How to Grow Your Business During Any Economy

While the economy seems to be slowly recovering, it's far from smooth sailing, and many businesses are still struggling to find firm footing. Even so, you don't have to look hard to find businesses that are thriving. What's the secret behind these companies that the struggling ones haven't found? It may be tempting to think that lowering prices is the best way to compete in a struggling economy. When times are tough, people think longer and harder before making the choice to buy something. But this doesn't mean they will always opt for the cheapest option. If they did, Apple wouldn't be the brand leader it is today. There are many inexpensive alternatives to Apple's popular products, yet they continue to break sales records with each successive new product release. The Internet has made it easy to compare prices and find the cheapest alternative. Only one company can be the cheapest, and the low-price shopper will spend as much time as necessary to find what they are looking for. This type of person is not your target customer because they will leave you as soon as they find someone else offering a lower price. There's no brand loyalty in this game. Instead, it's a race to the bottom, with eventual closure its only prize. A Better Approach The much better approach is to increase the value you bring to your marketplace instead of lowering your prices. This value could be found in offering helpful knowledge to people looking for the types of products you sell. It could mean offering bonuses such as free shipping or discounted installation. It could be as simple as a friendly, smiling person greeting customers in store or on the phone. The more value you can find and bring to the table, the less impact price will have as the sole factor for buying what you sell. When you bring value like that, you become invaluable to your community and to the types of customers you want to attract. These are customers who won't leave you for the latest sale by the low-price companies. Instead, they're real customers who come back because they appreciate real value.

The Five Dollar Workday

Henry Ford, the famous Ford Motor Company founder, was known for many things. Among them was his role in promoting the assembly line as a viable means for mass-producing automobiles, a process that made cars more affordable for middle-class Americans.

Ford had a global vision with consumerism as one of its centerpieces. He had an intense commitment to lowering costs through systemization and building a more process-driven company. This focus made his next move (which is not as well known) quite a shock at the time. The Five Dollar Workday In January 1914, Henry Ford made a radical decision. He increased Ford Motor Company employee wages from $2.34/day to $5/day (equivalent to approximately $110 today) and reduced the workday from nine hours to eight. While this was one of the most generous pay hikes of its time, Ford didn't do this simply out of the goodness of his heart. At the time, the Detroit area was already becoming known for companies offering higher-than-average pay. In addition, the boredom of repetitious, assembly-line work led to higher employee turnover rates. One of the underlying reasons behind Ford's move to increase wages was the desire to attract and retain top-notch employees by effectively creating golden handcuffs. Ford used his PR machine and news journalist contacts to spread the word about the generous pay. Soon, there were thousands of applicants at every Ford factory, which allowed the company to hire only the best applicants. The fortunate hires stayed with Ford much longer than they otherwise might, since they couldn't get similar pay elsewhere. In one bold move, Ford had managed to solve most of his company's labor problems. But higher employee retention was only one benefit of Ford's plan. Within two short years of the pay raise, Ford's profits increased by 200% to $60 million per year. Within five years, Ford Model T's were rolling out at the rate of one every 24 seconds, much faster than the 12 days each had initially taken to produce. By the end of 1914, the 13,000 Ford Motor Company employees were producing 260,000 automobiles annually, while the rest of the automotive industry produced 280,000 combined. At the time, much of corporate America did not view employees as an asset. Instead, they were seen as part of a company's expense. With this single move, Ford was able to open the eyes of the corporate world. Ford had created a workforce that became a model for the eight-hour workday and HR departments of today. More importantly, he set the pace for the eventual rise of middle-class America. Ford employees could actually afford to buy one of the cars they produced. With the $5-per-day pay hike, Ford was able to reduce employee turnover, increase the pool of high-quality applicants, reduce absenteeism drastically, and attract top-notch employees. The corresponding morale increase led to the highest productivity rates in history. So what's the moral of this story? What can we glean from it and apply to our own companies in the 21st century? When companies shift their mindset from viewing employees as an expense item on the financials to an asset with vast potential, they can begin to see brighter possibilities for the whole company as well. Employees who truly believe they are appreciated and feel valuable to their company are much more likely to be highly productive and happy with what they are doing. Content employees are much less likely to actively seek opportunities elsewhere. Loyal, long-term employees lead to stability and customer satisfaction. Henry Ford made a big splash with his five-dollar workday. The same kind of impact can be made today by implementing innovative ideas that show employees you appreciate what they do. Studies and surveys have shown that higher pay is not the top motivator for employees to stay with their company. Feeling valued, being content in their role, and accomplishing larger goals are more important criteria. Find effective ways to instill those feelings in your employees, and you can make your own splash.

How to Beat a Low Price Competitor

Every industry and every business tends to have at least a few competitors who know only one way to compete: unreasonably low pricing. These businesses undercut pricing so much that few make any profits. Unfortunately, as they go down the tubes toward oblivion, they often drag a few good companies with them.

Everyone knows that competing is part of being in business. Problems occur when some companies don't want to play by the rules. One man who ran into just this sort of problem was Herbert Dow. Herbert Dow founded Dow Chemical in Midland, Michigan, after inventing a way to produce bromine inexpensively. He sold the chemical for industrial purposes all over the US for 36 cents per pound at the turn of the 20th century. He couldn't go overseas, however, because the international market was controlled by a giant German chemical cartel that sold it at a fixed price of 49 cents per pound. It was understood that the Germans would stay out of the US market so long as Dow and the other American suppliers stayed within their borders. Eventually, Dow's business was in trouble, and he had to expand. He took his bromine to England and easily beat the cartel's fixed price of 49 cents per pound. Things were okay for a while, until a German visitor came to Michigan and threatened Dow that he had to cease and desist. Dow didn't like being told what to do, so he told the cartel to get lost. Shortly thereafter, German bromine started appearing for sale in the US for 15 cents per pound, well below Dow's price. The cartel flooded the US market, offering the chemical far below their own costs, intending to drive Dow out of business. But Dow outsmarted them. He stopped selling in the US entirely and instead arranged for someone to secretly start buying up all the German bromine he could get his hands on. Dow repackaged it as his own product, shipped it to Europe, and made it widely available (even in Germany) at 27 cents per pound. The Germans were left wondering why Dow hadn't gone out of business and why there suddenly seemed to be such a high demand for bromine in the US. The cartel lowered its price to 12 cents and then 10 cents. Dow just kept buying more and more, gaining huge market share in Europe. Finally, the Germans caught on and had to lower their prices at home. Dow had broken the German chemical monopoly and expanded his business greatly. And customers got a wider range of options for buying bromine at lower prices. Dow went on to use the same trick against the German dye and magnesium monopolies. This is now the textbook way to deal with predatory price cutting. The way Dow went about dealing with a low-ball competitor may not be the solution for you in dealing with your own competition. But his method does show that you can win by thinking creatively and putting some thought into outfoxing an opponent in other ways than just matching their low prices.

8 Skills Successful Entrepreneurs Have That Others Don't

There are skills you can learn from textbooks, skills you can learn in business school, and skills and lessons passed down from mentors and peers. Then there are the skills that can only be learned in the school of hard knocks and the real world. An entrepreneur who wants to be a true leader must understand which skills are the most important in order to lead a healthy and growing business. Here are eight of the most critical skills which differentiate successful entrepreneurs from others.

1: Patience and Persistence The life of an entrepreneur includes facing many closed doors. Successful entrepreneurs have grit. They focus on the end goal and have the patience to see it through to completion despite the roadblocks. 2: Planning Skills & Time Management Entrepreneurs must wear many hats and are often pulled in many different directions throughout the day. It's critical, therefore, that plans and goals are flexible enough to handle unexpected surprises when they occur. Successful entrepreneurs set the GPS for their lives and businesses so they know where they are going every hour of every day. 3: Communication & Persuasion Whether speaking with a prospect, a customer, an employee, or a stakeholder, it's critical that the message and key concepts are presented clearly. When the point is made with focus and clarity, the chance for ambiguity falls by the wayside. Leaders know how to communicate and how to persuade. 4: Confidence & Sales Skills Successful entrepreneurs are able to sell their products, services, ideas, and passion not only to the outside world of customers but also to their internal team of employees. That requires confidence and sharp sales skills. Successful entrepreneurs can sell anything. 5: Knowledge and Learning Skills Successful entrepreneurs are passionate about continuous growth and improvement. When others think they know all there is to know, these leaders will push themselves to expand their horizon. They set aside an hour or more each day to read and learn about new, noteworthy industry advances they can apply to their business. 6: Realistic Optimists No one can avoid bad news. Losing customers and having employees quit is part of life for any entrepreneur. The difference comes in how people view these challenges. The successful entrepreneur doesn't hide bad news under the rug, but has learned instead to deal with it quickly and move on to the task at hand without being dragged down. 7: Resourcefulness and Managing Cash Flow Resourcefulness is a great trait for any entrepreneur. The ability to think creatively and come up with out-of-the-box solutions is a must-have skill. This goes hand in hand with being able to manage the cash flow of the business. It's a skill that shouldn't be outsourced and one that the most successful entrepreneurs have learned very well. 8: Intense Focus What separates the most successful entrepreneurs from others is their ability to focus intently on the goals and tasks at hand. In a world of short attention spans and constant noise, these leaders are able to put blinders on when needed, unplug from all the unnecessary distractions, and see the task all the way through. That is perhaps the biggest difference between successful and ultra-successful entrepreneurs. Becoming a successful entrepreneur is not about what you are now, but what you do today and tomorrow. You now know eight critical skills to work on to be what you are meant to become. Start working on them today.

How Premiums Work Better Than Coupons and Discounts

What is a Premium?

A premium is anything of value that you offer a prospect or client in exchange for taking an action that you direct them to. This could include an incentive or a gift. The right premium could encourage someone who might otherwise set aside the mail to act now instead of later (or not at all). This works especially well when there is a limited quantity available or you state a deadline for responding. An example of this would be offering a Starbucks coffee gift card in exchange for filling out a survey or submitting an honest testimonial. Premiums can also be used to generate demand for your products and services, to reward fast response, or to boost the size of an order. Why Does a Premium Work? Everyone wants something for free, but they also want to reward those who rewarded them. Premiums work because of the "rule of reciprocation" made famous by Robert Cialdini, a psychologist and author ofInfluence: The Psychology of Persuasion. According to Cialdini, "We are obligated to give back to others the forms of behavior that they have given to us. Essentially, thou shalt not take without giving in return." How Premiums Improve Direct Mail Response? Any direct mail campaign includes the following components: The Mailing List The Design The Copy The Offer The Print & Packaging Timing & Delivery How do premiums fit into this? They are part of the offer. Most premiums have low costs but a high perceived value. Although premiums add to the cost of a mailing, the gain in response and the attention they provide outweigh the additional expenses. Premiums can be delivered in several ways, depending on the goals of the campaign. The premium can be delivered as a front-end offer, when you want your mailing to stand out. It can also be delivered as a bonus or incentive, if the recipient responds to your call to action. In this case, a photo or graphic image of the premium would work well. Examples of premiums can be found in daily life outside of direct mailers. The McDonald's Happy Meal is often purchased because of the toy premium inside rather than the food. Many cereal boxes are sold because of the trinkets inside as well. Premiums are often used at sporting events when the ticket attendant hands out a calendar or a bobble head to the first 1,000 attendees. Premiums are also found in many non-profit mailers, where a free set of mailing labels with your return address printed on them are included, along with the request for a donation. Our society at large is conditioned to appreciate premiums. Premiums can also be used to encourage your existing clients to give you referrals and testimonials. They can be used as great reminders to motivate your best clients to help you get more customers. But will premiums work for you? Remember that your premium is only one part of the direct mail package. You must still follow best practices and essential principles of direct mail. Although a premium can improve results, premiums alone do not guarantee success. Just because premiums work for many companies does not guarantee that they will work for you. Test different premium offers, and keep careful records of your costs and sales (or leads) generated. Although the recipients are not obligated to respond, history, case studies, and human psychology indicate that offering premiums can significantly boost your response rates. Direct mail + a premium can be a winning combination to boost business for your company.

Your Unique Selling Proposition

What's a unique selling proposition (USP)? First the Wikipediaexplanation:

"The unique selling proposition (a.k.a. unique selling point, or USP) is a marketing concept that was first proposed as a theory to understand a pattern among successful advertising campaigns of the early 1940s. It states that such campaigns made unique propositions to the customer and that this convinced those buyers to switch brands. The term was invented by Rosser Reeves of Ted Bates & Company. Today the term is used in other fields or just casually to refer to any aspect of an object that differentiates it from similar objects." A strong USP can mean the difference between being "just another company" and one that's unique and memorable in the minds of customers and prospects. To do this, a USP must accomplish three things. Each USP must make a strong appeal to the target audience. Not just words, not just product puffery, and not just window advertising. It must say to each reader: "Buy this product, try this service, and you will get this specific benefit." The benefit must be one that the competition either cannot, or does not, offer. In other words, it must be unique. The proposition must be strong enough that it can attract new customers to your product or service on its own. Here are some USPs you might recognize: Nike: "Just Do It!" Apple: "Think Different." Miller Brewing: "Tastes Great, Less Filling" KFC: "Finger Lickin' Good" Subway: "Eat Fresh." Energizer: "It Keeps Going, and Going and Going..." Head & Shoulders: "You get rid of dandruff." Domino's Pizza: "You get fresh, hot pizza delivered to your door in 30 minutes or less -- or it's free." FedEx: "When your package absolutely, positively has to get there overnight" M&M's: "Melts in your mouth, not in your hand" Metropolitan Life: "Get Met. It Pays." Southwest Airlines: "We are the low-fare airline." Walmart: "Always Low Prices. Always." Your USP is your unique answer to these questions: Why should I listen to you? Why should I do business with you instead of anybody and everybody else? Why should I do something instead of nothing? What can your product do for me that no other product can do? What will you guarantee me that nobody else will? There are two types of USPs: explicit and implicit. Explicit USP The message you lead with Clearly stated in your marketing materials Involves promises & guarantees Aimed at new customers or first-time buyers of a particular product or service Implicit USP What customers love most about you Things that keep existing customers coming back to you May get mentioned by customers in testimonials & word-of-mouth referrals You may go for years and never state it publicly: "We operate with absolute integrity." Whether you have a new business or an existing one that needs a stronger USP, here are some ideas to help you come up with a USP that translates to a benefit the customer wants. A strong USP can have some or many of these characteristics. Faster service More personal service Services above and beyond the basics Guaranteed on-time completion Guaranteed delivery Guaranteed friendliness Guaranteed live phone support Better prices Exclusivity ("Ours is the only package that includes 'x.'") Superior quality Convenience A better promise or guarantee of results Your USP should be unique, useful, simple, and memorable. A well-thought-out USP can help you position your company in a powerful and strategic way. It's never too late to strengthen your USP. Start today.

Is Your Business Card Bringing You Business?

Typically, many hours are spent deciding on the logo, layout, and tagline to include on a company's business cards. But not much time goes into thinking about strategies to make those business cards actually work to bring in customers. That is a mistake. Business cards are like mini ambassadors for your business. They represent you, your company, and your brand. Business cards often provide the first impression a recipient will have of you and your company. They shouldn't be just an afterthought in your marketing collateral mix. To effectively market and advertise your business, whether through business cards, social media, or a website, the first step is to create awareness. Awareness is generated through uniqueness. The colors, stock, font, graphics, and unusual finishing touches like rounded corners or foil stamping and special die cutting can all add up to create a business card that stands out in a crowd. Simple elegance and a clean, uncluttered layout work best. Sometimes more is learned about a business by the professional look and design of its business card than by almost any other marketing collateral. Prospects may forget about and toss out many other collateral pieces, but they usually keep an interesting business card. Visually standing out is the first step to make a business card work to bring you business. The second involves the recipient and answering a simple five-word question... What's In It For Me? The text on your business card must quickly and clearly explain the benefits of working with you. You can't fit an entire brochure on the small area a business card provides (although some people try!). Most companies will list the services they provide. That is fine to do on the back of a business card. On the front, however, where everyone looks first, you need to state clearly what results your products and services deliver. What is the primary benefit of working with your company? Make it short and sweet. Don't hide it. Proudly display it on the front of the card. The quality of the stock used, the font and layout, the finishing touches, and the copy used all work hand in hand to create a powerful, client-getting business card. But those beautiful cards won't do much good if they aren't getting deployed. Take business cards everywhere you go. Put a stack in your car, in your wallet, and in your purse or briefcase. If you find the right target audience, hand them not one but several cards and ask them to pass the extras along to colleagues or friends who might be able to use your services. Strategically thinking about the design, production, and copy on your business cards has the effect of creating a viral campaign for your business. Unlike the online variety, this is a viral campaign that can actually bring you real results and not just buzz in the marketplace.