Service companies like health clubs (who provide ongoing memberships) and interior plantscapers (who sell weekly maintenance) are faced with a sales situation that can make or break their businesses. How to structure contract

Long term contracts provide predictable cash flow, insulate clients from competition and reduce client churn. However, they can be harder to sell and renew because the client faces more risk from the transaction. The secret weapon for selling long term contracts – a strong money-back guarantee to reduce client risk.

Month-to-month contracts (or no contract) provides less initial sales resistance and better conversion rates. But, attrition has a greater impact on cash flow and clients can be lured away by cost cutting competitors.

Selling Less To Sell More
More and more businesses have been migrating their contract service models to month-to-month. Why? Because consumers are demanding that service companies share the dis-satisfaction risk. It provides the customer with extra value in the transaction without a written or formal guarantee. Companies are understanding that value and turning it to their advantage. Here’s an example from the health club industry via The Houston Chronicle:

“Why are Life Time and Town Sports succeeding when Bally has stumbled? One key difference is in membership structure.

In an interview, Simkins said Bally was highly leveraged to member financing under its original structure, which required that customers commit to long-term memberships at lower rates.

Analysts prefer the Town Sports and Life Time models, which are primarily month-to-month and target a higher income clientele with more expensive fees.

A Bally spokesman said the company began offering month-to-month memberships in 2004, to provide customers with more choice.

One downside to a month-to-month structure, however, is it gives customers an easy out if the fee becomes too burdensome. Analysts said the industry has been generally resistant to recession, but acknowledge that an economic downturn could cause customers to turn in their gym memberships for jogs in the park.

CIBC World Markets analyst Vivian Ma, who gave Life Time a “Sector Outperformer” rating noted, however, that the industry has experienced steady growth since 1987 and showed no significant slowing during two recessions. Life Time outperformed the industry during the most recent downturn in 2001 and 2002, she adds.

As for Town Sports, Simkins said the company is tied to New York City’s economic health, and noted that unemployment in the city is relatively low. About 70 percent of Town Sports’ store base is located in the New York City metro region.”

How is your business selling it’s services? How could your business be selling it’s services? That may be the most important question of all.

Post from: BrightCite

Warning.  Slight rant below…

Is Your Business Web Friendly?

Is your small business prepared for the arrival of the virtual marketplace?  For years I’ve been telling all who would listen how strategic use of the web is a critical small business asset.  I’ve been met with many glazed eyes and blank stares from small business people who just don’t get it. 

Too bad – because the clock is ticking for the small business person who is web-illiterate and who still thinks about and uses a website as only an online brochure. 

It’s going to be a rough road ahead for small businesses not actively seeking to build online assets and who lack a basic understanding of how business works on the web.

On the flip side, proactive small business owners who see the Internet as an opportunity for a business building investment will be rewarded with an exceptional rate of return on time, money and resources. 

Are you actively educating, positioning and preparing yourself and business to profit from the power of the Internet?  Where do you stand?

Quick Audit
Answering yes to the questions below indicates you are positioning yourself to build online assets that will serve you and your business well in the years ahead:

1. You have a dedicated domain name for your website and e-mail (www.yourbusiness.comyourbusiness.com) skills.
2. You have a strategic plan for your website that ends with tangible results.  These results are based on visitors taking specific actions like calling, e-mailing, registering and downloading information from you.
3. You see  analytics information at least weekly, that tracks how many people visited your site, what they clicked on and how they found you.  You use this information to improve the strategic results of your website over time.
4. You understand the basics of Search Engine Optimization and have identified the keywords potential customers are likely to type into a search engine to find you.
5. You understand what a blog is and how it works for business (just as you understand the news media and PR).  You have left a comment on a blog.
6. You have a basic understanding of what RSS is and have used a feed reader before.  You know how it’s used to subscribe to and organize video, audio, blogs and other web content.
7. You have visited MySpace, YouTube, LinkedIn, Flickr and SecondLife to familiarize yourself with social networking, Web 2.0 and network effects that govern an emerging virtual marketplace.
8. You know what a Podcast is and have listened to one.
9. You know what a widget is.
10. You have given thought to how the web is changing the rules of your business and assessed how it complements your business strengths and exploits your weaknesses.  You are actively exploring the online opportunities and threats to your business.

The more questions you answered "no" to, the less prepared you are for the rapidly approaching future.  On the other hand – there has never been a better time to start increasing your online business knowledge and skills. 

Post from: BrightCite

Ideas, Vendors, Opportunities, Hiring…  Small business is filled with decisions large and small.  We make most of those decisions by comparing pro’s and cons, risks and rewards, plus numerous other variables to determine the best. 

It’s really about  competition – survival of the fittest.  Our options compete and what we feel is the best solution wins the decision and survives.

A Powerful Business Tool For Making Decisions
There is a simple, powerful tool that distills logic, weeds out the weak options and narrows a field of contenders to a best choice.  

It allows you to harness the collective intelligence of others on your behalf.  And you are probably familiar with this powerful tool and it’s elegant, simple solution – The Bracket.

Sure you’ve seen them used to measure the results and winners of sporting events and college basketball.  But have you applied their power to your business?

Slate – offers an interesting application of brackets based on what authors Mark Reiter and Richard Sandomir call Braketology the title of their book.  According to the Slate essay:

Bracketology—the practice of parsing people, places, and things into discrete one-on-one matchups to determine which of the two is superior or preferable—works because it is simple. It is a system that helps us make clearer and cleaner decisions about what is good, better, best in our world. What could be simpler than breaking down a choice into either/or, black or white, this one or that one?

Apply The Power For Yourself
Let’s say you are looking for a new Unique Selling Proposition (USP) for your business.  You write down numerous tag-line ideas, looking for the ultimate slogan.  You arrange your list in brackets and have potential slogans compete with each other.  Round after round you narrow the group, harnessing the collective brainpower of your company and customers, who choose their favorites.  Ultimately, one tag-line is left standing – the best decision has been made.

See It In Action
Slate has set up Ad Slogans bracket competition to determine the best slogans of all time.  Check it out and you’ll not only get some great marketing inspiration for your company – you might just discover a way to solve that business problem that’s been holding you back.

May the best solution win!

Post from: BrightCite

In my last post I discussed how adoption of feed readers are turning RSS into an up and coming online advertising channel.  The channel is relatively new and inexpensive, not to mention uncrowded.  This is a great time to get in on the ground floor and get ahead of the pack.

Here’s some info on how RSS is being integrated into online ads:

From the post: Turn Ads Into Content & They Work Better:

“In late September, several marketers — including Symantec — rolled out ad units that pulled content into ad banners straight from RSS feeds of those advertisers’ corporate blogs. I just reviewed click-through data for Symantec’s first twenty days, and the early data suggest that RSS-powered deliver better performance, both in terms of click-through rates and engagement.

Normal ads (whether they’re video ads on TV, banner ads on the web or billboards along the freeway) experience “creative fatigue” over time. Creative fatigue means, in essence, our eyes get bored with the same creative after we’ve seen it too often, and we stop noticing it altogether. If you plot the performance of a single creative execution over time, with time passing left to right along the x-axis, it’s a sad, downward slope almost every time. This is why advertisers “refresh” their creative frequently.”

Blog.memeorandum.com expalins the RSS sponsorship model being used by Techmeme (A news and blog aggregator website).

“The way it works is simple. A sponsor’s blog feed is polled every few minutes, the latest post of which appears in its assigned slot (first, second, or third).

Advantages of this approach over banner advertising are numerous. “Click-throughs” can lead to the visitor browsing, commenting on, and even subscribing to the sponsor’s blog. And a sponsor has direct control over what appears on Techmeme simply by posting.”

Here’s how they’re doing it. (Notice the sponsored posts on the right coming from the advertisers Blog Via RSS feed)

This is an exceptional ad model because it hits the intersection of Consumer and Advertiser value.  The consumer can self-select meaningful content that stays relevant because it’s constantly updated.  The advertiser’s product and services then become next in line for the consumers attention.  Even if no transaction takes place, a consumer clicking through to the advertisers blog can set off a chain reaction of back end marketing value through list building,consumer comment feedback, community development, analytic analysis, inbound links, social networking and SEO impact.

We’ll keep our eyes on this as it evolves.  But there is no doubt RSS has and will continue to develop into a powerful online marketing and advertising tool for small businesses. We’re working on integrating a similar model in our upcoming Xtenda™ release.  Stay tuned…

Post from: BrightCite

Essentially, Really Simple Syndication (RSS) feeds allow people to subscribe to specific content.  That subscription is realized through a feed reader that is automatically updated each time new content is posted.  Below is an example of Google Readers RSS Reader – I’ve also included their description of the free product:

Stay up to date
Google Reader constantly checks your favorite news sites and blogs for new content. Whether a site updates daily or monthly, you can be sure that you won’t miss a thing.

Simplify your reading experience
Google Reader shows you all your favorite sites in one convenient place. It’s like your inbox, for the web.

Discover new content
Millions of sites publish feeds with their latest updates, and our built in feed search makes it easy to find new content that interests you.

Several companies are trying to provide RSS feed Pay-Per-Click advertising models as Google and other PPC advertisers have done with search engines.  Two of these companies – Feedburner and Pheedo have also release some stats involving RSS usage and feed reader adoption. 

According to Pheedo:

Here is a chart by FeedBurner showing top feed readers.  If you do not currently use a feed reader I encourage you to try one of the readers from the chart below.  Getting comfortable with using RSS technology is something that will pay off big for you in the future…

Post from: BrightCite