THE REPORT BLOG

Don't Discount, Add Value

In a recent five-page special section titled, “Strategies for Survival,” the Wall Street Journal compiled valuable tips from thriving small business owners to help businesses get creative to financially stay afloat. One story I found especially compelling was about Pittsburgh-based advertising firm, Smith Brothers Agency. While advertising has been suffering as a result of both the global recession and growing pains from becoming relevant in new media, Smith Brothers experienced a 30% revenue growth in 2008.

One of the ways the privately owned-firm has kept business development healthy in these tough times is by offering performance-based pricing instead of discounting their service and offering extra services or promotions for increased customer affordability. According to the article titled, “Smart Ways to Cut Prices,” Smith Brothers gets paid only if a client’s campaign goals are met or exceeded. This is a bold move, but in an industry with little overhead, it’s a good alternative to discounting, while providing a rare service and streamlining revenue.

For other alternatives to discounting, click here to read NY Report contributing editor Craig James’ suggestions.

How to Get Salespeople to Be Part of the Team

In a recent BusinessWeek blog, the president of a technology company posed the question: "Does it make more sense for sales to be performed by autonomous agents or by team members?"  He then lauded the team-building benefits of putting sales people on salary, rather than commission. The writer’s reason was that if you put a salesperson on commission, you’re communicating to that person that the only consequence of producing less than 100% is simply an incremental reduction in total take-home pay instead of a setback to your business as a whole.

 

While I disagree with the philosophy that commission-based compensation for salespeople makes them feel that work is optional, the author does raise an interesting point. In a “make your own way” field such as sales, how do you foster the teamwork environment necessary for any small business to succeed? Try creating weekly sales meetings with a collaborative vibe as sales expert Jeremy Rawitz recommends in “Building a Better Sales Culture.” Contributing editor Craig James suggests encouraging recognition and appreciation from senior management, coworkers or customers in “The Care and Feeding of Your Sales Staff.”

 

How do you create a sense of team among your own sales staff? I’d like to hear from you.

 

Don't Waste My Time!

I just moderated a dream panel at NYC Entrepreneur Week(more on this over the next week or so).  In response to my question "what should companies be doing differently in this economy", serial entrepreneur Robert Levitan told the following story.  He was at iVillage in 1995 and they were getting ready to launch and he had to start selling advertising.  He interviewed a bunch of media salespeople and no one wanted the job because no one thought that selling online advertising was going to work.  Remember this is before even consumer products companies had websites.  So he decided to do it himself and he had two months to sell the advertising before iVillage's launch.  When he met with potential advertisers, and keep in mind this included some of the largest consumer products companies in the world like P&G, he started out by telling them, "don't waste my time."

So here he is selling an unproven product to the biggest prospects and he tells them not to waste his time.  Why?  Simple.  He had two months to accomplish this crucial goal.  He wanted a "yes" or "no".  Anything else was going to interfere with him accomplishing his goal.  (By the way, he made the sale).

Lesson?  Now more than ever, you have to be disciplined to achieve your most important goals.  Don't let anyone waste your time: suppliers, employees and even customers.

Is Your Prospect Trapped Under a Filing Cabinet

An associate recently sent me an article titled “12 Ways to Get Your Prospects to Call You Back.”  I then forwarded it to my sales staff and asked which one of the 12 suggested ways to get a call back from a phantom prospect is their favorite method. The winner was #5, “Ask if they’re okay.” Below is an example of an email that a sales person using this method might send to a suddenly silent prospect:

Dear Bob;

On the XXth of June, I sent you an email asking for… and as I haven't heard from you, I can only assume one of the following:

1) You're now not interested and I'm reduced to the status of an annoying piece of spam clogging up your email; or

2) You desperately want to contact me, but you're trapped under a fallen filing cabinet and can't reach your phone or PC.

Your guidance would be greatly appreciated.

Kind regards,

Michael Freer

P.S. If it is #2, please let me know and I'll send someone round to help you out.

The truth is my sales staff has used this method in a less comical context. And, it has worked.

 

For more tips on motivating your sales staff in a difficult sales environment, click here.

Revealing Interview Questions

Since I have been interviewing a lot of job candidates recently, I have refined my chops as an interviewer quite a bit. I find that there are a few questions that evoke revealing answers. Here are just a few that have been very helpful:

 

1) "If you could waive a magic wand, what would your next position look like?” I always start with this one. The answer to this question usually tells me, right away, if the person could be a fit for the position as well as for my company.

 

2) “If we were sitting with your last supervisor, how would she respond to ‘what is the area that (candidate) can most improve upon?’” By rephrasing the old, “tell me about your weaknesses,” you avoid getting the “I care too much” answer. You are making the question more objective and allowing the candidate to be honest by shifting the opinion from the candidate to a prior supervisor. 

 

3) “What questions do you have for me?” The more questions he or she has, the better. This is a great way to better understand the candidates’ priorities.

 

But the best questions for specific example of how a candidate did things in his or her past employment.

What You Need to Know about the New COBRA Law

Businesses employing 20 or more employees and have terminated or are planning to terminate personnel will be affected by the American Recovery and Reinvestment Act of 2009. Instead of writing monthly checks for 102% (the extra 2% for administrative costs) of the healthcare premium they received on-the-job, unemployed individuals now have to front only 35%. The remaining 65% must be paid up-front by employers. The employers then withhold the amount of the payments from their next federal payroll-tax contributions. The new regulation applies to employees who involuntarily lost or involuntarily loose their jobs from September 1, 2008 to December 31, 2009.

 

The state has also passed a revised obligation. For employers of less than 20 employees subject to New York State insurance continuation, the employee or other family member pays 35% of the cost but for this temporary subsidy program, the insurance carrier providing coverage under the group insurance program will get the tax credit.

If your business is affected by these changes, visit The Business Council of New York Stateweb site for tips on the next steps to take.

 

Stop Selling Yourself

I had breakfast today with Jeffrey Stewart, noted entrepreneur (Mimeo, among others) and angel capital investor. Among the many things that we discussed was his notion that the business owner should not be selling. His reasoning is that it is impossible to focus on building a company and making sales at the same time. Despite my actions to the contrary (I do sell), I wholeheartedly agree. So given the fact that the business owner is typically the best performing sales person in a company, how do you get to a position where you don't have to sell? First, make hiring the most important thing that you do.  Second, train them really, really well. That includes documenting and sharing all of the things that make you, you.

 

By the way, some time ago I read an article in Inc. that said business owners can be terrible salespeople. The reason was that as an owner, you are used to being in control. In sales, you lose that control so you do a lot of things to avoid losing control and often, put yourself in a position to miss the sale in order to save face.

Traditional Media Still Matters?

I recently read that the subject of our April issue’s Company Next Door interview Gary Vaynerchuk of Wine Library signed a seven figure book deal to pen 10 books. We featured him in our April issue as an example of the power of social media marketing. His success in increasing revenue for his business through his video blog is nothing short of astounding. After reading this article I wondered, when you have defined yourself through new media, why go back to technology as old as the printing press?

 

As a publisher of both traditional (a magazine) and new media (website and e-newsletters), I’m forever trying to wrap my brain around the value of all these different media. When I see TMZ.com has a television show on the local Fox network and Apple computer co-creator Steve Wozniak is ballroom dancing for a reality show, it seems illogical for these early adopters and inventors of new media to revert back to the boob tube…but yet they do.

 

Back to Gary, in his interview with our managing editor, he said his next goal was to get a gig hosting a television show. While I think what Gary is doing is fantastic marketing, I’m still left scratching my head. Proponents of new media are continuing to aspire to traditional venues. This goes back to something our contributing editor Nancy Shenker wrote in “Social Status”: “Social media must be a part of your marketing plan, not a substitute for the media that came before it.”

New Form I-9 Effective Today

Starting today, April 3, 2009, employers must use the revised Form I-9 for newly hired employees. Changes to the new form include:

 

• All documents presented by new hires must be unexpired;

• Temporary Resident Card and outdated Employment Authorization Cards (Forms I-688, I-688A and I-688B) are no longer acceptable documents; and

• Foreign passports containing certain machine-readable immigrant visas have been added to acceptable documents.

For a revised form, click here.

This Too Shall Pass

At the Chase Business Insight Seminar I attended earlier this week, economist Jeff Thredgold gave us trends occurring in the current recession that present opportunities for business owners. One of those opportunities is that the labor markets will remain under pressure with unemployment rising throughout the year. If you look ahead to your company’s growth strategy, now is an optimal time to recruit the talent that you will need to get there. Another employment trend Jeff identified is “bridging.” Basically, workers over 65 aren’t jumping right into retirement; instead they are dipping their toes. Thousands of retirement age employees are bridging employment and retirement by continuing on a part-time basis, using the skills developed over a lifetime. This is an opportunity to work with an experienced person you might not be able to afford on a full-time basis.

 

Jeff also sees low overall inflation continuing through 2009 and 2010. Short- and long-term interest rates will remain low providing great opportunities for business loans and home mortgage refinance or new home purchases. Like every other business trend – from the post WWII boom to the dot-com bust ‑ this recession will end and Jeff thinks that will be at the end of 2009. His overall message was that aggressive business owners are now positioning themselves to emerge from the recession stronger than ever.

New York Enterprise Report to purchase Inc and Entrepreneur

As part of its recently announced financing, The New York Enterprise Report that it is purchasing Inc. Magazine, Entrepreneur Magazine and every other small business media company available.

Happy April Fool's Day.