This is the third in a series devoted to building business on value and redesigning your business to maximize customer perceived value.

Measuring customer perceived value is a key marketing process. It replaces the idea that pricing should be based on cost of production plus profit margin. This provides great flexibility to those providing fixed products and services. Prudent small business owners can – if they want to take the risk – shape and reshape their product to fit customer needs in motion. For example, bakers or florists can flavor or arrange product in multiple variations.

Value is what makes customer’s move their business, so, keeping customers happy takes on a new importance. Where customer satisfaction can be clearly measured, small business owners need to survey their customers’ perception regularly – with the intent to adjust service and product to those measured needs. Touching base with customers with some regularity respects and flatters them. However, unless the surveys lead to change or improvement, the customer feels ignored and disrespected.

Some small businesses mistake a phone call or a “how ya doin’” as a survey. The survey is better focused on specific elements of the perceived value.

• Ask questions that address functions of your product/service. Determine if the satisfaction has to do with color, size, assembly, or structural utility.
• Phrase questions that confirm you competitive edge. Determine if the product delivers on the edge you promised. Reconfirm that your product is larger than. Lighter than, more durable than the competitor
• Check on the customer’s emotional response. There is a benefit in reassuring the customer that it is good to feel “good” about owning the product. We don’t ask enough people, “Tell me, how do you feel about this?”
• Let the survey remind the customer indirectly that your service met his dreams. Help them see how you helped them to stand out, to have some bragging rights.
• Make sure the cost is tied to the value. An assembled product may be a “bargain” to someone who doesn’t have the time or talent to put things together. Convenience, time, delivery, payment terms, and checkout process: all these are values in different ways to different customers. So, let the survey be the tool where you remind the customer that it was the convenience (or whatever) that made the difference.)

One approach is to survey the customer once shortly after the sale. Another is to survey the customer repeatedly with brief questionnaires that address each of the value factors listed here.

I know this takes time and attention, but it also gives structure to customer follow-up you should be doing in the first place. For example, you should be talking to a customer once a month. It won’t be hard to use one or more of these factors as the purpose of that call.

Ever wished your business had a mobile app to offer your customers and clients?  Mobile apps (applications) are, in fact, vital to an increasing number of small businesses. Prospects and clients need to reach you easily and immediately. They need to find you quickly among all the competition out there. They need to see your logo, find your location, examine your products/services, and pursue your links. You can’t wait for them to get home to their desktops (and neither can they).

Still, it is a daunting technology which presents fears of getting into the mix – and of staying out of it. There are concerns about set up, pricing, and expertise. It’s a sunk cost to large corporations, but the same costs have spooked small business owners.

App Express is 2011 start-up ready to bring mobile apps to small businesses owners– at a price and ease they can afford. In the words of Mary Beth Brendza, CEO of App Express, the company wants to enable small business owners “to run their business from their pocket.”

They offer an attractive and easy to navigate website at http://appexpress.com The site offers videos, trials, and samples (only fitting for a website claiming to promote same.) It promises professional and sophisticated maps to facilitate payment making, appointment scheduling, daily couponing, deal messaging, and social sharing. And, they provide you with the pricing.

25% of all US mobile users (smartphones, tablets, PDA’s, etc.) use only their mobile device (and mobile apps) to shop, schedule, set appointments, make payments, and so on. The growth in sale of mobile devices and such uses is exponential in speed and size.

Current and future customers rely on their mobile devices to the increasing exclusion of their desktops and laptops. Look around the room at your next Chamber of Commerce lunch to see people multi-tasking. For good and bad, mobile apps have become an integral part of our personal and work-lives. Google Mobile Ads reports:

• 9 out of 10 smartphone searches lead to action (purchasing, visiting a business, etc.)
• 24% recommended a brand or product to others as a result of a smartphone search
• 95% of smartphone users have looked for local information
• 88% of these users take action within a day
• 77% have contacted a business, with 61% calling and 59% visiting the local business
• 79% of smartphone consumers use their phones to help with shopping, from comparing prices, finding more product info to locating a retailer
• 74% of smartphone shoppers make a purchase, whether online, in-store, or on their phones
• 70% use their smartphones while in the store, reflecting varied purchase paths that often begin online or on their phones and brings consumers to the store
• 71% search on their phones because of an ad exposure, whether from traditional media (68%) to online ads (18%) to mobile ads (27%)
• 82% notice mobile ads, especially mobile display ads and a third notice mobile search ads

The times, they are achangin’, and we need to be on board. It is vital for small business to be able to develop a cross-channel strategy and implement an integrated marketing strategy that makes puts you in the hands of mobile users.  Mobile apps might just be a great way to make that happen!

Becoming a Federal government contractor – while not always simple – often results in contracts that are lucrative and long lasting. For small business, such government contracts can easily be a path to growth and longevity, particularly in a depressed economy.

Small business owners would be mistaken to think that they are too small to matter. Departments of Defense, Energy, Health and Human Services, Treasury, etc. all have needs of products and services. They are particularly interested in innovation and promise, virtues that are usually cornered by entrepreneurs.

Thankfully, doing business with the Federal Government is pretty transparent. While the directions and resources may be overwhelming in sheer volume, the information is readily available to assist you in your bid for becoming a government contractor.

Departmental size, bureaucracy, and decision-making can also be barriers to your success. Still, if your business provides a product or service useful to government needs, you shouldn’t be deterred.

Keep the following tips in mind when considering or pursuing government contracts:

• Time is not your friend. Give your plans 12 to 14 months to mature. The current contractor doesn’t always get a renewal. Sometimes, they have failed the agency; other times, you can beat the competitor’s bid.
• Put your hat in the ring. List your business on the Central Contractor Registration. This is a database agencies can search for info that appears to suit their current needs.
• Put the plan in motion. Check FedBizOpps.gov where all government interests must be posted. Reviewing their needs locates potential targets for you; it also tells you what they are looking for, so you can adapt to their needs.
• Do deep and wide research. For example, the Department of Defense has an Office of Small Business Programs which includes a Guide to Marketing to the DoD.
• Explore resources such as your local Procurement Technical Assistance Center, set up to assist small businesses, especially those that are veteran, disadvantaged, or women-owned business, in their application processes with assigned Small Business Specialists.
• Secure the “solicitation for the requirement.” Study it in detail, seek advice, and do what you can to meet the specifics required.
• Turn information on the competition inside and out. Explore available databases on current contractors, subcontractors, and earlier contractors. It’s all available to you – if you take the time.

Now, be advised:  Federal contracts represent a significant undertaking in time, and time is expensive. So, clearly – if there is no felt return for this investment, stay away. But, if you see potential here, set goals, staff to the need, and secure qualified advice. It can re-shape your business future! 

Whether or not to register a TLD – or Top-Level-Domain – is the newest challenge in front of small business owners. It’s not an easy decision and requires some thought.

Internet domain names are registered with the Internet Corporation for Assigned Names and Numbers (ICANN). They have filed 100+ million names which do not admit duplication. So, for example, if the name www.maria’srestaurant.com is already taken, you can’t call your restaurant Maria’s or you need to find an alternative for your domain name. Top-level-domain names will open wider categories and optional choices. A new TLD choice allows you to distinguish your business from others with similar names, others in the alphabet, others without your performance standards. It is a marketing boost. If you are registered, licensed realtor, you can separate yourself from the pack; yours will be an exclusive address in an exclusive directory. And, ICANN will be there to police the exclusivity.

But, clearly, there are critics and those who don’t see the need. There is a short and long-term expense. The cost to apply for the TLD is no big issue, but there are immediate and subsequent costs in marketing materials in advance of, during, and following the re-naming. This involves planning, marketing materials, and stationery and billing. Owners have to decide on the timing for this – and the subsequent value. In addition, apparent changes in direction threaten customer goodwill. Customers establish relationships with websites; they learn to navigate them, know where to find information, know how to contact you through the site. You may not want to jeopardize this.

In a poll offered by The Wall Street Journal, 53% of respondents think the idea of a TLD is a good move while 46% do not. That split indicates some lack of clarity on this issue. Small business owners haven’t had very specific labels in the past. The web address usually ends with a .com, .biz. .net., or .org. TLDs offer very specific identifications, such as, .realtor, .contractor, .restaurant, .florist, and the like.  

Every small business has been or will be approached sooner or later to purchase new domain names. There are aggressive and numerous campaigns to sign you up with wildly contrived IDs. They layer on costs for international addresses and renewal fees. The ICANN reputation is singularly positive. It’s history and processes are transparent, and not a bad place to place your trust. The small business owner’s decision is individual:  investigate the options, the process, the expense, and the value to your business at this time.

This is the second in a series devoted to building business on value and redesigning your business to maximize customer perceived value.

Small business succeeds when it – consciously or unconsciously – provides customer perceived value. This begins with a new understanding of customer loyalty.

Customer loyalty may be the most misunderstood value in commerce. The US economy grew in the ‘50s on the unspoken marketing concept of “built-in obsolescence,” the presumption that, because customers were repeat buyers, their loyalty would keep them buying brand. Quality, not surprisingly, stole these “loyal” customers away from American manufacturers in the ‘70s and thereafter.

Now that American businesses have learned the value of quality – a reasonable demand of local and global customers – we are winning back markets thought lost. American designs, programming, engineers, and craftspeople have regained dominance in automotive, aerospace, and technology.

Small businesses, on the other hand, have always understood and depended on the values of buying local and customer service. Given small business volume, a lost customer is not just “a drop in the bucket.”

• Small business must move away from so-called “customer loyalty” that is really just reluctant allegiance. For example, every Christmas, a dry cleaner I know, bless him, gives out lint brushes. In his mind, he is repaying customers for their loyalty. But, it isn’t the lint brush that keeps them coming back; it is the convenience of the store’s location and the geniality of the counter person. Open another dry cleaner across the street and cut the price by $1.OO per shirt, and he will be overstocked with lint brushes.
• Small business has to learn that customers don’t like having no choice in the matter. They do not like having their loyalty monopolized. This is what tears at the fabric of small town businesses as customers flee to improved perceived value at the newly big box stores. Customers are fickle and whimsical, but they will stick with you if your perceived value gives them a choice. They are able and ready to compute the cost of travel away from town to save a few cents, but if you can’t offer an offsetting experience, they will one-stop shop.
• Small business rewards only matter so much. Big businesses can lure and harness customers with rewards programs. But, studies show this link is tenuous at best. For example, United Airlines’ frequent flyer points are nowhere near to turning people away from the perceived value in flying Southwest. A flyer may keep his/her United frequent flyer plan open because the boss pays for the flights or because United goes to some places that Southwest does not, but all things considered, Southwest has the edge in value – and an attractive travel incentive plan to  boot.
• Small business needs to learn that customer loyalty is not a tangible asset. You cannot trade on it even though it may figure into the price of your goodwill. You are missing the point of loyalty and corrupting the principle if you think of loyalty as leverage, as customer ownership. A goal – not a strategy – loyalty is driven by total customer experience.

When businesses learn to drive this total customer experience – and to price it accordingly, they will define their future success. If they fail to do so – and do so soon, they’ll wonder what they missed.

Ever tried to define the value that you offer your customers?  A price is the dollar sign on a product, the tag on the item for sale, but that is not the same as value.  I’ve been mulling this over lately, and wanted to share some of my thoughts.  While this post is somewhat of a textbook discussion, it lays important groundwork for additional posts. 

Pricing of products and services has traditionally been cost-based, determined by adding a desired profit to a cost determined by cost analysis. That is, the seller/vendor figures out what the product cost is in terms of parts, materials, labor, sales/marketing, packaging, shipping, etc. Then, s/he added the desired profit margin, say 25-35%. Or, the lawyer/doctor/consultant charges hourly fees in an attempt to place an arbitrary price on a service that portends to cover operating costs plus the alleged value on professionalism.

The cost methods are not value based because they don’t clearly and unambiguously determine what value means to the customer.

In traditional costing, the attitude has been: “here’s the price; take it or leave it.” Small businesses hanging onto this tradition may not be serving their customers well – and are leaving money on the table. The tradition does not understand that a customer’s opinion of a product’s value determines the value to him or her. This value differs from the market price which has typically determined by competition and accessibility.  

I find that customers buy from the source that offers the highest perceived value; i.e., “the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.  Customer perceived value is the exchange a customer would be willing to make before dropping down to the next offer.”

Small business customers do not place the same value on three martini lunches, big promotional items, or glossy marketing efforts. Frankly, they do not care what you paid for the item or how the economic crunch is hurting you.

Customers are more interested in the following:

• Overall, do you convey an image that respects your own self-image?
• Do you communicate frequently and with a caring attitude?
• Are your services offered on a timely and dependable basis?
• Are you available and responsive?
• Can your customer expect fairness and accountability from you?
• Is your work efficient and effective?
• Do customers feel they have learned something about the services/product and about what you have brought to the party?
• Do customers feel they have done the right thing – and that you have done right by them?

Notice that these are criteria separate and distinct from market values. For example, I knew a newly hired marketing manager at a manufacturer who promised to secure customer loyalty by delivering product as soon as possible. Trouble is most of the customers did not want the product until a specific later date because they did not have storage room. So, in this case, prompt delivery was not a value to the customer.

Small businesses can do better if they realize that loyalty is a strategy and not a tactic. Loyalty is not to be presumed. Target loyalty as a goal worth securing and developing – rather than as something you can bank on.

How you move from cost pricing to value-based pricing may be difficult. You may be turning around a big ship. And, the move may be more treacherous in some lines of work than others. I believe there is profit in making the move sooner than later, but here is the big question:  How do we clearly and succinctly identify what it is that our clients value? Stay tuned…

Small Business Saturday is dedicated to supporting small businesses on one of the busiest shopping weekends of the year.  Are you ready?  Start now to include the project language in your signage, marketing materials, and website.

 Small Business Saturday 2011 (November 26, 2011) is the second year for this nation-wide venture. With heavy participation by American Express, FedEx, and Facebook, this is a huge marketing thrust to bring customers to main street shopping opportunities. (Other sponsors include Business Matchmaking, Count Me In for Women’s Economic Independence, National Trust for Historic Preservation’s Main Street Center, National Association of Women Business Owners. SCORE: Counselors to Americas Small Businesses, Women’s Leadership Exchange, and Yelp!)

 These collaborators want to recognize the nation’s small businesses and their importance to the US economy, job creation, and contribution to local communities. This can be a great chance to jump-start your small business at this time of year. This marketing support clearly embraces storefront retail and service businesses, but it can also benefit on-line businesses – if you want to take advantage of it.

You can visit http://smallbusinesssaturday.com to learn more about the project. The website has links to signage, e-Marketing materials, and $100 worth of ads on Facebook.com. This will let you bring some consistency to your advertising and outreach in terms of language and visuals. Those with on-line businesses would be smart to copy the logo, signage, and e-Marketing language to their websites early enough to grab attention by Thanksgiving. The site even lets you share your info with other small businesses and offer Groupon type of coupon opportunities.

If you customers register their American Express card at www.facebook.com/shopsmall, they are eligible for a $25 credit when they use the card on Small Business Saturday. In addition, FedEx will print posters on the FedEx Office Print Online application at a one-time 20% discount.

Last year’s Shop Small Business Saturday campaign saw 100,000 businesses download the marketing materials, 10,000 businesses sign up for free Facebook ads, and 200,000 American Express cardholders registered their cards for the $25 break. Moreover, American Express will donate $1 – for every person who “likes” Small Business Saturday on Facebook – to Girls, Inc. to support young women who want to be the entrepreneurs of tomorrow.

 Here’s some 2010 numbers that should catch your attention:

•  Small Business Saturday was featured in over 3,000 items in national and social media.
• The coverage reached more than half a billion prospective customers.
• Over 40 elected officials endorsed the coalition.
• 1.2 million liked the idea on Facebook and 30,000 tweets were sent.

 This is an exposure you cannot ignore.

 Now, what should you do? Explore the Small Business Saturday website and related materials. Print your flyers and hang your posters. If you’re a Main Street storefront, recruit your neighbor stores to join the initiative. If you’re an on-line business, post a link to your website, make a discount offer, and e-market your customer base and prospect database. Here’s a marketing opportunity on a platter. You still have time to make it work for you!

When the economy is tight, it’s not easy for small businesses to give back to their communities. For the record, 90% of our small businesses give to charities and non-profits in their area. And, 60%+ of them admit that charitable giving brings them success. 

Even when they are have little time or money to spare, small businesses find a way to support a local T-ball team, contribute equipment to schools and libraries, or mentor and coach. We want to share some of the ways our customers in meaningful ways without giving up big bucks or otherwise productive time. 

• Award a prize. Support a charity by donating a prize for a raffle or silent auction. Donate a product or a gift certificate.
• Give them a hand. Provide a service, such as printing, webspace, or window posting. Supply giveaways, such as promotional items, volunteer service, or volunteer hours.
• Put employees to work. Make volunteerism a part of your business pace work culture. Calendar a day when employees can volunteer to work at the local food bank, cook at a homeless shelter, or help local seniors.
• Take a collection. If your situation permits, collect customer spare change for local charities; change it monthly. Or, place a collection bin for used books or non-perishable food.
• Sponsor a scholarship. Contribute as little as $25 to a reading contest at your library or school, and call it a “scholarship.” Children and parents appreciate the support, regardless of the size.
• Join forces. Persuade the stores on your block or in your strip mall to promote a single campaign. It multiplies contributions and maximizes exposure. Partner with another small company in your sector to turn what may have been a small donation into a sizable one.
• Sit on a board. Bring your business and management skills to the board of a non-profit. Take the lead on bringing other businesses into line.
• Scratch a back. Trade your service for a link on the charity’s program or website.
• Hold a lawn sale. Sell used office furniture and electronics to raise money or donate it outright to local schools, churches, and libraries.

 Now, you can only work with what you have. Don’t over commit or spread yourself thin. Weigh your options when you are doing your 2012 budget. For example, you might take that $10/week payment for a tiny ad in your church bulletin and put it towards are larger gift with bigger exposure. It doesn’t lessen your charitable motives to expect community response for your effort. Small businesses serve their communities well, and support them with taxes, rentals, and payroll. There is no reason their loyalty should leave town.

Klout is a real time and relevant benchmark for those who market through social media.  Are you using social media to build and market your small business? You are wasting your time – if you don’t know how big your audience is.

Klout.com is an analytics platform that scores your reach. Klout cross crunches variables in Facebook, Twitter, Foursquare, and other social media. The result is a score based on:

• True Reach reports the size of your audience based on the engagement of your followers, friends, and those who interact with your messages.
• Amplification Probability indicates how likely your posts are to provoke likes, comments, retweets, and the like.
• Network Score measures the influence of your audience. If you know you are reaching the “right” people, it’s all the difference between broadcasting and targeting.

This is a qualitatively stronger index of performance than search optimization scores in the past. Klout’s final score ranges from 1 – 100, but the average score is in the 20s, and 50s and 60s are considered high.

Klout ignores spam and inactive accounts, and it focuses on the content your audience shares. It also counts the lists you have been added to and what happens to your content once you send it. It monitors if your messages spark reactions, conversation threads, forwards, and retweets or texts. It measures inbound and outbound messages to show how probable it is that your content will spread.

This helps you to identify influencers, users who are likely to communicate and promote your product or service. Influence drives action. Influencers suggest you go to a movie, check out a YouTube video, or promote a product. To reward these influencers, you can offer Klout Perks, exclusive, free or discounted products, services, or experiences to your friends and audience.

Klout is important because it measures the depth and breadth of your social media marketplace and quantifies and qualifies their subsequent influence. It is the closest thing you have to an index of your return on investment.

Caution: Still a work-in-progress, Klout can be manipulated. On the other hand, time and motivation spent on gaming the system doesn’t really make sense. PeerIndex, TweetLevel, and Twitalyzer are alternatives. But, Klout.com is easier and more intuitive to navigate. It’s exciting to see a solution to this need in the works! Check it out.

Small business survival depends on creating fresh awareness of your product or service.  A marketing strategy that puts you in front of your prospects is key.  In a supply and demand economy, it’s up to you to press consumer demand.

Here’s a challenge! Implement one new marketing idea – each week. Experts will tell you that your marketing plan does not have to be complicated or expensive, but it does require consistent activity.

You can do this without a huge investment of time or money with simple effective small business marketing ideas:

• Go social. Use social shopping sites to get your products in front of more potential buyers. Start out slow and be selective about the inventory you feature – choose products that create a buzz and reinforce your branding identity.
• Create buzz. Get everyone talking about your business. Launch a marketing campaign that falls outside what’s been done before. Make your campaign memorable and, thus, unforgettable. Distribute an unusual promotional tie-in or invite customers to a sponsored event, such as a ball game.
• Warm up to cold calls. Cold calls can be an effective sales driver for a small business. They don’t necessarily have to happen on the phone because you can drop by local stores, club, or chamber meetings.
• Develop collateral materials. Printed marketing materials still have a place in the modern business world: fliers, brochures, and postcards for direct mail and trade shows. Resist the urge to save by designing the pieces yourself; enlist the services of a skilled designer to create a professional image.
• Start blogging. Make your website visually compatible with your collateral materials. If you don’t have a blog, start to blog now. An inexpensive, high-returning online marketing strategy, a blog gives you presence and credibility while it provides customers with value-adding content. As a bonus, the constant stream of fresh content and strategic keyword usage will boost your site’s rankings in search engine optimization.
• Send regular emails. Contact established leads and customers with predictable regularity. Make sure each message contains a relevant, value-adding benefit to the recipient. To save time and money, consider leveraging the services of an email provider who can assist with template design, email deployment, and list management.
• Consider a newsletter. Customers love information, so become an instant authority. Design and email a monthly or quarterly newsletter, or use it to introduce a new product or service. Make it an e-zine, and you avoid printing and postage costs.
• Hire a copywriter. Your written content – whether it’s an email, brochure, or web page – directly reflects your business. Take the time to find a professional business writer whose style and experience is a good fit for your business.
• Be generous with discounts. With consumers pinching pennies, catering to their budget-minded sensibilities can get you far. Try sending coupons with your next mailer, or include them in a bundled coupon package. If the fit works, advertise on Groupon.

The most important thing is to be authentic. Deliver messages directly relevant to your brand or audience and don’t make promises you don’t keep, or potential buyers will move to a competitor whose campaign rings true.

Remember, small business marketing ideas will be just that – ideas – unless you take action to implement them. Don’t waste time … get started!