The Customer Service Paradox

Small business owners will do well to understand the Customer Service Paradox: 

Great customer service will not help sell a product or service that nobody wants, but bad customer service will ensure customers won’t buy something they do want. 

What makes the Paradox true?  In simplest terms, good or even great customer service is not enough to sustain customers, but it can be the single issue that drives customers away.  The challenge for small business owners is that they want to use customer service as a competitive advantage.  Small business owners may rely on customer service as the unique selling proposition that spurs their marketing efforts when really, great customer service is a basic expectation that all customers have.

At its core, customer service is the activities that enhance overall customer satisfaction with a customer’s or client’s experience with your organization.  You will notice that it is not just the purchasing experience, but the total experience with your organization.  When you think of all the ways customers may interact with your organization, you will see that this can become significantly complicated.

The obvious place to strengthen your customer service efforts are with your staff – all staff.  Your sales or customer service reps are not the only contact your organization has with actual and potential clients.  Make sure to communicate your customer service goals to everyone within your organization.  Convey the idea that excellent customer service is an integral part of every employee’s job description. 

In today’s virtual world, many of your customers may never pick up the phone or talk with someone face to face.  Every access to your company is an opportunity to exceed your customers’ expectations.  Is your website easily understood?  Can your customers find the information they want or find a contact person if they have questions.  Do your employees respond well with e-mail? 

If you ask people to share an example of customer service, good or bad, ten to one they go to the bad.  Customers love to share their horror stories of “what went wrong!”  Again, customers have an expectation that they will be treated well, that they will be able to find what they need, and that they will have questions answered.  If they cannot get this basic customer need met, they will find a company who can deliver.

The Customer Service Paradox transcends all industries and sectors, large and small companies alike.  Customers enforce it every day.  While customer service isn’t enough to drive customers to your company on its own merit, remember that it does have the strength to keep them from returning.

When busy doesn’t equal productive …

Recently, I completed the certification for FranklinCovey’s 7 Habits for Successful Managers, the training component based on Stephen R. Covey’s very successful and highly acclaimed The 7 Habits of Highly Effective People.”  This program was developed specifically for small business owners and managers. 

 The training provided a much-needed opportunity to reflect on my own managerial style and how effective I am in provided leadership for my organization and employees.  There were several light bulbs illuminated during the two days, but one in particular resonated strongly with me.   

Habit 3 is putting first things first.   Stephen R. Covey puts it this way, “You have to decide what your highest priorities are and have the courage – pleasantly, smilingly, nonapologetically – to say no to other things.  And the way you do that is by having a bigger “yes” burning inside.”  Translate that into a manager’s behavior, it is moving from being the manager who is convince that s/he can do it all to the manager that organizes and executes around his or her highest priority. 

If you are like me, you tend to focus on the urgent – not the important.  At the end of the work day, I felt like I had crammed a whole week’s worth of putting out fires and resolving problems, but yet really hadn’t accomplished the things I wanted to get done.  I was busy, certainly.  But I wasn’t very productive! 

In a study published in the Harvard Business Review, two professors found that 90 percent of managers waste time in ineffective activities.  The largest group of the study, roughly 40 percent, was managers who were well-intentioned and highly energetic, but their activities were unfocused.  They began projects with the best of intentions, but wound up either “fighting fires or abandoning the project all together.” Only ten percent of the managers were considered highly focused and highly energetic.  (Bruch and Ghoshal, February 2002)

So how does a manager go from being busy and unproductive to focused and productive?  Thankfully, there are tools and techniques to assist in making that shift.  First, and probably most difficult, is becoming very clear about your important goals.  Focus on the important goals, the ones that make or break or your organization.  By not squandering energy on projects or issues that don’t help achieve those goals, the work becomes much more energized and focused – and thereby much more productive. 

If we go back to Covey’s quote in the beginning of this column, we get to the crux of this habit.  This is difficult for the busy manager because busy managers don’t say no.  Productive managers do.    We all want to be good team players, help out others, be seen as a needed members – the list goes on and on.  But, how many of these activities keep managers from accomplishing and reaching the true goals. 

If you, as a manager, can’t say no – start practicing.  Go from being the busiest manager you know to the most productive.  Truly, when  you think about it, which would you rather be?

Demystifying Federal Funding for Small Business Innovation

(Contributed by Pat Dillon)

Small businesses with innovative ideas don’t often make the connection between their technology-based ideas and federal funding sources. They assume federal funds are not available for their idea or technology, or they simply don’t know how to get started. 

Two federal funding programs, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs, make available funding to support small business (1-500 employees) research and development. Yet maneuvering the idiosyncrasies and nuances of these programs can be daunting and overwhelming.

As a state, we must demystify these programs to enable small businesses to capitalize on this funding for economic gain. We must “spread the gospel” about federal R&D funding opportunities to benefit small businesses in both urban and rural areas.

Recently, a small, rural-based business in Rice Lake, WI, was successful in winning a $3.2 million grant from the National Institutes of Health SBIR Program to construct a prototype mobile fetal magnetocardiography (fMCG) system. The project partners include UW-Madison, Department of Medical Physics; three industrial partners; and four well-known clinical sites, all aimed at developing this new mobile fMCG system to help women with high-risk pregnancies during the second half of their pregnancy.

This NIH SBIR grant is the second largest in Wisconsin and the first SBIR grant in northern Wisconsin (north of Highway 8). To bring this medical advance to the forefront, the company leveraged the state’s resources, programs, services and brain power to prepare and submit its proposal to the NIH. They continue to leverage that expertise to manage the grant.

SBIR/STTR Basics

Since 1983, Wisconsin’s technology-based businesses have been awarded about $200 million of SBIR and STTR funding, resulting in many new and innovative products and services for government and commercial customers in many industry sectors. Nationally more than $50 billion has been awarded to thousands of small businesses to research, develop and commercialize technologies in the life sciences, defense, energy, education, agriculture, homeland security, space, software, environmental, transportation and many other areas of science and technology. SBIR/STTR Programs were established to:

• Stimulate technological innovation
• Use small businesses to meet federal R&D interests/needs
• Encourage participation of disadvantaged and minority persons in technological innovation
• Increase private sector commercialization through federal R&D investment
• Promote collaboration and partnerships between small business and academic institutions, federally funded R&D centers and/or private sector firms  

 

Benefits

These programs enable small businesses to fund and conduct innovative R&D efforts in collaboration with private or public sources; retain intellectual property rights of the federally funded R&D effort; retain 100 percent ownership of their small business; and achieve credibility in the federal R&D marketplace. 

 

Agencies

SBIR requires 11 federal agencies to reserve a portion of their extramural R&D funds for award to small businesses. STTR requires participating federal agencies (5) to reserve a portion of their extramural R&D funds for award to small business/nonprofit research institution partnerships. Collectively, these agencies award more than $2.5 billion annually.

 

Process

There are three phases to the SBIR/STTR Programs. Each federal agency publishes its solicitation, which includes information on research topics and interests, rules and regulations, and instructions for submitting a proposal. SBIR/STTR funding can be used to cover direct and indirect (overhead/G&A) costs and a small profit/fee. Eligible expenses include research personnel salaries; consultants; supplies; equipment; facilities; human and animal studies; and project-related travel.

At each phase, the small business submits a proposal to the appropriate federal agency. A small business can receive up to $850,000 over three years (two phases) to determine the technical feasibility of the innovative idea leading to the production of a working prototype.

During the third phase, the commercialization phase, the company is encouraged to seek private sector financing, licensing, and/or strategic partners to commercialize the product/technology. Some agencies (Department of Defense and NASA) may award non-SBIR/STTR procurement funds for “sole source” procurement from the small business. This can result in millions of dollars in sales for the small business.

Should you pursue SBIR/STTR?  

Deciding to pursue SBIR/STTR funding really depends on the vision and goals of the business, and its product development pathway. It is a strategic business decision – one that requires dedicated internal resources (time, people and materials).

The competition for these funds is fierce; the process is time consuming; and it has risks. But persistence and tenacity result in huge opportunities and rewards for those who are smart, savvy and strategic about pursuing federal R&D funding to support their innovative product development.

Wisconsin-based companies, like the Rice Lake company mentioned above, are encouraged to leverage the knowledge, expertise and relationships in government, academia and the private sector to successfully compete for federal SBIR/STTR funding.

 

Pat Dillon is the Northwest Regional Director for the Wisconsin Entrepreneurs’ Network. Dillon has extensive experience with SBIR and STTR programs and can be reached at dillonp@uwec.edu or 715-836-5056.

Search Engine Optimazation (SEO)

When I taught my SEO class for the first time at the University of Wisconsin-La Crosse, I announced to the group that “I have time built into today’s session for questions so please ask me whatever you like as we move along instead of waiting until the end.” And then one person bravely raised their hand and asked a question, and I answered it. The manner in which I answered the person’s question must have communicated to the other attendees that I was sincerely there to help, would give them recommendations in a specific step-by-step format, and would never include sarcastic comments in my answer. Well, whatever I said opened the proverbial question flood gate. Question after question was fired at me and they were outstanding. Attendees asked me about 60 questions over the course of nearly 5 action-packed hours.

 

Here’s one of the top FAQs that I have been asked by business owners while teaching my SEO class.

 

Q1: Is investing my time toward SEO really worth it? What are some typical results that will benefit my site?

 

A1: Excellent question, because if the results are insignificant, you would be better off investing your time and cash toward other areas of your business. If your site is not currently optimized, and you implement the 15-step process that I teach in this book, it is highly likely you will realize the following two primary benefits:

Dramatically improved rankings in 30 days or less
Doubling of your Web site’s monthly unique visitors within 90-days or les
And, if you purchased the companion DVD to this book, you already know that I will guarantee these results with my 110% money back guarantee. How is that for an awesome return on investment?

 

Oh, I recommend that you take a baseline measurement of your current traffic statistics before you begin the optimization process, so you can compare before and after results. Simply make a note of the month, day, and year you upload your first batch of optimized content pages/files so you can compare the number of monthly unique visitors before and after optimization. For example, if your Web site attracted 1,000 unique visitors in June 2009 before optimization, you will have this statistic available when you evaluate July’s results using optimized content.

 

Stephen Woessner is the author of The Small Business Owner’s Handbook to Search Engine Optimization. Available on Amazon.com You can find Stephen at www.seotrainingproducts.com as well as Facebook, LinkedIn, and Twitter.

 

Creating a Customer Profile

Customer profiling is as easy as answering two simple questions:  Why are customers buying this product or service and why are they buying it from you? Throw in a few demographics and you have got yourself a profile.

Okay, it may not be that easy, but customer profiling, formally known as market segmentation, can be an important component to your marketing plans.  Market segmentation is the process of dividing the entire market into smaller groups of potential customers that have similar demographic, psychographic and/or product usage characteristics. 

Market demographics are facts.  Age, income, gender, education and marital status are all demographics and help characterize markets.  Psychographics are subjective, human behavior traits that are identified as being shared by the segment.  Market segments can be conservatives, liberals, leaders, followers, or any other group characteristic that is shared by the group and influences their purchasing decisions.

By identifying key trends and commonalities of your customers, you can fairly accurately predict customer reaction to your overall marketing strategies.  Profiling gives you the all-important “why” factor.  Why do customers buy certain products or services?  Why do they choose to buy from you rather than your competition?  Knowing these answers allows you to add dimension to your customer profile.

You may sell one product, but different market segments will buy it for different reasons.  Simply put, different benefits appeal to different customers.  For example, a TV dinner is a TV dinner is a TV dinner.  But, convenience is not saving money, weight-loss or better nutrition.  Yet, Hungry Man, Budget Gourmet, Lean Cuisine and Healthy Choice have segmented a market of frozen meal buyers into specific benefits that appeal to a specific customer.

Profiling your customers allows you to link the segment with the benefit.  Getting the information is as easy as watching who comes through your doors and asking them.  As you ring up sales or assist them in their purchases, you should be noting what they are buying and asking them why.  Most customers will attribute it to friendly customer service. 

This type of market research can become more sophisticated.  Surveys, focus groups, purchased demographics summaries and more are available for a fee.  These tools can assist market segmentation efforts, especially if you have neither the time nor the inclination to take on this project on your own.

Additionally, once you know your customers and their salient characteristics, you can look for similar segments that you are currently not reaching.  For example, if a certain segment is buying your product or service for the benefit of convenience, are there other groups who would appreciate the same benefit?  Usually there are and once you have found that link, you have also found a brand new customer base.

With a little work and time, you can get to know your customers and their buying habits and characteristics.  This knowledge should guide every marketing decision you make.  

The bottom line is this.  Knowing who your customers are makes for better business.  Your marketing dollars will yield a larger return on investment if you can better predict customer reactions to your marketing efforts.  With successful customer profiling, you can.

10 Truths of Business Ownership (continued)

6. Planning is essential.  The old adage about those who fail to plan, plan to fail is more true in business than anywhere else.  Your business plan keeps you focused on your goals while providing you with the foresight to weather challenges.  There are many resources out there to help you plan, including business plan classes and technical assistance. 

7.  You can’t do it all.  It’s your business, but why make it harder than it has to be?  Put your own board of advisors together to work with you. Make sure that you include an accountant and an attorney.  Their advice will be invaluable to you as your business grows.  Depending on your own strengths, you may also want to include a marketing expert or business consultant.  Having a group of trusted allies helps you keep your courage up and builds your confidence.  It’s good to have someone in your corner.

8. You may not make any money the first year.  Even though you may sell your product and do well, sales may fall short of expectations and costs may be higher.  Financial forecasting is an essential part of your plan.  Make sure that you develop your cash flow projections, your income statement and your budget.  Then, make sure you understand what these statements are telling you.  If you are prepared financially for the first few years when money is tighter, your business won’t succumb to cash flow or other financial problems.

9. You should prepare for the end.  It’s hard to think about the finish line when you are just starting the race.  But thinking about the long-term goals will help you correctly set up your business now.  Will you want to sell your business as part of your retirement plan?  Will it be passed on to the next generation?  Knowing where you want to end up is a key part of getting started, so keep the future in mind.

10.  It will be the best thing you ever do.  Entrepreneurs start their business because they have a passion, a dream.  If you ask them, entrepreneurs can’t imagine doing anything else.  Whether someone is just starting out or they have been in business for 30 years, the satisfaction of putting it all together never goes away.  The resources and help to get started are out there.

10 Truths of Business Ownership (first five posted today)

1.  There is no free money.  No matter what late night infomercial tells you, business grants, when they exist, usually are very specific to outcomes, such as job creation or industry-specific innovations. However, there are financial opportunities for small business with significant loan programs or venture financing.

 2  Just because Uncle Lou will buy your product, it doesn’t mean everyone will.  Neither does it mean that people won’t., but asking family and friends does not provide the marketing analysis your business plan needs. You must do impartial research to get the true marketing potential of your business. Historic data, primary research and professional consultants are available and can help in this process.

 2. You will not go fishing on the weekends.  Starting a business takes time … a lot of time.  New business owners eat, sleep and breathe their business. On average, new entrepreneurs spend more than 10 hours a day at work.  So while you may not go fishing or hit the links or catch the games as you used to, your schedule will eventually even out.

 3.  You must like working with people.  Your business will not succeed in a vacuum.  Even if you are a home-based business, your success will be partially based on how well you work with others. Vendors, suppliers, customers, partners and many others groups will be in constant contact with you as you go about your daily business. Make sure you have the necessary people skills.

 4.  Change is the only constant.  Business is in a constant state of flux.  You must stay on top of the trends in your industry as well as changes in daily operations.  Being an active participant in your trade association ensures you stay on top of what is new in your industry.  Trade associations also are a good source of data on customer profiles, marketing techniques and benchmarks.