As an entrepreneur, you’ve invested your money, time and expertise in developing a way to deliver products and services that people can use. How do you let the world know? Further, how do you compete with the big organizations that have significantly greater resources for promotion and advertising? And how do you do it within your budget?

If you say that you can’t, then you are missing out on a tremendous opportunity called Public Relations (PR). Opportunity? Yes, the opportunity to tell your story to your audiences and, in many cases, the most it will cost you is your time. 

The Enigma of Public Relations

Ask ten people to define PR and most likely you will get that many different definitions. Venture to say that it may be one of the most misunderstood disciplines in the field of communications. In fact, it seems to make more sense to start explaining what PR is by telling you what it isn’t.

What PR Isn’t

PR is not advertising. In fact they are pretty much on opposite ends of the spectrum. Here’s the difference: An advertising message is a paid endorsement with a specific and controlled message. It’s harder to establish credibility with an advertisement because the public knows the advertiser has paid for the space.

Public Relations efforts get editorial coverage when the media determines that the messages are newsworthy. The editorial earned with PR carries with it a degree of credibility and can be more persuasive than an ad. But, unlike an ad there are no guarantees on when, if and how your message will be conveyed to your audiences.

PR is not publicity. Publicity and public relations are not interchangeable terms. Publicity is only one phase of a total public relations effort. Publicity is the actual coverage you receive from a PR campaign – the news stories, interviews, etc. Publicity is the distribution of information to gain public awareness and it is just one tactic in the PR arsenal.

PR is not a quick fix. Public Relations is not something that just happens. And it really shouldn’t be part of a last minute effort when all else has failed. Contrary to what you might get from the nightly news, it’s not all about spin-doctors, celebrities or front-page headlines. PR is a valuable tool for creating awareness, establishing credibility, building relationships and even, in many cases, boosting sales. None of these things happens overnight. They take time and effort, well-directed effort, and a well thought out plan of action. PR is ongoing.

You can’t expect to do a “little PR” and get great results. One press release does not constitute a public relations program. The impact of public relations builds over time, with repetition of key messages in a variety of contexts.

What It Is

Rather than give you a list of the many “textbook” definitions of PR, this post will speak to its purpose and the elements that confirm its overall goals.

So do you think that PR is relating to the public? Communicating with the public? You’re right. But there’s a lot more to it. It is disciplined communications. That means that it follows certain guidelines and rules and uses specialized tools to create and maintain relationships with your target audiences. These relationships are of equal benefit to each audience and can often mean the difference between the success and the failure of an organization.

Why is Public Relations Important?

Face it, in order to succeed with your business you need to focus on attracting customers who will buy your product or service. And PR is one way of attracting them. Remember, PR is about relationships – creating them, building them and maintaining them. You deal with customers, suppliers, competitors, and media daily. That interaction forms their perception of you and your company.

The reality is that almost any organization that has a stake in its public image needs a solid public relations program. Well-planned, effective communications are becoming even more necessary to companies in today’s changing world.

Every organization depends on people – their attitudes, understanding, and motivation can be often make or break an organization, a program or an idea. PR is part of the overall marketing picture and can be very effective when used well. It can shape images, sway opinions and even change behaviors.  A good campaign will educate, inform and persuade those audiences significant to your success. When done right, PR works!

Everyone has a Story – What’s Yours?

Public relations tells a “story” – your story – to the public.  Not a fairy tale, once upon a time story, but the real story. Whether it’s a personal story, a company story or an organization’s story, a credible PR program helps shape that story and the organization and the way it performs.

Think about your story.

• What do you want to tell people?
• What do they need to know?
• What makes you – or your business, or product or service – different?
• How does that benefit your customers?
• How is it of interest to them?

Maybe you’ve never even thought about your story let alone put it in a message that goes to a variety of different audiences. If that’s the case, don’t panic. Start by writing down your thoughts. When you have developed a fairly good list, stop and read what you have written. You’ll start to notice a pattern that will make it easier to create your story, your message and a base from which to create your PR program.

Once you spend sometime evaluating what you and your business are all about, make sure to review IMPress’ upcoming eBook “Writing Effective News Stories.”  This will help you understand how you can develop communications that will compel journalists to cover your news. 

Chart Your Course

Okay, you have your story, you’re fairly confident in what you want to say, so now what’s the plan? How do you take your message and get it to the people most important to your business? You need a plan – a map that will help you reach your destination.

First you need to do some research to help evaluate public attitudes and opinions. Take the temperature of your community. Find out:

• What do people already know about your company?
• What do they think of your product or services?
• What do they know about your competition?
• What is the public’s perception of your company?

This is extremely important information. Ever hear the phrase “Perception is reality?” Believe it.

Using that information you get from this research will help you create an effective communications programs.  Here are few more things to make sure you address when you start to form the outline for your PR plan:

• What makes you different and how does that give you an advantage?
• Who are you talking to? Who are your customers and how do they impact your business?
• What about your story is important to each of your audiences?
• What do you really want them to hear?
• Does you message really define your company in the best way?
• Will it help you achieve your goals?
• Will people understand it?
• How will you get the word out?

Tools of the Trade

Now that you have your message defined you need to communicate it. There are many tools available to help create a well-planned, effective public relations program. Press releases are the most common tool for communicating with the press. But advanced tools like press kits, press conferences, special events, speeches, trade shows and the web are all part of a PR professional’s tool kit.

Additional titles to look for that will define each of these tools in greater detail include:

• Using the Web as PR Tool – Understand the importance of including a press room on your website; how you can reach bloggers and other industry partners issuing e-newsletter; what you can do to increase a story’s visibility on search engines; and how you can use webcasts and podcasts to tell you story.

•   Holding a Press Conference – When there’s a timely, high profile story to tell, holding a press conference can help you get your message out to the masses. Learn what you need to do to plan and how you can get the media to attend your conference.

•   Using Special Events to Effectively Make an Impact – When your company is holding an event – a fundraiser, educational forum, anniversary party, grand opening, etc. – this is an opportunity to get your name in the news. Learn how to let the media know about your special events and how to compel them to cover your story.

•   Using Press Kits to Package Your Message – A press kit is an opportunity to educate the media about your organization and press them tools they can use to cover your news.  Learn how to create an eye-catching press kit that will stand out from the clutter.

•   Using Public Speaking to Establish Yourself as an Expert – The more you speak about a topic in public, the more you will be viewed as an expert source by journalists.  Learn what types of speaking opportunities are out there and how you can get journalists to use you as an expert source in their stories.

•   Taking Advantage of Trade Shows – Trade shows are an excellent way to expose your product to customers and other potential industry partners. Equally important, trade shows offer you a valuable opportunity to showcase your products and services to the press. Learn what to do to attract journalists to your booth.

Each tool has a specific purpose. Not all of them will be used every time. For every PR program, campaign, new product launch, or company event, it will be important for you to decide which tools will work best in that specific case. Familiarizing yourself with these eBooks will help you to know exactly what tactics will work in a given situation.

Targeting the Media

Where does your target audience go to get the information they need to make business decisions, purchase decisions or to just be informed? Is it the business section of your local paper? Is it a trade magazine that covers your industry? Is it a local radio or television broadcast? The answers will help you define the appropriate media for you to target with your PR efforts.

The media you select will vary depending on the nature of your story. Is it a human-interest story that would appeal more to the local media? Or is it an exciting new product launch that would interest industry trade magazines?  For example, if you run an auto parts business and you have just launched a retail website, you certainly want to make sure your news gets to automotive magazines – both trade and consumer – because these are publications your customers read.

Once you define the right sources, you can create a list of media outlets and contacts at each outlet that specifically cover the news related to your business, your industry or the specific story you want to pitch.  For a complete understanding of the many ways you can reach the media, review the upcoming eBook, “Reaching the Media with Your Story.”

Building Relationships with the Media

We’ve looked at how you might determine what media outlets will help you reach your target.  But, how do you build a relationship with the journalist who will cover your news? There are some basic dos and don’ts in dealing with the press.

Do…

• Know what is newsworthy
• Know who you are contacting
• Know what you are going to say
• Be persistent

Don’t…

• Give them fluff
• Call a reporter on deadline
• Make assumptions
• Let opportunities slip away

Crisis Communications

Perhaps one of the greatest communications challenges in the realm of public relations is effectively handling a crisis. What do you do when your manufacturing facility is destroyed in a natural disaster, a key employee dies or your security systems are breached? The short answer is that you have let your employees and customers know what has happened and what needs to happen next.

There’s a lot you can do in a crisis to assuage concerns and maintain confidence in your company. It’s simply a matter of having a plan developed in advance.

In Summary

A well-planned, well-managed, targeted public relations program can help your business grow. But, you need to start by gaining an understanding of what PR is all about.  Taking the time to understand that PR is about planned communications and building solid relationships with your publics, de-mystifies the public relations process. Knowing what tools are available to communicate your message to the right audience is critical to the success of your program. So is your ability to build strong relationships with target media.  PR takes time, but when it works, its priceless!

IMPress Action Checklist

Below is a list of the steps that will help you as you approach public relations for your company. Check off each step as you complete it to keep track of your progress.

1. Make sure you know what public relations is and what it isn’t before you decide to create your own program.
2. Define realistic expectations for what PR can do for you. Be prepared to spend the time needed to make your program effective.
3. Create your story and your messaging. This is what you want your public to know about you and your company.
4. Get familiar with the tools that you can use to communicate with your audiences.
5. Know your media – what they cover, who to contact, respect their deadlines and their time.
6. Establish a relationship with them and nurture it by giving them “news.” Gain their trust and respect by knowing and following their guidelines.

We’ve all seen it happen on the Big Screen:  The critical point has been reached and our Hero is totally stumped.  His sidekick starts making some irrelevant small talk when – BAM! – something he says ”clicks” and our Hero sees just what to do to save the world from total destruction, or whatever the crisis de jour is.

This Hollywood formula is such a staple in moviemaking because it rings true.  While most of us have never been faced with saving the world, we have all experienced that flash of insight that comes from a source somewhat removed from the context of the problem that has us in its grip.  As satisfying as that flash is, both in the movies and in real life, we would like to be able to get that illumination before everything is coming down around our ears.  Can we really hope to become creative on demand? Or is creativity reserved for a few artists and eccentrics?

This post will examine how the way you think encourages or discourages your creativity, and will give you a couple of techniques that have consistently proven themselves fruitful, to apply to your business situations.  And don’t be surprised if you think up something creative by the time you finish reading!

Defining Creativity

You are probably more creative than you think you are simply because of the way you define the term.  If you think that being creative only means that you ‘invent something new — such as a gadget, painting, play, book, musical — then most of us would have to say we are not creative.

But creativity, in essence, is coming up with something that has not quite existed before – whether that be any of those things previously mentioned, or a new or different way of doing something, a satisfying solution to an employee problem, a good way to use up an overstocked item, ad copy that appeals to women aged 19-34, a company slogan, a way to get a $3000 bang for a $300 buck, and the list goes on.

When you bring together bits of information and apply them in a novel or specific way, you are definitely being creative.  So some of the thinking processes you already employ can be commandeered for your more creative pursuits, perhaps simply by pushing past the first thing that occurs to you.

Example

Let’s take on the age-old problem of employees congregating around the water cooler.  The most common solution is an edict from management that says ”don’t congregate around the water cooler.“  Then management has to occasionally police the area to make the edict work.  But what are some other ways to discourage congregating?

Consider location:  Would they congregate if it were right outside your office door?  Would they congregate if there were no room to stand around it?  What if the cooler was right in the middle of a bustling area, offering no privacy?

Now consider the problem from another point of view:  Is there a way to make congregating a productive use of time?  After all, congregating people often come up with good ideas!  How about posting data that might provoke thought and discussion – latest sales figures, number of days left until new product launch, the new product’s prototype, info on the competition.  What if you put the suggestion box next to the cooler?  What about write-ups on employee accomplishments?  Or about your biggest customers?

Anything that gives an alternative something-to-talk-about that is positive, company-oriented, and productive may not cut down on the time spent at the cooler, but may make that time worth more money.

Is there currently nagging problem in your business that you can try thinking of from a new point of view?

They Aren’t Called Free Thinkers for Nothing!

Brain researchers have confirmed what we have suspected all along: our minds prefer to take information and fit it into its proper place. That place was often carved out when we were young, and since then we have only put things into new places when we had to.  Most of us might rightly be called, Controlled Thinkers.  Free Thinkers, on the other hand, are people who have their proper places open for debate.  Admittedly, some Free Thinkers are just plain annoying, either because they come up with oddball stuff too often, or because they don’t even try to make it fit anywhere.  Wouldn’t it be great if we could come up with stuff – oddball or not – and make it fit somewhere?  Maybe the Controlled Thinkers can learn a thing or two from the Free Thinkers, and vice versa.

Did you hear about the two dogs named Timex and Rolex?  They were watch dogs.

We appreciate humor because we can see that we were being led down one path and then  jumped over to another at the punch line.  We appreciate this after the fact, of course.  What about the person who made up this joke?  What were they thinking?  This particular joke seems so simple now that you may feel like you could have made it up, and creative ideas do tend to have that characteristic – they make sense.  We can see that what was required to make this joke work was to play on the two meanings of the word ”watch.“  Two unrelated ideas had a common meeting ground.  In a similar way, you can take two unrelated ideas and make them fit.

Example

A group was given the assignment to pick up an object in one room of the house and deposit it in another room.  They had to leave the object there until they came up with a novel idea.  One person grabbed a hammer on the way in from the garage and set it down in the bedroom.  Now what could possibly make a hammer at home in a bedroom?

After thinking about all the pounding, prying, paper-weighting types of things, she thought about a hammer in a child’s bedroom.  This sparked a vision of a child’s little plastic workbench with hammer, screwdriver, wrench, plastic nails and screws.

Then she remembered that some children’s beds are made of formed plastic.  Why not make a child’s bed with the headboard shaped like a tool cabinet with little plastic tools in it?  The frame of the bed could have a couple of non-essential plastic planks that could be hammered and screwed into place, moved around, etc.

The bedspread and pillows could look like a workbench top.  The child could even have pajamas that look like a red flannel shirt and jeans with an image of a carpenter’s tool belt slung low on the hips and slippers that look like work boots!

Try this today yourself.  Just pick up something when you walk from one place to another and see where your mind goes when you try to make it fit into the new surroundings.

Force an Association

This method of generating ideas by forcing two unrelated ideas together has proven the most valuable to many people.  It requires little preparation, no special training, and often does not even take much time to produce results.  It can be as simple as taking an object out of context, as in the hammer example, or choosing a word at random to see what it makes you think in relation to the problem at hand.  You can find a random word by just looking at the newspaper, opening the dictionary to any page, or with word-generating software available at sites like Random Word Generator (http://www.gammadyne.com/ ) or Word Browser (http://www.wordbrowser.net/ ).

You hear so much about ”thinking out of the box,” and that is exactly what this method is intended to make happen.  The normal places your mind has put stuff are disrupted, so your mind will try to form a new association.  Websites such as InnovationTools.com (http://www.innovationtools.com/ ), CreatingMinds.org (http://creatingminds.org/ ) or The deBono Group (http://www.debonogroup.com/) suggest several activities along these lines, and include articles and reference books with many more to try.  Forcing an association can be done alone or with a group.  Most times it is fun, but people should be forewarned that there is a certain amount of mental uneasiness (called cognitive dissonance) involved in this, so they need to cut themselves – and each other – some slack.

Example

A manager was being constantly interrupted during the workday by phone calls and employees.  He needed ideas about how to cut down that number, and his random word was ”mosquito.“   He could see immediately that the interruptions were like mosquitoes that he wanted to swat, but that was not the purpose of this exercise!

He began by listing what he knew about mosquitoes: they bite, the bites itch, they suck blood to get their nutrients, they are drawn to some people more than others, they are most active at dawn and dusk, deet repels them, deet stinks, they can breed in the smallest amounts of water, they buzz, they bite you more than once until they are full, and so on.

Not all of these ideas were helpful, but he saw that he had made himself too juicy a target and needed to delegate some responsibilities so that people would not always be seeking him out for answers.  He also thought he could repel interruptions by not being physically available during certain times, and that he could shift some of his productive time to the early morning, since employees came in later, and he was a morning person anyway.

He also realized that he had one employee in particular who would keep coming back until he was sucked dry, so he tried setting up a scheduled time with that person to lay out a plan for her workday, and cover all the issues she could think of all at once.

Now you try this.  Start small so you can get a quick result.  Describe your problem or issue then find a word at random.  List its definitions or characteristics and see which you can apply to your issue.  If you don’t get anything right away, give yourself a little more time and put some additional thought into it.  If you are still getting nowhere, choose another word and start over.  Actually, you may want to select a second word just for the fun of seeing what else you can come up with!

Define the Boundaries

Another method that often produces good results is to define the boundaries, parameters, or criteria that an idea has to fulfill or meet.  Many times, solutions to problems or new product ideas must meet some specifics, and knowing these specifics can force you to think outside the box.

It’s like saying, Product Z has to meet conditions A, B, and C, and fit criteria L and M.  These criteria often compete with each other, and you must balance the trade-offs in order to find a winner.  For instance, time and money often compete:  to accomplish something in less time will require spending more money, but spending less money may draw it out too long.  (For example: printing, cutting, and assembling a company catalog yourself vs sending it out to the printer.)

Example

An employee had to write a feature article for the company’s newsletter.  The boss said that the article had to be about 200 words, feature one of the new products each month, give the sales reps insight into what the customer would be thinking about the product, imply a response to the customer without outright telling the sales reps what to say, and be infused with the personality of the employee writing the article.

These became the parameters the employee used when deciding what to write.  Each article’s theme and selection of wording had to be compared to this list, with the employee in turn accepting, rejecting, and modifying until it fit all of them.

Now you try this with one of your issues.  List the specifics that the product or solution must meet, and run each idea by all of them until it fits perfectly.

Weeding Out the Good from the Not So-Good

Nobody loves your brainchild as much as you do, and it seems totally unfair that after you expend so much effort to birth the thing that everybody else wouldn’t love it, too.  Some brainchildren only need a bit of tweaking, others demand a total overhaul; some may even need to be scrapped.

Your creative approach must include a way for you to decide which ideas pass muster.  One of the most thorough treatments is deBono’s “Six Thinking Hats” method, described more fully at Debonogroup.com.  Basically, this six-step process takes you from generating ideas to finding the keepers.  This activity can be done alone or with others, but preferably with others, since they will bring a variety of insights.  DeBono uses the hat colors to help key in on the activity involved at each stage:

Green Hat thinking is for thinking creatively and coming up with new ideas, which is the color hat you have been wearing so far, employing the techniques described above.  The questions you ask when wearing the Green Hat are, “We have a problem; could we do this in a different way?  Here is a situation where we need some new approaches; any ideas?  This is how things appear; could there be another explanation?  Can we come up with some alternatives?  What new toy/widget/apparel can we make?  Is there another way of using a paper clip/hammer/accounting program?” 

Red Hat thinking has to do with feelings and intuition.  Some people rely too much on their feelings and some people don’t pay enough attention to theirs.  But people who buy things often make emotional decisions.  That’s one good reason to get emotional with your ideas.  But more importantly, you want to be able to use your gut feelings and intuitions without getting so caught up in them that you don’t see your idea clearly.  So, agree to spend a specific time on this, and fit what you find out into the overall picture.  Red Hat thinking says things like:  “This is how I feel about this.  My gut reaction is that people won’t like this.  I sense this will be a real hit with younger women.  My intuition tells me this will take longer to do than we’re planning on.  I believe that we are onto something here but we need to make a slight change in it along these lines.”

When you use Yellow Hat thinking, you are going to be only positive and optimistic, while remaining logical.  You want to identify some of the benefits and strong points of an idea.  You look for ways to make the idea work, believing that is feasible.  These are some ways to employ Yellow Hat thinking:  Begin to verbalize why the customers would want this, how it would benefit them.  Further identify ways to make it of more value to them.  You can note what you really like about the idea, and what you find really interesting about it.

Black Hat thinking, as you can imagine, is the critical judgment hat.  It is often far too easy to find fault, and you want to get the benefit from scrutinizing your ideas without killing them in the process.  This hat helps you identify potential problems to avoid.  Here, spend time looking for what can go wrong, what you need to be cautious about, why some idea might not be profitable, what customers might dislike about it.  You can imagine what could go wrong in the marketplace that you would be liable for.  You can question how much a trade-off there is among time, money, resources, employee skills, equipment requirements, etc.

White Hat thinking makes an assessment of information pertinent to the idea.  Every idea has to fit into some context, be measured against some criteria, be launched in some location.  You should make every attempt to know as much about this context as possible, hence the age-old question, “Will it play in Peoria?”  You take an inventory of what you know, what you need to know, what you don’t know, and where you can find the missing info.  You can ask if there is something you would like to know, and decide if there is a place to find the answers.  For instance, do you know enough about Peoria to know if it will play there? 

When you put on the Blue Hat, you are stepping outside yourself and viewing the goings-on of your Hat-thinking process.  Are you spending too much time criticizing, or are you leaning too far into optimism?  Is the process being dominated by an individual to the exclusion of other valid points of view?  Blue hats stop to summarize, make conclusions, come to decisions.  Blue hats sense when it’s a good time to take a break, or revisit a point brought up earlier.  With your Blue Hat on, you plan your next steps, give out group assignments, set a time to meet again.  The Blue Hat pulls the output from all the other Hats together and lets you measure your progress.

The end result of this process should be an idea that has been toughened up to the point where everyone is confident of its value.  It may not be the exact brainchild that you first birthed, but it should now be one that has a chance at a productive life.  This scrutinizing process often also yields ideas about the procedures it will take to make the idea happen, and how you will need to go about marketing it.

In Summary

Nothing changes until someone changes their own thinking, and then that of others.  Since our minds prefer order and stability, we have to shake up their status quo if we want to produce a creative idea.  We can do this by using some simple but effective methods that make our brains build new associations, and then work over those ideas to make them solid enough to stand on.

IMPress Action Checklist

Use this list to help you work your way through to generating creative ideas:

• Define a problem or
• Identify an issue or
• Think about a new product
• Force an association using unrelated objects or random words
• Define the boundaries and come up with an idea that fits
• Hone the idea by viewing it from a number of perspectives
• Finalize your idea and game plan

There are literally thousands of hosting companies in the world, with services ranging from basic to all-inclusive, offered at a dizzying array of price points. How do you know where your site belongs in this virtual whirlwind? Is it possible to get a good deal and still receive all the performance you need? This post will help you shop around, weigh your options and make the right choice.

Many websites make the mistake of choosing the first or cheapest hosting company they can find. Then, they’re surprised to experience slow functionality and costly downtime. The truth is, your hosting company ensures site performance, security and, most importantly, it keeps you open for business 24/7. In order to succeed, it’s imperative that you carefully research your options and choose the one hosting company that will best work for you.

Terms to Know

One of the reasons most website owners don’t put a lot of thought into choosing a hosting company is because a lack of high-tech knowledge can make the decision seem difficult or overwhelming. Try not to get caught up in the technicalities. You should have a general technological foundation to discuss the maintenance of your site and make smart decisions, but you don’t need to be fluent in all the complex back-end technologies available.

Terms to know:

Server: A computer that “serves” your website by providing files or data in response to request from individual desktop computers.

Uptime: The percentage of time when a website is functional. A hosting company should guarantee this number – typically at 99% or above — and provide some sort of refund if it falls short of its promise.

Redundancy: Using one or more components to serve as back up if a glitch occurs on the primary system.

Service Level Agreement (SLA): This contract may cover such key topics as: an uptime guarantee, maximum downtime, redundancy, time requirements, etc.

Data Transfer: The amount of bytes transferred from your site to users as they browse. Also referred to as bandwidth or traffic.

Payment Card Industry (PCI) Compliance: An industry standard list of twelve requirements that helps ensure the security of credit card and other important data.

Top Considerations

Reliability

The bottom line is that, if there is a problem at your hosting company, your site could be down for hours, even days, costing you hundreds or thousands of dollars in lost sales. Ask yourself: How much will 24 hours of downtime cost my business? If you’re selling just two products a day at $100/each, it may not be that much. But if smaller priced items that are flying off your virtual shelves, this cost could be quite detrimental. When potential buyers cannot access your website, not only do you lose revenue, but the downtime could also result in lost credibility and loyalty.

How these failures are handled depends on your hosting arrangement and service level agreement (SLA). The following questions are helpful in determining a host’s reliability:

• Do you offer a documented uptime guarantee? This motivates the hosting company to stay on top of potential issues and ensures that you are at least partially covered if problems arise.
• Are your systems redundant? This may increase the cost of the hosting service, but it will give you peace of mind in knowing that your site will have back up if failure occurs.
• How do you handle server emergencies? There should be someone on call 24-hours a day to provide support and address problems right away. Otherwise, you may not know you’ve lost income until you receive an e-mail report after it’s too late.

Disk Space & Speed of Access

At the start, you’ll probably host your site on the hosting company’s shared server. You may also choose to purchase your own server to handle this job, but this can prove to be a potentially expensive and time-consuming affair for the website owner who is not skilled in technology troubleshooting. If your company needs a whole dedicated server, Rackspace.com and Verio.com offer dedicated servers which they manage for you.

Watch out for those hosts touting “unlimited disk space.” Most websites need less than 5MB of web space, so if the hosting company tempts you with 400MB, 800MB, or even unlimited space, keep in mind that this is too much to factor into consideration as you comparative shop.

Instead, it’s important to know how many other sites are sharing space on the same server. Many “free” or “discount” hosting companies pack their servers with as many websites as possible to save money. This self-serving practice may put you at risk for slow performance during peak hours. Like rush hour, the more traffic on the shared server, the more likely your customers are to experience slow navigation. As a result, they may leave in search of another store that can sell them the same product, but faster. If you’ll be sharing server space at your hosting company, here are some things you’ll want to know:

• How much disk space will be allotted to my site? You might start with 20 – 50MB of hard disk space, but consider your growth and find out the cost and procedure for buying more space in the future.
• What server technologies do you support? You must make sure that the technology used to build your site will be compatible with the hosting company. Most hosting companies will not install new technologies just because you happen to use them.
• How do peak traffic times impact your servers? Inquire about how many sites are hosted on a single server and ask how the company handles increases in traffic.

SECURITY

Since you’re in the business of e-commerce, you’ll likely be handling secure data such as customer addresses and credit card numbers. Protecting the security of this information is crucial to your success. Unless you can assure customers that their private data is confidential and safe, they will go somewhere else to buy.

Not only will you lose credibility with your customers, you may also be at risk for large government fines associated with loose security. Get specific details from your hosting company to learn all you can about their approach to this subject. Before you agree to any terms, you must have a complete understanding of responsibilities and liabilities on behalf of each party. Use these questions to start your discussion:

• What security measures are in place? At the very least, the host should have encryption capabilities, firewalls and other methods for making the building itself secure. Find out if the security only covers their network or protects your server’s security as well.
• Are the systems in place PCI compliant? This will confirm that your hosting company is going above and beyond to protect your customers’ data, but this extra security may come at a higher price tag.

SUPPORT

As noted above, three days of downtime can seem like an eternity on the web, especially when profits are at stake. Just because a company says they offer technical support 24/7 does not always mean this is true. Test them by emailing questions at odd times of the day or night. If you don’t receive an immediate response to your Sunday morning emails, you may want to reconsider their claims.

Email should not be the only means of support. Getting someone on the phone to help you troubleshoot potential problems can take a lot of mystery out of the process. Larger web hosting companies like NetworkSolutions.com will offer toll-free phone support and weekend hours, which can be a great benefit to you. Other questions to ask include:

• Who can l I talk to when problems arise? It would be nice to have a single point of contact, but hosting companies often have several teams working different shifts, so you’re likely to speak with any number of people. Be sure that they are qualified technical experts, not just customer service or sales associates who are unable to help.
• Will you automatically notify me when problems arise? You wouldn’t want to discover that the site is down just when you’re presenting your store to a business partner or vendor.

DATA TRANSFER LIMITATIONS

You may come across hosting companies that offer “unlimited bandwidth.” Don’t believe it. Bandwidth costs the host money and, if it were limitless, the company would be out of business in no time. This is a promotional ploy to sign you up with their services and the exact amount is often specified in the small print of policy documentation. You might start within the “unlimited” amount and, as your site grows, you’ll receive an unexpected and exorbitant bill for somehow exceeding that amount.

Think of your data transfer requirements like your cell phone plan minutes. There are likely to be overage charges associated with going over the contracted amount, so before entering an agreement, you need to have a general idea of what you’ll use. Generally, start up websites should look for an arrangement that offers around 1000 Megabytes of bandwidth a month. You may need more once your site gains in visitors and links, so it’s a good idea to continually evaluate your needs and upgrade as necessary. Additional questions to ask include:

• What are my data transfer options? Just like a cell phone plan, a host company should give you choices on the level of data transfer. You should comparison shop to find the best deals.
• Is there a published charge for overages? Hosts should be upfront about their overage charges – beware of those who try to hide these costs in the small print.
• Will I be expected to prepay for potential overages? It is best not to choose a host who insists on a prepay arrangement since it is difficult to forecast if and when your website will exceed its bandwidth.

Research Your Options

You’ve shopped around and have picked some solid candidates for consideration. But before you make your final decision, it’s always worthwhile to search behind the scenes and find out if your top choices have any negative feedback. Just type in the company name at www.Google.com and see what comes up. If you do unearth a bad review, look closely to be sure that it’s not a competitor trying to undermine their credibility. You can also go to www.webhostingtalk.com to do a search on different hosting companies. Thousands of users post the good and the bad on the most popular options out there.

In Summary

Imagine if you drove to the store during business hours to buy a much-needed item, only to find that it was closed. You might think twice about going there again and drive to a competitor store to purchase your item instead. This is the same way your potential buyers would feel if they went to your site to make a purchase, only to find that it was down.

Just like anything else in life, preventative measures should be taken to lessen the risk. Downtime, slow performance and security issues can cost you your business. Your best bet is to choose a reliable hosting company with a reputation for consistent and secure performance. A small upfront investment will help prevent expensive downtime and costly security issues in the future.

IMPress Action Checklist:

Below is a list of the steps necessary to choose a hosting company that works for you. Be sure to check off each task as you complete it to make a smart and educated decision about this vital business vendor.

1.  Familiarize yourself with basic technical terms
2.  Evaluate a list of hosting companies using these considerations:
3.  Reliability
4.  Disk space & speed of access
5.  Security
6.  Support
7.  Data Transfer
8.  Research your top choices online
9.  Review your SLA closely, including small print

Your buyers could be online right now, looking for products and information on search engines such as Google, Yahoo!, and others. That’s why entrepreneurs work hard to maximize their chances of getting noticed by employing smart search engine optimization (SEO) techniques. SEO should be a key part of your marketing strategy. If you build and maintain your site to interact well with search engines, you’ll make it easy for your audience to find you.

Consider how you use search engines to find specific information. How often do you look beyond the first few pages of listings before you end your search? Most of us don’t go beyond page five before trying other keyword options and combinations. In fact, 80% of web surfers don’t make it past page two. That’s why it’s so important to work your way to the top.

Of course, everyone wants to be at the top of a list on a search engine, but only a handful make it there. Contrary to popular belief, there aren’t any complex, hacker-esque secrets that get them in premier positions. These fortunate few understand how search engines work and use many of the techniques discussed in this post to increase their standings on the listing pages. This is what SEO is all about.

Understand the Process

As with any business initiative, you should first have a plan in place before you take action. Apply the same philosophy to search engine optimization (SEO). It’s not rocket science, but it does require some forethought to maximize your efforts. Generally, the process goes something like this:

Optimize

Now you should build or alter your site to rank well for particular terms. This is a focused and strategic action plan to increase your odds of top list placement. The section “Tricks of the Trade,” provides a basic overview of tips to help you accomplish this.

Submit

This should be your first step to getting noticed. Website submission is like raising your hand to let the search engines know you exist. In most cases, it’s free and it’s simple. Go to the most popular search engines’ submission sites:

Google (http://www.google.com/addurl/): 71% of search traffic

Yahoo! (http://search.yahoo.com/info/submit.html): 14% of search traffic

Bing (https://ssl.bing.com/webmaster/SubmitSitePage.aspx): 9% of search traffic

Ask (http://www.ask.com/about/help/webmasters): 2% of search traffic

AOL Search (handled by http://www.dmoz.org/add.html): 1% of search traffic

Register your site and voila! Mission accomplished. You’re one (very) small step closer to the top. Don’t expect immediate results, however. Sometimes this easy action could take months to increase your standing, especially if it’s the only action you’ve taken. Be patient; there is no need to submit your site multiple times. In fact, you risk being disqualified if you re-submit your site more than once monthly. You can submit different pages of your site, especially those with the most hyperlinks, like site maps, to enhance your presence.

Track

The only way you’ll know if your efforts are successful is if you check your search engine placement on a regular basis. Where do you rank in the search listings? What keywords have you ranking the highest? You can attempt to do this on your own, by typing in keywords into various search engines and hoping for the best. But there’s an easier way.

There are a number of different software providers that will help you track your success. First, start by downloading the Google Toolbar at http://toolbar.google.com/tour/toolbar.html. Other sites that will help you determine your ranking include: WebCEO.com and WebPosition.com. You can also use free online tools such as SeoBook.com and Thumbshots.com.

Adjust

Now that you’ve seen your plan in action, look for opportunities where it can be modified for improvement. What is your objective? Naturally, everyone would prefer to be in the top ten listings, but determine what keywords can bring you the best results. Then, plan your strategy in phases so you can track what works and what doesn’t, keeping in mind that some tactics require a longer lead-time to achieve results. Sites that will help you in this endeavor are WebCEO.com and SeoBook.com.

The Inner Workings of a Search Engine

There are literally thousands of search engines out there, but only a few that matter to most of us – the top crawler-based search engines listed above. These sites create their listings by using complex formulas, or algorithms, to search and find what visitors seek. Each search engine has its own formula, which explains why your results will slightly differ at each different site. But the methodology is the same. Here’s how it works:

Spider

This is another name for crawler. The spidering software will reach out to a website, read it and follow links contained within the site to other places in the site. It returns to the site every few weeks to check for changes. Everything it finds is placed into an index.

Index

This is also known as a catalog, since it’s like an enormous book that contains all the content that’s identified by the spider. It’s updated with the latest changes that are discovered, but this process is not immediate. Your site may be spidered, but it’s not relevant to a web search until the information is added to the index.

Search engine software

This is where the magic happens. The search engine software sifts through millions of pages of information within the index to find matches to a search. It uses engine-specific algorithms to determine relevancy and ranking.

There are also human powered search engines such as dMoz.com, LookSmart.com, Gimpsy.com, GoGuides.com and Zeal.com that find and rank websites in a more basic way. They depend on human submissions of website descriptions, and then identify search matches based on relevance to these descriptions.

For the purposes of this post, we’ve focused on common approaches to SEO with crawler-based search engines because that is where you’ll receive most of your traffic. Still, you should not ignore human-powered search engines all together because some of your customers may be searching there. Strategic descriptions and creative use of keywords play a large role in your success in this area.

Location. Location. Location. (And Frequency!)

Type in the same keyword into two different search engines and you’re likely to get different results. That’s because there are so many variables to each search engine’s algorithm, you’ll never know exactly how to crack it. But there are two constants that you can count on to help you rank well:

Location

Search engines are busy by nature, so they skim through web page content as quickly as possible. Where’s the first place they look? Your page titles, of course. Keywords that appear in the HTML title tag are likely to be more relevant than others to your topic. If you sell camping gear, for example, you should always include the word “camp” along with the product name in your titles.

The second place search engines look for keywords are in content near the top of your web pages. Pack your headlines and introductory paragraphs with as many search-relevant terms as possible.

Frequency

The second key factor to determining your ranking is how often keywords appear within the site. Search engines will assess the number of times these words are found in your web copy compared to other words on the page. Those with higher frequency are deemed more relevant and thus, ranked higher.

In the past, webmasters have tried to trick search engines with a number of different schemes that attempt to take advantage of these rules. In response, the algorithms have become smarter. Here are some ways that search engines combat spammers and tricky webmasters.

Page exclusion

If spamming is detected, a search engine will ignore it. For instance, when a word is repeated hundreds of times on a page, the search engines recognize it as a fraud. They also rely on complaints from their users to weed out non-relevant pages.

“Off the page” factors

Webmasters used to change their sites frequently so that crawlers would continually update them in their indexes. This “new” content helped the site rank higher, even if it wasn’t any more relevant than the old content. So search engines look for factors that cannot easily be changed by webmasters to overcome this problem. The main factor is link analysis. If your site links to multiple pages of content, it helps the search engine find the most important content to boost rankings. See more on this below.

Click thru measurement

Simply put, the search engine will watch the results of keyword searches. Then, if top ranking sites aren’t pulling in traffic, it will increase the ranking of the lower ranking pages that do.

SEO Tricks of the Trade

Choose Your Keywords Carefully

If you were searching for your products, what words would you type into Google? Conduct a quick brainstorming session to come up with a list that reflects your products and their attributes. You can also use tools from WebCEO.com, SeoBook.com and KeyCompete.com to help you develop targeted lists.

If you’re selling a common item, such as tents, you’ll probably have plenty of competition. Be more specific to stand apart. Use detailed phrases with two or more words, such as “Family tents,” “Ultra light tents” or “Self-assembly tents.”

Additionally, you can also use variations on the same keyword within your text as an easy way to broaden your list without seeming reiterative. You may sell camp equipment, but pepper your text with references to “camping” or “campers” to reinforce your relevancy in a logical way.

Write Great Metatags

In the past, metatags were one surefire way to enhance your ranking on the search engines. Today, they’re less essential in the formula, but they’re still a key factor. One of the biggest benefits of using metatags is that you can have some control over how your site is described by search engines.

Some search engines pull directly from the metatag for the descriptions, others pull from the content. Regardless, you’ll want to infuse your metatag with keywords so that search engines pick it up. Be careful not to overload it, however, because it may be the statement that compels someone to click through to your site. You want it to make sense to both your audience and the search engines.

So what’s a metatag? The full definition is too complex to provide here but, at the most basic level, it’s information inserted into the technical areas of your web pages that human visitors may not be concerned about. It helps direct the browsers and communicates behind the scenes information that supports site functionality. For SEO purposes, there are a few types of metatags that you may want to know: Meta Robots, Meta Description and Meta Keywords.

Integrate Keywords Into Content

As noted above, keyword location is imperative to being identified by a search engine. Be sure to include your best keywords in high-profile locations of each web page, including HTML title tags, heading titles (h1 & h2) and introductory paragraphs. However, be careful that your title tags are related to the topic at hand. Your title words must be reflected in the page content for the search engines to deem it relevant.

Be careful not to bog down your text with words that don’t fit the context. Writing nonsensical, overly long paragraphs filled with keywords will not help you sell product. It will only annoy your customers. First and foremost, your content should relate to what’s on the page. Think short and sweet when writing headlines and be descriptive with your product detail. Then, your keywords should come into play naturally.

Keep Design in Mind

Make sure your text is in HTML, not graphics or art. Many times designers will use creative fonts that must be transitioned into graphics to be placed on a site. It may look great, but it’s invisible to search engines.

Another rule of thumb is that if your content is hardly visible to your readers’ eyes – small fonts or colored text – you can bet the search engine may have a hard time finding it as well. Some web designers have attempted to “hide” content from the reader by making it the same color as the background. In theory, your customer won’t see this content, but the search engine will. Not so! The search engines have caught on to this trick and will ignore your efforts.

Direct your graphic artist to design with SEO in mind. Use formatted text for almost all of your content – product descriptions, company information, etc. But be sure to integrate imagery to make a strong visual impact and set your site apart.

Make Connections with Hyperlinks

Your home page may not be your most relevant page to any search, especially if your product pages are rich with descriptive content. Help the search engines find this valuable copy by linking to pages inside your site within your home page text. You may think that your navigation bars are enough, but search engines aren’t likely to read these image map links.

HTML hyperlinks not only assist your readers, but they increase your relevancy dramatically. Here’s an example:

Welcome to GreatCampingGear.com. We’ve got all the equipment and clothing you need to make your next great escape a great success…

Then, once the reader/search engine clicks on one of these hyperlinks, they’ll be taken to a page with even more hyperlinks:

Looking for quality camping equipment? You’ve come to the right place. Here, you’ll find everything from tents and sleeping bags to headlamps and boot gators.

Finally, if you have an extensive or diverse product listing, you should also include a site map page with text links to all pages on your site. If you submit this page to the search engines, it will help them locate pages within your site.

Link with Others

Search engines find relevancy in websites that link to other sites. This is because it is difficult for webmasters to “fake” quality links, so a site with link listings tells crawlers that your site is legitimate. The more websites that link to your site, the more legitimate you seem as well.

You should aim for quality over quantity when you build link partnerships. All links that go to and from your site must be related to your product listing in some way. Create a “favorite links” page on your site. Then, approach popular websites where your potential buyers may be visiting. Your links may include some friendly competitors, but think creatively to determine categories that are indirectly associated with your products. For example, campers may be seeking out deals on travel sites or looking for maps on park sites. Type some of your keywords into a search engine, and then contact some of the top listings for link sharing opportunities.

In Summary

SEO is often the first step online retailers take to get noticed among a growing stream of competitors. Why? Landing at the top of a search list can increase traffic exponentially. Plus, initial investment is virtually non-existent and a few strategic enhancements can pay off big time. Still, you should consider SEO to be a small, but necessary, part in an overall marketing strategy. It may take some time and experimentation to see tangible results, but remember to be patient and track carefully. Keeping a cautious eye on keywords, design and links to increase the odds of success.

IMPress Action Checklist

Increase your rank and exposure to potential customers by optimizing your site for search engine crawlers. This action list will help you put your SEO plan into action. Check off each step as you complete it to keep track of your progress.

1. Familiarize yourself with basic search engine methodologies
1. Location/Frequency
2. Brainstorm keywords
3. Integrate keywords into title pages, headlines and introductory copy
4. Double check design for search engine roadblocks
1. Tables
2. JavaScript
3. Frame links
5. Submit your website to popular crawler-based search engines
6. Build link partnerships with other sites
7. Track your results
8. Adjust your keywords as necessary

As you start out, your primary marketing objective may be to generate traffic and bring in new customers. But once you’ve built a database of customers, you should capitalize on their familiarity with your products or services and positive experiences with your store to have them coming back for more.

Did you know…

• Up to 80% of total sales comes from return customers or customer referrals?
• It’s less expensive to retain customers than bring in new ones?

As discussed in the post Understanding the Basics of Marketing and Branding, the key to successful selling is knowing your target customer. But once you make a few sales, you have accumulated all the information you need in order to make contact again and again for repeat business long into the future.

This post will uncover the many opportunities to reach out and communicate with your customers in ways that encourage them to return and buy. Consider this post to be the start of your research on this subject.

Up Sell. Up Sell. Up Sell.

Don’t let your customers get away without offering a little something extra. More often than not, when you capitalize on the impulse buy, customers will take the bait. Why? Your customer may NEED the product in his shopping cart, but he may WANT some other things as well. Here are a few ways you can increase your average sale before you close the deal:

• Remind customers at checkout and in follow up communications of items that complement their purchase.
• Invest in shopping cart software that recommends items to customers based on their shopping patterns.
• If you’re taking an order over the phone, suggest small complementary items, such as a special cleaner to wash the new product, and offer a special “package” price.
• Offer customers a discount on shipping if they spend a certain amount.

All successful businesses are fluent in up selling techniques and these suggestions are just the tip of the iceberg.

Unlock the Sales Within Your Database

Once you’ve made the sale, your customer information is sent to a secure database that you access for billing, shipping and tracking. But beyond these practical purposes, your database holds incredible sales potential…if you have the right software and know how to use it.

Invest in Customer Relationship Management (CRM) software to make the most of your customer base. Vendors that provide CRM software include: SalesForce (http://www.salesforce.com/), Zoho CRM (http://www.zoho.com/crm/), and Sugar CRM (http://www.sugarcrm.com/crm/). Some shopping cart providers offer software packages that include CRM solutions as well, such as NetSuite (http://www.netsuite.com/).  Your CRM software can be a fully robust package that helps you service your customers in the best way possible.  But how can it help you manage your database to improve communications with your current customers?

Your CRM software lets you gather information about your customer – contact information, buying history, etc.  This lets you personalize communications with very little effort.  For instance, when your customer buys from your website, you can send her back a personalized email thanking her for her business (e.g. Dear Jane Smith).  People like to receive messages that don’t have a cookie-cutter, formulaic feel.  They don’t want to feel like a number.  CRM software can actually automate this process.

Once you accumulate information about your customers’ buying habits, your software can help you assess behavioral patterns and develop promotions based on common themes.  For example, if you know a customer likes to buy a certain brand of merchandise from your site, you can send him an email promotion offering a discount on his next purchase, which may encourage him to come back to buy.

CRM software allows you to market to your customers in a number of ways.  That said, you should evaluate the ways that this software can work best for you based on your overall business operations plan. Once you’re familiar with the nuances of this subject, you’ll find that it will make your work life much more productive and profitable.

Get a Good Excuse

Most people don’t like to be solicited on a regular basis. Think about all the junk mail in your mailbox or inbox. You didn’t ask for it, but somehow, these companies find you, especially if you’ve bought from them in the past. If you don’t have good reason to contact your customers, your marketing materials could join the growing mountain of others in the trash.  Here are a couple of ‘good excuses’ to integrate:

Sales & Promotions

Start brainstorming some promotional and sales strategies that will turn heads. You might send out sales notifications on occasion, especially if you’re conducting an end-of-season or super clearance sale. Or, you could reward top spenders in your database with VIP customer discounts. And don’t forget to let customers know of any new additions to your product line. Use messaging like, “If you liked this product, you’ll REALLY like this product.”

Value-added Education

Your customers may be intrigued by promotions that might save them money on the latest and greatest product on your site, but they might also appreciate learning a thing or two as well.

A newsletter is a great way to offer them value. It gives them must-know, relevant information while promoting your brand and your products. For example, if you are selling baby clothes on your site, you could send out a newsletter that educates your customers about everything from pregnancy to childrearing.

As a part of this newsletter, you can highlight your newest offering. Of course, the products that are featured in your newsletter should also be featured on your site to make them easy to find and purchase when customers come looking for them.

Sometimes, coming up with new information on a regular basis can be challenging. Or, you might think designing a newsletter is out of your league. Internet Marketing Press can provide these services, if you need assistance.

Choose Your Mode of Communication

Once you’ve determined your reason for contact, now you must decide how you’ll touch base. This decision is based on a number of variables including the importance and frequency of your message and your budget. For instance, if you plan to send out weekly newsletters, you’ll likely do it via email to avoid printing and mailing costs. But if you’re running a one-time, “biggest sale of the year,” you might want to invest in a direct mail piece and send it via US mail.

Email

E-mail is one of the fastest, cheapest and most effective marketing tools. As a result, it has become the marketing approach of choice for most companies. That said, you should use it for immediate follow-ups during order processing, and occasional sales promotions. You may also choose to use it for your newsletters, but be careful – today’s spam filtering services are ensuring that promotional emails get sent to the users’ junk folders. Here are a few companies which can help; iContact.com, Benchmarkemail.com, ConstantContact.com and GetResponse.com

Email is useful throughout the post-sale process for order confirmation, shipping notification and general thank you messages. Although your primary purpose for communication may be informative, don’t miss the opportunity to promote related products.

Direct Mail

You may have noticed that your mailbox is getting more traffic lately. That’s because many companies are choosing to forgo the inbox in lieu of the mailbox. Direct mail is one of the most commonly used marketing tactics and comes in a number of different forms – catalogs, self-mailers, and post cards, just to name a few.

Direct mail is a great way to reach out to your current customers; however, there are costs involved.  Sometimes, these costs can be substantial depending upon the direct mail piece and the number of people you are trying to reach. Before you send out a sweeping direct mail campaign, you must first evaluate if it’s worth the expense. To maximize your marketing dollar, do a test run and gauge effectiveness. Then, consider your sales objectives within the context of your planned spending to determine potential cost per customer figures. Sound confusing? It can be if you aren’t fluent in direct mail principles.

Product Fulfillment

As we’ve established, the sale doesn’t stop when you ship the product. One of the best ways you can encourage customers to return is by including incentives inside the packaging. This may include a flyer or postcard that offers:

• Free shipping on the next order
• Discount coupon for the next order – 15% off your next purchase, etc.
• Free product or sample with purchase

One low-cost direct mail tactic is to include your product catalog with every order you mail out. Many times, consumers keep product catalogs to browse at a later time, such as around the holidays. This will ensure that your business stays around the house for future buying opportunities.

Overall, product fulfillment is a valuable opportunity to make a memorable impression. Use creative packaging. Surprise your customers with a freebie inside the box – one that stays around the home for future reference.

Transform Your Customers Into Brand Advocates

Word-of-mouth is one of the best ways to get new customers to come to your site.  If your existing customers tell their friends and family about your site, then you’ve won half the battle!  There are a variety of ways that you can encourage your customers to spread the word about your business.

Word of Mouth

Word of mouth, also known as “viral marketing” in the advertising world, is one technique that you can use to capitalize on pre-existing social networks to drive traffic to your site.  Think of this process like the spread of an epidemic. The message is often delivered word-of-mouth and then enhanced online.  Here’s an example of a viral marketing tactic:  You send out an email to your current customers offering 25% off their next purchase if they forward the email to five friends.  If they take the bait, five more people will be informed about your site.

Viral marketing doesn’t always need to occur via email. You can send coupons or gift certificates in your packaging for your customers to pass out to their friends. These types of referrals are valuable because they’re coming from a trustworthy source.

Social Marketing

The fastest growing viral marketing technique it social marketing. Facebook.com and Twitter.com, as well as the numerous other websites out there, have changed the landscape of viral marketing.

Shopping Cart Features

You can encourage customers to recommend your site to friends with enhanced shopping cart functionality. Incorporate features like “Email a Friend,” “Gift Registry,” and “Wish Lists” to the structure of your site. This way, if customers see something they like, they can add it to a list or registry for friends and family to purchase. Or, if they see a product that’s perfect for a friend, they can quickly and easily send the friend an email with a link to the product page.

This additional functionality is a win/win situation for both you and your customers. You use it as a way to draw new people to your site, but your customers perceive it as a convenience that has been added for their benefit.

In Summary

Your current customers are like gold to your business. Once you have an established customer database, you definitely want to spend the greater portion of your marketing budget trying to retain their business. Be careful not to harass your customers with frequent sales messages; they’ll quickly tune you out. Instead, make sure each contact is meaningful and carries your brand. Teach them something. Reward them with value. Incentivize them to tell friends and family. Only when you engage this audience will you be successful in getting them to return.

IMPress Action Checklist

Below is a list of the steps that will help you as you market to current customers. Check off each step as you complete it to keep track of your progress.

1. Upsell. Upsell. Upsell.
2. Develop an approach to CRM and select software that can help you make the most of your database.
3. Evaluate your reasons for contact
1. Sales/Promotion
2. Education/Newsletter
4. Determine the best mode of communication
1. Email
2. Direct Mail
3. Product Fulfillment
5. Personalize your contact
6. Incentivize customers to spread the word about your site
1. Viral marketing
2. Social marketing
3. Enhanced shopping cart features

How can I help you? Did you find what you were looking for today? Thank you for your business. What do all these statements have in common?  They are all designed to enhance a customer’s experience and make them feel appreciated. Using these few simple words can have a powerful affect on your customer’s perception of your business.

The bottom line is that regardless of what products or services you offer, you are also in the business of servicing customers. And your approach to customer service can make or break your business.

Even if you have the luxury of being the only company providing your particular product or service, you should always work to provide outstanding customer service. The truth is that new businesses appear on the horizon all the time. You can easily lose customers to a competitor who excels at dealing with customers, even if your product is less expensive or better. This is especially true with web-based businesses, since it is often easy to find someone else with just a few mouse clicks.

This post will help you to understand the importance of quality customer service and introduce you to some of the ways you can go about delivering it.

What Constitutes “Good” Customer Service?

Good customer service occurs when all aspects of a business seek to give customers what they want and need. To evaluate your business’ customer service practices, ask yourself the following questions:

• How well does your product or service meet a customer’s needs/wants?
• Does it deliver whatever qualities your customer is looking for in this type of product?
• How well is it priced in their eyes?
• How easy is it to find out about your products?
• What will they see when they visit your website?  Will it encourage them to shop?
• How easy is it to navigate your website?
• How easy is it to place an order?
• How secure do customers feel when placing an order?
• How will you get the product to them?
• Are your shipping terms reasonable/competitive?
• Will the product arrive quickly and intact?
• What could go wrong, and what will you do about it?
• How will you handle complaints and problems?
• What do you need to keep track of, and how will you do it?
• How are you going to interact with your customers?

If you can’t answer these questions or you aren’t providing favorable answers, you need to spend some time honing your approach.  All of these elements go into effectively serving your customers. And, it’s not just up to the “frontline face” to handle customer service; it’s built into every step of the process.

Taking a Customer-Focused Approach

Walking in Your Customer’s Shoes

Often, when you ask customers what they want, you may find that they really don’t know, or can’t express, what they want, or sometimes even what they need.  Perhaps what one customer finds extraordinary strikes the next one as barely passable.  Even what a customer likes one day may not quite do it for them the next.

You may be tempted to throw up your hands and despair over the futility of trying to work with such fickle people…until you realize that you have been there yourself.  Remember that your customer has experienced everything that you have experienced as a consumer – a product that is not quite what you wanted; merchandise that breaks and then no one returns your calls; late shipments; the wrong color; and the list goes on…

Remember this:  With good customer service, the Golden Rule expands into the Gold Rule: Doing for others as you like it done for you wins repeat business.

The Benefit of the Doubt

Whenever possible, give your customers the benefit of doubt.  Always try to keep the peace by avoiding engaging them in an argument just to prove who is right. This is hard to do and you may fail at times.  You may have to say something like, “Let me ask my supervisor about this,“ just so you can put them on hold to give them – and yourself – a chance to calm down and take another run at this.

There are customers who are totally unreasonable and completely wrong, but you may have to swallow your sense of justice, smile and discount the price on the sale or even go negative on profit.  However, this is part of good customer service and, in the long run, you will win!

Resolve All Disagreements

When it comes to conflict resolution it is always in your company’s best interests to come to some sort of agreement with customers.  If the customer doesn’t like something about their purchase, either promptly refund their money or exchange the product.  The last thing you want is a chargeback.  Any customer who uses a credit card to purchase has the right to contest the charge with their credit card company.  When this happens merchant services debits this amount from your bank account until the disagreement is resolved.

Usually this process takes about 6 weeks to resolve and requires about 1-3 pages of response from you. When it gets right down to the decision, you will probably lose… about 98% of the time merchant services sides with the customer.  Chargebacks are rare, but it is far less complicated to resolve the issue directly with the customer than to go through the detailed process of dispute.

Make Good on Your Errors

Hey, stuff happens!  A large order that is expensive to ship gets sent to the wrong address. A box gets packed with the wrong item. A customer is billed for the wrong order. To be honest, the temptation to place blame on someone else will be there.  It’s difficult to eat the cost of sending and retrieving a product that costs $70 shipping each way! However if you make a mistake, be sure to make good on it promptly… your customers will appreciate you for it.

A tip: if you make a shipping error sometimes it’s much cheaper to discount the product if the customer agrees to keep it.  Ask them and see!

Moving Beyond Face-to-Face Communication

Your business may not be handling customer transactions face-to-face, but that does not mean that courtesy and decorum are thrown out the window. It’s important that your smile be heard even over the phone and your enthusiasm is conveyed in the text of an email.

Providing good service through email or over the phone can be a challenging proposition.  When you aren’t communicating in person, there is a lot left to interpretation. Sometimes when using these forms of communication the meaning of our words are lost in translation. Just think of when you receive an email from a friend in capitalized letters. Perhaps this friend intended to send you a friendly correspondence that came across as a ranting chastisement simply because they hit “shift” and “caps lock” on their keyboard.

So, if you didn’t sleep well the previous night and you pick up the phone sounding groggy, or if you craft abrupt responses to customer emails, remember that you are likely to alienate them. Think twice before you pick up that line or hit send on that email. Always make sure you are putting your best foot forward and your customer feels like you value their business and you are there to help.  Otherwise, they will more than likely go elsewhere.

Dealing with Exchanges & Refunds

To keep the customer happy it’s important to refund their money as soon as possible and without question. Major retailers such as Wal-Mart, Home Depot and Target have set the standard here.  If you want to return anything at anytime for any reason to one of these retailers, they will take that item back, no questions asked. Do they lose sometimes? Of course they do, but they gain so much more as customers keep coming back.

Make sure you post your return policy on your website. This policy may evolve over time as you encounter and resolve situations. Here’s a suggested policy statement to begin with:

“XYZ Corporation gladly exchanges products or refunds your money (less shipping charges) for products that are returned in the original package and in resalable condition within 30 days of purchase. Washed or used items are not accepted. All defective products must be exchanged within 60 days of purchase”

What if they want to return a product that was purchased 45 days ago?  Should you refund? The answer is yes, most definitely. If a customer wants to return an item purchased 4 months ago, why not compromise and give a store credit?  It’s a judgment call; try to please the customer with a fair solution. Most companies, however, do not refund shipping costs as this is paid directly to the carrier and is non-refundable.

With exchange items you should implement the same philosophy. Be liberal and fair with exchanges.  Many companies offer free shipping on exchanges, or you can charge actual shipping costs.

What do you do with returned products? If you are not able to resell the product as new (such as the packaging is destroyed or a small scratch), then you have a few option to consider before throwing it in the trash. You could offer the product at a discount or sell it on eBay.com. Remember, it is important to disclose ALL product flaws. Customer are sometimes willing to purchase a product at a discount with a small scratch.

The Benefits of Technology

Many businesses have found that the speed and convenience of the internet is a God-send from the customer’s point of view, evidenced by the fact that more and more are joining the ranks of cyber-buyers every day.  And cyber-buyers continue to choose their favorites and establish their loyalties just as they do in traditional retailing, if they find that all goes well in their dealings with you.

Technology even allows for some customer service bonuses – such as point-of-purchase product reviews, customer comments, and product popularity rankings – that are just not feasible in the brick-and-mortar store. Amazon and E-bay have set a new standard, and what they do is by no means beyond your reach. You may not have yet achieved the same volume as these e-commerce giants, but picture having to handle thousands of transactions per minute, nearly flawlessly.  And that’s just the beginning.

How do you keep track of all those customers and their buying habits?  Send them word about specials that they may find interesting?  Resolve issues with as little hassle as possible?  Since customers can shop and buy so quickly, they expect you to be able to handle their concerns just as quickly.  Customer Relationship Management (CRM) software solutions allow you to do just this.

CRM providers, like SalesForce (http://www.salesforce.com/), Zoho CRM (http://www.zoho.com/crm/), and Sugar CRM (http://www.sugarcrm.com/crm/) offer software that integrates processes across departments – marketing, sales, distribution, manufacturing, inventory, and customer support.  This keeps everyone in the loop by contributing and analyzing data on prospects, customers, manufacturing capacities, inventory levels, customer experiences, shipping concerns, and reasons for lost sales.

Watch for Fraudsters

An unfortunate side issue related to customer service involves dealing with the dishonest few that may attempt to purchase from you on the web. It is your responsibility to verify that all transactions are legit. Even if you receive an approval on the transaction, all fraudulent transactions result in a chargeback.  Mistakes come out of your pocket each time. In most instances the law does very little to investigate fraud of this nature. More than likely you will not catch the perpetrators nor hear back from the police. Stopping the fraudsters from the get-go is the only cure.

The good news is that you can eliminate 99% of fraudulent transactions by taking a few simple steps. Utilizing fraud tools like Address Verification Service (AVS) and Card Verification Number (CVN) checking can help keep your business safe.

In Summary

Your customers are your partners in business and taking their wants and needs into account is your primary concern. Use each contact as an opportunity to win your customer’s trust and loyalty. Make good on your mistakes, quickly and with a positive attitude. Be sure your smile is heard when handling inquiries and complaints, whether through e-mail or over the phone. Make full use of technology to gather, analyze, and use customer data in such a way that it helps you better serve them.

IMPress Action Checklist

Below is a list of the steps that will help you as you begin to integrate customer service into your business processes. Check off each step as you complete it to keep track of your progress.

1. Evaluate your approach to customer service
2. Work to take a customer-focused approach
3. Develop a return policy that’s liberal and fair to your customer
4. Take advantage of technologies that will help you to service your customers better

Traditional advertising is what most people think of when the word “ad” comes up in conversation. Print, radio, television and outdoor are media that have long been successful to gain exposure and new business. The reason we call them “traditional” is to set them apart from the mass of modern-day advertising options, including viral (i.e. Word-of-Mouth) and online marketing initiatives.

When prospective customers see your company’s name outside their computer screens, it suddenly becomes more valid. Online, you’re just a virtual presence that can be changed or deleted with a click of a mouse. But in print or on television, you’re just like any brick-and-mortar retailer – committed to growing your business for the long-term. This also translates into even more sales from unlikely sources, including audiences who aren’t likely to be online often, but may make an exception to purchase your product.

This post provides an overview of your traditional advertising options and the advantages and disadvantages of each. Use it as a reference guide as you consider traditional advertising methods for your overall marketing plan.

The Buck Starts Here

There are so many options for traditional advertising; it may seem overwhelming at first. Take a step back and look at the big picture. This is especially important because traditional advertising can be much more expensive than many online alternatives. Ask yourself these questions before you invest hundreds or even thousands of dollars in any ad:

What are my objectives?

Before creating any plan, you must begin with solid objectives to measure the plan’s success. Your goals may be to generate traffic and increase sales, but be more specific. Write down figures that represent your ideal goals, no matter how ambitious. These are your long-term goals. Then, think about the financial resources to reach those goals and adjust your numbers to be more realistic for the short-term. This will help you prioritize which tactics are appropriate for your goals.

Who is my audience?

You must first understand who your audience is before you can figure out where they might be. Use the tips in “Understanding the Basics of Marketing and Branding” to learn how to figure out your target and secondary demographics. Then, brainstorm a list of places they might be seeking information. For example, if you’re selling fishing equipment, your target customers may subscribe to a variety of fishing or sportsman magazines. These publications could be very effective advertising vehicles for your website.

What is my budget?

Remember, you can’t afford NOT to advertise, but you may not have the luxury to spend thousands of dollars on one ad. Start small and appropriate more funds to your advertising budget as you grow. No matter what your budget, there are options available. The more you meet your sales goals, the more you should spend on marketing.

How can I stand apart?

Evaluate the competition’s advertising and consider creative alternatives to the norm.  “Traditional” does not necessarily mean “conventional.” If your competition is running ads that are cluttered and boring, develop a creative concept that’s in line with your brand but cuts through the others.

Where should I advertise?

Once you have the answers to the above questions, you can start to research your traditional advertising options. Read on for a basic overview of the pros and cons of each media.

Newspaper

Think about it. Almost everyone you know receives a newspaper. And if they don’t, perhaps their workplace does. That’s why newspaper advertising can be one of the most effective ways to extend your reach to the masses…and one of the most expensive buys of the bunch.

Advantages

• Somewhat targeted: There’s something for everyone in the newspaper. Sports, Entertainment, Classifieds, Fashion, etc. You can reach members of your target audience by placing section-specific ads.
• Ad heavy: People expect there to be plenty of advertising in the newspaper. In fact, some people read the paper just to learn about the latest deals and promotions.
• Placement on short notice: Production time is at a minimum for newspaper placement, so you can contact your sales rep a day or two in advance and still make the insertion deadline.
• Variable sizing: Newspapers offer many, many different size ads so you can pick and choose one (or a series) that suits your budget.

Disadvantages

• Short lifespan: Some local papers or special sections may remain around the house for a week or longer, but most newspapers are thrown out by the end of the day.
• Low-quality print: Although newspapers have come a long way in the clarity of the newsprint, print quality is still not the best, especially compared to magazines. Keep your ad design simple and this shouldn’t be a problem.
• Ad heavy: This is also a disadvantage because you’ll be competing with many other ads for attention.
• Variable placement: Aside from the section, you probably won’t be able to control exactly where your ad is placed in the paper. And, if the page doesn’t have anything newsworthy to say, your audience may skip it all together.

Magazines

Do a little research on this topic and you might be surprised at how many magazines are out there nowadays. Trade-specific publications have cropped up more and more in recent years, so if you look beyond the supermarket bookshelf, you’ll find dozens of magazines on everything from woodworking to quilt making. Use this to your advantage when shopping for magazine ad space. Seek out highly-targeted publications with readership that fits your demographic profiles.

Advantages

• High quality print: Magazine print allows your design to be much more detailed than newspaper. Because the print quality is superior, the design should be as well. Consider using an advertising agency or graphic designer who is fluent in all the technical press requirements.
• Creative potential: Magazine ads are often more conceptual and less about price. Put your creative mind to work and brainstorm an idea that expresses your company’s distinctive advantages in a memorable, stylish way.
• Longer shelf life: People often keep magazines around for weeks or months. They might also pass them along to friends so the opportunity for exposure is greater than a newspaper, which may be thrown away after a day.
• Targeted Options: Large circulation isn’t always better. Purchase less expensive ad space in smaller, highly-targeted publications and you may see similar, if not better, results. Some national publications also have regional advertising sections that offer affordable options.

Disadvantages

• Lead-time: Magazines often require you to submit an ad up to a month in advance, so plan early!
• Expense: Ad cost is almost always based on circulation (the more people who may see your ad, the more expensive it is) so evaluate those numbers carefully. You can always start small, even if it means a listing in the “advertising” section of the magazine and evaluate the results to see if it’s worth a larger expense in the future.
• Clutter: Magazines are a popular form of advertising but, unlike newspapers, most people read the magazines for the content not the ads. Before you purchase ad space, be sure to review the magazine and seek out creative opportunities to stand apart.

Radio

Since the advent of satellite radio, there has been some controversy about how effective radio commercials really are. This is a valid concern, but given the significant ratings of popular radio channels across the nation, it’s safe to say that radio still attracts plenty of listeners. People are listening at work, in their cars, or as they relax.

Tap into this market with some smart buying strategies. You don’t need to purchase the typical 30-second commercial to be effective.

Advantages

• Engaging: Radio is often called “theater of the mind” because it compels listeners to use their imaginations, giving them something to remember.
• Segments: Radio stations offer news, weather, traffic in addition to music. Consider purchasing a “tag” that allows you to sponsor one of these segments. For example, you may “This weather report brought to you by GreatFishingGear.com, who encourages you to get out and enjoy the fall temperatures with a new reel from Bass Pro!”
• Negotiation-power: Your radio rep is more likely to negotiate better rates than your print advertising rep. You can discuss creative ways to add value to your buy.
• Quick changes: With one call to the radio station, you can add to or change your script. If you were running an ad in Sunday’s paper, you could say, “Look for our ad in the Sunday Times for details!”
• Different formats: The most cost-effective way to buy radio space to give the station a script and have one of their personalities read it. This is called a “voiceover read.” You can also hire talent, go into a studio and record a “produced” spot, which can cost thousands, but is more likely to stand out. 

Disadvantages

• Inability to review: Once the commercial plays, it’s done. If your audience missed the message, they can’t go back and listen again.
• Timing is everything: Popular listening times, like rush hour, can be very expensive, but ratings drop significantly during the night and mid-day. Beware of sales reps who offer spots during these times because there will be very few people listening.
• Mass marketing: Your listening audiences are loosely targeted and attract a diversity of listeners, so your message will be heard by a number of people who aren’t remotely interested in your product.

Television

More people spend more hours watching television than any other medium. The most recent study upped the national average to over eight hours a day! TV has the power to extend your reach to millions of people nationwide. So why do we typically only see commercials for the “big guns” like eBay.com or Amazon.com? Obviously, television advertising can be very expensive. But that doesn’t mean there aren’t more affordable options available to fit your budget.

Advantages

• Highly targeted: Television shows each have their own set of demographics associated with them. There audience who watches Trading Spaces is much different than those who watch Monday night football.  Buy time associated with your audience. There might even be a program directly associated with your product, such as fishing shows for GreatFishingGear.com.
• Creative potential: With television, you have the chance to make a memorable impression with a conceptual and highly visual representation of your product. Work with a professional production house and/or advertising agency to help you craft a spot that will tell your story in the most impactful way possible. 
• Large audiences: There’s no doubt about it, you’ll reach the most people with this medium. Remember, “more” doesn’t always mean “better,” so be sure to evaluate your options closely before you purchase.

Disadvantages

• Production: In addition to your media buy, you must also invest in the creation of the commercial, which is likely to cost you thousands of dollars because television audiences expect high-quality production. But once you do, you can use it over and over, until you’re ready to create a new spot.
• Expense: Your media costs are based on the number of viewers who watch the program and the time of day the program airs. A 30-second commercial during prime time viewing hours can cost 10-30 times more than one radio spot during prime listening time. Seek out inexpensive options. The fishing program that airs at 5:00am may be a smart buy because almost everyone watching will be potential customers.
• Inability to review: Just like radio, once the commercial plays, it’s done. If your audience missed the message, they can’t go back and see it again.

Outdoor

Outdoor advertising is much more than billboards! This unique and creative medium encompasses signage in and around our cities, including busses, subways, taxis and trains. With outdoor, you have the option to make an impression with potential customers in places your competition normally wouldn’t consider.

Advantages

• Captive audience: Your audience may be able to tune outdoor advertising out, but they can’t turn it off. So, in a sense, they are a “captured audience,” who will see your ad whether they want to or not. Think of the last time you were in traffic behind a bus. You probably read the message in front of you, simply because it was there.
• Location specific: While outdoor is a medium that markets to the masses, you can also look for locations where your audience may be. For GreatFishingGear.com, it would make sense to purchase a billboard on common routes to popular lakes around the country.

Disadvantages

• Quick read: You don’t have much time to get your message across since outdoor advertising draws, on average, 2-3 seconds of your reader’s time. Keep your message concise (5-7 words max.) to
• Contracts: Typically, you need to commit to a minimum of three months when purchasing any outdoor space. This may be outside your budget or too large of an investment for experimental purposes.
  

Direct Mail

Research shows that direct mail is the third largest media expenditure behind television and radio. This explains the growing number of unsolicited sales messages in your mailbox, which is exactly why you should make extra effort to stand apart so your direct mail doesn’t become junk mail.

Advantages

• Highly targeted: More and more marketers are turning to direct mail because it is one of the easiest ways to target specific audiences by region and household income. This is especially important if you’re selling high-end products – you wouldn’t want to promote your products to people couldn’t afford them, so you would restrict your mailing list to include people in ritzy neighborhoods.
• Creative potential: Remember, your mailing doesn’t need to take the form of a letter. You can do postcards, self-addressed reply cards and three-dimensional mailings to increase the odds that your message will be read.

Disadvantages

• Expense: It can be expensive to produce an effective direct mail piece and a targeted list. Investing in the services of an experienced advertising agency may be in your best interest if you are not familiar with these practices.
• Blending in: Once your mailing reaches its destination, there’s no guarantee that your audience will read it. If your message doesn’t catch their attention, it will find its way to the garbage and your investment is wasted.

Media Buying Overview

Buying media is tricky business because advertising sales reps are trained negotiators who are not always working in your best interest. Your representatives at the traditional media outlets can be both friends and foes.

You may want to enlist the services of an agency or freelance media buyer who specializes in media buys to purchase the space for you, because the newspaper, magazine or outdoor outlet pays the agency a commission and it doesn’t cost you a dime.

Ask for a media kit

This ad package is typically a folder that includes demographic information, distribution, rates and a sample of the publication. This will help you evaluate if the newspaper or magazine is right for you without having to speak to anyone.

Ask for suggestions

Your rep can keep you posted on special sections or promotions that are related to your business. The travel section may be running a feature on the “Best Places to Fish in the US.” These are great opportunities to increase your exposure with your target audience.

Ask for editorial contacts

Express an interest in getting your story in front of journalists. Look for our upcoming post on Public Relations. Although sales and editorial staff are entirely separate entities to protect journalistic integrity, your rep can probably point you in the right direction to enhance your PR efforts.

In Summary

Ultimately, traditional advertising can be expensive, but it can be highly effective with the right planning. Consider your objectives, your audience and your competitive landscape before rushing into any media buy. If you’ve never launched a traditional ad campaign before, you may want to enlist the services of the pros for both creative development and media negotiations. And, always remember, no matter what you spend, investing in advertising is the smartest way to grow your business.

IMPress Action Checklist

Below is a list of the steps necessary to create a traditional advertising plan. Be sure to check off each task as you complete it to ensure a comprehensive approach from start to finish.

1. Plan wisely
1. Objectives
2. Audience
3. Budget
2. Choose your media
1. Newspaper
2. Magazine
3. Radio
4. Television
5. Outdoor
6. Direct Mail
3. Negotiate your costs
4. Brainstorm great creative
5. Measure the results
6. Evolve your plan

So, you’ve decided to take the plunge and start your own business!  No more rude bosses or flaky co-workers.  No more dancing to the tune of upper management’s latest ditty.  No more waiting on other departments!  No more performance evaluations!  Now YOU get to call the shots.  YOU get to be responsible for your own decisions and reap all the benefits of your ideas and hard work.  And YOU get to answer to the government!  Or, if you’re able, to hire someone who will.  Let’s face it, one way or another, every good business is an accountable business, operating within the acceptable practices and laws of its state, nation, even the entire world.

Trial by Fire

If you are like the typical start-up business owner, you know much more about your product or service than you do about structuring a business entity or paying related taxes.  To help get you through this fiery ordeal with only minor smoke damage, here are the highlights of selecting the legal form of your business, registration and licensing requirements, tax liabilities, and insurance considerations.

Not to be overlooked is the assistance of an attorney or accountant.  You will almost certainly require the services of one of these over the life of your business – an accountant, for sure, when filing your federal taxes – so it will be good to find one you can grow with.  The Yellow Pages and the local Chamber of Commerce are good sources for leads, as well as word-of-mouth.  An accountant need not be in a firm, or even be a Certified Public Accountant (CPA) to be just what you need, although a CPA will have had extensive education and experience with the foundational aspects of business ventures.  At the least, conduct phone interviews with a couple of prospects, asking such things as their business education and experience, types of businesses in their clientele, their availability and fees.  On the practical side, make sure this is someone you can talk with, who can answer your questions without making you feel like you wish you hadn’t asked.

Big Legal Decision #1

What form will your business take?  There is no perfect answer to that, as each of the options has advantages and disadvantages.  The major considerations will be among the trade-offs in personal liability, taxes, control, profits and losses.

Sole Proprietorship

Every business is some type of legal entity: either it is defined separately from its owner or it is not.  A sole proprietorship is identified entirely with its owner, who has complete control over all management and operational decisions.  If it prospers, so does its owner; if it has debt, so does its owner; if it is sued, so is its owner; if its owner dies, so does it.  A sole proprietorship can be in the owner’s name, or can conduct business under a fictitious name, the familiar “Doing Business As” (dba) designation.

A fictitious name is usually registered on-line with the state’s Business and Corporation website, for a small fee. A sole proprietorship doesn’t face double taxation as a corporation does, because the owner pays personal income taxes on the profits made, making accounting much simpler.   A sole proprietor is considered to be self-employed and is therefore required to make quarterly estimated tax payments, usually a minimum of 15% of estimated taxable income.  A sole proprietor can also have employees with certain tax liabilities.  This is discussed in the “Tax Liability” section.

One disadvantage of a sole proprietorship is that it can have a harder time raising capital, since it tends to be perceived as less solid than a corporation, partnership, or limited liability company.  It has no shares to sell to raise capital as a corporation does.  Potential investors are, in effect, investing in the owner himself. Another disadvantage of a sole proprietorship is that as a business becomes successful, the risks associated with conducting business tend to grow, such as taxes on higher income, employee liabilities, production costs, risk of lawsuits, and changing marketing considerations. At this time, a sole proprietor can decide to trade off some independence for protection by forming a corporation or limited liability company.

C Corporation

Legally, a corporation is a person – not a human being, but a distinct entity separate from any human being associated with it, including you.  You may own all the stock, but the corporation still ”lives on” even if you die.  You are not liable for a corporation’s debts, and if it is sued, you are not, unlike a sole proprietor.  Incorporation may require the involvement of an attorney or accountant, but you can accomplish it on your own through your state’s business website.  The fee is considerably more than for a sole proprietorship, usually several hundred dollars, and there is an annual recertification fee.

You will need to select a name, keeping in mind how important a good name is in the marketplace.  Refer to the post “Choosing a Successful Name” for some solid advice.  You might even want to trademark the name, and you would be well advised to search the US Patent and Trademark Office’s database at www.uspto.gov, as well as your state’s database, to make sure the name is not already in use.  You may choose to name your corporation one thing and do business as another, in which case you would register the dba as a fictitious name through your state’s business website.

A corporation has officers, you most likely being the President, and is governed by a Board of Directors.  You must hold annual shareholder meetings and document the proceedings.  Corporations also have bylaws, which you will not have to write from scratch, but will tailor with the help of your attorney or accountant. Software programs are available, such as Quicken Legal Business Pro 2011, to help create the necessary documentation.

Corporate profits are taxed at the corporate rate and are usually distributed to the shareholders as dividends, which then are taxed as personal income.  A special type of corporation, the S Corporation, does not face this double taxation, since profits are not taxed, but are divided among shareholders according to percentage of ownership and become part of personal income.  Likewise, S corporation losses become part of the personal income tax return.

Partnership

As it sounds, in this business entity, control is shared by agreement among the partners.  Although not necessary, it’s best to draw up a partnership agreement, detailing who is responsible for what and to what extent.  Quicken Legal Business Pro 2011 offers a template for creating a Partnership Agreement. Each partner is always accountable for their own business-related actions, as well as those of the other partner(s.)  In other words, if one partner’s actions result in a lawsuit, all other partners are equally liable.  All partners are personally liable for the partnership’s debts.  The income (or loss) of the partnership is allocated to the partners according to their agreed-upon percentages and are taxed as personal income.  Capital gains (or losses) of the partnership are capital gains (or losses) of the partners and are allocated according to agreement.

In a Limited Partnership, there are also limited partners (LP) in addition to the general partners (GP).   The GPs have management control, share in the profits proportionate to the agreement, and are liable for the limited partnership’s debts.  The LPs have no management authority and are liable for debt only to the extent of their investment.

In a Limited Liability Partnership (LLP), the partners each have management authority and enjoy liability protection similar to that of a corporation, with the partnership, and not the individual partners, being responsible for obligations.  Usually, LLPs are formed by professionals such as attorneys or accountants, and in some states, are limited to these.  Check out your state’s business website for information pertinent to you.

On the disadvantage side, all partnership types are liable for self-employment tax, and the necessary quarterly estimated tax payments.  Setting up a partnership can cost several hundred dollars, but not usually as much as a corporation.

Limited Liability Company (LLC)

An LLC provides limited personal liability to its members, similar to a corporation and a limited liability partnership, and in contrast to the personal liability for the debts and obligations of the business that are borne in the general partnership or sole proprietorship.  LLCs do not have bylaws as do corporations, but you may need to write an operating agreement, spelling out the duties of the members.  Some states require a written operating agreement.

An LLC can be classified as a corporation, partnership, or proprietorship for tax purposes, and its income (or loss) flows to the members’ tax returns as in an S corporation, sole proprietorship, and partnership.  Quarterly tax payments of estimated self-employment tax must be made, unless the LLC is classified as a corporation.  Generally, the state filing fees for an LLC are a couple hundred dollars. Quicken Legal Business Pro 2011  has a section on “Running Your LLC.”  It contains a boilerplate Operating Agreement all ready for you to adapt to your needs, plus consent forms for LLC members, forms for meeting notices and a format for meeting minutes.

Making a Federal Case of It

Regardless of the type of entity you choose, you will need a Federal Employer Identification Number (FEIN or EIN).  If the number is needed for identification only, it is referred to as a Tax Identification Number (TIN).  This nine-digit identifier is necessary when filing tax reports, paying employee taxes, applying for credit, and opening business banking accounts.  You can get one on-line by going to www.irs.gov under the Business tab.  Complete and submit Form SS-4 on-line or print out, complete and mail.  You can also call the IRS at 800-829-4933 and complete the process, receiving your number immediately, if you are an authorized owner of the business.

Before completing the form, you must decide the type of tax entity your business is: corporation, partnership, or sole proprietorship.  Of course, if you have been working with an attorney or accountant, they will know and may even obtain one for you.  Or, you can call the 800-number and the agent will help you determine this.  If submitting on-line or over the phone, you will receive the number immediately; if by mail, allow a week or two.  After you receive your number, the IRS will contact you about setting up online filing of your tax liabilities (discussed below.)  This may prove very handy for you, but these filings can also be done through the mail.

Registering Your Business

You will most likely register your business in the state where you live.  If you are incorporated in one state and open a branch operation in another state, you will need to register as a “foreign corporation” with that state.  This can usually all be done online by visiting state Business websites.  As a minimum, you will register the business’ name, address, physical location, and the names and addresses of owners or officers.  Your city may require a business or occupational license.  The licensing division is usually one of the city government offices and can be found in the government section of the phone book.  Your county may also require you to register, so check with the county clerk’s office.

Business Tax Liabilities

The list of taxes levied on businesses only seems endless!  As an individual, you are accustomed to paying federal income, state income, sales, property, real estate, federal withholding, Social Security, and Medicare taxes.  Your business, also a legal entity, pays these plus a couple more.  The ways that these are paid by your business is different from how an individual pays them in most cases.  Here is a discussion of each and some suggested sources of help for you:

Income

Income taxes for C and S corporations are due to the IRS by March 15 of the tax year, using Form 1120 or 1120S.   Six-month extension requests may be made using Form 7004.  Sole proprietorships file on the owner’s Form 1040.  Partnerships file using Form 1065.  Software application packages such as QuickBooks (http://quickbooks.intuit.com) and Peachtree Accounting (http://www.peachtree.com) can help you to keep the financial data you need in categories that make filing taxes much easier.  TurboTax (http://www.TurboTax.com) also contains all the forms you need for filing.  Initially, you may want your accountant to head up this process, as it can be confusing to the uninitiated, but you can grow familiar enough with the process in time to do it entirely by yourself.  If your state collects income tax, it is normally filed at the same time, using the appropriate state forms, which you can locate on the state’s Business website.

Sales

When your business purchases items intended for resale, you do not pay sales tax on the purchase if you have a state tax resale number, since your customers are the ones paying the tax.   You can obtain a resale certificate through your state’s Business website, or regional branch office (check out the Government offices pages in the phone book.)  When you collect sales tax from your customers, this must ordinarily be reported and paid before the end the following month.  As of now, internet sales are not taxed, except those sales to customers in your state of business registration.  Some cities and counties also require collection of sales tax, so be sure to check with their local offices.

Property

Taxes on equipment and machinery are usually required by county or city governments.  Check with the local tax appraiser’s office or wait until they contact you, which is a part of the business registration process.  They send you a form asking for a listing of equipment, its purchase price, and current value.  They assess the amount of tax you then owe.

Intangible Property

Some states require the annual payment of an intangible property tax.  Common types of taxable assets are:

• Stocks & bonds
• Loans & notes
• Mutual funds, including money market funds
• Ownership interest in a limited liability company
• Interest in limited partnerships registered with the Securities and Exchange Commission
• Accounts receivable not arising from your normal course of trade or business.

Check with your state’s Business website, or your accountant, for further information.

Federal Employment

Before we discuss taxes, let’s look at a couple of required forms you must have for each of your employees.  When you hire employees, your business is required to keep on file an Immigration and Naturalization Services Form I-9, Employment Eligibility Verification.  This is to show that a person is legally permitted to work in the US.  The form itself contains guidelines for acceptable identification.

Each employee also fills out a Form W-4 Employee’s Withholding Allowance Certificate, which shows the number of deductions each is entitled to claim, affecting the amount of federal withholding.  This is the number you use when referring to the Federal Tax Table, Circular E, to withhold the proper amount of tax from the employee’s paycheck.  Each employee also has 4.2% (new rate for 2011) of the gross pay withheld for FICA (aka Social Security) and 1.45% for Medicare.   You must match this 6.2% and 1.45% for each employee.  Within certain dollar-amount guidelines, you deposit the sum total of all withholding and employer match monthly, using tax coupons, indicating this is for Form 941.  Quarterly, you fill out Form 941, to show that your 3-month liability and the three deposits you have made during the quarter total the same amount.  You can make up any difference by including a check with the report, or rolling over any overpayment into the next quarter.  Form 941 must be mailed back to the Department of the Treasury by the last day of the month following the end of the quarter.  (For instance, a report must be filed by April 30 for Jan-Feb-Mar.)  QuickBooks (http://quickbooks.intuit.com) and Peachtree (http://www.peachtree.com) have payroll features that allow you to figure paychecks, accumulate funds, track deposits, and prepare Form 941.

By Jan. 31 following the tax year, you are required to issue Form W-2 to each of your employees, and to file Form W-3 with the Social Security Administration by Feb. 28, along with copies of the W-2s.  Again, accounting software can make this an easy process.

Your business may hire some independent contractors from time to time.  In order to be an independent contractor, they must truly be separate from your business and management control; otherwise you can be fined for evading employment taxes.  Check out www.irs.gov for further clarification.  If you pay someone as an independent, have them fill out Form W-9 Request for Taxpayer Identification Number and Certification.  By Jan. 31 following the end of the tax year, you issue each a Form 1099-MISC if the amount you paid any of them exceeded $600.00, along with Form 1096 Annual Summary and Transmittal, which must be sent by Feb. 28.  Quicken Legal Business Pro 2011  has a section on “Hiring Employees and Independent Contractors” which is well worth taking the time to read to ensure that your independent contractors truly are independent, in the eyes of the government.

Federal Unemployment (FUTA)

If your federal unemployment tax liability exceeds $100.00 for the tax year, you are required to make monthly deposits, indicating 940 on the tax coupon.  You only pay unemployment tax on the first $7000.00 of each employee’s wages.  You file Form 940 by Jan. 31 following the tax year.  Either of the software packages QuickBooks (http://quickbooks.intuit.com) or Peachtree (http://www.peachtree.com) will track your liability and prepare this report for you.

State Unemployment (SUTA)

State unemployment tax reports are filed quarterly by the end of the month following the quarter.  When you register with the state as an employer, you are issued a withholding multiplier.  The state can change this from time-to-time, depending on several factors, and you are notified if it changes.  Again, you only pay unemployment tax on the first $7000.00 of each employee’s wages.  QuickBooks (http://quickbooks.intuit.com)  and Peachtree (http://www.peachtree.com) have a feature that allows you to automatically calculate this, as well.  Some states require that you report New Hires, so check with your state’s Business website to make sure you remain in compliance.

Liability Insurance

The amount of liability insurance you carry depends on your industry and the types of products you sell.  A business selling products for children faces broader liability vulnerabilities than does one selling books.   You may wish to consult an attorney for a definitive ruling on how much you need to carry, but you can also check out industry standards through trade associations and insurance companies.   Some states will not license certain businesses that do not have the minimum recommended coverage.  Check with local and state licensing agencies for more details.  Getting quotes from several companies is quick and easy on-line: just search on ‘business liability insurance’ and take your pick.  Your business may also need to carry Worker’s Compensation insurance.  Again, check with your accountant or attorney, or your state’s business website for guidelines.  In most instances, business owners and principals are able to file an exemption, a big financial break.

In Summary

There are many legal issues facing businesses, and though they may seem overwhelming at first, most business owners manage to navigate the sea of them and survive.  Attorneys and accountants can prove invaluable, but there is also a multitude of information and assistance available online and through software applications.  One of the most crucial decisions, with long-term implications, is how to structure the company, which affects many of the tax and liability issues.  Weighing all the options before making the decision sets a wise course.

IMPress Action Checklist

Below is a list of the steps that will help you address the legal issues you face.  Check off each step as you complete it to keep track of your progress.

At Start-up

1. Select an attorney or accountant to interview
2. Review the types of business entities, deciding which is best for you
3. Get with your attorney or accountant, or proceed to the next step yourself
4. Visit your state’s Business website to check out business entity requirements
5. Download needed Business Entity registration forms or complete online
6. Select Accounting Software and begin accumulating data for tax filings
7. Apply for FEIN online, by phone, or by mail
8. Register your business with city and/or county offices
9. Set up State Unemployment Tax account
10. Contact your Property Tax Appraiser’s office, or wait for them to contact you
11. Obtain Sales Tax Resale Certificate
12. Set up Unemployment Account with state
13. Get Federal Tax Deposit Coupon book through mail, or set up online account
14. Check out Liability Insurance requirements and obtain coverage

Every Month

1. Make Sales Tax report by month-end to state, city, and county, as required
2. Make Employment Tax deposits by the 15^th online or using coupon for 941
3. Make 940 deposits monthly, if accumulated liability exceeds $100.00

Every Quarter

1. File Form 941, reconciling monthly deposit total with tax liability
2. File State Unemployment Tax report
3. Make Quarterly Estimated Tax Deposits (if not a C or S corporation)

Every Year

1. File Form 940 Federal Unemployment Tax report by Jan. 31
2. Prepare and Mail Employee W-2 forms and Contractor 1099-MISC by Jan. 31
3. Prepare and Mail W-3 form and Form 1096 by Feb. 28; include copies of each W-2 and 1099-MISC
4. File Intangible Property Tax Return with State, if applicable

When You Hire

1. Have employee complete Form W-4
2. Complete and File Form I-9 with photocopies of verified employee identity
3. Report New Hires to state, if required

So, you’ve got a brilliant product, a wonderful website design and an inventory stocked to sell.  Now it’s time to spread the word. Where do you start? Advertising online can be overwhelming at first, but not if you have a basic understanding of the options and follow the tried-and-true process that’s outlined below.

Just like in the offline world, knowing where and when to promote your products can make all the difference in your bottom line. This post will help you gain exposure and generate traffic without breaking the bank.

Before You Begin

Set Goals

Even if you have a strong vision for future success, don’t make another move without writing down measurable objectives. Ask yourself questions like, “What are my sales goals for each quarter?” and “How many unique visitors should I expect each month?” This will help you hone your advertising strategy down the line.

Define your budget

Your budget will build the framework for your marketing plan. It should be incorporated into your start up costs and should also be included in your operating costs as you begin to make sales.

Enlist the services of an expert

This is an option that many successful retailers take at the start of business. Depending on your budget, you could pay an advertising consultant for a few hours of advice or go so far as to hire an advertising agency to write up a marketing plan and do the work for you.

Invest in tracking capabilities

Tracking is essential to evaluate the effectiveness of your marketing plan. Online companies such as Adobe Digital Marketing Suite and Webtrends.com offer services and software to help you track where your customers are coming from. These services have become quite robust over the past few years and are worth looking into. Google Analytics is a free service offered by Google that lets you measure your advertising ROI as well as track your Flash, video, and social networking sites and applications. You can also track your customers by associating coupon codes with specific promotions to determine the success of each. 

Build your Site to Maximize Exposure

Before you consider spending one dime on online advertising, there are a number of things you can do at the ground floor level to gain exposure. It’s much easier to integrate the following strategies as you build your site than going back and making these changes later.

Effective naming/Multiple names

Choosing the perfect name(s) is your first requirement to success on the web. Without it, your customers may not find your site, or not remember it for future purchases. See the eBook on choosing an effective name for everything you need to know to do this right.

Optimize your site for search engines

To increase the chances that you will be noticed, be sure to maximize search engine optimization (SEO) by taking the following actions. Look for the eBook on search engine friendliness for details.

• Write content, page titles and metadata that is rich in key words
• Include an outbound “links” page
• Ensure that other sites are linking to you (“inbound” links)
• Integrate hyperlinks at every opportunity

Register with search engines and directories

Large search engines like www.Google.com, www.Bing.com or www.Yahoo.com often have a “Submit” link where you can register your site. This is like raising your hand and saying, “Here I am!” in hopes that you will catch their attention.

Keep a database of current customers

Be sure to keep a detailed list of all customers so that you can communicate with them in the future. Add the ability to sign up for an e-newsletter on your home page so that you’re capturing the information of potential customers as well. Look for the eBooks on marketing to current customers for more information.

Assess the Landscape

Too often, e-commerce retailers get caught in their own small website bubble and fail to look at the big picture. Taking your audience and competitors into consideration is key to gaining new perspective and making educated decisions. A little research can go a long way as you embark on a potentially expensive online campaign.

Customer Profiles

Take some time to evaluate the people who are buying your product. Think about their demographics (income, age, etc.) to help you determine where they might be looking for your product. This will help you save money by targeting your advertising efforts to those specific groups of people.

For example, if you’re selling wedding favors, you can assume that your primary customer will be a woman in her twenties. She will likely be looking for ideas at large-scale wedding information sites like www.theknot.com and also at various websites targeted to women such as www.ivillage.com.

Competitive Marketing Evaluation

Researching your competitor’s marketing initiatives will not only help you decide how to price and position your promotions to be more attractive to your customers, it will also help you figure out where you need to be listed to draw customers away from their stores and over to yours. It’s a good idea to start this process as you decide what products to sell. For tips on how to do this, be sure to read the eBook on evaluating the competition.

Create Your Plan

Building a marketing plan is a serious undertaking that should be planned, monitored and evolved on a regular basis. Ideally, you should create a plan that’s a strategic combination of the tactics listed below. Start small, using a few of the following approaches, and build up your plan as your customer base and budget grows.

Here is a list of some popular methods that e-commerce entrepreneurs use to break through the online clutter and help potential customers find their stores.

Viral Marketing

One of the most inexpensive ways to advertise is to have your customers do the work for you! Viral marketing is the new term used for “word-of-mouth” advertising. Incentivise your customers to send friends and family to your site by offering them product discounts or other rewards. You can also include a “Send to a Friend” link on each product-listing site to encourage this action. Don’t forget about “spreading the word” on the widely used social websites like Facebook and Twitter.

Blogging and Article Creation

Are you an expert in your field? Do you have valuable information to share with your customers? It may be time for you to start blogging. Probably the fastest growing trend in online marketing, blogging has made its mark. It gives you the opportunity to share information that potential customers are looking for on the internet. An excellent example is the fact that you are reading this blog. The blog of choice by millions is WordPress. Internet Marketing Press offers custom WordPress website development. Contact us for more information.

Submitting article on the internet has also become a very popular way to increase links to your website. There are numerous free and paid directories for article submission. With a list of over 1000 article directories, http://www.freearticlesubmission.org/ is a good tool to submit your articles to the top article directories on the internet.

Pay Per Click

This is the easiest, most immediate and measurable way to drive traffic to your site. It can also be the most expensive if you don’t take the right approach. Using this technique, you’ll go to a known search engine such as Google AdWords (https://adwords.google.com/select/) or Yahoo Search Marketing (http://searchmarketing.yahoo.com/) and bid on keywords. The higher you bid, the higher you rank when a potential customer searches for words related to your product. When someone arrives at your site through these search engines, you will be charged a fee, regardless of whether a sale is made. Facebook (http://www.facebook.com/Ads) has a similar program with highly definable demographic features to reach your specific target customer.

Directory Listings

Think of online directories as the Yellow Pages of today. You should list with as many general and industry-specific directories as possible. Many times, the cost is free or quite affordable. Plus, because directory listings are crawled by search engines, so the more directories you’re listed with, the higher your chances of increasing your exposure in search results.

Affiliate Marketing

With this popular method of promotion, you’ll reward an “affiliate” site for sending customers your way. Think of it as a modern-day variation of paying finder’s fees to someone for referring them to your store. Oftentimes, this is a very attractive arrangement because you pay for performance. Payment structures vary from cost-per-lead to a percentage or dollar value of a sale.

Banner Ads

Large e-commerce sites hire advertising agencies to spend hundreds of expensive hours creating and purchasing banner advertising. But you can accomplish the same task on a smaller scale by researching product-related sites that may sell advertising. Look for “Advertise with Us” links at the bottom of these related websites and make contact to explore this option. Banner advertising rates are always negotiable, so be sure to get the best price based on impressions or per-click-thru.

www.Amazon.com & www.eBay.com

One of the greatest ways to gain exposure and acquire new customers is to sell your products on established websites such as Amazon & eBay. This can be especially successful if you include a catalog or sell sheet of your products in the packaging with purchase. This way, once a customer buys from you on the larger site, you can drive them to your website to buy direct from you in the future.

www.Shopping.com and other shopping portals

Many of your customers may be searching shopping portals like Shopping.com to compare like products and get ideas. If you’re selling a commodity product with a number of competitive advantages (cost, value, benefits, etc.), listing on these sites is a must. The cost ranges from a flat rate fee to a per-click charge.

Google Product Search

Listing in Google Product Search (http://www.google.com/intl/en_us/products/submit.html) is a free way to extend your reach to millions of new prospects through Google’s search engine. You simply register with Google Product Search and, upon merchant approval, upload text file containing the URLs of your catalog files and images. While it may not drive thousands of customers to your site, it’s free and well worth the time to become listed.

Each of the above subjects is so extensive, it deserves a post all its own! Stay turned for more information in the future.

Collect Data & Evaluate the Results

Now that you’ve set your marketing plan in motion, it’s time to analyze the results to ensure that you’re getting the most bang for your buck. Once you’ve seen at least 1,000 visitors come to your site, collect all data that has been tracked from measurable sources and review for effectiveness.

Questions to ask yourself:

• How close am I to meeting my objectives?
• Where are some different places my target audience may be searching for my product?
• What is my cost per lead? Cost per sale?
• Am I generating quality traffic – customers who are truly interested in my product – or are most of my visitors “window shoppers?”

Evolve as Necessary

There should be a direct correlation between the amount of effort put into your marketing efforts and an increase in sales. But remember, some of the tactics you employ may be as immediate as others. For instance, pay-per-click advertising can be measured right away, but your SEO techniques may take some time to bear fruit.

Based on the data you’ve collected and evaluated above, you can now make informed decisions on how to best update your plan. But if you find you’re not getting the results you were seeking, make minor modifications rather than drastic measures. Experiment with a mix of marketing techniques to reach current customers and draw new ones.

In Summary

No business can afford to waste money on ineffective advertising. Research all your options, and target your ads to a specific audience whenever possible. Keep a close eye on measurable methods like pay-per-click advertising and modify your approach as often as necessary. And don’t forget that effective advertising isn’t just about fueling short-term sales. It’s also about building long-term awareness and familiarity with your brand to retain a strong customer base in the future.

IMPress Action Checklist

Below is a list of the steps necessary to create an online advertising plan. Be sure to check off each task as you complete it to ensure that you’ve got your bases covered from start to finish.

1. Before you Begin
   1. Set Goals
   2. Define a Budget
   3. Ask an Expert
   4. Invest in Tracking
2. Build to Maximize Exposure
   1. Name effectively
   2. Register with search engines and directories
   3. Employ SEO techniques
   4. Keep a database of current customers
3. Assess the Landscape
   1. Customer profiles
   2. Competitive marketing evaluation
4. Create Your Plan
5. Collect Data
6. Evaluate Results
7. Evolve Your Plan

Competition is a fact of life, especially in the business world. Having a solid understanding of the competitive landscape is critical for the success of any business. This post will help you understand how to evaluate your competitors and the value of doing so.

Why Evaluate Your Competition?

In order for a major league baseball team to be successful, it must win. The more a team wins, the better, because people love to support winning teams. The more fans, the more money. The more money a team has, the more the team can invest in top players to keep winning, thus furthering the financial success of the organization.

The success of a winning team is contingent upon more than the performance of talented athletes. It is also determined by a solid understanding of the team’s rivals. Team owners, managers and coaches look at everything from opposing player’s salaries to their batting averages when sizing up the competition. These are indicators of a team’s strengths and weaknesses, and it is this information that allows team leaders to develop strategies to win.

The same is true regarding the success of any business. To be a leader in your marketplace, you have to understand key players in order to develop strategies that will allow you to stand out and become the preferred choice for your product or service.

How to Identify Your Competition

There are many sources that you can use to identify your competition. You can start to evaluate your local competition by simply looking in your phone book. If you access a phonebook on the internet, such as Yellowpages.com, you will have access to who is selling your product or service within approximately a 50-mile radius.

Today’s global market demands that you take your search a little further in most cases. If you are thinking of selling sports memorabilia online, you are by no means alone in the marketplace. For this reason, the internet is among the richest sources of information for determining who your competitors are on a larger scale. Search Google  using keywords to identify competitors.

Trade associations can also be a great source for identifying your company’s competitors. For example, if you were going to start an e-commerce site dedicated to selling aftermarket car parts, you could visit the website for the Automotive Aftermarket Industry Association (AAIA), (http://www.aftermarket.org/). This site happens to include a list of automotive aftermarket product vendors in its member directory. Search Google using keywords to identify your industry’s trade associations.

Most industries also have trade shows associated with them. Attending these shows is a great way to get-to-know your competition. You can see their products firsthand and gather intelligence from company representatives.

TV, radio, newspapers and magazines, including consumer and trade publications, are also good sources for identifying marketplace rivals. You may see your competitors advertising in these vehicles or find articles featuring their products or services.

How Much Competition Exists?

In order to have a complete understanding of your market rivals, you need to assess exactly how much competition exists on a local, state, regional and national level. This will allow you to develop strategies to compete within these markets. It is important to determine from this information who your direct and indirect competitors are.

Direct competitors are those businesses that offer identical or similar products or services to your business. These companies are vying for your customer’s attention, and represent the greatest threat to the success of your business.

Indirect competitors are businesses that are offering products and services that are similar in nature. These competitors are targeting your market, but delivering a different product. For example, if you were selling cars through your e-commerce site, an indirect competitor would be a business that sells alternative transportation vehicles such as motorcycles or scooters.

It is also important to evaluate how much future competition you may have. Let’s say you are looking to sell sports memorabilia through your e-commerce site and there is a store five miles from your location in a shopping plaza. You identify that this store doesn’t have an e-commerce presence; however, that doesn’t mean that they never will. Consider this store a potential rival.

Remember that identifying all the existing and future sources of competition is nearly impossible in many cases. It is most important that you determine your existing major competitors. Start by making a list of 8 – 10 direct competitors and 3 – 5 indirect and future competitors. Completely analyze who you perceive to be the strongest players in these groups. 

How to Analyze Your Competition

When it comes to your competitors, the more you know the better.  You need to know their strengths and weaknesses.  In turn, you can then determine how you can capitalize on their weaknesses and make your business more successful. Here are some points you want to understand about your competitors:

• Location. Where are your competitors located in proximity to your business?

• Shopping portals. By what means are your competitors selling their products? Catalogs? EBay or Amazon? Brick and mortar operations?

• Sales margin. At what price are your rivals selling your product or service, and how much profit is associated with that sale?

• Number of employees. How much manpower is necessary for the success of your competitor’s business?

• Sales volume. How many products are your market rivals offering and how much are they actually selling? The more they are selling, the more buying power that business has, which means they are more of a threat to the success of your business.

• Customer service. How are competitor businesses serving their customers? For example, what are their policies regarding service and returns? Do they have a toll free number to handle customer service calls or just email?

• Marketing efforts. How is the competition spreading the word about their business? For example, look at how and where they are advertising and the messaging involved with those efforts.

• Marketing messages. What are these companies saying in their sales literature or advertising about their product or service? What is the company’s apparent mission? What image are they trying to create? To be the less expensive choice?  The higher quality choice?  etc.

• Market image. What do consumers think about your competitor’s business? A rival business may have the initial appearance of being a strong competitor, but if people aren’t saying good things about them, that could leave that business dead in the water.

Here’s an example of how you might apply this knowledge: Let’s say you decide to sell sports memorabilia at your e-commerce site. You identify that there is a brick and mortar operation selling the same products 5 miles from your location, and this operation also has an e-commerce presence. You ask around and discover that your friend recently made a purchase from their online store and was dissatisfied. Not only did his order show up two weeks late, but also the wrong merchandise was sent. With this information, you can learn from your competitor’s mistakes and develop procedures/policies that will allow you to serve your customers more effectively. Further, you can work to position yourself as the better choice for ensuring a product is delivered accurately and on time, every time.

Don’t forget to create files for each of the competitors where you store the information you accumulate. Continue to add to these files as you watch your market rivals. Review the information periodically for ideas.

Are Your Competitors Thriving?

Once you identify your competition and analyze how they do business, it’s also important to determine if their businesses are in a good financial position. A competitor may appear to be strong on the surface, but if their business is in financial ruin, they won’t be in the marketplace for long.

Public Companies

If your competitor is publicly traded, it’s relatively easy to find out how they are doing financially. All public companies are required to disclose their earnings by the Securities and Exchange Commission. Where can you find this information? If you search by ticker on Yahoo! Finance or MSN Money, you will find earnings statements that will tell you if a company is meeting earnings per share expectations. Many of these companies also house investor relations content on their websites, including earnings statements.

Many public companies distribute their earnings statements using wire services, because this is the easiest way for them to meet disclosure. The major wire services feed their content directly into sites like Yahoo! Finance, or you can visit the wire service’s website to search for the information directly. Some of these sites include Prnewswire.com, Businesswire.com and Marketwire.com.

If you can’t find a publicly traded company’s earnings statement online, this information is also included in its annual report. You can simply request a copy of this report from the company.

Private Companies

The water becomes a little muddier when you are trying to assess the financial position of a competitor who is not publicly traded. That said, you will have to get a little more creative. Here are a few things to look at:

• How much traffic to your competitor’s site?  Alexa.com can help you determine how much traffic your competitors are getting. The more traffic, the more popular the site.
• Trade publications. These journals will often highlight the successes and failures of businesses within their industry as a tool to educate readers. Many have article archives or back-issues available on their website.
• Industry/trade associations. These organizations work for the common interest of those in the industry. A part of this effort involves knowing firsthand who is winning and losing within the industry.
• Customer reviews. What are customers saying about the business? If you find nothing but complaints from dissatisfied customers, that’s a good indication the business is in trouble. Many online auction and shopping sites have customer reviews of sellers such as Ebay or Amazon. You can also check Resellerratings.com and find thousands of reviews of online stores.
• Dun & Bradstreet (D&B). This company is among the world’s leading sources of business information. D&B’s database contains more than 100 million business records. Visit Bnb.com.
• Better Business Bureau. This organization is the gold standard. If the Better Business Bureau has blacklisted a company, they won’t be doing business for long. Visit Bbb.com.
• Trade and manufacturer “gossip.” You may be able to gather intelligence about your competitors from your suppliers. As you establish relationships with company representatives, you can start to ask them what they know about your market rivals.
• Friends. Do your friends know anything about your competitors’ businesses?

Identifying Weaknesses and Strengths

You’ve gotten a grasp on the competitive landscape. Now, what do you do with this information? You evaluate the intelligence you have gathered to assess your competition’s strengths and weakness. Having an understanding of these things will allow you to capitalize on their weaknesses and learn from their strengths.

One place to start is by looking at your market rivals’ websites. First, how popular are these sites? When you search for your product on Google or Yahoo!, are their sites among the first to come up? Here are a few other questions to ask yourself when looking at a website:

• What is your first impression of the site?
• Is the site user-friendly?
• Are you able to easily find what you are looking for?
• Does the site respond quickly?
• How is information organized?
• Is it easy to access?
• How does the shopping cart and payment processing software work?

You also want to look at your rivals’ prices, shipping options, return policies, diversity, and product presentation. Reviewing all of these things will allow you to determine how you can stand out in the marketplace.

Identifying Your Points of Differentiation

When you look at the information you have gathered about your competitors, next consider ways that you can do it better. Can you ship products more cheaply or offer them at a lower price? Can you develop a website that is more user-friendly? Can you offer incentives that your competitors can’t? Can you present your products in a more effective and appealing way? Can you market your business in a more creative fashion? Can you offer your customers better service? Believe it or not, this is a key success factor. Consumers are demanding. They want it now, and they want it with a smile. If you provide outstanding service, your customers are more likely to return to your site and recommend it to friends.

In Summary

Evaluating the competitive landscape is an important step in developing a successful business. Having a grasp of who your competitors are and how they do business allows you to learn from their successes and failures. In turn, you can find ways to make your business stand-apart and attract more customers.

IMPress Action Checklist:

Below is a list of the steps that will help you identify and evaluate your competitors. Check off each step as you complete it to keep track of your progress.

1. Identify your competitors
2. Gather information on direct and indirect competitors
3. Analyze your rivals’ business practices
4. Determine if your competitors are financially sound
5. Evaluate your competitors’ strengths and weaknesses
6. Determine how you can sell your product or service better