How not to talk to your customers

This past week I was discussing the construction of a new office/warehouse with a client. This of course is a major investment. So many options for both direct cost cutting and long term savings were discussed.

I was researching solutions like solar power, increased insulation, alternative construction methods and materials and many other things when it hit me. Almost all of the websites had completely misunderstood what the customer is looking for.

All these companies kept talking about the benefits of their solutions; they had savings over time numbers, and a lot of other data supporting their claims. But the one, simple question that every customer wants answered was missing. - "What is this going to cost me?"

Now, if you put an FAQ up on your site, and don’t include price, I think you’ve mistaken what the customer really wants to know. Even when price varies, include a ballpark estimate or examples. The customer will want to hear all your information, after they have determined this is something they are even interested in. Anything but that and you are wasting time - theirs and yours.

So I did a little calling around to get prices, and I managed to squeeze in a simple question to five suppliers of solar power solutions.
"How many of your calls include a question of price?" The answer was ALL OF THEM.
That in my book makes it a Frequently Asked Question, and one that you should be including the answer to on your website.

The thinking here is naturally that you want the customer to call so that you can put a sales rep on them and try to sell them the product. You know this, your customer knows this. Please do everyone a favor and stop thinking that you are smarter than your customer; it’s not going to make you any friends or sales. Since the customer knows that this is your intention, they will be resisting any sales efforts, and keep after getting the ballpark figure that you could have included on your website to begin with.

If you free up this time, your sales reps will have more time to answer the questions of those customers that can afford your product. Meaning that you will make more and better sales with less effort, this is not a bad equation to follow.

Next time you put up a Frequently Asked Questions page. How about actually making it about the Frequent Questions, and not a camouflaged sales pitch? Every time you insult your customer by thinking they can’t see this. You are simply saying "FAQ You!"

Do you really want to kiss your customer with that mouth?

Is your approach bringing, or stopping traffic?

Both StumbleUpon and Digg have the potential to be real traffic boosters for your website or blog. They can also put an effective roadblock on your attempts to make it anywhere if you and your friends are not using them the right way.

You have to remember that these networks were not designed to drive traffic to you; they were designed with their own well being in mind. Not yours. Users who want more than they give are not going to be very successful.

Digg and StumbleUpon both rely on people to submit and vote on content. They have complex algorithms for calculating what stories should be promoted to popularity status and which ones shouldn’t. The common thread for these calculations is that they attempt to stop users from manipulating the system, and they are pretty successful at it. Far too many users are trying to manipulate the system to get traffic, this will be hard to do and is the primary reason why it isn’t working. There is a much easier way to use the system that will inevitably get you traffic - and a lot of it.

What is the Right Way?

1. Participate
This is the base for all Social Networking success. Be an active part of the network so that you add as much as you hope to receive. However, as you will see later in this post. Mindless participation doesn’t do much.

2. Think about what the network wants
The Networks both want users to submit and vote on GOOD content, they have checks and balances to make sure that the votes counted are worth something.

3. Comment
Commenting shows the system that you are giving this article more attention, which automatically will make a comment worth more than just a vote.

A Closer Look at Digg

Digg has the option to shout pages to your friends. Since Digg wants to promote good content. Do you think they are going to give a vote where the reader isn’t looking at the article first? For Digg, the key is to either submit the vote from the page with a button on the article, or use that hyperlink before you click digg. If you vote without looking at what you are voting for; Digg will know and compensate accordingly.

When I have shouted a Digg article to friends, the total amount of traffic is directly related to how many hits I get from that shout. I’ve had articles with 30 diggs but only 4 actual hits. In other words, the people that dugg the article didn’t read it. The total amount of traffic there was about 20 hits.

Then I have had articles with about as many hits and 20 hits from the shout. Which gave me a total traffic of over a hundred. Digg’s algorithm saw that people were actually reading the article before voting and kept it higher on their pages for longer.

StumbleUpon

Stumble is different, when you thumb up an article there, the best "value" of a vote is when the user arrived at that page because of the Stumble button. Not if they vote from the article itself.

A stumble always happens from the page or article, so the problem encountered at Digg with users not actually reading the page isn’t present. What I am fairly sure about thought is that Stumble will look at how long you spend on a page before voting. A lot of testing has shown that Votes inside of a couple of seconds after arriving don’t count for much there.

Commenting for Traffic

If you really want to be an active part of the community and become a powerful voter, you have to comment. Your comments are worth a lot more than your clicks. Comments on your post will drive it up the algorithm scales much quicker than votes will. If you comment on others, they will comment on you. It’s that simple.

Choose your friends wisely

It is easy to just go ahead and slam on as many friends as possible, thinking that it will boost your power and traffic as a result. This is not necessarily true at all.

On Digg for instance. Having a lot of friends will actually make articles you submit and shout harder to get promoted to popular. There are reports that people with a lot of friends are seeing this effect clearly although it is not documented on their site. Also votes inside your network aren’t worth as much as votes that are completely unrelated to you. Having a lot of friends that aren’t’ reading and voting is actually slowing you down.

On Stumble, You are limited to 200 friends, this seems like a lot, but if those friends are added randomly without understanding what they are looking for, they might actually not be your best option.

Chances are that if your friend isn’t interested much in your topic, they are not going to vote you up when they get to your pages. If you aren’t getting thumbs up, then you are not getting the benefit of them promoting it to their networks. This will immediately show up in your numbers.

Avoid the temptation of adding anyone and everyone that you can find, add the people that show interest in your items already, if they vote on your articles, they are likely to want to read more of them in the future and do it again.

Make friends in your own topic area, they are also looking for your information and will have friends that are doing the same. This is where your traffic will come from.

Finally never underestimate the power of good content. The same old story will always be true, good content will always do better than bad. Work on your writing and the results will show up.

Good luck, and if you liked this, I hope that you will Digg or Stumble it as well.

The elevator pitch - a 30 second window to make an impact promoted by so many is actually slowing you down. But there is one great thing about the elevator pitch. Most people don’t know that they are wasting their time. Use that to your advantage.

Jack of all trades - Master of none

This is the problem of the whole concept; it means that you have to write a sales pitch that covers everyone and everything.
Almost no business can be made in 30 seconds, the elevator pitch is designed to create interest and hopefully further contacts so that you can get the business at a later date. So in order to measure the effectiveness of an elevator pitch we need to see how much of it results in future contacts.

If you completely 180 your approach, you can actually improve the results of this opportunity to almost 100%. You do this by letting them run their elevator pitch on you.

Get them talking

No matter how you do it, get them to throw their elevator pitch at you instead. By listening to their trimmed and elegant message you will gain valuable information about what they are doing.

Use question sets that keep them moving forward.
- Oh, how do you do that? - Isn’t that a very competitive field? - Is that government regulated… Ask questions relevant to what you do, know, or can offer. But don’t try to sell it now.

Don’t interrupt; let them get as deep into their elevator pitch as you can get them. Your only objective is to walk away with as much information as you can get and their business card.

The benefit of this is that your interest will do two things for you, it makes them feel comfortable, and it takes the pressure off you to have the perfect elevator pitch for every situation. All you have to do is listen and pay attention.

Once you have got them to talk about their business and themselves, the next step is to simply get their business card. Since they are already warmed up and relaxed, the natural next step for them is to give it to you. Especially since you didn’t sell or try to pitch anything to them.

If you can get their cards, you now have the 100% return, by doing nothing more than listen, you get the control of further communication. You also have key information as to who they are, what they are doing and maybe even what they want, and you have their contact information. Use this opportunity to take your time, come up with how you can help this person, and prepare a much more targeted, relevant, and powerful message.

Take them to lunch - you have now increased your window of opportunity from 30 seconds to an hour.

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Welcome to the Evolution

In this installment of the series we will find out what a Dinosaur Marketer does, and how to spot them in order to avoid them. I’ll also begin to explain to you what will work today and in the future, as well as what companies need to consider if they wish to be a part of this future. Today we will look largely at the Internet perspective since this is where this revolution began.

Recognizing a Dinosaur Marketer

Anytime a Marketer is telling you that your current message should be used on Social Networking sites etc. You should run the other way. The simple fact is that old-school, Hard-sell, in your face, marketing is not going to impress anyone on a social networking site, and it will brand you and your company as a Spammer very quickly.

In the future, the successful marketing message will be an information road sign. With a strong invitational tone and a weak or non-existent sales message, the key will be to provide them with key information up front, but not to try and force anything down their throats.

The Comfortable Lie

The change away from so much of what we have known about marketing is causing some serious problems for many. Both business owners and a lot of marketers are uncomfortable to accept that what they know, and what has been working for so long is not only losing effectiveness, but could actually be hurting a company.

Many marketers out there are capitalizing on this reluctance, and they are making big money telling businesses exactly what they want to hear. These are the dinosaur marketers that can effectively put your company on the extinction list. They are not selling you the best option, what they are telling you is. "We can take the old ways, and force them into the new media." This is a great sales pitch, because it sells comfortable, easy to understand, old school marketing in new wrapping to those that don’t understand what has really happened to the marketplace. It is also a great way to make you about as popular as a meter-maid. You are about to become a Spammer.

Here are two key trademarks of the Dinosaur Marketer

1. They will propagate using Social Media Profiles to spread your sales message. The worst possible scenario of this are the ones that actually hijack "hack and steal" profiles on places like MySpace in order to use the credibility of the person to send marketing messages to their friends. Should they do this in order to promote your company, you are now liable for the legal ramifications of this.

Most aren’t that bad I have to admit. The norm is to set up a profile and try to add as many people as possible in order to then send them your sales pitch. The more unscrupulous will hire people to do this in large numbers with more or less sophistication, (less is the standard.) Then they show you how much traffic they are generating.

You can forget about the traffic here, it has little or no bearing, because this like any other mass marketing will have a very low conversion rate. What is even more telling is that profiles that do this are marked as spam and deleted. Although the people on this list might be interested in your product, they are not interested in being disturbed and spammed, so they will not look at your information as often as they will mark you as a spammer effectively cutting your access to them.

2. They will try to sell you on email lists, and often claim that these are "targeted".

They do this by data-mining social networking sites, finding people who are interested in your area of business, and then compiling lists for it. They will then tell you to send emails to these addresses.
These approaches are bad ideas because they lack the key ingredient necessary for success in the modern marketplace. Remember that the customer now expects you to ask for their permission before you start bombarding them with sales pitches. An interest in your general area is not the same as giving you permission.
Instead these marketing dinosaurs are trying to use some middle ground of acceptability to justify this approach. Arguing that just because someone lists "gardening" as a hobby, they want every piece of gardening related advertising you can throw at them.

You can’t have my email

People are now protecting their contact information more and more. Even when we do post an email address online today, it is becoming normal to camouflage it in several ways. Instead of Myemail@myisp.com, People will write things like myemail (a) myisp (dot) com in attempts to confuse the automatic software applications (called robots or spiders) that scour the web for the less careful posters. This is only one of the many attempts to protect email addresses from spam.

A lot of people now have a "trash" email with a service like Gmail or Yahoo mail to use as the email openly displayed. This is the equivalent of a large garbage can to collect your information. That most of the trash will collect there. Again, this is a hint to be applied towards your re-evaluation of your direct email marketing. If people don’t want it, why keep doing it.

The Dinosaur Marketer will apply the reasoning "If they don’t protect themselves, its fair game." I’ve heard that said more than once by the old school marketers. Now all I’m asking is that you think about this for a while. Not protecting oneself is not the same as giving everyone the permission to disturb. This kind of reasoning is like saying "if you don’t lock your car, it’s you are giving permission for anyone to use it." If you don’t appreciate spam, what makes you think that your customers will?

What is the market demanding today?

The market demands less noise. It’s really that simple. We are still extremely interested in huge information flows. Interconnecting ourselves to more and more information every day, but the customer makes the choice of what information they want.

This means that there are still plenty of customers out there interested in what you have to say, but they want it when they want it. They are demanding information at their leisure, and either with their express permission or at their direct demand.

Google is a great example of this. We hear all the time that being on the first page of Google for your specific search terms is key to generating business. This is not a testament to Google as much as it is a clear indicator what the new marketing landscape demands. It does however explain that Google has understood this and has become a premier provider of the solution that the customers want.

What I want, When I want it

Context is the key word you need to remember. When a search is made for "business cards" on Google, chances are the searcher is interested in buying business cards. Not getting an oil change or reading about Britney Spears latest adventures. This is the difference between the modern world and the old mass marketing swamp.

Your customers and potential customers are getting very good at finding what they want. And thanks to all the social sites, they are getting even better at sharing this with their friends. Your business has in other words only a few simple requirements. Make sure that the customer is able to find you when they want to, and when they do, meet their expectations.

Forced Ethics

Unscrupulous marketers have made customers weary of being cheated, tricked and duped. In the past, people might have just walked out of the store. Today, they will write about their experience. Your company will quickly show up on Google’s first page alright, with the additional keyword "scam" attached to it.

Try it now, pick any decent size company, and search for it on a search engine. But add the word Scam ("acme widget design" + scam). The results are pretty telling about this concept. When you manage to make a single customer feel like they have been cheated, you are going to have to live with it. And your company name will be dragging through that swamp for much longer than you might want it to

This creates what I call Forced Ethics; the mere possibility of this happening is changing the marketplace and mostly for the better. Customers now have the direct power to do serious damage to your business based on their experience alone. Negative publicity spreads much faster than positive leaving a large possibility of making a small mistake a very expensive one.

Your only real defense is to do business in an ethical manner. Companies are being forced to live up to all those lofty statements that they made in the past and never cared about. You have to promise what you can keep, and keep what you promise, or your customers will spread the word very quickly. You are no longer collecting the cash and moving on, every single time this happens you are losing prospective customers at an alarming rate.

The Dinosaurs of the business world are trying to fight this with lawsuits, suing bloggers and social network posters that mention negative aspects of their companies. But the only effect is a snowball of bad publicity. You have to remember, that even if the initial statement is false and you can win a libel law-suit over it. The lawsuit itself will now make you look like Goliath, and the original false statement is going to be reported on 100’s of blogs around the internet.

Now the blogs are reporting what is true, you did sue XX over the statement, so you just managed to create a negative publicity campaign for yourself that you can’t sue your way out of.

This effect is the same regardless of whether a customer is disappointed on or off-line, the information about this experience will make its way online and on to hundreds, thousands or potentially even millions of others.

It’s not about Web 2.0, It’s about relationships

Your business has to be based on relationships, your relationship with your customer will make you part of their network of connections. It’s a circle of friends and acquaintances that you have to treat like a social group of any other kind. Trying to force your way in will result in an increased effort to keep you out.
If you can build strong relationships, you will be invited into these circles. That’s where your money will be coming from in the future.

In Part three, we are going to take a hard look at everything you should be doing, how to make social networks both on and off-line work for you, and how to build your business around long term sustainable practices.
Don’t forget to subscribe so that you don’t miss the rest of this series.

This multi-part series will help you understand what is really going on with the marketplace today. How the Social Media Revolution is going to affect the way you do business today, and in the future.
We will address both the pure marketing as well as the management and business development issues that are changing your marketplace and forcing you to choose between evolution and extinction.

This revolution is not just a fad, it won’t go away, and most importantly, it is so momentous that you can’t just adapt your old techniques to fit it. Adaptation now means re-thinking your company from the core. With a weakening economy, those who cling to the old ways today will be the proverbial Dinosaurs tomorrow.

If you are in business today, or plan to be in the future, you should consider Subscribing to make sure you don’t miss any of these posts.

Part 1 - Understanding a Changing world

The technology revolution has since the 90’s sparked discussions on how we are becoming more and more disconnected from each other and how the Internet is depriving us the basic human need of socialization.

Human needs will only be denied for so long. The Social Media Boom is a clear symptom of this. The market has taken the internet to a new level by becoming increasingly interconnected. Before this revolution, a customer could do little more than sue if they were displeased. Today, even the smallest customer can build an avalanche of negative publicity.

Effectively the market has returned to a pre-computer time when "the customer is always right" still ruled. The customer now actively seeks out others to talk and discuss not only your products, but also everything else that your company does. They are using this means of communication to force companies to listen to them. The power of numbers has again made the customer right.

The relative isolation of an angry customer is no longer there. Your customer in Japan can and will communicate their disappointment to your prospect in New York as easily as if they were neighbors. Those that choose the short term solution of not listening to a displeased customer are handing out their own coffin nails.

Let’s take a look at what has already changed, and what changes we expect to see in the future.

Access Denied

The total accessibility of our modern times if often discussed. Technology gives us access to enough information to completely overload our capacity to take it in. When the overload hits, we naturally limit something. And the first thing to go out the window was our tolerance for unsolicited sales efforts.

We can see the movement towards this reduced tolerance in some recent developments.

1. The Do Not Call Registry
Over 70% has signed up for this list of numbers that phone salesmen are legally bound to not call. This should tell anyone that the industry is dead. Don’t make the mistake of thinking that the remaining 30% WANT to be called in the middle of dinner, they just haven’t signed up yet.

2. TIVO / DVR
When asked, over 65% of all digital video recorder owners stated "the best thing with this technology is the ability to watch a show after it has been run so they can fast forward through the commercials." Although 35% had another primary reason for liking their DVR, over 99% reported fast forwarding through the commercials on a recorded show.

3. XM-Radio
Again, one of the big selling points here is radio without advertising. "100% Ad-Free" is on almost every XM-Radio sales poster you see around.

4. Direct Mail
Most apartment and condominium complexes have a trash can right next to the mailboxes for people to "sort" their mail before even bringing it in.
Next time you are in an office supply store, look at the shredders. One of the major selling points for these machines is that you have to shred your direct mail to avoid identity theft. Direct Mail is not only a nuisance anymore; it has become a threat.

The message is clear. The unsolicited sales effort is not only ineffective. It is now considered invasive, unwanted and interruptive. This means that the companies that continue their old forced efforts will be considered invasive, unwanted and interruptive as well. Not exactly the most desirable buzzwords for any company.

The marketplace has sent a very clear message, and you better pay attention.
"You don’t have access without my permission."

The Social Marketing Asteroid

So the customers got very good at screening out the unwanted sales pitches. This left a little room in their otherwise busy day for other types of information. Enter the Social Media networks.
Not only did they allow for a lot of activities that people simply thought were fun, it was soon discovered that it also gave access to information that previously wasn’t easily accessible. No matter how obscure the topic, someone knew something about it. Word of mouth marketing started in these networks simply because someone liked a band, a new product, or made some other discovery. This was not selling; this was honest stories from other consumers.

Now people were talking, and sharing information. Small companies, with niche products who had lived on tight marketing budgets were all of a sudden being talked about. Word of mouth rocketed some of these small companies out into the stratosphere before even they had time to react.

Then the Asteroid hit.

The information sharing online all of a sudden reached critical mass, and it became the norm for getting information about products and businesses. The customers now got the information they wanted, when they wanted it, and they got it from non-affiliated sources. We choose to listen to relative strangers before we take the word of the company that sells it.

All of a sudden, the high volume carpet bombing of customers lost most if not all effect. This was the real beginning of the end for the Dinosaur Marketer.

Just like any other well established institution, traditional marketing is fighting back, clawing at everything to retain a grip in a quickly changing world. These are the ones spreading mass emails through social networks, and using fairly innovative ways to fit their square peg into the round hole.

Here is the problem.

We know Social Networks became popular as a way to get information without being bombarded with sales pitches. The idea that we should try to fit mass marketing into this forum is nothing more than a foot in the door. It is the last desperate attempt of the ones destined for extinction because they are unable to adapt. Those who propagate this are the Dinosaurs of Marketing, and the market will exercise its power to push them into the history books soon enough.

For any company that wishes to survive, it is imperative to recognize this type of marketing effort. It may appear cheap but really is expensive, simply because it doesn’t work very well. More importantly it halts your company from beginning the necessary evolution to survive.

Stay tuned for Part Two where we will discuss how to recognize a Dinosaur Marketer, how to effectively begin evolving, and I will explain why this is going to change all marketing, not just the online world.

Most companies have a pricing policy that leaves very little room for giving a customer his or her money back. The ones that have that space normally do so because they are aware that their product is not what they make it out to be.

I discussed the cost of losing a single customer in "Short term Decisions ". And this is something you should always keep in the back of your mind.

Both approaches are equally dangerous. I won’t explain the problem with selling a sub standard product under the pretense of it being more than it is. You will however never be completely error proof in your business. You will always have customers with legitimate problems, and they should always be taken care of immediately.

Before you consider any major purchases or investments, put enough of a buffer away so that you can quickly and easily give a customer his money back should they be dissatisfied. Building this financial buffer into your financial model means that you will always have the ability to correct a problem and hopefully avoid bad will.

No one likes having made a purchase that they are dissatisfied with, but if they are met with no argument and a quick fix, this will often turn into a Positive relationship builder as opposed to a negative experience.

Take the small hit up front. You will gain a loyal customer that comes back, and brings friends.

You should never let a day go by without doing at least one marketing activity. This can take many shapes. If you are normally short on time, focus a lot of your energy on the activities where you learn more about your customers as opposed to just trying to sell to them. This will both build your relationships and give you an insight into where you can improve to better help them solve their problems.

If your schedule is normally packed full, your lunch could be a great way to do this. Start every day with making a phone call or two and see if you can book a lunch with a customer or prospect. The key here is to take the time to listen to them, ask questions about who they are, what they are doing, how they are doing it, and what problems they are having.

Don’t sell, don’t try to sneak in your pitch, and try to talk a whole lot less than you listen. Remember, this is not a sales meeting, this is marketing research. You are going to learn a whole lot about the customer and by not putting any sales pressure on them; you will be given a much greater gift, Information.

You can then take that information back and take a long hard look at what you are doing to meet the customer’s needs, and solving their problems. This is often the best way to find areas where you could be selling your services to a customer that neither you nor they have thought about. It can also be a way to find out that your customer could become a strategic partner.

You have to eat, why not make it count.

Customer relations are a wonderful thing. Done right you build a strong connection with your customers and you can become their preferred supplier of solutions to a particular problem. The new CRM software boom is giving us tools that make this process easier and much more effective. More and more companies are jumping on the bandwagon and the mating call "Let’s get CRM software" is echoing through the Business Jungle.

Just like so many other powerful tools, most end up using only a fraction of the available functions, and instead of evolving their approach and actually improve their relationships, they keep doing the same thing they have always done. Effectively turning what could be a great strength into a nuisance for the customer.

I keep hearing sales managers ranting "It’s been 32 days since we called, we have to call this customer now." This is the first mistake. It doesn’t matter how long ago it was that you called them. There are way too many other facts that come into play to just rely on this one number that CRM can track for you. If this is the common statement at your company, it’s a dead giveaway that you are doing something wrong.

It is however a great way for bad sales managers to look like they are doing something.

Customer relations like any other relation means that you need to pay attention to the customer and if possible try to predict their needs. It does NOT mean that you should be more diligent at bothering them.

The real way to build customer relations is to use every piece of available knowledge about them to become an asset, something that increases their productivity and makes their life just a little better. This is done by listening to what they say, paying attention to what they do, and then contacting them when the time is right. Or if you can’t predict their patterns, at least make their ordering process as smooth and painless as possible. Most services are needed when they are needed, which doesn’t necessarily mean on a fixed schedule.

At a small company I once worked for I was responsible for all purchases. The coffee usage at this place followed patterns that only a chaos mathematician could predict. So we simply ordered when someone noticed that we were getting low. I kept getting calls from the coffee supplier on a certain date every month. It didn’t matter if I ordered a week before or not, on the first Wednesday of every month I got a call telling me to order more coffee.
Not asking… telling! (but we’ll get to that one in another post… )

These calls not only did nothing to help me, they became annoying. They had entered my order frequency at once per month and picked the day to call. Come hell or high water they were going to call me on that day. The fact that I had to tell the sales-people that I just ordered coffee from them told me that they were not the sharpest knives in the drawer.

It would have taken little or no energy for them to start running my orders through the same system and seeing that I recently ordered, maybe over time they would have figured out what I never could; How to predict our coffee consumption. Had they managed to do something like that, they would now have become an asset, helping me make sure that coffee didn’t run out. This would have given them the competitive edge where a competitor would have to work very hard to even be considered.

Needless to say, I had no problems switching coffee suppliers when I saw a good deal simply because I got nothing more than coffee from the old company. Not only did the new supplier beat their price, but I had everything to gain in terms of service.

Real Customer Relations means that you listen, learn, and do everything you can to become an unobtrusive and natural part of your customers life. When your services are self-evident and automatically included in their day to day lives, I guarantee you that you will keep them as customers for a very long time.

By all means, use the tools available to you, but use them to become better at helping your customers. If all you do is use your CRM software to become the Swiss Watch of annoying sales calls, you could probably spend the time, money and energy better somewhere else.

Do you have an advertising budget? If so, is it considered an expense? If you answered yes to those questions, you are letting the wrong person control your marketing.

Accountants and Marketers are notorious enemies in the corporate world. Accountants are constantly fighting to keep budget control, and Marketers keep singing the old "spend money to make money" tune.

Treating your marketing budget as an expense is completely wrong. It should be considered a form of credit line if anything. You should certainly start by setting aside an amount that is to be used for marketing. But in order to make sure that you are not shooting yourself in the foot, this amount must be allowed to replenish on its own merit as it earns money. This will allow your marketing to become self funding and it will also give you much better insight in what works, and what doesn’t.

If you run an ad, costing you $500, then that money should be taken out of your marketing/advertising budget. Just like the accountant would want you to. That’s however where the accountant is right for the last time.

If you have a $1200 advertising budget, you can afford to run a $600 ad twice if you work on a straight budget. After you’ve run it twice, you are out of money and have to stop. However, if that ad brought you $800 in profits, you are bidding for a dunce cap if you don’t run it again and again.

When that ad brings you $800 in profits, start by replenishing the marketing budget before you consider what your real income was. In essence, you made $200 but your marketing budget is back to its original level.

Should the Ad bring $500 in revenue, don’t run it again, but stick that money back into the advertising budget. "Pay" your marketing account first, and you will always be able to continue your efforts.

Doing this carries two major benefits.

1. It gives you a better understanding of your marketing ROI, Telling you which efforts are good and which are bad.
2. When done over time, it allows you to compare several ads. In other words it allows you to find the ads that are outperforming the others, tweaking your message so that you will slowly see better and better results from each ad you run.

You should end the year with the marketing budget at the same amount as you started. That will be your best indication that your advertising has justified itself.

Over 80% of all new businesses are gone within 4 years. Often the decision that kills the business is taken in the early stages, and the efforts to correct this mistake are never enough to overcome it.

Most of the time, the problem starts with a small decision that seems to be part of day to day management, and ends up being the 800 pound Gorilla that knocks the business over. This decision can be anything from placing a single ad to choosing what printer to buy for the office. Small and seemingly insignificant decisions that prove to be anything but small or insignificant down the road.

I saw a company go from a steady growth to being out of business in just over two months because they chose a cheap printer. When the printer failed late one Sunday night when a lot of printing was needed for a very important presentation on Monday morning, there was no time to correct. They had spent a lot of money on the event and had no way of recovering.

Two seemingly small errors, buying a cheap printer was one, the more serious one was allowing things to get that close to the finish line without sufficient backup plans. As much as we would like to think that this is the exception, small businesses are notorious for cutting deadlines way too close.

Being flexible is only good if you can stand firm too

Small businesses make these mistakes because they operate in the “flexible range”. One of the great strengths of a smaller company is its potential to adapt. This however often leads to changes being commonplace, which is never a good idea. Always changing to match the present is a reactive approach, always keeping the company behind the curve.

The key to avoiding these mistakes is to always make decisions for the long term. It’s known that successful business people are often quick to make decisions, and slow to change them. This might sound counterintuitive since a business person has to be adaptive to their environment, but the simple fact is that the short term environment is much too volatile to base your decisions on.

Being slow to change a decision means that your decisions have time to come to fruition, Making long term decisions and sticking with them until you have enough data to see whether it is the right one is the only way to ensure long term success, changing every time the wind does is an extremely expensive way of doing business.

Count to Ten (thousand)

You make long term decisions by stopping yourself from reacting every time something seems to be wrong. The “problem” is a marker, a heads up that this is an area that you should keep an eye on closer, but you should never make a decision based on disturbing news on a Monday morning. That’s the time to grab a coffee and talk to people. Try to hash out what this really means, Is it a trend change, or just a bump in the road. If you are prone to reacting quickly, you will make decisions based on too little information.
If you really think that a change is needed, it’s time to pull out the whiteboard and consider what that change will mean to all the other aspects of the business. Run through what the immediate effects of a decision are, and then try to see if you can predict what impact each of those effects will have for the future. Do this as a rule whenever you are considering making a change or a decision.

After a while, you will become better at seeing the long term, and that alone will put you ahead of the curve, the main idea is to slow yourself down to acting on trends, not just little bumps.

Don’t be so firm that you lose customers

There is one definite exception to this rule, make quick decisions when it regards correcting a customer’s negative experience. If the customer is displeased, you have a very limited time to make a difference. This is a now or never situation. And unless you are running a business that gets a lot of complaints, taking the hit and improving your customer relations is almost always the best choice. Because you are dealing with relations, this is in fact a long term decision.

As an example, think of a restaurant that you no longer go to because you didn’t like something there, maybe it was the, service, maybe the food itself. Fact is that since you haven’t been there for a while, you don’t know if it is anything like what you remember.

The restaurant could have fixed the problem the second you left the last time. You still just choose another place when you need to pick a restaurant. They have lost your business, regardless of what changes has been made since. Not only has their corrections not brought your business back, they have also lost your references. You aren’t going to recommend this restaurant to anyone simply because you have a bad experience from it.

Now imagine that the restaurant corrected the problem that turned you off the second you walked out the door. Think about the effects of losing you as a customer. Over the course of one year, you might have eaten there four times, and told five people about it, who each eats there four times a year, and tells five people etc…

If the above is true, each customer eats there four times a year and converts five more people to do the same every year. The total effect of turning you off from that restaurant is 18,748 customer visits in five years. Just ballpark that the average tab is $30, that comes to a total lost revenue of about $560.000 over those five years.

Would you rather lose the $30 tab, or the $560,000?