making a profit. Nothing else matters! Take this add-on concept seriously and look at all the potential. I think every day about some-thing I heard on a tele-seminar with Dan Kennedy, “you condition the people you do business with to do business the way you want them to.” That’s right; your clients are condition-able. If you have effectively established your business in your market, then future clients and clients should trust whatever it is you ask them to do.

Scott Manning
President, Manning Methods, LLC
317 407-3382
sj@manningmethods.com

Posted in Expert Columns, Scott Manning | No Comments »

The right insurance will keep your family feeling secure

Tuesday, November 25th, 2008

By Matt Hall
Merritt Hall Insurance

I recently had the opportunity to spend a few hours with Dr. Robert Cialdini, author of the New York Times bestselling book – Influence: the Psychology of Persuasion. In the brief time we spent together, he shared some new discoveries he made in the field of human psychology based on recent research findings… findings that should be of great interest to entrepreneurs who desire to gain influence in the marketplace. Some of the information I’m about to share with you is currently unpublished and not available to the public from any other source.

Maybe you think psychology doesn’t have any relevance to your business or industry. As a whole, you’re probably right. However, I think you’d agree that a simple understanding of how the human mind works (especially concerning the principles involved in the decision making process) can have a tremendous impact on your business. After all, businesses don’t make buying decisions, people do. All markets are made up of people, and that makes the study of human psychology more important to your business than it may appear at first glance.

You’ve probably heard the phrase: “Money follows trust.” Well, that’s true now more than ever, because research tells us that in uncertain times, when people are not sure what to o, they don’t look inside themselves for the answer. They instead look to credible sources (people) of authority to tell them what to do. And that’s the position you need to be in. You
want to be the credible authority… the expert everyone is looking to for advice and guidance. That’s the position of power and influence.

Knowledge and trustworthiness grant license to authority and credibility. Where you truly have expertise, you have warranted authority, but that doesn’t mean you can wield it universally. Before exercising authority, you must demonstrate expert status (what you are known to know). The person you wish to influence must perceive you to be a both
knowledgeable and trustworthy before they will grant you authority to influence them. So what can you do if you’re not currently seen as the expert or don’t have a lot of credibility in the eyes of your market?

Relax. I’m not going to suggest you spend thousands on branding, image building or trying to get on T.V. and radio shows. Now don’t get me wrong, those things can work, but they don’t always make sense in every situation. Instead, try this strategy based on psychological research. It’s simple. It’s free, and most importantly, it works. And you could start using it in the next 60 seconds.

Research shows that you are afforded a brief moment of power immediately after admitting a weakness. So when making a proposal or presentation to a prospect, before presenting a powerful benefit or feature, mention a weakness in your case. Being trustworthy enough to describe the negatives has a disarming effect. Sharing a weakness or shortcoming before mentioning the benefits causes your prospects to feel that you are trustworthy and you gain credibility in their eyes. Remember, money follows trust.

Now maybe you’re concerned that revealing a weakness in your argument will cost you sales. Not to worry. There’s a simple solution. Use the word “but.” It has an interesting function in the mind. It says, “Forget any and all comments that came before me.” So, if your presentation has a weakness, position it before the “but!” By strategically placing any perceived or real shortcomings in front of the word “but”, you instruct the reader or listener to discard the preceding shortcomings and focus on what comes next.

Perhaps you think this strategy is too simple to work. Well, there are some big companies taking advantage of it: L’Oreal (Cosmetics): “We’re expensive, but you’re worth it.” (Forget that we’re expensive. You deserve this!) Avis (rental car): “We’re #2, but we try harder.” (Forget that we’re 2nd. We’ll try hard to please you!)

Berkshire Hathaway (holding company). They have no product. All they have is credibility. It’s interesting to note that in their annual stockholder reports, they always cite a mistake or error before relaying the victories. And this is a stock that costs $116,000 per share!

Be careful, though. This principle works the other way too. The Ford motor company (among others) has violated it many times to their own harm. Their CEO has often been quoted saying things (in stockholder meetings) like, “We’ve had a great quarter, but we still have a long way to go.” Might as well say, “I know we look promising on paper, but don’t believe what you see.” So make sure you’re using this principle to your advantage.

Remember, history has shown – it’s when the going gets tough that the best become the best, because winners find ways to win, and all it takes is one idea to turn your business around… provided you implement.

Matt Hall
Merritt Hall Insurance
2421 Production Drive, Suite 203
Indianapolis, IN 46242
317-247-7737

Posted in Expert Columns, Matt Hall | No Comments »

How To Discover What Boomers Like And Will Pay For In Your Business

Tuesday, November 25th, 2008

By Jeff Bell
Sales & Marketing Results

We previously talked about how baby boomers are the largest growing affluent market segment in the US. And that if you don’t already have boomer customers patronizing your business, you’d better be targeting them fast to attract their business and wallets. “But Jeff, I have a normal boring business and I don’t know what baby boomers would buy from me or pay more to get from my company?” Okay Mr. Commodity Seller, pay attention whilst I spoon feed you some long overdue marketing advice.

Boomers have, because of their accumulated wealth and age, the desire to have their life made easier and to save time. To them, it’s worth it to “pay a little (or maybe a lot) extra” to have things done for them.

What would make their lives easier? The first answer to that is to ASK THEM. It’s really pretty simple. Tonight think about your business, what you sell or the services you deliver to a “boomer” type person. And think about any and all potential hassles or time wasters your business (or companies like yours) causes baby boomer people.

It may be as simple as they have to get in a car to come see you, as opposed to you going to see them. One of my clients is a CPA firm. When I’m in their office during tax season their always an endless parade of older couples walking in the door with their tax papers. Over half the time when they meet with their accountant the comment is made, “Boy it
sure was hard to fi nd this place”.

What do you think it would take to have a senior or “boomer” type on the payroll who likes to drive, to go around town during tax season and picks up the clients tax information, instead of them having to get in their car and brave the traffic to just “drop it off”?

Who knows if this would be attractive or not? The boomer client would you dummy! All the CPA firm would have to do is ASK THEM. And that’s all you’d have to do to. But if you’re a bright one, you might have caught an idea here – that being the baby boomers might pay for the DELIVERY of certain products and services, rather than having to go get them themselves.

A small town grocery store or restaurant might deliver. If you give massages or run a day spa, you might consider a “go-to-them” premium priced service menu. Hair stylist, attorney, fitness trainer, pet-sitting service, general medical doctor, dentist, rental car service (think Enterprise), travel agent and so on.

With the wide availability of wireless internet access via a cell phone card you plug into your laptop, you can carry the internet world to just about anyone. The same goes for equipment. The automobile manufacturers have several commercial van and truck options for pulling your equipment along with you.

I’ve seen traveling, doctors, dentists, pet washers & groomers, storage units, billboards, circuses, libraries, carnival museums and more. Go to any art fair, food market or flea market in your city and you’ll see a variety of businesses carrying their products and services TO their customers and clients.

Again, delivery to boomers is just one idea. It might work for your business, it might not. The key is to ask. And there are several ways to ask. And different times you can ask. Here are some suggestions.

At the check out counter. Don’t ask what I hear now in every retail store I walk into, “Did you fi nd everything you were looking for?” People rarely tell you the truth and say NO. Instead ask, “Buy the way, what one thing could we/I do about what the products/services you buy from us that would make your life easier or save you some time?”

Write the answers down. Keep a list. Do this for a day. If you get responses, do it for an entire week. Then start categorizing the most common responses and start chicken scratching next to them to find out which ones are the most popular.

If you send out a monthly newsletter (you’d lazy if you don’t) next month put in a survey on a half sheet with a return envelope, or maybe put the survey on a postcard – and have them mail it back to you. Tally and score the answers to the same question.

Figure out what the top one, two or three things (ignore them if they tell you to drop your prices) your customers say would make their life easier or save them time, and then build a premium version of your products or services with a HIGHER and still PROFITABLE price and start test marketing it the next month.

You may not hit a home run the first time around but you might be surprised what you discover. It might be that the boomers that buy from you are more than willing to spend more money with you than you thought before because you offered them a “boomer” type product or service that is specifically geared to their wants and needs.

Next month we’ll talk about “packaging and bundling” to create boomer products and services. But before you set this newsletter down, start writing in the margins your questions because you have homework tonight you young whipper-snapper!

Jeff Bell flunked his 1st semester of college pre-med classes almost 30 years ago. So like his fellow underachieving fraternity brothers, he quickly switched to the School of business and majored in management and marketing. Since then he’s helped international companies, regional businesses and start-up entrepreneurs successfully grow their
businesses by creating highly effective advertising & marketing systems.

But if you need to attract more customers with your advertising, request his FREE Special Report at www.TheAdvertisingFormula.com or you can leave less than fl attering comments or questions about this article on his voice mail at 317-713-1244.

Posted in Expert Columns, Jeff Bell | No Comments »

Current Bank Liquidity Issues Necessitates Being Proactive

Tuesday, November 25th, 2008

By Tim Garrison

In today’s environment business owners have to be proactive to provide safeguards in where there money is, is it protected what are the rules for this, what do I need to be doing in checking on my financial institution. Further with the liquidity issues loan renewals and/or new loan requests are going to be more challenging than in the past.

Proactive steps to check on your banks checking / money market accounts:
Is my money safe (FDIC www.fdic.gov insured to $250k thru 12/09 at this point then it returns to the $100k for checking per owner 1/1/10)

Should I open another account in a different bank if I have more than $250k – this is an option but setting up a sweep account that takes the money and invests in an investment account can accomplish the same thing if assets held by NFS or possibly other similar type firms watch limits noted below.

Check on bank financials to see how they are doing a source I found for various bank ratings and financial information is www.fdic.gov/bank/individual/bank/index.html

Investment accounts and how this works when assets held by bank or possibly National Financial Securities NFS (NFS holding assets removes risk of bank failure putting assets at risk within limits noted below)

Investments – SIPC covers the first $500k (there are separate limits that apply to cash and securities within the $500k)

Investments – CAPCO insurance covers amounts in excess of the $500k (purchased by bank you will need to verify if your bank provides this)

We have all heard by now the stories of businesses that go to use a credit facility and not be able to draw on the availability that is there for various reasons.

Areas to be proactive in overall loan relationship coupled with areas to watch:
Know your loan renewal dates for line of credit and term loans. In this environment we have seen credit lines get cancelled if there is nothing outstanding without notice being sent.
Something to be aware of not a statement that all banks are doing this!

Keep your banker up to speed on financial results – they hate surprises

Be prepared for more questions and for many companies the renewal process over next 12 months will be more painful than in the past. You need to plan for this and be proactive in what you are doing to help cash flow, and ratios.

Know your loan covenants concerning ratios and limitations or restrictions built into loan – don’t create a problem if you can avoid it.

DO NOT BOUNCE CHECKS – this is a major red flag to the bank and to outside creditors (the information is available in credit checks). If you do bounce a check get it covered promptly.

If you have a borrowing base and come up short be proactive with bank on what and when you will be bringing it back into balance.

In this environment I would use the credit line once in a while and pay it back just to ensure that it is still there and available. Also in the times we are in the credit line will likely be used but if you get a chance to pay it down even briefly do it (see last point)

The business environment today will cause businesses to have difficult to impossible loan renewals – you have to be prepared for this consulting with your professionals to see what strategies would be appropriate to protect cash of your business. There are times when this might require setting up a bank account outside of bank where primary loans are.

The information above is a brief overview and is not to be used as legal or financial advice be sure to employ your own financial advisor to check on these areas.
Tim Garrison
The Controllership Group, Inc.
317-572-1227

Posted in Articles, Business Tips | No Comments »

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November 2008 Articles

Add-on Services or Products – bundle or package your products or services

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The right insurance will keep your family feeling secure

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How To Discover What Boomers Like And Will Pay For In Your Business

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Current Bank Liquidity Issues Necessitates Being Proactive

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