Tag Archives: customer

Solving the Pricing Riddle

Posted on November 14, 2011 by Lauren Folino

Dear Norm, In October, I parted ways with my former employer. I have decided to start my own business creating mobile websites and apps for businesses. The trouble is, I have no idea how to set pricing. My overhead is $7,044 a month, and it takes me about two weeks to develop each website or app. I have one client, a friend of the family, whom I charged $500 for a huge website, which I know was too little, but I’m worried about losing customers by setting my rates too high. Then again, I need to eat! What do you advise? Kate McGinley, founder, McGinley Media Pittsburgh Everything has a price, as the saying goes, but a lot of people struggle with figuring out what the right price is. I get more inquiries about pricing than about any other subject. The classic mistake is the one Kate was about to make: setting a price based on what she feels she needs to earn rather than on how the market values her service. Competition generally determines the price you can charge. So the first step should always be to find out what competitors are charging. There are many ways to do that. You can call up other providers and — posing as a customer — get estimates. Local, state, or national trade associations may also provide the information you’re looking for. If all else fails, you can follow my father’s advice, which he gave me in the form of a humorous story: A brand-new optician opens up a store and isn’t sure what to charge. On the first day, he gets his first customer, who looks at some glasses and asks how much they cost. “Uh, $20,” the optician says. “$20?” the customer responds. “That’s all?” “Well, that’s just the frames,” the optician says. “The lenses are extra.” “How much?” the customer asks. “Uh, $15,” the optician says. “Only $15?” says the customer. “Per lens,” says the optician. “Oh,” says the customer. “So that’s $50 altogether.” “Well, the case is $5 extra,” says the optician. “Hmm, $55,” says the customer. “That’s a little high, but I’ll take it.” I’ve used this method, and it works. But whatever approach you take, the rule is the same: You don’t set the price; the market does. Your job is to determine what the market will pay. Then you can decide whether it’s enough to cover your costs and fund your lifestyle. If you do it the other way — starting with your own financial needs — you’re likely to wind up charging too much or too little. And charging too little is even more dangerous than charging too much. If you set your prices too high, you can always just reduce them. But if you undercharge, you develop the wrong kind of reputation. I told Kate, “You don’t want people saying, ‘Let’s use Kate McGinley. She’s cheap.’ It’s a lot better if they say, ‘Yes, she’s a little expensive, but her quality is worth paying for.’ ” Please send all questions to AskNorm@inc.com . Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is now available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs. Next Question Business – Optician – Customer – Entrepreneur – Pricing Continue reading →

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How to Bring Your Concept to Market

Posted on September 7, 2011 by Nitasha Tiku

You have moved past the stage in which you have a brilliant business concept; and, you are no longer in the product development phase, where you do the pre- and post-prototype. You have tested your concept by conducting online surveys, focus groups, trade show demonstrations or through some other means to determine if potential customers will buy your product or service. You have refined your concept based on reliable feedback. Now comes the business development, which means you are all geared up to start manufacturing, marketing and selling your product or offering your service. “I started out with a concept on a piece of paper, now we are in 1,000 uniform stores,” says Gary R. Bronga, president of Miami-based Clipeze Worldwide. The Clipeze is Bronga’s personal design spin on an identification badge that features a bar at the bottom of a lapel pin allowing for custom logos and artwork for companies and associations. Braga had worked in the aerospace industry at Cape Canaveral for 21 years, where wearing identification badges was a routine part of his wardrobe. After applying for five different design patents, finding a supplier for the prototype, and coming up with a low-cost price point, Braga contacted buyers in catalogs. “The advantage of going to catalogs is that they like new products,” he says. “I conducted a marketing campaign where it was geared toward the individual buyer with a personal letter. I sent samples. I followed up.” According to Braga, catalogs help in several ways: “They distribute to an entire industry, they provide a stream of income, they keep your product in the catalog as long as it sells, and they open up access to other outlets, including retailers.” Your local library will house directories listing catalogs and mail-order retailers. “Once you get into that first one, which is always the toughest, other catalogs companies in that category will contact you. If you are good for their competitor you are good enough for them,” adds the author of Bringing A Product To Market From Your Home . Clipeze is in some 20 catalogs. Braga has sold to date over three million of his badge holders. Nurses and other medical professionals are among his biggest supporters. An analysis of your business will of course dictate if mail-order is the best distribution channel for your particular product. Or if your business is a service then how will you find customers and how will they know about you. How to Bring Your Concept to Market: Have A Business Plan There are three resources that must be maximized to ensure your business success — money, strategy, and people. Having a business plan provides a detailed description of the best way to optimize these resources. But this goes beyond a 10 to 20 page document; you need a well thought of plan of action. What are the mechanics to bringing your product to market: how much will it cost to produce, what price will you sell it at, what is estimated sales volume and profitability? The answers to these questions are where your earlier market research and consumer feedback comes into play. “Moving forward without a written business plan is a common mistake among budding entrepreneurs,” says Jeff Mesquita, chairman of the Atlanta chapter of SCORE (Service Corps or Retired Executives). “A business plan forces you to clarify the strategic plan for business growth,” he adds. It’s also a living document that you should revise more than once over the course of the business. For help developing your business plan, go to local small business development centers, many of which are affiliated with local colleges or chambers of commerce. Start is with the Association of Small Business Development Centers . Also, SCORE ’s Quick Start program assists business start-ups nationwide. Dig Deeper: Business Plan Template How to Bring Your Concept to Market: Execute Your Business Concept Your job now is the implementation. Figure out how to get your product or service into the hands of customers who are your target market. Will you do it yourself or will you outsource manufacturing? Who is going to physically transport your product to customers? If you haven’t already done so, line up suppliers, manufactures, and distributors. Check with the National Association of Manufacturers , Thomas Register of American Manufacturers , or National Association of Wholesaler-Distributors . What are the methods of distribution: retail, online, and/or catalog purchases? “What’s your understanding of the final consumer, the end-users? Your market research should have revealed more than do you like my product or service but really how and where does your target market buy,” says Suzan Barnett, a consultant and area director of the Small Business Development Center at Valdosta State University in Valdosta, Georgia. Who will sell it: you, in-house sales staff, independent reps, telemarketers? What about facilities: will you operate from home, a kiosk in the mall, or local storefront? Take into consideration key factors. Foot traffic is a big deal in retailing. Don’t overlook business incubators, which are one-stop shops of space and services, including technical assistance. Contact the National Business Incubation Association . How will you get the word out about your product or service to your target market, asks Barnett. If they don’t read newspapers but look for information online, then you don’t want to spend money on print advertising (and vice versa), she explains. Many cash-stamped entrepreneurs are using Google, which provides a host of web-based products, services, servers, and client applications beyond Gmail. Google’s AdWord enables small businesses of all kinds to place ads for as little as $25 a month. Yahoo! has a Small Business Resource Center that offers a wide range of Web hosting, e-commerce storefronts, sales lead generation, and online marketing services. Dig Deeper: How to Use Sampling and Demos for Customer Feedback How to Bring Your Concept to Market: Protect Your Concept Once you have tested your concept and found it to be sound, safeguard your brand name or image by registering it as a service mark or trademark, suggests Richard Stim, attorney and author of Patent, Copyright & Trademark: An Intellectual Property Desk Reference . To protect a unique product you have invented—one that is fully developed and working—register a patent with the U.S. Patent and Trademark Office . Literature, music, art, fashion designs, and software programs are copyrighted and registered with the U.S. Copyright Office . The most common response by a competitor to a successful product or service is to imitate it. “The best defense is to always strive to be No. 1 in the marketplace,” says Braga. “Most companies will let you gain market share before they copy you.” Have plans in the works for making improvements to your product or your service so that you are prepared when there are competitive threats to your business, he suggests. Not every product requires a patent. This is a costly process in terms of lawyers and fees– from $3,000 to $15,000. A lot of it depends on how difficult it is to duplicate your idea or reverse engineer your product, says Stim. Coca Cola doesn’t patent their secret formula so that their recipe doesn’t get stolen; it’s treated as a closely held trade secret. One way to protect your product or service is to position yourself as an expert or go-to person in the industry, says Susan Friedmann, a nichepreneur coach in Lake Placid, New York and author of Riches in Niches: How to Make it Big in a Small Market . Use social media, blogs, Twitter, Facebook. “Those things become important in letting people know who you are and what you do.” Arrange for speaking opportunities at conferences or attend trade shows to let people see how knowledgeable you are even when aren’t selling directly to them. Dig Deeper: How to File a Trademark How to Bring Your Concept to Market: Build Your Capital Bank credit and traditional loans are even harder to access these days in the post financial meltdown economic climate. Which means you’ll probably have to tap into personal savings, equity in your home, or relatives to finance your new enterprise. Braga started his business with $500 and a computer. “I made sure that I didn’t go out and borrow a bunch of money and get into a lot of debt.” Barnett notes that if you have not positioned your personal credit such that a bank will see you as a strong enough credit risk, they won’t lend to you. “A poor credit score will ruin any chance of qualifying for a loan.” Starting out, have enough money in savings during the first 6 to 12 months of operation so that you’re not relying on the business to cover personal living expenses. Pour profits back into the business to pay for the business’ expenses. Keep in mind selling a lot of product or service doesn’t mean your making money. Some businesses spend more than they earn. “Stay on top of your finances,” says Barnett. Dig Deeper: How to Finance a Business With Your 401K Business – Google – Marketing – Advertising – Distribution Continue reading →

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How to Open a Business in Brooklyn

Posted on August 13, 2011 by admin

For Alexis Miesen , Atlantic Avenue had all the makings of the quintessential Brooklyn thoroughfare that combines the charm of a small town with the pace of city life. With its colorful boutique storefronts, diverse dining options, smattering of coffee shops, and antique stores, she expected to see happy families strolling along the street sharing ice cream cones. There was one problem: There was no ice cream anywhere around. “It’s filled with all these fantastic bars and restaurants and shops and it just has this really great kind of energy. They have all these great amenities to the community but no great ice cream shop,” she said. “This is a gap in what other people are offering.” Less than three years later, Miesen and her partner Jennie Dundas had opened not only an ice cream shop on Atlantic Avenue, but also had rapidly expanded the franchise to two other Brooklyn locations, feeding summertime crowds that often form lines winding out the door. Blue Marble’s organic, grass-fed dairy-based ice cream has been praised on The Martha Stewart Show, CNN, and in a bevy of New York City publications. Brooklyn has become as much a brand these days as a location. Slap the word “Brooklyn” on a piece of clothing and it’s instantly edgy, and quite likely to sell. New York City’s most populous borough remains a popular place to start a business, and Miesen and Dundas are emblematic of the grassroots, DIY entrepreneurs across the borough who’ve found a niche, and a loyal fan base that helps spread their brand along the way. (Check out Inc.com’s slideshow on Brooklyn’s Best Entrepreneurs .) The surge of creative energy, young artists and recent graduates is putting Brooklyn on the map not just for its booming music scene but also as competition with San Francisco to see who will lead the next Internet revolution. Business owners say starting a venture in Brooklyn requires creativity, a careful study of neighborhoods, and a good deal of Web 2.0 savvy. We talked with several successful companies about why the county of Kings is a bubbling cauldron of entrepreneurship, and how to get in on the action. Opening a Business in Brooklyn: Why Brooklyn? While Brooklyn was once considered a sparse hinterland outside the bustling hub of Manhattan, now it’s seen as the roomier, cheaper, less chaotic alternative, with a more stable population, and a reputation for creativity that draws artists, developers, and investors from across the world. “It’s a community actually that appreciates a lot of handmade goods, ethnic foods,” said Catalina Castano, director of the Brooklyn Small Business Development Center. “It’s not only ethnically diverse but it’s also culturally diverse. People have really open minds.” For those looking to tap into the excitement of New York City without getting tapped dry on cash, Brooklyn can be the savior. The average rent for prime commercial corridors in Brooklyn such as Court Street, Fifth Avenue in Park Slope, and Bedford Avenue in Williamsburg is between $35 and $100 per square foot, according to a 2010 retail report produced by CPEX Real Estate. Compare that to $125 to $2,000 per square foot in most of Manhattan’s commercial areas. “It is a bit closer to the real world,” said Taylor Mork, owner of Crop To Cup, a family-farm centric coffee importer based near downtown Brooklyn. ”It’s not as fast-paced. I think people are willing to wait a little longer on their investment in you.” With 2.7 million residents, the demand for goods and services is multitudinous and diverse. The first step, experts say, is figuring out where you need to put your business to best serve your clientele. Dig Deeper: The View From Brooklyn Opening a Business in Brooklyn: Location, Location, Location Brooklyn’s neighborhoods all have unique flavors and demographics, so Castano and others said the initial question any new business should ask is: Who are my customers? If you’re a family retailer like the boutique Area Kids, the answer is Park Slope, and the busy pedestrian and commercial thoroughfares of 7th and 5th Avenues. “What I look for with kids stores is people pushing strollers,” said owner Loretta Gendville, who runs seven stores and spas in Brooklyn and two in Manhattan. “I want a high density with parents, moms. I like people that are at home, people that are with their kids during the day.” That means opening a space alongside kids hair salons, yoga studios and tea shops on those Park Slope streets. Trying for a bar? The influx of artists, a vibrant music scene and a surge in condo construction make Williamsburg a hot spot for bar hopping. If large-scale production is your game, the old manufacturing warehouse buildings on the north Brooklyn waterfront are considered prime real estate. When Rob Ferraroni was looking for a new location for his Ferra Designs metal fabrication shop 12 years ago, relocating to the Brooklyn Navy Yard seemed like a bold move. Now, people are clamoring to get into the property, and the ground-level, 10,000-sqare foot space in a former World War II building trades shop is coveted. A lot of his work is for clients in Manhattan, which is a quick hop across the bridge. “You need to be able to execute these ambitious projects, so you need room,” Ferraroni said. People also doubted Doug Steiner when he started building Steiner Studios on in the Navy Yard in 1999. But Steiner saw the potential for major growth, and the opportunity to fill a hole in the movie and television production market in New York City. Now Steiner Studios is the largest studio complex outside of Hollywood with aims of growing to a 50-acre campus, and New York City has helped roll out the welcome mat for the film industry in Brooklyn. “Everyone under 30 in the business now lives in Brooklyn. Manhattan’s gotten homogenized and nullified,” he said. “The light and the air and the view and the waterfront make this a really special place to come to.” In the tech community, the neighborhood of DUMBO (whose acronym stands for Down Under the Manhattan Bridge Overpass) is the hot trending ‘hood. For instance, drop.io, a private file-sharing service, moved to the area in 2008 to grow its business alongside a rising district of art galleries, performance spaces and a newly expanded Brooklyn Bridge Park. Another perk: an incredible view of the Manhattan skyline. “If you did it in Manhattan or Midtown or something, you’d basically have to get an office the size of a conference room,” said Steve Greenwood, drop.io’s head of applications. Instead, the company got a cheaper, spacious headquarters with exposed brick ceilings and enough space to use for both work and after-hours social and networking events. “The culture of DUMBO is very complimentary to starting up business,” he said. “This is a very creative, imaginative place.” Dig Deeper: How to Pick a Site for Your Business Opening a Business in Brooklyn: Finding and Understanding Your Customers If there’s one thing people say is almost unanimous across Brooklyn it’s that borough residents tend to be fiercely loyal and supportive of their local businesses. But how can you earn that loyalty? Business owners said Brooklyn is ripe with ways to discover and cultivate a customer base, even before you decide on a permanent location. Mork spent months pitching his Crop to Cup coffee all over Manhattan only to be met with blank stares. In 2008, he decided to set up a $100-a-day booth at the first outing of the Brooklyn Flea, now a wildly popular market-style showcase of local artisans and antique dealers held in the Fort Greene neighborhood. There, his company’s credo of farmer-centric coffee found an eager audience. Within a few years, his coffee was on the shelves at several nearby businesses, and he recently opened a Crop To Cup caf Continue reading →

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Connecting Your E-mail and Social Marketing

Posted on August 2, 2011 by admin

Your business has accumulated an e-mail list, but you have no idea how to connect those e-mail subscribers to your Facebook page, your Twitter followers and other social networks. You’re looking for a relationship with those customers, maybe something more than responses to your marketing e-mails. Enter Flowtown.com . Co-Founder Ethan Bloch started his first business at 13, using IRC (Internet Relay Chat – the grandfather of Twitter and Instant Messaging) to directly market the products from his electronics ecommerce site. Ethan offered Playstation and Dreamcast accessories during the summer of 1999, and was successful competing on price for 6 months. Then suddenly, he lost all his customers because someone had created a similar website with better prices. Bloch learned at that moment about the value of creating customer relationships. Fast-forward 10 years, and Bloch, formerly the host of the Internet video show WSYK (What Should You Know) and his cofounder Dan Martel, a Canadian long-time entrepreneur, launched the company. Flowtown is simple tool that allows you to run a list of e-mails and obtain the connected accounts on Facebook , Twitter , StumbleUpon , LinkedIn and more than 40 other networks. You can then communicate with the people from your list on those networks as well. Additionally, you can learn your list’s demographics, geographic characteristics, and the subscribers’ influence ranking. “We reached out to these influencers directly via Facebook,” said Meaghan Edelstein, Social Media Director of Smashyn.com . “We said ‘We see you’re a customer who has purchased before and we’d love to hear what you think, and we’d encourage you to like and link to our customer’s page on your own page.’ Everyone that we reached out to did this – quickly.” Another feature Flowtown enables is parsing your incoming e-mail subscribers, to see if they meet certain criteria, and flagging them. (Flowtown can be integrated with e-mail services iContact , MailChimp and Campaign Monitor as well as form creator Wufoo .). So if a person with a million Twitter followers joins your list, you will find out about it when it happens. “We push these demographic stories into these mail tools – so they can help you create segmented lists based on gender, age, location and social network.” How would you start such a communication without making your customers feel like you were spamming them on Social Networks? Edelstein told me that her firm used Flowtown for their client Natural Skin Shop . “With our first outreach, the client increased the “Likes” on their Facebook Page by over 50%. Further, we sent out a campaign to all the customers who were on Facebook asking them to post on the Fan Page wall why they love Natural Skin Shop. In less than 24 hours around 200 posts from customers showed up on the wall. Twitter followers increased as well but not by as much. However, the number of people who purchase products from natural Skin Shop via Twitter has increased significantly.” What kind of return on investment did they achieve? Flowtown can cost a few dollars a month plus about 4.5 cents to import each user. Bloch says “If you can get one influential person to blog about you, it should generate more marketing attention than the $450 you would spend on Flowtown for importing 10,000 users.” Bloch emphasizes that “Connecting with customers on Social Networks shouldn’t replace your e-mail marketing efforts – rather it should compliment them. If you’re a bakery in the MidWest, you might send e-mail news once a month. What Flowtown will do is help you understand what you should be saying, and to whom, since now you know a lot more about your subscribers.” Additionally, if you analyze your list and see you have a lot of Facebook users but few are on Twitter, you know where to concentrate your social outreach efforts. The way small businesses connect to customers is changing, and Flowtown seems like a useful tool in a marketer’s up-to-date arsenal. What are you using to find and connect with customers? Share your tips below. Flowtown – Social network – Facebook – Business – MailChimp Continue reading →

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Spicing Up That Sales Pitch

Posted on May 23, 2011 by

Can laughs make the sale? Plus, the new deal-site ecosystem, loving the Like button, and the rest of the day’s news for entrepreneurs. Each day, Inc.’s reporters scour the Web for the most important and interesting news to entrepreneurs. Here’s what we found today. Using laughs to land the deal. Is your sales pitch too stale? Try using humor, says Burt Teplitzky, an author, stand-up comedian, and corporate trainer based in Los Angeles. According to Teplitzky, incorporating humor into one’s sales pitch releases tension, establishes a rapport with customers, and increases the “likeability factor.” In an interview with The Wall Street Journal , Teplitzky explains how punchy, relevant jokes are more engaging and impressive to an audience than a straightforward presentation. “Your main job is to create an environment where the customer wants to buy from you,” Teplitzky says. “Humor helps to open lines of communication because you are both comfortable with each other.” The new deal-site ecosystem. With Groupon adding 150 employees a month, and LivingSocial’s third office space already bursting at the seams, the Associated Press reports that deal sites are becoming so popular that their office are starting to look as crowded as their subscribers’ inboxes. Exponential growth of these sites—including hundreds of clone or niche deal sites—might look like a bubble. But analysts interviewed say it’s actually an emerging category of commerce that’s dramatically changing how retail and service industries price and sell their goods. With Groupon, the top daily deal site, racking up 85 million subscribers in about two years, and LivingSocial gained 28 million. On the other hand, Joshua Gans in the Harvard Business Review offers a cogent argument that perhaps the daily deals space is becoming too crowded for the biggest names to continue rocketship-pace growth. he writes, “right now, there is one issue on which every economist I know of actually agrees,” that Groupon should have accepted a $6 billion bid from Google, that Google was insane to have offered it, and that Groupon is doomed. Which story do you believe? What Facebook’s Like button can do for you. The stats compiled here by Search Engine Land’s ed-in-chief Danny Sullivan come straight from Facebook, but none the less shed light on how Facebook’s so-called social users can super charge web site referrals, page views, and—even—revenue. Glenn Beck, e-commerce entrepreneur. That’s right. The infamous TV personality’s production company, Mercury Radio Arts, announced this morning the launch of a new e-commerce discount website called Markdown.com, Business Insider reports. What will the site sell? So far, Beck’s production company says deals will be on everything from credit-score monitoring services to chocolate. Considering Beck’s Oprah-like reach, the new venture could prove profitable. Markdown will offer one to two deals a week at first, but has plans to expand. Should CEOs hate surprises? Barry Salzberg, who will rise to global chief executive of Deloitte Touche Tohmatsu, offers some thoughtful leadership advice in a Q & A with The New York Times. On leadership, Salzberg notes “I don’t like surprises. I don’t like good surprises. I don’t like bad surprises. Obviously it’s better to have good surprises, but the idea is to be transparent and straight and tell it like it is all the time and to make sure that you are involving others along the way.” When it comes to hiring, Salzberg says a “good marriage” is the most important aspect of finding the right person. We’re “looking for these intangibles, because at the end of the day, what we’ve found is, people join you for the firm and what they think they are going to do, and they leave because of the people and the environment they work in,” he says. Iams’s top dog to help business’s smaller pups. After making billions selling premium dog food, former Iams owner Clayton Mathile now is helping small businesses see at least a fraction of his mammoth success. According to CNN Money, the 70-year-old billionaire’s nonprofit, Aileron, has helped more than 20,000 small business owners grow and develop since he poured $130 million into the organization three years ago. Aileron was named after an airplane wing part that helps lift the airplane during flight to symbolize how the nonprofit uplifts their clients, mostly entrepreneurs who have $1 million to $30 million in sales and 10 to 100 employees. With classes, counseling and funding, these entrepreneurs develop leadership and managing tools to apply in their start-ups. “Entrepreneurs can solve almost all the problems we have in this country, in this world,” says Mathile. “It’s just that they have to be allowed and afforded the opportunity.” More from Inc. magazine: Get this delivered to your inbox. Follow us on Twitter . Follow us on Tumblr . Like us on Facebook. Continue reading →

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