Top Ten Reasons Small Businesses Fail - part four

Clients

Every Small Business owner, operator or employee should be aware that it costs much more to acquire a new client than retain existing ones.  But old or new, client management is essential to your Small Business economic health.

A key reason Small Businesses fail is that they fail to appreciate the distinction between clients and customers, or they take their clients for granted, chasing after the sale but never following up after the payment clears. Yet there are a few simple, low-cost activities that can help you turn customers into clients, and find new business with your existing clientele, such as:

• An informative, interactive website
• Customer satisfaction surveys
• Email campaigns (and autoresponders)
• Cross-promotions and value-add upselling
• Favored client discounts
• Client loyalty cards, coupons or programs

Business is about relationships - court your clients like a romance.  Remember: there is much more to client management than the sale. Otherwise, it's just a customer relationship. A well-established brick and mortar shop can survive on "one and done" customer relationships; a service business, a startup or an online venture must attempt to capture clients - those people (or companies) that will do business with you on an ongoing basis.

Clients will support your business, well beyond spending their money with you once, and moving on to your competition (usually, without notice). To cultivate such a connection, you must get to know your clients' needs. Examine your financial records, invoices and communications to determine:

• Who your best clients are
• How much business they do with you, on average
• What goods or services they purchase most
• What related goods or services might appeal to them.

"Customer service", even though we're really talking about clients, is one of the single most important overlooked practices of Small Businesses. We're not just talking about handling complaints, and correcting the occasional error in order fulfillment. This is about developing lasting relationships that can make the difference between prosperity and bankruptcy.

These relationships BEGIN with the sale, but do not end there. If, for you, a successful purchase is the end of your active concern... that may be why your client retention rates are lower than they could be.   Just as your relationships with family, friends and loved ones can go cold from neglect, you must put a sincere effort into nurturing your client relationships.

Find new ways to relate to them, but be careful of crossing into the "spam zone".   You want them to appreciate the constant contact, not dread and avoid each new phone call or email. Focus on the value you add to their lives and businesses; it's okay if this takes some time and effort.

What have you got to lose -- except opportunity, revenue... and clients?

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Series inspired by "Top Ten Reasons Why Small Businesses Fail" by: Connie Holt, E.A. cholt@henssler.com
The Henssler Financial Group Position Paper
© 2004 The Henssler Financial Group | www.henssler.com

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Related articles

• Client Retention is Easier with This 5 Step System (bettercloser.com)
• Analysis of 100,000 Small Business Websites Uncovers Critical Challenge (prweb.com)
• Social Media for Small Businesses Is Anything But Small (blogs.constantcontact.com)
• Small Business Growth: Reach out, get connected, and get educated (blogs.constantcontact.com)
• How Insider Perks' Brian Searl Got 9,000 Twitter Followers (businesspundit.com)

Top Ten Reasons Small Businesses Fail - part three

Marketing

A handful of business cards and a no-frills website are no longer a sufficient Small Business marketing strategy.

The word "marketing" typically brings to mind expensive media campaigns, billboards and the services of highly-paid advertising firms. Clearly many Small Businesses have neither the time nor the resources (money, personnel, expertise) to take this approach to marketing, but that doesn't let them off the hook.

Many Small Business owners and operators either have prepared a business plan, or know that they should. But many are completely unaware of the the need to prepare a marketing plan. New clients won't find you just because you want their business, and even existing customers and clients would benefit from an understanding of your full range of goods or services, and a constant reminder that they are available.

Small Business entrepreneurs and "solopreneurs" are quite busy, especially in today's economy. It's easy to consider a marketing strategy a "nice-to-have", rather than a "need-to-have" element of doing business. But consider this: why do well-known, successful corporations spend millions of dollars each year on marketing? Even though we are already familiar with the coffee shops, fast food restaurants and supermarkets we do business with, they still expend a lot of energy reminding us of their brands, their offerings and the overall "feel" of their products and establishments.

Marketing is not advertising, although advertising is a component. Advertising is about what goods or services you offer, price and availability. According to Wikipedia, "Marketing is used to identify the customer, to satisfy the customer, and to keep the customer." While Small Businesses may not have the budgets of large corporations, they have a greater need to focus on acquiring new customers, and retaining existing ones.

McDonald's or Walmart can survive a considerable decrease in clientele (not that they would enjoy it). For a Small Business, losing even a few clients can spell disaster. Since they don't enjoy the regional or national visibility of major firms, they cannot depend on product or brand recognition that brings in customers at random.

Look to as many free or low-cost resources as possible to promote your business and market your offerings. Social media, such as twitter, Facebook, LinkedIn and such are not just for kids: they can provide a range of exposure once available only via television or radio advertisements. Low-cost "real world" techniques, such as focused flyer distribution, bulletin boards and well-designed business cards are not to be overlooked.

Email marketing sites such as ConstantContact.com and  MailChimp.com are a hidden treasure: MailChimp allows you to create mailing lists of up to 2,000 addresses, and send up to 6,000 messages each month. With templates, autoresponders and video tutorials available, it's a secret weapon I recommend as an indispensable Small Business marketing resource.

You still need a strategy, which requires more detail than can be provided in a blog post. These tips, however, can help point you in the right direction:

• Determine the focus of your offering
• Identify the value proposition to the customer
• Maintain a consistent message
• Develop a memorable catchphrase or tagline

Remember: marketing is about the impression you make in the mind of the existing or potential client or customer. Business is about relationships - marketing is the conversation.

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Series inspired by "Top Ten Reasons Why Small Businesses Fail" by: Connie Holt, E.A. cholt@henssler.com
The Henssler Financial Group Position Paper
© 2004 The Henssler Financial Group | www.henssler.com

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Related articles

• Survival Tips for Solopreneurs (inc.com)
• Don't Look Now, But Small Business Is On The Brink Of Something Big (businessinsider.com)
• Small Businesses Cautiously Optimistic About the Future (blogs.constantcontact.com)
• Allocating Resources to Help Small Business Grow (blogs.constantcontact.com)

Top Ten Reasons Small Businesses Fail - part two

Competition

Are you the best at what you do? Among the best? Anywhere close to the best?

Wherever you rank in comparison to your competition, are your existing or potential customers or clients aware of how you compare? As importantly, how accurate an assessment do you have of where you rank amongst your competitors? Remember: our ideas are like our children - we love them because they are our own.

But as any honest parent will tell you, sometimes we must face some brutal truths about ourselves. Before you can match or exceed the competition, you have to understand who the competion is.

How many competitors do you have?  This is not an abstract question about hypothetical competitors "out there, somewhere"  in your chosen field: this is about who your potential clients might consider in addition to, or instead of, you? More importantly, it's about who your existing customer or client might consider doing business with instead of you.

To remain competitive, you have to assess the competition: the "business school" term for this is "competitor (or competitive) analysis". Who else is doing what you're doing? How saturated is your market? Even if you don't operate from a physical (brick and mortar) office location, most of your customers/clients are probably local.

Examining the competition is also helpful in determining whether your pricing is too high or low for your market, and is a good source of ideas for new goods or services to offer.

You have probably heard the phrase "there's no loyalty in business anymore". This is usually said in reference to employer loyalty - gone are the days that "noone gets laid off at IBM", and such. There's no such thing as a guaranteed steady job, regardless of trade.

There's also no such thing as automatic customer loyalty. Just because they've "always done business with you" doesn't mean that they'll be back tomorrow, to replace the product or renew the contract.

Business, especially in today's economy, is about relationships. Just as apathy and ignorance of other potential suitors can lose your sweetheart's affection, inattention and unawareness of competitors can lose business. Make no assumptions, and court your clients, existing and potential, as if you were a newlywed on honeymoon.

In many ways, the stakes are even higher...

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Series inspired by "Top Ten Reasons Why Small Businesses Fail" by: Connie Holt, E.A. cholt@henssler.com
The Henssler Financial Group Position Paper
© 2004 The Henssler Financial Group | www.henssler.com

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Related articles

• Keep stroking clients, or they'll flee (theglobeandmail.com)
• 3 Keys to Competing (blogs.forbes.com)
• What Are The Top Three Things All Small Business Websites Need? (gilygily.com)
• Startups: Dealing With Competition [TNW Entrepreneur] (thenextweb.com)
• Being Different Isn't Just "Cool," It's Necessary To Survive; Part 2 of 2 (blogs.constantcontact.com)