Small Business Marketing Shifts to New Model

By Chris Wendel, Regional Director, MI-SBTDC

The internet and other related technological advents are drastically changing the way businesses market themselves. Gone are the days of guessing the demographics of a perceived target audience and somewhat blindly sending out advertising message, hopefully garnering some kind of response. How many times have we been told that a great response from a direct marketing piece is 5%?

The new model is more permission based, with customers finding your unique product or service through a network of likeminded customers that spread the positive word of mouth for you. So, how does one go about implementing such a program? The first step is to collect and organized your customer’s email addresses. Sending out timely emails and promotions to reward established customers creates the community of devout followers. A program like “Constant Contact” works well for organizing the data and for comprising content and determining the frequency of email offers and communication.

A simple informational blog website can offer product information, discuss pertinent topics, and start customer discussion in a personable way that a static web site cannot. Blogs are easy to start and are free (that’s right, free). Two recommended sites for blogs are wordpress.com and blogspot.com. Remember; think of a blog as a more personable way to compliment your regular web site and as a way to build your community of customers.

A prerequisite for this permission based marketing is great customer service and a unique product niche. Without these, you could be building a community of people who bash and trash the negative aspects of your business.

Overall, the idea of the time is to have customers come to you because they heard about you from someone else, rather than throwing money into the sky with blind faith advertising. This doesn’t mean that you abandon previously proven advertising and marketing efforts. But in the long run the new model of permission based marketing will save you marketing dollars.

Branding with Buttons (and more)...

By Chris Wendel, Regional Director, SBTDC

The foundation of any business marketing program worth its salt is branding. This includes the development of a name, logo, and slogan combined with consistent fonts, typestyle, and colors. This branding is then used consistently with signage, business cards, print and web based advertising. One effective but overlooked way of communicating one’s brand is through the use of promotional items such as bumper stickers, buttons, key chains, and pens.

Northwestern Bank here is Traverse City has used the slogan “I can do that!” for several years now. The bank’s staff prominently wears simple label buttons with the slogan, creating a subtle and effective way of convening its company image both at the bank and at public events. The slogan is also well integrated into all of the bank’s marketing and advertising including brochures, interior signage, and web pages.

Michelle Bak of Bay Area Buttons in Elk Rapids is a great local source for buttons and other specialty items. Building from a small home based micro-business into a regionally known advertising specialty company has been a challenge but Michelle’s persistence and networking have created larger accounts that now reach far outside the Grand Traverse region.

Buttons and bumper stickers may seem like a nice add on form of advertising but consider the case of Lizzie Och of Lake Leelanau. Och is a student at Northwestern University north of Chicago but still considers Leelanau County her home. Back in November Och and some firends started a Facebook site called “Leelanau, my home is your vacation”. The site in a few scant months has over 1000 members, a community of like minded individuals who are primed for the planned roll out of bumper stickers, buttons, and t-shirts with the same “Leelanau, my home is your vacation” moniker. Suddenly a new business is born. So what’s the bottom line? Rethink the way you brand your business and don’t forget the buttons.

Program Note: Don’t forget to join us online or locally at 1270 AM for “Small Business Focus” on WMKT radio’s Vic McCarty Show, Wednesdays from 10:30-11:30. Each week we feature a small business and small business topics from the Grand Traverse Region.

The Knowledge Economy: Making the Transition

By Chris Wendel, Regional Director, MI-SBTDC

We’ve heard much talk lately about the “knowledge economy” and its role in our national, state, and local situations. From a broad perspective the knowledge economy refers to the transition from an activity centered on the production of manufactured goods to value placed on human capital including cutting edge ideas, technology and information. While some may argue the exact definition of the term knowledge economy, we all know that many of the traditional rules of economics no longer apply to what’s happened to our national economy in the past year.

Michigan is an example of how this transition can be painful, when a large percentage of economic activity traditionally depended on high paying employment assembling hard goods (can you say Big Three?) rather than employment requiring a high tech education and skill set.

Today most of the world’s thriving urban centers have high concentrations of young people who are well educated, earn high salaries, and are will versed in this knowledge economy tenants. The internet is the centerpiece in this era of quick transition, spreading new information to people in different parts of the globe, accelerating the opportunities for technology advancement, and creating tremendous opportunities for those who are forging ground breaking ideas.

How does this translate to the economy of Northern Michigan? First, the world is now our marketplace with the internet making us closer than ever to large scale commerce both domestically and world wide. One no longer has to necessarily live in an urban center to regularly participate, work, and interact with other large scale businesses. Instant media coverage makes all of us less isolated from what is cutting edge while business and social networking creates an environment of small market niche opportunities that can be exploited over an ever expanding geographic landscape.

Our area’s highly valued quality of life is the backbone that already attracts a high caliber work force that lives here by choice and does business many times from an up north “virtual office”. A sector of the young population (age 25-35) mentioned earlier is increasingly moving to Northwest Michigan, in search of a certain lifestyle, while being well equipped for navigating the knowledge economy, and possessing a strong vigor for technology, arts, and the environment.

In many ways our region has already made a somewhat successful transition into a diversified economy that combines both the soft technology of the knowledge economy with a still necessary manufacturing base. Challenges remain in attracting, training, and retaining a talented work force and improving our infrastructure in areas of accessible internet in isolated rural areas. While some are still trying to understand what the knowledge economy is all about, it’s obvious that its impact has already arrived.

Doing Well, Doing Good

By Chris Wendel, Regional Director, SBTDC

Many of the business lessons we learn come from the voices of our mentors. I catch myself sometimes uttering sage words of advice that came from my father including the phrase “You have to do well before you can do good.”

With that engrained in my mind over the years, I have been a firm believer in making a company financially strong before giving much back in charitable or socially conscience contributions. As cut and dried as that seems, I’ve seen plenty of exceptions lately that have altered my point of view.

So as a business owner, when is the right time and the right way to give back? The most effective company programs for community involvement have some element of employee initiative. It can be something simple like employees coaching their kids’ teams and evolve into the company sponsoring the kids’ team, and beyond.

If you or your company’s employees have a local charitable group or cause that they care for, then the business can show an effort (monetarily or otherwise) in that direction. There are plenty of local examples of imaginative alliances made between business and non-profit groups. Grand Traverse Pies donate a portion of pie sales to breast cancer research, area businesses decorate trees for the annual Festival of Trees, Traverse City State Bank sponsors a 4-H kid’s steer in the Northwestern Michigan Fair.

The idea is to donate, endorse and be directly involved with a charity at the same time. It’s not just saying that your company gave money to a charity or social cause; it’s having a true company and employee stake that demontrates true dedication to that charity.

One local company founded their company in the premise of being socially responsible before all else. Higher Grounds Trading Company built its company with the idea of selling fair trade coffee from villages in Central and South America, and Africa. Owners Chris and Jody Treter wove the mission of social good into their original company business plan and have stuck to it ever since.

Aligning Personal and Business Goals

Guest Columnist, Peter Wendel

Once again we enter a new year. But this one is different! We have a new president elect, the economy is in shambles and every business is facing new, serious challenges. What used to work won’t work now.

It’s often normal to use this time of the year to step back, evaluate where we are and set some new goals for the New Year. In our personal lives it’s called ‘making new years resolutions.’ In business, it’s an informal kind of strategic planning. But often, we do a kind of problem solving; focusing on trying to do what we’ve been doing, but better - a kind of ‘fix mode.’

The trouble is that because the world has changed, fixing often isn’t good enough. We need to shift from dealing with today’s problems to focusing on building a different future. Instead of being problem driven, it’s time to be vision led.

Let’s take some time to explore ideas for business owners to ponder as you prepare for the new, different 2009. Remember, you are being challenged to think differently - to let go of old ideas and old approaches.

Here are some ideas for you to consider as you look ahead:

The ultimate measure of success of any business is how well it helps you and your associates achieve your personal goals. Your sales, innovation, customer service, production, etc. results are all finally measured by the answer to key questions such as; “Were we profitable?” and “Did we move closer to our personal goals?”

This raises the key question for you, “What are my personal goals?” It’s so easy to get stuck in a rut - to keep doing the same thing you’ve been doing. You need to get out of that rut and focus on what you want to create. The change of focus energizes your brain and gets you thinking differently. The key is to have a destination to make informed decisions. Remember the old saying, “If you don’t know where you are going, no road will take you there!”

Start by thinking about your personal goals five to ten years from now. Where do you want to be in your life? What do you want your business role to be? Will you still be working? What is your exit strategy; an internal sale to your associates or an external sale to an outside party? How far along do you want be in the transfer of leadership and ownership?

Now choose what you want to achieve in the next year to reach your five to ten year goals. What do you want to happen in your business to help you achieve your personal goals? Where will you focus your energies and your resources?

What’s going on around you? What has changed in your markets? How are your customer’s expectations changing? What new technological changes will, or might, impact your business? Are new competitors with new solutions and new products entering your markets?

What about your staff? Do your potential future leaders have the needed skills and a ‘fire in their belly?’ Are key people moving toward retirement that you need to replace? Are you in tune with the interests and expectations of the Gen X people who have joined your business?

Now make some plans. You can’t do everything. Decide where you will focus your resources.

What should you stop doing, continue doing and what should you start doing that you aren’t doing now to move toward where you want to be next year at this time?

Having a plan doesn’t mean that you must rigidly follow it. The process of thinking about your future pulls you up from the ‘tyranny of the present,’ and moves you from being problem driven to becoming vision led. Thinking about what you want to achieve helps you prepare for unexpected events, capitalize on opportunities and deal with setbacks.

One last observation: I recommend that you don’t do this in a vacuum. Involve others. On the personal side, have conversations with your spouse, your family and others close to you. On the business side, involve your key associates. Explore your aspirations; explain your intentions and the reasoning behind them. Build alignment and involve them in planning the execution.

Then check in regularly to be sure that you are all working together. (For ideas on the kinds and frequency of meetings, go to the book Death by Meeting by Patrick Lencioni.)It’s not enough to keep doing what you’ve been doing. Your challenge is to clarify the future you want to create and think differently, boldly, about your next steps to get you there.

Peter Wendel is the founder of the Peter Wendel Group, an organization dedicated to helping build high performing companies through strategic planning, team building, and leadership development.

New Businesses Snowball From Unlikely Places

By Chris Wendel,
Regional Director, SBTDC

Last week I represented our organization at a local lender’s forum. These get togethers are typically organized by a local chamber of commerce or economic development group to give local businesses people, bankers and other financial related organizations a feel for the borrowing climate and available financial resources. With the extreme changes in our state and national economy it was interesting to see how things have shaken out on the local level.

I was surprised by how some of financial institutions viewed the plight of a start up business. The word entrepreneur was flying around the room, yet the prevailing thoughts centered around the traditional bricks and mortar start up, where large sums of money are initially needed for renting a building location and financing the owner’s wages while the business gets rolling.

This is counter to many of the start ups our office is seeing around the region. The new model includes many Internet based businesses that start on a small scale as a side enterprise. The owner is many times looking for auxiliary income and if the idea if well accepted, it is expanded over time, and then the owner considers the plunge to full time self-employment.

Examples include the stay at home mom who successfully runs an online retail operation selling not just to the local community but throughout the country and world, the self published author who writes when time permits around their regular job, and the hobby gardener who sells their produce to a local roadside farm market.

These small niche businesses collectively provide viable economic impact to the area and disposable income that is spent with other local businesses. These enterprises require small amounts of start up funding, are truly resourceful, and do I dare say…entrepreneurial.

Who do you Trust?

Stephen M.R. Covey was in town last week for a dinner and speaking engagement revolving around his best selling business book "The Speed of Trust". I read the book several months ago when the Northwest Michigan Council of Governments made the commitment to bring Covey to Traverse City. Covey's 90 minute presentation centered on trust being a commodity that is just as integral in business and other relationships as time and money.

I saw Covey's father speak (the author of The 7 Habits of Highly Effective People) two years ago at a conference in Denver and Hiram Smith the founder of the Franklin Planner, (who several years ago merged Franklin with the senior Covey's company). Both were accomplished presenters, so I was excited about this week's event.

With an audience close to 400 attending the event at the Grand Traverse Resort, it was good to see a nationally known speaker in Traverse City, with a finely tuned message that all of us could apply to our own business and personal lives. Covey included superb examples of how our society is in the midst of a trust crisis. All of us walked away with tangible ways we could improve the trust level we have with those around us, while also improving our own levels of trust.

Managing the Business of Sports

by Chris Wendel

Every Wednesday I have the opportunity to sit in on a local talk radio show for 20-40 minutes to discuss the area's small business climate. The host Vic McCarty is a sports anchor by trade and as much as we should talk about business we too easily delve into sports. You see I'm a true sports fan myself. Someone once introduced me by saying that I had the "dominant sports gene". My wife is understanding and although she doesn't get too much into sports she is amazed of my ability to spout detailed trivial sports facts and retain mostly useless information.

A few weeks ago on the air, Vic asked me about the management style of Al Davis the owner of the Oakland Raiders. For once the two worlds of sports and business meshed together and I was able to compare Davis' old school top down management style to a autocratic railroad executive of the 1950's. I reminded Vic and the audience that sports franchise owners come in two forms; the ones that dominate and make major decisions themselves and the ones who can delegate and trusts others to collectively make major (and minor detail) business choices.

This weekend I watched a college football game on TV between Missouri and Oklahoma State that took this idea of management delegation even further. In the tight second quarter of the game the Oklahoma State head coach Mike Gundy left the sidelines when his team was on defense and spent almost 12 minutes sequestered on the bench totally absorbed in charting offensive plays for the next Oklahoma State offensive possession.

Although I've never been a big fan of Gundy (that's another story), I was amazed how he was able to pass the steering wheel and complete trust to his defensive staff while he focused on his strengths; making adjustments, attacking his competitor's weakness, and forming a solid strategy for the rest of the game. Sure enough Oklahoma State quickly scored when their defense held and Gundy's team went on to upset #2 ranked Missouri.

Missouri's coach Gary Pinkel played the more traditional role of a corporate CEO, staying on the sidelines and making coaching moves obviously with the input assistant coaches. Gundy's management style is more in line with a progressive Silicon Valley IPO , but also requires a tremendous amount of trust to the people around him.

Speaking of trust, Stephen M.R. Covey will be in town next week with a dinner/speaking engagement at the Grand Traverse Resort. Covey's book "The Speed of Trust" had been on the very top of national business best sellers list for the past year. The book describes how trust is a vital commodity in running a business and in business relationships. There aren't many opportunities to see a nationally recognized business speaker in Northern Michigan and Covey is a sought after ticket in most parts of the country so call 231.922.3780 for ticket information.

Getting to the Root of Value-added Agriculture

We hear a lot of talk locally about the words "value added" especially in the area of agriculture. While "value added" may be more of a square to fill in a buzz word bingo game, the term has relevance with our area's burgeoning wine and farm businesses.

*Definition: Increasing the productivity of a farm by:

• Growing a commodity for a special market: Adding value to an agricultural product in a non-traditional way can command a higher market price. Selling bib lettuce to a local restaurant highlights that the product is produced in the local economy which enhances the perceived value to the end user.
• Changing the form of a commodity is packaged before it is marketed: Transforming raw agricultural products into another product by processing. Frozen tart cherries can be cooked with sugar, pectin, and a small amount of fruit liquor producing a premium priced dessert topping.
• Changing the way a commodity is packaged for market: This includes packaging that features convenient packaging (smaller sizes or "ready to go" gift packs), or decorative and informative packaging that enhances the presentation and the perceived value of the commodity.
• Growing a Commodity for a Special Market: Producing products for a certain ethnic or cultural market. Organic foods fit this category as products that are purposely grown to the growing health oriented market.
• Adding a New Enterprise: For the traditional farm this would mean the addition of a road side market with features such as a petting zoo, corn maze, wedding facilities, and bed & breakfast.

The trend in our ten county region points towards an increase in the local food and value added ag. The traditional model of commodity farming with centralized processing encouraged produce to be processed rather than distributed fresh. With food scares, rising gas prices, and uncertainty with securing adequate employees, it only makes sense that smaller farms that distribute their produce within a community would be the preference of consumers.

This shift is happening quickly in the Grand Traverse region and provides plenty of entrepreneurial opportunities for small scale farmers and food producers. More on that in our next installment.

*Source, USDA Natural Resources Conservation Service, AE-4 Importance

Customer Service from the Inside Out

by Chris Wendel

Business people behaving badly, sounds bad, does it not? As customers all of us run into situations where people don’t exceed our expectations or even worse, make us feel downright insignificant. Be it the disinterested cashier that can’t muster a simple “Thank you,” or the handyman who does not show up on time (or at all), each of us has our share of customer service horror stories.

Admittedly, I’m always looking out for good and bad customer experiences. Like many of you, I keep a mental list of businesses that I have placed on “probation” (I’m not going there for awhile), “double secret probation” (Why did I come back here again?), and “boycott status” (I’m not ever coming back here again!).

On the flip side I will be almost reverent to a company that I can count on for a consistently positive experience. There’s a lot to be said for a business that does their work well, and employ people working who obviously enjoy what they are doing.

With plenty of the focus put on advertising and marketing, a well thought out plan for customer service will insure that you retain the customers you have, and spread positive word of mouth to others. In short, knowing the impression others have of your company’s customer service, is vital to growing your business.

The following factors are paramount to superior customer service:

• Management that understands that their most important customers are their employees.
• Building a friendly and loyal staff that knows that their ideas and opinions are valued and if good, will be implemented by management. Many times being a stakeholder in the workplace is a higher priority to employees than the wage they are paid.
• Writing your own rules of customer service. A good place to start is with the “Golden Rule” or better yet, the way your elders taught you to treat others with dignity and respect. The thought of spreading good Karma also works here.
• Making clear from the onset what you as a business owner expect in the way of customer service from your employees. Initially hiring people who share similar customer service values can save you time by not having to teach basic life lessons.
• Over time, building a high level of trust, teaching employees how to solve problems, and instilling sound customer skills will empower employees to deal with challenging customers on their own. This frees you to manage the business, work on larger picture issues, or better yet, take some well-deserved time off.
• Have a system for gauging your customer’s happiness. This could be a simple survey (reply card or online), or having employees, customers and friends who are blunt with you about what happens when you’re not around. These methods work better than realizing at year-end that your sales are down, and then wondering if your customer service is up to snuff.