4 Times You Should Drop a Product or Service
Simon and Garfunkle’s song “Kodachrome” gets played on the radio every day, but the iconic film itself is now a just a footnote in history. The last 35mm cartridge of the film rolled off the Kodak assembly line in 2009. As you can probably imagine, dropping the production of Kodachrome in the age of digital cameras was a fairly easy – and obvious – decision to make at Kodak. Yet, the Kodachrome story captures a Kodak moment that teaches a good lesson for all small business owners: Move quickly when markets change and products cease to contribute to the bottom line. I say this because within three years of Kodachrome’s demise, Kodak itself declared bankruptcy. With that lesson as a backdrop, let’s examine four cases when you should drop a product or service from your offerings. 1. When the product is losing money. Although this seems obvious, the situation needs to be carefully considered. The entire cost of a product includes the cost of goods sold (the raw materials or inventory), the variable direct costs incurred producing and selling it (for example the salaries of account executives or product managers) and the indirect costs, such as the product’s portion of rent, utilities, insurance, and other costs of doing business. If you add all of these up and they amount to more than you’re making via selling the product or service, you’re losing money, on paper at least. However, two things need to be considered: Are you correctly assigning variable direct costs and indirect costs? Will indirect costs actually decrease if you drop the product? I’ve seen business owners fool themselves about the profitability of business ventures or products because they haven’t properly assigned costs. They may have a “pet” area of their business that they want to believe is more profitable than it is, so they dump costs on a part of the business that they aren’t so fond of. This error always comes home to roost! Secondly, if indirect costs will not go down, then those costs will end up being assigned to the surviving products or services, lowering their profitability or pushing them into loss territory. This could cause a “death spiral” for your company. 2. When opportunity costs are significant. This point is related to many of the other points listed here. For example, in the cost scenario outlined above, you could avoid the “death spiral” if you had a new product or service that would take on the indirect costs and show a real profit. In other words, if a product isn’t performing well, on some level it’s keeping you from pursuing other opportunities. Lost opportunities are a real cost, as the demise of Kodak proved. Frankly, in the very first days of digital cameras, Kodak made a good product. However, other makers were soon leaving Kodak in their dust. Had Kodak been able to focus on and develop its digital cameras more quickly, perhaps it would be an industry leader today. Did continuing to allocate resources to film products weaken Kodak’s position? I think the answer has to be yes. As a small business owner, you must always be weighing the potential of new products and services against your legacy products and services. 3. When a segment of your business becomes a distraction. I’ve...
read moreWhat We Can Learn from Emoticons and Use in Our Marketing, Management
The popularity of emoticons and emojis is no accident. Further, Facebook’s desire to cash in on emojis is no accident either. All of these phenomena are testimony to the fact that we are hard-wired to be emotional beings. Let me ask you a simple question: Have you ever had an argument in your life and afterward said something like, “I can’t even remember what we were fighting about”? Nonetheless, you were able to remember the feelings of anger and frustration, right? Or how about this: Have you ever said “I’m sorry” to someone to have your apology rejected because the other person didn’t like the tone of your voice? When this happens the emotion expressed by the tone of your voice far outweighs the “logical” message of the words you have spoken as they would be defined in the dictionary. If you are selling something that can be generally categorized as a commodity, one of the best ways to separate yourself from other sellers is by making an emotional connection to your customers. I made this point with regards to writing a tagline for your business in a recent post, but I want you to see the importance of playing to emotions in the bigger picture. I’ve seen the basic emotions broken down into five groups: Fear, Disgust, Sadness, Anger, and Enjoyment. Emoticons, however, break down much further. Here are just a few of the names, emotions, feelings, and gestures of some of the most-used emoticons (you’ve probably sent or received these many times yourself): laughing very happy frown sad angry crying surprise kissing winking tongue sticking out skeptical indecision embarrassed blushing devilish cool bored These, and more, all symbolize emotions and feelings that you can leverage in your business – if you think creatively. Let me give you some examples. I bet that there’s a furniture, mattress outlet, or car dealership in your area that does or did crazy things in its television commercials. In a memorable episode of Seinfeld, they spoof these kinds of promotions with a character who does TV commercials for a local electronics store who is crowned like a king and spouts, “Nobody beats the Wiz!” That kind of over-the-top advertising will always generate some kind of emotion. The writers on Seinfeld knew that it would make people laugh (enjoyment) but I’m sure it stirs disgust or anger in others. But, I think few would be emotionally neutral and everybody remembers these kinds of commercials. Have you eaten at a Dick’s Last Resort? They make a living by insulting their customers. Don’t go, by the way, if you have a thin skin. But your experience at Dick’s Last Resort is tame compared to the verbal drubbing and cursing out you’ll get at The Weiners Circle in Chicago. Of course, many local, family-owned diners have lasted for generations for exactly the opposite reason; when you eat there you are relaxed and welcomed like you’re part of the family – you’ll hear nothing but a kind word. You can add an emotional element to every facet of your business. It can be in the atmosphere you set, the marketing materials you produce, the events you hold, the way you answer the phone, the relationship you have with your employees, and every other little slice of your...
read moreEasy alternatives to a crystal ball (that actually work)
“People don’t know what they want until you show it to them,” famously said Steve Jobs. In some cases, that is certainly true, and when it’s true, the results can be phenomenally profitable, as Jobs proved several times over. However, not every product you offer, or every service you provide can be totally new and unknown to the buying public. Further, lots of times people, in fact, do know what they want and are willing to tell you about it. Companies have made themselves very profitable over the last several decades by conducting market research. Yet as we know, most small business owners don’t have the money to conduct extensive market research. Fortunately, the Internet has somewhat democratized research. With a few of the tools and a couple of the tactics described here, you can throw your ideas against the wall and begin to get a decent understanding of which will stick. Conduct polls or surveys One of the best ways of finding out something is to ask and that’s what polls and surveys are all about. You simply ask questions to gauge what your customers are thinking about with regards to your products or services. If you run a house cleaning service, you might want to know if your clients would be interested in “all natural” products even if it cost a little more. A pet shop owner might want to see if there is a demand for engraved dog collars. Here are some free or low-cost survey tools a local business or online business could easily employ: Facebook polling app Twitter polls Google doc survey Survey monkey SurveyGizmo Checkbox There are a range of WordPress survey plugins if your website runs on that platform. By the way, if you use an online survey app and have a local business, you could have a computer in your location and ask customers to complete your survey. You could offer a small incentive to reimburse them for their time. Also, your email service provider may have a survey function built into its system. I use Constant Contact and they give me the ability to conduct surveys, for example. Present an online early offer If you do online sales, another way to gauge interest in a new product or service is to promote it like it’s an existing product. You can do this in a variety of ways, two of the most popular strategies are to create an eBay page or a website landing page. You need to be clear that the product isn’t yet shipping. Your goal is to collect email addresses so interested individuals will be notified when the product is in stock or you launch your new service. Of course, you do not collect any money. If you do a landing page, couple it with an inexpensive AdWords campaign. Not only will you quickly see if there is any consumer interest in your new idea, but you’ll also be able to estimate some of your future marketing costs. One final word: These market research strategies reinforce the importance of having an extensive email list of your customers or clients. We often discuss using email to sell, but I think you’ll find email surveys equally valuable. I also think you’ll discover that the people on your email list appreciate...
read moreThis week in small business: A shark goes after Trump’s economic plan
Learn from email marketing heat maps, liven up your brand, and find out what Shark Kevin O’Leary thinks of Trump’s economic ideas. Those are just three of the important (and interesting) topics covered in this week’s collection of curated content. Politics, government, and the economy The Shark Tank’s Kevin O’Leary weighs in on Donald Trump’s economy plan, startups and a lot more in this article. Leadership, management, and productivity With small business depending more and more on freelancers, many of you will appreciate these four tips for hiring and keeping the best of the best. In case you need more convincing, here are seven reasons you need a mentor for entrepreneurial and small business success. This infographic gives small business owners 10 powerful ways to network. Marketing and sales Need video marketing guidelines for social media success? Here they are. Neil Patel shares five content marketing tactics for picking topics and setting goals. Unless you want to end up like the Titanic, steer clear of these five Facebook marketing mistakes. It has taken a while, but more small business owners are moving to a mobile-first marketing strategy. Not getting noticed? Check out these seven surefire signs that you need to rev up your PR program. Is it time for you to act on some of these 15 tips for livening things up when your brand is getting stale? Leaders work hard to stay ahead of the curve. That’s why you need to look over these six social media marketing trends. If you do email marketing, you need the information revealed by heat maps. Entrepreneurship, startups, and innovation After studying the lives of Thomas Edison, Walt Disney, Steve Jobs, Richard Branson, Albert Einstein, Mother Teresa and Nelson Mandela, Luis E. Romero came up with seven success secrets every entrepreneur must eventually learn. When you need a quick fix of entrepreneurial inspiration, turn to these 10 quotes. What do startups need most that they don’t have? Answer: Customers. Here’s how to create a customer acquisition plan. Amazon is after women entrepreneurs to sell through its marketplace and in that effort just held its first Women’s Entrepreneur Conference. Here are the signs that it’s the right time for you to become an entrepreneur. Need a push to start your own business? Scan these 10 benefits of becoming a small business owner....
read moreThe Concise Guide to Writing a Professional Press Release
Probably the most misunderstood aspect of small business marketing is how to create and use a press release. The first thing to understand is the function of a press release, it’s simply to release information to the press corps. Press releases are, as you probably know, written documents, so let me give you one critical writing rule that needs to be first and foremost in your mind whenever you sit down to write something: Write for your audience. As I said above, in the case of a press release, your primary audience are members of the press corps. Today, this would be all the newspapers, magazines, radio stations, television stations, and online publications, such as blogs and e-zines. With our first rule of writing in mind (Write for your audience), we can come up with some guidelines to follow when we write a press release: It must be useful to editors and writers, It must be newsworthy, It must be concise, It must be well written, and It must be easily editable. Let’s look at those points in greater depth. A press release must be useful Editors are often looking for articles they can run in their publications, whether they are print, electronic, or over the air. A good press release can be seen as free content and everyone likes free. To be useful, the press release has to hit the second through fifth points listed above. If it fails at the above points, it means that the editor – or someone on his or her team – will have to rework it and that requires time. Editors and publishers do not want to invest their time in your press release! Your press release is not useful to them. A press release must be newsworthy Many small business owners think that sending out a press release is a great way to get free publicity for their upcoming sale, a special coupon code, or a new product they are adding to their catalog. These kinds of “events” are generally not newsworthy. In fact, when editors see press releases that are touting some obvious commercial endeavor, their reaction is to take it and hand it over to the advertising sales team with the instructions, “Sell an ad to this guy.” Before you decide to write a press release, ask yourself this question: Is my topic news? If you aren’t offering information that is of general interest to your audience, you’re probably wasting your time with a press release. The types of “news” you might create in your small business includes events such as: You’re the first at something, like the first to export to Kenya in your community. You’re giving a chunk of money to a local charity, or creating a partnership with a local charity. You’re hiring or promoting staff. You’re announcing a new business alliance. You’re expanding your business to another location. You’re receiving an industry award. Your product or service was used in an unusual or otherwise newsworthy way, such as disaster relief. A press release must be concise, editable, and well written About 300 words is good for a press release. Don’t go over 500 words. Further, get all of your critical details in the first paragraph. Answer the who, what, when, and where in the opening...
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