Sunday, February 26, 2017

6 Ways Entrepreneurs Can Win More With Social Media

twitter-headAn all-too-common question I get from startups and small businesses is “Which is the right social media platform for my business?” Is it Facebook, Twitter, LinkedIn, or one of the other 200 active platforms vying for attention these days? The right answer is that not all of these are worth your attention, but it’s probably more than one.

The “Tyranny of the OR” is a concept from the classic business best-seller “Built to Last,” by James C. Collins (Stanford Business School). Too many executives believe that things must be either A or B, and can’t be both. The reality is that most businesses need to embrace the “Genius of the AND,” meaning they should use and monitor more than one of the available platforms, based on objectives.

If you are in the half of all small businesses who still ignore social media, you need to read the book by Dave Carroll, “United Breaks Guitars.” It highlights the story of how United Airlines paid no attention to social media while Dave’s story of his crushed guitar and poor customer service went viral around the world. United Airlines spend a long time recovering from that debacle.

Thus your objectives for social media should at least include monitoring your online reputation on the three top platforms, and hopefully taking the minimum actions to turn any negatives into positives for the rest of us. Of course, the right approach is to be proactive along all the following fronts:

  1. Reputation management. You can’t ignore the fact that Facebook now has over 1.86 billion monthly active users who may be talking about you, and there are 22 others, per Wikipedia, that have over 100 million users. You need to protect and grow your brand, so the first step is to know what’s going on, and the best defense is a good offense.

  2. Build your brand and expert visibility. Engaging in social media and blogging on a regular basis is a low-cost way to achieve visibility, and become the “go-to” person for that topic and the voice that people trust in your industry. That’s how you brand yourself as an expert in your niche and make your company the one that others seek out and turn to. Customers today trust those they know and those they see others trusting.

  3. Increase customer leads and conversion. With over 78% of the U.S. population now using social media, at least 30% look at profiles on Facebook, Twitter and LinkedIn before buying any product or service. Of those, approximate 70% said they wouldn’t deal with a new company if it didn’t have a social media presence. You need to be there.

  4. Maximize customer retention. It’s a well-known axiom of business that efforts to retain existing customers have tremendous payback, compared to the costs of attracting new customers. Courting them with ongoing updates and special offers through their social networks is a natural way to keep their loyalty.

  5. Proactive customer service. Without social media, companies must rely on incoming calls and letters to address customer problems and concerns with products and services. Why not ask them for feedback before there is a problem, and watch what they are telling their friends, both good and bad?

  6. Keep up with the competition. Last year, Facebook’s revenue from advertising was over $26 billion, which was a 50% year-over-year increase. Almost 40% of small businesses that sell on Facebook say it is their sole sales channel. Ignoring what your competition does is sure to limit your business longevity.

So what are the best social media platforms for small business, according to these industry leaders? It never hurts to look at where the big boys are. According to data from Inc. 500 companies, major hitters are LinkedIn (93%), Twitter (78%), and Facebook (74%). I recommend that these be the point of entry for every business.

For the new platforms and all the rest, that’s where tracking and testing comes in. Set some objectives, pick a likely platform, set some measurements, and do a 30-day trial. If you don’t get results, it might be a mismatch for your target market. If you see progress, double down and add even more content or focus to continue the positive momentum.

So there is no one magic social media platform for any business, just like there has never been just one marketing channel for any business. The best marketing programs today for small businesses are the “genius of the AND,” including traditional print and video advertising, complemented by proactive efforts in a selection of the new social media domains. Don’t put all your marketing eggs in one basket.

Marty Zwilling

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Saturday, February 25, 2017

Why Good Marketing Campaign Costs Continue To Rise

marketing-campaign-costsEvery time I challenge a business plan with little or no budget for marketing, I get the answer that they will be using “viral” marketing, which costs nothing. The founder explains that the product is so “buzz-worthy” that usage will spread rapidly through word-of-mouth only, meaning people loving it and recommending it to their friends.

First of all, Seth Godin pointed out a long time ago that viral marketing does not equal word-of-mouth. His view is that word-of-mouth is an unsolicited consumer action, positive or negative, which usually fades quickly, like a good or bad restaurant review.

Viral marketing is a deliberate marketing action, designed to grow attention at a compound rate, without further stimulus, by word-of-mouth. It usually implies an opportunity to win big, like a lottery, or experience something sensational, like an incredible video or free product.

At any rate, “buzz-worthy” and “viral” are marketing illusions that cost big money to create, and these are only the beginning. In a business plan these are only one of the many marketing campaigns which continue to rise in cost. Here are three key cost elements of just the viral marketing campaigns:

  1. Hire brand evangelists. Think of a brand evangelist team online as people blogging about your product, or posting links to it in every forum. Brand evangelists offline talk up your product lines at cocktail parties or recommend your services to friends while watching their kids' soccer game.

  2. Develop viral content. Someone has to design and create those entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by e-mail. It’s harder than it looks to exploit people’s propensity to share humorous, enjoyable or useful information - jokes, special offers, and games.

  3. Seed viral activity. People are more demanding and have more choices than ever before. This means spending more money on search marketing (SEM) to make it look like the buzz is working. It also means making the content appear omnipresent on the Web and in the marketplace, including dedicated video sites and blogs. In addition, special offers and competition prizes may be required.

As a result of the rising popularity of viral campaigns, the cost of developing one has increased significantly, and the increased ‘viral clutter’ has made it more difficult to stand out from the crowd. However, despite this, viral marketing can indeed be more cost effective than traditional marketing when done well.

Seeding is the most expensive aspect of a viral marketing campaign, with some video sites charging in excess of $10,000 to be featured on their home page for one week. Only a few years ago a humorous video or unique toy could be seeded into a couple of relevant online communities, and it would be hugely popular. However, the cost of entry has gone up as the concept of viral marketing has become pervasive.

In general a well-executed viral marketing campaign can cost anywhere from $100K to many millions. There is a reason that sites like Priceline.com Europe and Facebook, which everyone believes were made popular by viral marketing, have spent at least $50 million each becoming a household name.

Some startups not only ignore this and don’t budget for it, but they actually plan on the free viral marketing to generate enough revenue from click-through advertising to fund operations and future growth. That’s a double death wish.

We have all heard of a few cases where viral marketing resulted in a message “spread through the Internet like a cold in a kindergarten,” but counting on this can just as quickly lead to the death of your startup. Unless you have very deep pockets, plan for some very significant marketing costs to kick-start your dream.

Marty Zwilling

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Friday, February 24, 2017

8 Key Ingredients to a Profitable Consulting Business

consulting-businessMost of the guidance you see for entrepreneurs is aimed at those who are selling a product (Apple, Tesla, Xiaomi), or selling a service (Uber, Airbnb, Snapchat). Yet, according to statistics from the Small Business Association (SBA), over half of new businesses offer something else - personal professional services, including consulting, business coaching, and advisory services.

The challenges for making money and survival in these professional services worlds are different, maybe even tougher. The “product” value is difficult to quantify, the costs are nebulous, and entrepreneurs have to clone themselves to scale the business. Many are reluctant to really “market” themselves, and have trouble differentiating their offerings to clients, except by price.

If you are already running a business in this category, or thinking about one, I recommend a new book, “The Profitable Professional,” by Kelly Clifford. From his own successes and failures in this domain, he explains how the rules and customer expectations have changed in today’s world, and he offers some practical guidance on how to survive in this new world.

Based on my own years of experience in this space, I would like to highlight a critical subset of his key ingredients for success, to save you from the frustrations and setbacks we both have felt:

  1. Implement real competitive differentiation. If your business card and website come across as just another advisor, consultant, or accountant, then don’t be surprised if price is the only focus. Internally, you also need to do things differently to rise above your peers. This includes how you find leads, close clients, and minimize free work or rework.

  2. Shape your business by design, not by default. Announcing that you are a consultant, and hoping demand will set your focus, is not a good strategy. Focus on your passion and your vision of what you want to accomplish, and make that come alive in the design and delivery of everything you do. Picking a niche is another good way to focus.

  3. Proactively build relationships with target clients. Passively waiting for transactions only makes you a commodity. Clients need to see you as a trusted value add, rather than just a service provider. Use your knowledge of evolving needs and technology to add more value than competitors, and introduce clients to each other to build partnerships.

  4. Use visibility and social media to pull clients in. The days of a hardworking introvert hiding in the back room are gone. In addition to relationships, today’s clients want to see you and your expertise on videos online, industry conferences, and social media to feel the trust for differentiation. They expect reviews and testimonials from other clients.

  5. Set pricing to assure both revenue and profit. Unless you have deep pockets, you won’t survive without an adequate margin, including all the costs of running a business and staying current with technologies and market changes. Flexible business models, including value-based pricing, bundling, and custom proposals are the places to begin.

  6. Be targeted in marketing and lead generation. Just like product marketing, professional services requires a clear profile and demographics of your ideal client. To check your return on marketing investment, you need to define metrics and a formal process to evaluate progress and cost tradeoffs. Don’t forget seminars and events.

  7. Raise the conversion rate with effective follow-up. Successful professionals today know they can’t work only from memory. They use customer relationship management systems (CRM) for more effective tracking and data. They match individual customer preferences, whether it be voice, email, texting, or social media, to close deals.

  8. Maximize repeat business with existing clients. Just as with product marketing, it can cost five times as much to attract a new customer, compared to getting more business from current ones. It pays big dividends to make realistic promises and over-deliver the first time, and then follow-up to check for follow-on opportunities every three months.

Even with all these done right, don’t expect your professional services business to match the triple-digit growth targets of billion-dollar product startups. Your service is not a product that can be replicated by a machine, and sold at night while you sleep. As a result, you won’t attract the investors who could fuel that kind of growth, or scale as quickly as they may demand.

Yet, I find the delivery of professional services to be one of the most satisfying and fulfilling types of entrepreneurship, where you can actually build relationships with customers, see directly your impact on the world, and have some fun at the same time. For me, that’s the definition of success.

Marty Zwilling

*** First published on Inc.com on 02/09/2017 ***

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Wednesday, February 22, 2017

8 Ways Ownership Thinking Will Make You An A-Player

Rick-CrosslandOne of the biggest challenges in changing your lifestyle from an employee to starting your own business, is focusing on the right ownership elements, versus having a boss who sets the business goals, and provides performance feedback. Most entrepreneurs relish being their own boss, but find the transition to “ownership thinking” to be more difficult than anticipated.

Even if you were an “A-Player” in your previous organization (top 10-percent performer, high integrity, exceeds on commitments), you had peers and executives around you to provide coaching and keep you centered. Incidentally, if you never thought of yourself as being an A-Player employee, you probably will struggle even more in the competitive entrepreneur world.

I’ve spent many years in each of these business worlds, but I never made the A-Player entrepreneur connection until I read a new book, “The A Player,” by Rick Crossland, who comes from almost 30 years of experience developing, recruiting, and leading high performance cultures in bigger companies. I now believe that every entrepreneur needs to think like an A-Player.

Crossland outlines the elements and perspectives every A-Player needs for ownership-thinking. These look exactly like the strategies I have been recommending to every entrepreneur for growing their business, versus developing a solution. Here are eight of the key ones that I often prioritize for startups:

  1. Align all actions to the purpose of the business. Every entrepreneur needs to start with a purpose for the business which goes beyond making money, or working on your own schedule, just like employees seeking to be A-Players need to look above their immediate tasks. Every business purpose must be customer-centric and even altruistic.

  2. Spend time working on the business as well as in the business. Most entrepreneurs, whether they be technologists or restaurant owners, spend too much time working in the business, rather than planning their next best move on the business. Employees can be much more productive if they fully understand strategic issues and focus correspondingly.

  3. Understand the need for an investment well before results. Unfortunately we all live in an age of instant gratification, where we expect immediate payment for every effort. Entrepreneurs need to evaluate investment size and cycles for future payoffs, while employees need to realize that promotions require investment in learning and skills.

  4. Quantify the return on investment before taking action. In startups, I see technical entrepreneurs who build things just because they can. Comparably, in larger businesses, I see employees who work hard on things that have little return, for them or the business. Both need to first evaluate the value equation for the business, to become A-Players.

  5. Accept personal growth as directly related to business growth. In any business, it’s hard to be an A-Player in a business that is not healthy. In this highly competitive world, no growth means falling behind, as a business or in your career. Great entrepreneurs are always focused on the growth dimensions of more revenue, change impact, and profit.

  6. Recognize business growth means attracting more customers. Employees and startups need to focus on the two dimensions of customer pipeline – how many people need what you are selling, and what percent will actually buy, based on your actions. Everyone needs to see their actions as part of solving customer problems and selling.

  7. Increase ownership thinking on business efficiency. As an A-Player or an entrepreneur, the focus of work must not be on hours spent, but time and cost savings without micro-management. Everyone wins when more efficient work on the right items results in higher customer satisfaction, lower prices, and more profit per employee.

  8. Enhance team engagement and business culture. In every business, large or small, there must be no “us versus them.” Team success requires all members be engaged and working together. Business success requires employees, executives, partners, and customers not fighting for advantage through a business culture of win-win relationships.

Thus if you are contemplating a future as an entrepreneur, now is the time to hone your focus and skills that relate to ownership thinking. It you do it well, you will win be being an A-Player in your current role, and your odds of success in the startup world are much greater. That’s the definition of a win-win opportunity.

Marty Zwilling

*** First published on Entrepreneur.com on 02/13/2017 ***

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Monday, February 20, 2017

7 Lessons On How To Avoid A Quick Business Failure

quick-business-failure-avoidanceMost budding entrepreneurs don’t realize that nine out of ten startups fail within 24 months. They only see and remember the recent new entrants in the billion dollar valuation club, including Uber, Airbnb, and Snapchat. While last year was not a banner year for new businesses, the startup rate is still about one per minute, so you need more than luck to improve your odds of success.

I’m sure you understand that every new business starts with passion, and maybe even some deep domain experience, to fully appreciate a painful market need, with a large and growing set of customers with money for your solution. A lot fewer have experience with the challenges and complexities of launching a startup. Fortunately, there are a wealth of resources out there to help.

One resource that’s worth your time is a new book, “The Ultimate Start-Up Guide,” by a couple of entrepreneurs and marketing experts who have been there, Tom Hogan and Carol Broadbent. They offer a wealth of lessons and war stories, including strategies to avoid seven of the most common ways that startups fail, which I will paraphrase here from my own experience:

  1. Resist the urge to build it just because you can. This is a common challenge for technical entrepreneurs, who are fascinated by what they can do with a new technology, and are revered by peers for their expertise. The irony is that the average customer is afraid of any new technology, needs time, and may have a different view of the problem.

  2. Add a buffer to your funding calculations. Money for new ventures is always harder to come by than you expect, so you tend to underestimate real requirements, or assume everything will go right the first time. I recommend that you double your time estimates to raise money, and buffer the amount needed by at least fifty percent. You will still be short.

  3. Keep your solution and your mission focused. After listening to customers, experts, friends, and your own dreams, it’s critical and difficult to narrow your focus to a solution and customer set that you can satisfy with limited startup resources. Don’t try to be all things to all people. It’s important to do one thing well, rather than many things poorly.

  4. Don’t assume your great solution will sell itself. “If we build it, they will come” only works in the “Field of Dreams” movie. In this age of information overload and the Internet, even the best solution needs marketing to get noticed. Plan and budget for all the channels of marketing, including social media, digital content, video, and traditional.

  5. Find co-founders to complement your expertise. Successes via a single dictatorial founder are even more rare than billion dollar valuations. We all have strengths and weaknesses, so you need to find partners and team members who can fill in your gaps. If your strength is technical, find someone who has strengths in business and finance.

  6. Assign high priority to team chemistry and culture. It’s one challenge to round up the talent you need, but quite another to mold them into a team that works well together, trusts each other, and is aligned with your values and priorities. Without these key elements, you will find that a dysfunctional team won’t last even the minimum 24 months.

  7. Never under-estimate or ignore the competition. If you really believe that you have no competition, then you haven’t looked, or there is no market for your solution. You need to know and use the competition as your benchmark, not to degrade them, but to highlight your competitive advantages to customers and investors. Position your barriers to entry.

Even with all these strategies, don’t be devastated if you fail on your first startup. In today’s culture, most investors are forgiving of failure, or actually see failure as an advantage the second time around, if you are humble and willing to share a few lessons learned. Even Travis Kalanick, founder and CEO of Uber, filed for bankruptcy in his first startup, but obviously never gave up.

So if you want to improve your odds of joining the billion dollar club of new startups, don’t count wholly on your unique perspectives, or your personal amazing skills. I recommend that you scan the world around you for as much guidance as you can get, and then quit dreaming and start executing. You don’t have to make the billion dollar club to be a success.

Marty Zwilling

*** First published on Inc.com on 02/06/2017 ***

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Sunday, February 19, 2017

Social Entrepreneurs Seek Social Change vs Profits

Panel_on_social_entrepreneursAn entrepreneur lifestyle that continues to gain in popularity these days is being a “social entrepreneur.” In the simplest of terms, these are people who seek to generate “social value”, rather than profits, and use traditional business principles to provide solutions to social issues

On the surface, this sounds like entrepreneurs who want to build a non-profit organization. Yet the term seems to be more often associated with people who intend to make a profit, but whose work is targeted toward long-term socio-economic change. Think Bill Gates, with his current investments, or Blake Mycoskie with Toms Shoes, as opposed to the leaders of the American Cancer Society or Goodwill Industries.

Whether the objective is to generate profits or social capital, the common element for all entrepreneurs is the recognition that there is a problem which needs solving, or there is an opportunity to improve the status quo.

The vision is always to be a change agent, to invent and popularize new approaches, and to persuade people to take a leap forward. In every case this requires a committed ultimate realist with the determination to persist in the face of daunting odds.

Another way to distinguish between the two types of entrepreneurship is by identifying what social entrepreneurship is not:

  • Not a fundraising strategy for nonprofits. A social enterprise may actually be profitable, or it may be non-profitable, but the generation of funds is deemed secondary to success on the environmental or social issues in the vision. Generating funds should not be the highest priority.
  • Not about profit before social impact. A social enterprise must be financially sustainable only as a means to the end, which is its social or environmental impact and rate of change. The business entrepreneur mission is profit always, social impact maybe.
  • Not a new definition for the nonprofit sector. The evident and real purpose of the social enterprise must be to make the world a better place, through the operation of the business. This certainly also has potential for enhancing the vitality of the nonprofit sector, but it doesn’t move it to a higher moral plane.
  • Not an investment opportunity for business investors. I still get inquiries about how to find angel investors and venture capitalist to kick-start a social enterprise. Funding such an enterprise is more likely philanthropists, government grants, or bootstrapping. Business investors are looking for a high financial return, not social capital.
  • Not about entrepreneurship in the government sector. So far, the largest source of services and funding for social enterprises and social entrepreneurs has been federal, state, and local governments. Yet the enterprises are not government enterprises, and the process for success makes them good business enterprises.
  • Social entrepreneurship is not socialism. The socialist doctrine dictates compulsory taxpayer contributions to finance social initiatives, while the social entrepreneur uses the standard business model and innovative approaches to attract customers, fund activities, and accomplish social change.

In all types of entrepreneurship, an entrepreneur rather than an administrator is required. This is someone who is willing and able to create a new enterprise, based on an innovative idea, and is willing to assume total accountability for the inherent risks and outcome.

So, if you are an entrepreneur at heart, but you are driven by a higher cause than making a profit, social entrepreneurship may be for you. It is an emerging field with diverse and shifting interpretations, but most agree it’s really about making the world a better place. There is certainly plenty of opportunity in that space.

Marty Zwilling

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Saturday, February 18, 2017

10 Keys To A Killer-First-Impression Website Rollout

Web Design Design Logo Symbol Web InternetSmart people only visit and buy from credible and memorable websites. In the past, if your startup had a website presence, the company was credible by definition. In today’s world, a website is necessary but not sufficient for credibility. Dreamers and gamblers have found out that if the website isn’t validated as credible, it’s probably a scam, and everyone loses.

Yet most startups I know experience the same shock of disappointment when they first open up their website to offer their “million dollar idea” product, and nobody comes. What validates credibility and makes your site memorable in the minds of consumers, and how much does it cost?

  1. Put yourself on the site. People buy from people. Until the company name is a famous brand, you are the brand. No name, picture, address, or business history only convinces customers that you are hiding, located in an un-trustable country, or don’t have a clue. They will exit quickly.

  2. Show evidence of your expertise. Publish a regular blog, contribute to relevant social networks, and highlight several videos, podcasts, or eBooks of you and your technology. People respect people with relevant experience, so highlight your accomplishments, and the credentials you have.

  3. Highlight personal presence and testimonials. Third parties are always more credible sources than you are. Highlight interviews and reviews from recognized industry sources, and news sources. Include links to your profiles on LinkedIn, Facebook, and Twitter.

  4. Create a positive online image. Show your visitors some evidence of community involvement and charity efforts. Offer something that is really free – with no strings attached to cause them to lose their trust. Set up an award, and show winners.

  5. Link to recognized brands. If you can have an affiliate relationship with any recognized brand names, or any connection to publicly recognized experts, highlight these and provide links to their websites.

  6. Add a modest advertising presence. The presence of a few related advertisements can actually improve your site credibility, since most credible sites have them. Of course, too many or obnoxious advertisements are especially harmful to a site’s credibility.

  7. Join relevant business associations. Most will give you a membership graphic for your website, and an association link to give your business extra credibility. Don’t forget the local Chamber of Commerce and Better Business Bureau.

  8. Provide a privacy and security statement. Display a logo like McAfee Secure or Privacy Label, in addition to specific policy statements on these subjects, to persuade your visitors and prospects to trust you.

  9. Offer support assistance and guarantee. Publish the terms of your support, return, and replacement policies. Be consistent is their application, and provide contact information for both phone and email access. Follow-up for customer satisfaction.

  10. Professional user-friendly site design. Studies have shown that consumers gauge credibility in large part based on the appeal of the overall visual design, including layout, typography, font size, color schemes, no broken links, and correct language usage. Don’t forget basic Search Engine Optimization (SEO) so search engines improve your ranking.

These are all minimal-cost survival marketing efforts. Beyond these, you will likely need to budget time and dollars (up to $50,000 is not unusual) for real marketing efforts to enhance your visibility and credibility, which include branding, promotions, give-aways, and free services.

In summary, a startup with no website, or a website with no credibility will kill your business. Use the tips outlined above during the first three months to get in the game, and count on much more time and money if you intend to stand above the rest. Make your website not only credible, but incredible!

Marty Zwilling

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