The challenge of boosting growth in a low-inflation economy

For anyone who was around during the hyper-inflation days of Presidents Ford and Carter, the current economic climate as something of an Alice-in-Wonderland feel. I say this because in those days the Fed was continually hiking its interest rate to bring down inflation. Today, the Fed is more worried that there isn’t quite enough inflation in the economy and, interestingly enough, its solution is the same: raise the interest rate. (But to be fair, the modest rate hikes envisioned by the Fed are nothing compared to the way it boosted rates back in the 1970s in its attempt to strangle inflation out of the economy.) I think our unfamiliarity with this persistently low inflation may also relates to some recent business survey results and employment news: Unemployment ticked down to 4.2 percent in September while the economy lost 33K jobs, Business owners say that it’s more difficult to hire people than it was six months to a year ago (and it wasn’t easy then, either), The labor participation rate is finally going up, and Many businesses (58 percent) don’t plan to raise wages because it doesn’t seem to affect hiring or retention, yet the recent employment statistics showed the biggest jump in hourly wages (2.9 percent year over year) in a long, long time. Most of the lost jobs are due to the hurricanes, so we can expect them to bounce back quickly as businesses get back on their feet. What is interesting to me is the persistent difficulty businesses have hiring people yet they seem somewhat reluctant to sweeten the salary pot. The recently released PNC Bank Survey concludes that small and mid-size business leaders, while curbing their enthusiasm, remain optimistic on the economy. The same survey says that although hiring is a huge problem, offering higher wages hasn’t helped. I find it difficult to square this finding with the fact that hourly wages are up nearly 3 percent over last year. Someone is boosting wages out there. Since fall 2016 the percentage of employers planning wage hikes has gone from a low of 28 percent, to a peak of 41 percent, to 37 percent in the most recent survey. I suppose that minority large is enough to make a decent impact on wage growth. The inability of higher pay to attract or retain employees may reflect the reality of a long-term low-inflation environment. People aren’t frightened by escalating prices eating away at their spending power today. I suspect this is especially true for professionals who depend on their cars for their work. With fuel prices at reasonable levels, many have been able to pocket the savings. According to Gus Faucher, chief economist of The PNC Financial Services Group, Inc., “Hiring has become more difficult across all skill levels. Organizations even report that they have turned down business because of a lack of workers. That said, the one ongoing problem with the economic expansion remains persistently soft wage growth. Given the low unemployment rate and consistent complaints from firms about the difficulty in finding workers, wage growth should be stronger. Wage growth is likely to pick up as the job market continues to tighten.” (Faucher said that before seeing the latest numbers, yet he could be right. We know that these statistics are constantly revised, so that 2.9...

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10 tips to put a winning retail year-end game plan in place

In basketball they have “crunch time.” In baseball, they have “the bottom of the ninth.” In football they have the “hail Mary.” In retail – and related industries – we have the holiday shopping season. We’re all quite well aware of the fact that for stores, it’s “make-or-break” time. It determines whether retailers will finish the year in the black, or have to live with the financial legacy of a “losing season.” To keep with our sports analogies, let’s call a time out, huddle up, and go over the important things to remember during this yearly two-minute drill: Review how your holiday season went last year. Refresh your team’s memory on what went well and where you feel you dropped the ball. Get suggestions and buy-in on fixes. If you’re going to change hours and be closed on certain days, be sure to update those listings everywhere they are published: Internet, ads, phone system, email signatures, etc. Be sure your inventory records are accurate and kept accurate so employees in your location can have good information and so your website tells the truth to customers. Decide on shipping policies. Set your “drop dead” dates and make sure they are well communicated to your customers and your team. Prepare your team to deal politely and tactfully with customers who are likely to be under more stress than usual. Stressed out employees dealing with stressed out customers is a recipe for customer service and brand image disaster. Review important policies, such as returns and exchanges, to be sure that everyone is reading from the same rule book. Deal with all online reviews and comments quickly. Use systems in place on sites like Yelp and Amazon to handle complaints. Make a special effort to keep your premises tidy and well organized. Sometimes it feels like shoppers can do as much damage as a Category Two hurricane. Take care of all staff scheduling questions early. Understand where your bottlenecks usually occur and take special steps to alleviate those problems. Finally, if prognosticators are even close to correct, retail should be booming. This means that you and your team should be expecting heavier traffic, and consequently more challenges to the systems you have place, your training, and – to put it frankly – your patience and endurance....

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This week in small business: The real driver of economic good times revealed

If our elected representatives need to be clued in on the importance of small business to the country’s economic wellbeing, a good place to start would be reading Mary Ellen Biery’s article based on Sageworks statistics. And, for those of us who actually work for a living, the marketing, productivity, and entrepreneurship articles here are well worth the investment in time. Politics, government, and the economy Drawing on recent Sageworks stats, Mary Ellen Biery gives us nine amazing facts on the impact of small businesses. Writing for MarketWatch, Jeffry Bartash details the type of spending that leads to economic and real income growth. Leadership, management, and productivity Adrian Ghila says that delegation doesn’t work in small businesses and she gives leaders an alternative approach. Hey ladies, you need to check out Carol Kinsey Goman’s success tips for women in a male-dominated industry. If you want to boost your bottom line, review Choncé Maddox’s five proven ways to cut costs. Here’s some truly practical advice from Rob Star: 10 Tips to Prevent Burglaries at Your Small Business. The next wave in productivity improvement will come from “bias mitigation,” says Amanda Greenberg. Marketing and sales Have you tried “cause marketing”? Maybe you should, because according to Bryn Dodson, it isn’t dead, it’s evolving. We have the state of the union address and now Brian Sutter gives us the state of small business marketing in Forbes. Annie Pilon covers a wide range of areas in her 10 tips aimed at growing your small business. Facebook Messenger chatbots are the latest entry in digital marketing. To get up to speed check out Michael Stelzner’s article. Sheila Kloefkorn explains how to use best practices on your marketing budget. Not all marketing is online. Susan Friesen gives us ideas for combining offline with online marketing to build your credibility. Constance Brinkley-Badgett lists what she believes are the best Internet marketing services for small businesses in several categories. Entrepreneurship, startups, and innovation Get off the dime with the 20 motivational quotes to inspire your next business idea as curated and introduced by Murray...

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5 Tips for Making Small Business Saturday a Soaring Success

Are you like many businesses and taking the wrong approach to Small Business Saturday? This special day for local businesses has become increasingly popular in recent years and that’s a good thing. However, if you’re judging your success merely by scanning your end-of-day cash register totals, you’re making a big mistake. Don’t view Small Business Saturday as just an opportunity to boost sales as you head into the holiday season. That would be taking a very narrow view of what this day has to offer and failing to capitalize on the event’s potential. Look at it this way: Is there any other single promotion that gets the extraordinary financial backing of American Express, all kinds of local groups as well as a phalanx of local business owners? In other words, millions of dollars are being invested across the country aimed at benefiting smaller local businesses. If all you do is end up with a pretty good Saturday in terms of sales, you haven’t done your best at leveraging all of that good will. Your real goal on Small Business Saturday should be to introduce your business to prospects and put them on the path to becoming repeat customers – that would make your Small Business Saturday a soaring success. This starts with changing your perspective. Yes, you still need to offer good prices – I’m not denying that – but the overriding message you need to be sending is less about prices and more about “value.” What value can you offer local shoppers that will keep them coming back? Let’s look at some things you need to communicate to the prospects who walk into your business on Small Business Saturday. 1. Highlight your unique goods and services. In a comScore survey of why people buy from smaller local shops, the top two responses were that local stores offered unique products (61 percent) and they couldn’t find what they needed at traditional stores (49 percent). Be certain that you offer items and services that are not easily acquired elsewhere. Display them prominently and train sales associates to discuss their uniqueness. Items that are easily found elsewhere become commodities and that makes shoppers focus solely on price. 2. Be versatile in ordering, delivery, and returns. That same survey revealed that by a 60-40 ratio shoppers prefer to return items to stores rather than pack them up and reship them. Let shoppers know that no matter how they purchased items from you, they can bring them back to your location. By the way, most shoppers end up making another purchase when they go to a store to return an item. Versatility is also appreciated in shopping. Buyers are becoming heavily dependent on their smartphones. If you have the unique items I’ve already urged you to stock, you don’t need to be afraid of “web rooming” – when shoppers go into stores, find items and then comparison shop on their mobile devices. In fact, make it easy for them. Provide in-store wi-fi. It’s a convenience shoppers appreciate and it’s one more reason they’ll love – and remember – your store. 3. Wow customers with extraordinary service. If you, and others in your area, have done a good job promoting Small Business Saturday, be certain that you’re properly staffed – and stocked – to meet demand....

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What the Great Google Cheeseburger emoji faux pas means for your online marketing

Before we pursue this relationship any further, I have to know one thing: Where do you stand in the Great Google Cheeseburger Controversy? Yes, the dust has settled a bit since the emoji hit the fan recently, but it’s worth revisiting the cyberspace kerfuffle for a few moments because I think it will help us get the pulse of the digital citizenry. This knowledge should help you with your online marketing efforts. In case you’ve been living in a cave – or have better things to do – the online world had a cybercow the other day when Google released a set of emojis and it included a cheeseburger emoji with – gasp – the cheese on the bottom between the burger patty and the bun! It seems that Thomas Baekdal may have ignited the controversy with this tweet: I think we need to have a discussion about how Google’s burger emoji is placing the cheese underneath the burger, while Apple puts it on top pic.twitter.com/PgXmCkY3Yc — Thomas Baekdal (@baekdal) October 28, 2017 It got the attention of Google CEO Sundar Pichai who tweeted: Will drop everything else we are doing and address on Monday:) if folks can agree on the correct way to do this! You have to enjoy this kind of Internet hijinks, but at the same time realize that there are a couple of lessons to be learned, namely: Nothing is too small to rile people on the Internet, and Emojis are extraordinarily popular communication tools. Tread carefully The fact that “The Internet” has a thin skin and can get emotionally wound up by the smallest grievances is important to understand. If you want to engage and nurture prospects online, you need to know who you’re talking to and what their sensitivities are. When you’re casting a wide net, you must understand that anything hinting at controversy may anger half your audience. The young man behind the silly and feel-good Twitter account WeRateDogs got into trouble when it looked like he wanted to make a few bucks by cashing in on President Trump’s “covfefe” typo tweet. People objected to the mix of politics and commercialism coming from such a benign Twitter account. Consider this when you’re defining your customer personas. This also highlights another advantage of segmenting your lists. You might have customers who are less sensitive to some issues while others are more sensitive. Communication styles I think the most practical lesson you can learn from the Cheeseburger emoji matter is how important these little icons have become to us. Not only is this illustrated by the ill-designed Google emoji, the release of Apple’s iPhone X also makes this case. As I read reviews and look at promotional materials for the iPhone X, the ability to animate emojis seems to be the most important new function on the thousand-dollar phone. As cool as that is, it’s not going to change anyone’s life in a material way. However, it does reflect in a very important way how we communicate today. In other words, you should be using emojis in your communications. I discussed this once before in light of email marketing. Using emojis in subject lines boosts open rates. A friend of mine has begun developing Facebook Messenger chat bots and one of the lessons he...

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6 management mistakes that will kill employee motivation

I was talking to an elementary school teacher the other day who works for a major school district. While there are many things she likes about her job, her list of complaints was pretty long. It made me wonder how many small business owners are making these same type of management mistakes. She told me that a couple of years ago, the leaders of her district said they wanted to put power back into the hands of local principals. That sounds like a great idea, but it didn’t really seem to make any difference in the major aspects of her job duties or how situations are managed. Many of her complaints centered around overly strict rules or the lack of flexibility. See if you would have to plead guilty to any of these 6 management mistakes that will kill employee motivation. A simply silly dress code. Teachers can only wear jeans on Fridays. This is probably related to a student dress code of some kind. I remember a time when girls were required to wear dresses to school. That started to change when they were allowed to wear pants on Friday. Here’s the problem: Once you say jeans are okay on Friday, you’ve said that jeans are okay, period. There is nothing magic about Friday. It’s a fact today that dress and grooming norms have changed. For example, I often see major television hosts with no tie and having gone a day or two without shaving. That would have been unheard of five years ago. Don’t ask for more than is truly required. Too many mandatory tasks that no one pays attention to. You probably know that public school students today are subjected to all kinds of mandatory tests. I’m told that many serve no educational purpose; the results don’t get back to teachers so they can use them to help students. They are just used as a hammer to hold over the heads of districts and principals. Do you require your employees to do things that don’t make your business better? Are there required forms being filled out that never get looked at or followed up on? Too many approvals required. Committees and principals are required to sign off on a wide range of rather ordinary activities teachers would like to do with their students. When an employee has to go to others to get approval, it slows down the process, creates frustration, and leads to lost opportunities. Employees stop asking to do innovative things when there are too many hoops to jump through. Too many strings attached. Education funding comes from a variety of sources. Most of the money is local or state money, but there is federal money as well. Sadly, strings are attached to the money that put very narrow limits on how it can be spent; it’s a symptom of government’s myopic vision. I see a similar problem in many small businesses where the owner or manager will have an idea, begin to implement it, then refuse to adapt and change as others make suggestions. Too many unproductive employees. In education, bureaucrats will often “throw money” at a problem in unproductive ways. For example, if a school seems to be struggling they will fund “coaches” to supposedly work with the teachers. By strict rules,...

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