Monday, November 24, 2008

S&MM SoundOff: A Tool to Help with Reference Selling

Unless your sales method provides processes, tools, training, and measurements for leveraging existing customers as references, you are probably leaving money on the table. ...

One way savvy salespeople can leverage referrals is through the online service, a business networking site. This company provides an invaluable tool to many of their 6.8 million members.

... Your reps can learn where their targeted prospect worked before and with whom. The rep can then see whether the target connects with anyone in his or her business or personal network. There may be people within your company with connections to the target executive.

LinkedIn shows you those connections. The site eases the rep's pitching duties and is less intrusive for the prospect. It makes getting in contact much easier from the rep's point of view and much more acceptable for the prospect. LinkedIn is one technology helping salespeople sell more effectively.

Speaking of useful Web sites, be sure to check out Sales & Marketing Management's new online home: You'll enjoy the same management tools and resources you rely on--and a whole lot more. Click here to enter the Smart Sweepstakes!

Posted by dsteinSMM in Business Technology, Marketing Strategy, Sales Strategy Permalink

S&MM SoundOff: A Tool to Help with Reference Selling

Wednesday, November 12, 2008

Fannie, Freddie to ease some mortgage payments


Tue Nov 11, 2008 6:14pm EST

Photo By Patrick Rucker

WASHINGTON (Reuters) - ...Homeowners facing foreclosure who are spending more than 38 percent of their income on mortgage payments could have monthly payments reduced by Fannie Mae and Freddie Mac in an effort to keep their homes, [James Lockhart,] the head of the Federal Housing Finance Agency said....

Soaring mortgage defaults are at the root of the global credit crisis that threatens the U.S. economy with a deep and long recession, and some economists say putting a floor under the housing market is a prerequisite to recovery. ...

Lockhart said eligible homeowners could see their mortgage rates cut, the life of their loans extended or their principal reduced in an effort to ease payments. Borrowers would need to be delinquent 90 days or more to qualify for new loan terms. ...

FDIC Chairman Sheila Bair, however, faulted the new plan for focusing so narrowly on Fannie Mae and Freddie Mac, which means it will not cover the 60 percent of seriously delinquent home loans held by Wall Street firms and other investors. ...


Lockhart said he hopes other mortgage finance companies will adopt the new plan as an "industry standard," but mortgage investors often stand in the way of changes to failing loans.

In recent weeks, Citigroup Inc, Bank of America Corp and JPMorgan Chase & Co have all said they will ease some loan terms.

But critics say those efforts are also part of a piecemeal approach to the housing crisis that has so far failed to reverse the trend of increasing delinquencies. ...

The plan outlined on Tuesday was conceived in part by Hope Now, an industry group midwifed by U.S. Treasury Secretary Henry Paulson last year to help troubled homeowners.

Hope Now has spurred mortgage finance companies to ease terms for borrowers, but those voluntary efforts have not been enough to halt the growing pace of foreclosures. ...


Bush administration officials for weeks have been trying to agree on a fresh program to aid borrowers, and Tuesday's announcement could mark the first step in a wider effort.

[FDIC Chairman Sheila Bair] has emerged as a strong proponent of more-aggressive action, but others fret too much government aid could create a perverse incentive for homeowners to game the system.

The Department of Housing and Urban Development is mulling how to expand its Hope for Homeowners program, which gave the Federal Housing Administration a $300 billion kitty to underwrite failing loans...

That program ... went into effect in October. However, it got off to a slow start and officials are eager to loosen the terms and cut some red tape to make it more appealing to mortgage companies.

Under the program in its current form, a mortgage finance company must have a home reappraised and then erase 10 percent of its value before the loan can win a government guarantee. Officials are considering lowering that required write-off, sources said.

(Reporting by Patrick Rucker; editing by Gary Crosse)

© Thomson Reuters 2008 All rights reserved

Tuesday, November 11, 2008

Early Stage Algae Biofuel Company Closes $10.5M Funding Round; Additional $5M for Pilot Plant

Green Car Congress

11 November 2008

WeyerSolix calculations on the theoretical maximum production of algal oil. (See below.) Click to enlarge. Source: Kristina Weyer, Solix Biofuels

Solix Biofuels, a Fort Collins, Colo.-based early-stage company focused on algae-based intermediates for fuel and chemical production (earlier post), has raised $10.5 million in its first round of outside funding, and has reached an agreement with investors for an additional commitment of $5 million, to be used to build an algae biofuel facility near Durango, Colo. The pilot project is intended to showcase Solix’s ability to produce biofuel and feedstocks for the chemicals industry at commercially-feasible production levels and costs. ...

Two primary factors contribute to algal oil yield: the productivity of the algae, and their lipid content as a percentage of the biomass. Both vary with the species of algae. ...

Solix says that currently, algae grown in photo-bioreactors at its headquarters yield more than five times the amount of fuel per acre of land per year than agriculture-based fuels including ethanol from corn and biodiesel from soy and canola, at their current commercial yields. ...

Solix engineers have created systems that automatically adjust for environmental changes such as sunlight and temperature to optimize growing conditions. The Solix system has the ability to capture emissions directly from power plants and factories.

Solix Biofuels is a spin-off and technology partner of Colorado State University in Fort Collins, Colo. Solix seed funds were used to sponsor research by CSU faculty and graduate students to identify algae species with the best potential to grow at large scale and produce high yields of fuel and chemical feedstocks, and to develop technology that can bring the process to commercial scale. ...

Monday, November 10, 2008

Commercial-real-estate bust is coming, report warns

But downturn will present buying opportunities over the next 18 months, industry expert says


By Janet Morrissey October 26, 2008, 6:01 AM EST

Economists and market experts say a doom-and-gloom report on commercial real estate released last week confirms the industry's worst fears about an imminent major correction.

The widely respected annual report, "Emerging Trends in Real Estate," by the Urban Land Institute of Washington and PricewaterhouseCoopers LLP of New York, predicts that in 2009, commercial real estate will suffer its worst year since the industry's crash of 1991-92, with a noticeable rebound unlikely until 2011 at the earliest. It also forecasts a decline of 15% to 20% in property values, on average, from their 2007 peaks, with even sharper declines coming in weaker markets.

Amid the gloom, however, there will be pockets of opportunity for cash-heavy investors in discounted loans, distressed debt, raw land, apartment buildings and other niches, the report said. ...

"If you look back, there were tremendous opportunities available to anyone who would take the leap and buy properties at a discount from the [government-owned] Resolution Trust Corp. — and that set the stage for strong growth among REITs," said Robert Bach, chief economist with Grubb & Ellis Co., a commercial-real-estate-services and investment company in Santa Ana, Calif.

At the time, though, there were dire predictions "that there would be no need for another square foot of commercial real estate until about 2010 or 2015," which spooked investors, Mr. Bach said. "But people who bought properties back then did very, very well."

Nevertheless, the report throws cold water on any hope for a speedy turnaround. ...

"This is going to be the worst year since the 1991-92 industry depression," Stephen Blank, senior resident fellow for real estate finance at the Urban Land Institute, said in a webcast. "We expect to see drops in value, negative returns, sharp increases in delinquencies and foreclosures — it's a bleak picture." ...

"The private commercial markets need to correct; they're lagging everything else," said Jonathan Miller, a partner in Miller Ryan LLC, a real estate marketing advisory firm in New York, and author of the ULI/PWC report. "That [correction] is going to happen over the next 12 to 18 months." ...

Of the 50 metropolitan markets tracked, the study found only two — Dallas and Houston — where prospects for investment and development in 2009 were better than in 2008, thanks to their exposure to the energy industry. ...

In general, the report urges investors to sit tight and be patient "because the markets have yet to correct as much as they're going to," Mr. Miller said.

However, the report cited investment opportunities for those with cash and low leverage, noting bottom-fishing opportunities among distressed sellers and lenders, whose highly leveraged loans are upside down. ...

On the bricks-and-mortar side, rental apartment properties should continue to show strength due to the reeling housing market. Infrastructure and transportation projects are also good bets, the report said.

Mr. Miller added that residential lots and raw land should offer good investment opportunities over the next 12 months, but investors should avoid hotel and retail properties. "It's going to be ugly in retail," he said. ...

In a recent report of its own, The Goldman Sachs Group Inc. predicted that commercial real estate values will tumble 19%, and vacancy rates will approach 1990s levels. The New York firm recommends that investors avoid REITs with high leverage, near-term refinancing risk and a reliance on development and merchant building for growth. ...

The report predicted that the debilitated housing market will bottom in 2009, but not before pricing levels tumble to 2003-04 levels. Distressed Florida condos with ocean views could offer good long-term investments when they bottom sometime in 2009, Mr. Miller said.

Fitch Ratings Ltd. in New York thinks that 75% of the housing correction is already behind us and that prices may tumble only another 10% before hitting bottom in the next few quarters.

"2009 will be downer, and 2010 may not be much better, but maybe by 2011, a slow recovery will be under way," Mr. Miller said. "It all depends on the economy — we need a jolt."

E-mail Janet Morrissey at

Friday, November 7, 2008

Wellness critical for advisers in stressful times

During rough patches, scheduled exercise and eating right are even more important


By Joni Youngwirth October 26, 2008

...Rising to this occasion, being able to manage your clients' expectations and calm their fears — all while you might have fears of your own — requires advisers to be at their very best. With that in mind, here are some tips to help you stay healthy in mind and body.

Breathe: The Internet is a treasure trove of instructions on how to improve your breathing, especially when you are stressed. ...

For now, simply being aware that stress tends to make us breathe more shallowly may help us to reverse the tendency. Taking just a few deep breaths three or four times during the day may be the best thing you can do.

Talk to other professionals: ... What advisers need to share is not just the technical aspect of what they are doing with accounts but also how they are coping with their own emotions.

Exercise: If you have a regular exercise routine, be sure to stick to it. If you don't have a regular exercise routine, consider starting slow and easy with something of which your health care professional approves. The obvious choice is simply to take a 15- to 20-minute walk a couple times a week. Taking the walk at lunch or some other time during the workday provides the added benefit of removing you from a stressful physical environment. Consider providing this healthy boost to your entire office by scheduling a walking break for everyone.

• Diet: Nutritionists recommend we eat a variety of foods, especially whole grains, fruits and vegetables. ... If you don't have healthy habits, it is going to be difficult to make a major change right now.

But perhaps you can focus on one or two incentives for healthy eating for you, and possibly for others. For example, one adviser I know sent a fruit basket to his office to thank employees and colleagues for their extra efforts.

Sleep: Have you ever noticed how things don't seem nearly as bad the next morning as they do if you dwell on them during the night, when you can't sleep? ... Make a concerted effort at least to relax, even if you aren't getting the deep sleep you are used to.

Disclaimers aren't just for financial professionals.

With all the above, remember to use good judgment. If you have doubts about making any changes, contact your health care professional.

Certainly, more serious issues such as substance abuse require professional help.

These are unprecedented times for clients and advisers. So much is outside of our control right now that it is easy to feel despair.

But the attitude with which we choose to approach each day is key. Healthy individuals, consciously or unconsciously, choose the attitude they apply to life's experiences. ...

Take a minute and list all the things for which you are grateful. Then take that gratitude and turn it into one random act of kindness — it may be the most important stress reducer of all.

Joni Youngwirth is the managing principal of practice management at Commonwealth Financial Network in Waltham, Mass. She can be reached at

Thursday, November 6, 2008

All Mixed Up | Tips on choosing right media for multichannel campaigns

Direct Magazine

Oct 1, 2008 12:00 PM, By Grant A. Johnson

Creating an effective campaign in today's chaotic, competitive multichannel marketing environment is anything but easy. But you stand a much better chance if you remember to apply tried and true techniques to the media options of your choice.

...You're no longer limited to television, radio, print, public relations, telemarketing, direct mail, trade shows and good, old-fashioned door-to-door sales. Now you also must consider cable/dish TV, satellite TV, satellite radio (it's not all commercial free), airline advertising (no longer limited to in-flight magazine ads), cinema advertising and TV/movie product placement, plus everything available online — including Web-site and microsite marketing, Internet radio, banner ads, podcasts, pay-per-click advertising, organic search, blogs, microblogs, mobile marketing, instant messaging, virtual trade shows, Webinars, e-mail, social network marketing, viral and word-of-mouth marketing…well, you get the point. The choices can seem limitless — and overwhelming.

Because there are so many options, it's easy for marketers to overcomplicate things, think too far ahead and not maximize spending on multichannel media. As pressure mounts to get better results faster and cheaper, it's critical to test multichannel alternatives correctly.

Testing involves a proactive process as opposed to a quick-fix approach. ... That's where understanding your customers' buying preferences — like frequency, spending and channel choices — become paramount.

To implement a winning strategy you need to test, measure, analyze and move forward. ... Sorry, there are no shortcuts. That means adding media elements more slowly, keeping in mind that newer media options like e-mail, pay-per-click and search typically will yield results faster than mail, space ads and public relations.

Regardless of your media mix, it's important to keep some proven success-determining factors top of mind:

  • Understand your audience. ... Understanding customers' buying preferences and the competitive landscape is key. ...

  • Make an offer. Include a coupon, debut a “gotta-have” new product/service, announce a sale or give a sincere thank-you. Position your offer as something that will increase the recipient's desire to respond.

  • Ask and you will receive. ... Make it absolutely clear what you want your prospect to do. Make it easy for him or her to ...

  • Answer this. In just a few seconds you must communicate the answer to the common question “What's in it for me?” ... In short, succinctly tell them you have what they want or need to make a decision to respond.

  • Make it personal. ...With your fact-based, comprehensive “ideal” customer profile in hand, along with any historical customer data, you can make a greater impact on your target audience with relevant personalization. Use this data to incorporate meaningful messages and information that can add convenience or value to your message. ...

  • Start strong. ... Within seconds you must make it clear that you have something they need. Pitch your product with a solution, provocative question or irresistible offer. Position your pitch within the communication where it will get the most readership; subject line, masthead, the first paragraph of your sales letter, brochure cover, headline or photo caption. And don't forget to reiterate it in a “P.S.”

  • Be ready to respond. After receiving personalized messages, prospects expect prompt action to their responses. Be careful to acknowledge when and how requests will be fulfilled, how to prioritize responses, and most importantly, how your customer service/sales team will move the inquiry from lead to sale.

  • And remember: Test, test…and then test again.

GRANT A. JOHNSON ( is CEO of Johnson Direct LLC, Brookfield, WI.

A primer for executing a succession plan

(While the article addresses investment advisers, the principles apply to any service business. DMW)

'Dearth of talent' in the business makes finding a successor difficult for retiring advisers


By Beverly D. Flaxington September 28, 2008

Many advisers are in their 50s or 60s, and they are thinking about retirement. ...

An adviser might consider selling the business or look for an opportunity to affiliate with a larger firm and stay involved in the business.

Another alternative is the adviser selects a successor, ...

Let's face it, an adviser with a thriving business who wants to transition out of a practice has worked hard to develop relationships that are based on trust and performance, probably in that order. The clients — and the firm — matter.

The practice could have the owner's name on the sign, and is the "baby" that the adviser has nurtured for years, making the decision to leave difficult.

The transition process is difficult. Taking the time to consider what constitutes success in this process is done infrequently. ...

It is important for a person facing a transition — or considering one — to ask, "Am I ready to do this? Why am I doing this and how motivated am I to make this work?" If there is any hesitation, the adviser will not be open enough to alternatives.

During the process, it is important to set priorities for the transition, with an emphasis on what matters most. ...

Taking the time to plan the priorities, to write the goals and to articulate them to a successor will help ensure the success of the transition.

Many times an adviser will set the priority as "cashing out" or "getting the most value from my firm." These are fine goals, but to achieve them requires a well-developed plan and a method of measuring success.

An adviser needs to consider what he or she is willing to give up to a successor, and the changes he or she is willing for a successor to make to the firm. Surely, a successor will want to put his or her stamp on the business.

The process of finding someone should also include identifying the qualifications, and most importantly, making certain the cultural fit between the firm and the successor is a good one. ...

Last, the process must include bringing the clients into the fold — not "announcing" a transition once it happens, but rather implementing a process so the transition is smooth and easy.

In addition, set checkpoints once you have prioritized and worked with the successor to measure what is working and what is not. ...

Beverly D. Flaxington is a principal of The Collaborative, a Medfield, Mass., firm that helps clients improve business practices

Natural Beauty

Financial Planning Magazine

By Donald Jay Korn

October 1, 2008

...A lesser-known member of this exclusive club is the conservation easement, the gift of development rights on a piece of property to a government body or land trust in order to keep the land partially or fully wild. A landowner donating an easement may get breaks on income, estate and property taxes.

Even better, the recently passed farm bill allows easement donors to deduct gifts of up to 50% of their adjusted gross income (AGI), so long as the easement doesn't prevent farming or ranching on the property. (Farmers can deduct up to 100% of their AGI.) Gifts in excess of that amount can be carried forward up to 15 years. ... In 2010, the tax benefits may revert to lower ceilings: up to 30% of AGI and a five-year carryforward. (These provisions were originally part of the Pension Protection Act of 2006, which expired after 2007 and were revived in the farm bill.)

In many cases, though, clients seeking conservation easements are not driven by tax concerns. "One of my clients recently donated an easement worth $600,000 to a local land trust," says Tom Rogers, a principal at Portland Financial Planning Group in Maine. "She was oblivious that she'd be eligible for a significant tax deduction until I told her about it."

Income Tax Treatment Rogers' client owns acreage that abuts a beautiful lake in Maine. "The property, which has been in the family for nearly a century, contains a vacation home," Rogers says. "My client wanted to keep the property in the family and also wanted to prevent development on the land."

To accomplish her goals, the client donated an easement to a local land trust that "permits the vacation home to remain there, but prohibits future development," he says. "Before going ahead with the easement, my client checked with her children, who were on board with the idea." Discussing an easement donation with heirs can be vital because the property's resale value will likely be reduced by the restriction, which is in perpetuity.

An appraiser hired by the landowner provided valuations, before and after the donation. The appraisal showed that without the development rights, the property lost $600,000 of its value. Thus, the donor got a $600,000 income tax deduction for making a charitable contribution to the land trust.

Due to the sharp loss of appraised value, easement donations commonly result in six- and even seven-figure charitable deductions. A deduction this valuable used to be hard to realize, and could be so again if the new rules are not extended. For example, under the old rules, which are set to return after 2009, a donor entitled to a $600,000 write-off would need an AGI of $333,333 to take a $100,000 charitable deduction each year for six years, says David Scott Sloan, partner in the Boston office of the law firm Holland & Knight. Under the tax rules for 2008 and 2009, that client could have an AGI as low as $80,000 and still be able to deduct the full amount: $40,000 over 15 years.

But it may make sense not to stretch the charitable deduction from an easement donation far into the future. "My client with the $600,000 deduction is a retired professor with over $1 million in tax-deferred accounts," Rogers says. "I suggested she convert some of that money to a Roth IRA, which would increase her AGI, and use the easement deduction to offset 50% of that income." After five years and after age 591/2, all Roth IRA withdrawals will be tax-free.

Estate Tax Treatment Cutting a property's appraised value by $600,000 will reduce the size of the owner's estate and may eventually save estate tax. There is also a federal estate-tax exclusion for easement donors "worth up to 40% of the value of the land, but not structures, subject to a donated conservation easement," Sloan says. ...

Property Tax Treatment Reducing the property's appraised value with a conservation easement may also reduce property tax payments. ... Rogers says, "... [If]the property was assessed as a regular lot, the tax savings can be important."

Mark Jendrek, an attorney in Knoxville, Tenn., says that some states automatically reduce the tax on properties subject to a conservation easement. ...

Paying the Price Even after donating a conservation easement and reaping the tax advantages, clients still retain property ownership rights. They can use the real estate themselves, give it, bequeath it, or sell it, and they needn't permit public access.

Thus, a conservation easement donation may offer multiple benefits, especially for clients who want to preserve open space, forest land or scenic views. But the process is costly. "You'll probably have to hire an appraiser, an engineer, a surveyor, lawyer, title search expert and perhaps a tax professional," Sloan says. Donors are likely to incur thousands of dollars in fees. .... Before-and-after appraisals are likely to get close scrutiny, so they should be well-reasoned and from a reputable firm.

Other hurdles must be cleared in obtaining a conservation easement. For instance, it is necessary to find a recipient: The client must locate a local government or a qualified not-for-profit conservation group that is willing to accept the gift. Leads to groups that will accept conservation easements may be available from the Land Trust Alliance, the Nature Conservancy and the Trust for Public Land.

... But a land trust or similar organization will accept a conservation easement only if it perceives a significant benefit from preventing development in that area. "The group that accepts the easement becomes responsible for monitoring it in perpetuity," Jendrek says. "Someone has to go to the property periodically and make sure the provisions of the easement haven't been violated. If there is a violation, the group has an obligation to bring an action."

Typically, the recipient will expect some financial help to offset the costs of enforcing the easement. "My client made a cash donation to the local land trust, along with the easement donation," Rogers says. ...

On the Sell Side Not all conservation easement transactions involve donations. "Another one of my clients owns some property in New Hampshire that has been in her family for decades and is very suitable for a conservation easement because of its location," Rogers says. Not only is the property in a scenic area; there are also many second-home owners nearby who have a keen interest in preventing extensive development.

This client wasn't in a financial position to give away the conservation easement, so she put it up for sale. Selling the entire property without an easement wasn't an option, according to Rogers, because the client feared that the buyer would allow development.

A local conservation group was willing to buy the easement. ... "Some of the funding came from a federal farmland protection program and the balance came from private citizens," Rogers says. "Ultimately, my client received $475,000 by selling off the property's development rights." ...

History Lessons Conservation easements must serve a valid purpose to qualify for tax breaks, including preservation of certified historic structures. ... Owners can create easements on commercial as well as residential properties.

... Now an easement donated on property located in a historic district must preserve the entire exterior of the building, not just the facade, in order to qualify for tax benefits. Taxpayers must attach to the relevant tax return a qualified appraisal, photos of the entire exterior of the building and a summary of all development restrictions in the easement. City or country, easement tax breaks may not come easily. Senior Editor Donald Jay Korn's mystery novel, Payable on Death, is available at Amazon and other online booksellers.

Going Up

How to raise prices without losing customers by Megan Pacella

After years of educating small business owners about the rules of raising prices, Cliff Ennico had no choice but to take his own advice when skyrocketing fuel and food costs squeezed his bottom line. ...

"Small businesses are all about cash flow," Ennico says. "Any cost increase that’s not covered by an increase in revenue cuts into your profit margin--and that cuts into what you can live off of each month."

... But when it comes to raising your prices, there’s a bright side to the downturn, Ennico says. "Fortunately, everyone understands that the costs of things are going through the roof," he says. "You can fall back on the explanation that your costs are increasing just like everyone else’s."

Although customers are expecting costs to increase, you’ll drive business away if you boost prices without warning. Ennico suggests choosing a date for the price increase, and then advertising the increase on your company’s Web site. ...

..."Look at what your competitors are charging, and then try to charge 80 percent to 90 percent of that amount," Ennico says. "That way you can still tell your customers they’re getting a bargain."

Raising your prices is no easy task--especially when it comes to dealing with customers. But if you absorb all rising costs, you could jeopardize your business. "The danger is working below cost," Ennico says. "The cost of doing business is increasing, so you have to keep a close eye on your numbers. A lot of people make the mistake of not raising prices during inflationary times, and then the money in the bank starts dwindling."

That doesn’t mean you should institute a price hike just because everyone else is. If your business doesn’t have cash flow problems, then your prices are probably fine where they are. "You can’t be timid, but you also have to be ethical," Ennico warns. "The bottom line is that people won’t work with someone they can’t trust."

Raise Them Right Secrets to increasing your rates

Warn customers. When delivering bad news, it’s important to deliver it in the most customer-friendly way possible, says attorney and author Cliff Ennico. ...

Beat the competition. ... Whether you offer lower prices, higher value or other special services that beat the competition, make sure your customers know why they’re doing business with you.

Update marketing materials. ... The fastest way to lose potential customers is to demand higher prices than what you advertise.

Raise prices high enough. You might be hesitant about raising your prices, but if you don’t increase them enough you might be forced to do it again in a few months. Frequent boosts in cost could make you seem dishonest, so make sure you’re accurate the first time.

Tuesday, November 4, 2008

SBA unable to thaw credit freeze (Dealscape)

DollarMoneyCashSqueezeCrunchSmall.pngThe freezing up of existing lines of credit and the inability to get new credit is having a chilling effect. But according to The Wall Street Journal, small businesses who could traditionally turn to the Small Business Administration are finding that lending by the SBA has also dried up.

The SBA has long been promoted as a countercyclical stimulus -- when traditional credit is tightened, the agency loosens its spigot -- but because the SBA guarantees loans made by commercial banks instead of making them directly, its ability to counteract an economic downturn is limited. The WSJ notes that the big decline in SBA lending is fueling new criticism that the federal government isn't doing enough to help businesses when they are in most dire need of cash.

"SBA volume is significantly down, and one might argue that [it's happening] at a time when small business needs access to capital more than ever," says Chris Reilly, president of CIT Small Business Lending Corp. of Livingston, N.J., which ranks among the top SBA lenders nationwide.

SBA lenders are blaming the decline on a number of converging factors, including lower demand for loans overall, tightened lending standards and declining creditworthiness among applicants. - Donna Block

Monday, November 3, 2008

iRobot Cleans Up on Customer Service

1to1 Weekly

Date: 11/03/2008

Issue: November 3 2008

People: Mila D'Antonio

Whether their mission is to clean gutters or to neutralize land mines, customers of iRobot— which range from senior consumers to government agencies—all require various levels of technical support. ... Until a few years ago determining those individual customers' needs proved to be challenging for iRobot, maker of the popular Roomba vacuuming products. ...

Maryellen Abreu, director of iRobot's global technical support, wanted to get at that data and to make it actionable. ... "When iRobot launched, everything was outsourced. We wanted to centralize the information and allow management to see what customers were saying."

With the help of RightNow Technologies, iRobot introduced Web self-service to the customer service mix and can now manage its phone, email, and Web interactions to have a complete view of all past service calls. ... "People buy these robots to save time so it's important that we save time too," Abreu says.

... And in addition to having the transactional and interaction data, iRobot collects demographic customer information when they register their products and sends out a customer satisfaction survey every two weeks to 4,000 different customers to track the impact of the company's improvements and to gauge any emerging problems. Not only does having this integrated view of the customer help save customers' time and iRobot costs, but it ensures that the company's business decisions are customer driven.

Customers contribute to product development According to Abreu, the company often develops new offerings based on customer feedback. In weekly cross-functional voice of the customer meetings, Abreu collects the data, presents it, and assigns action items. ...

In addition to improving its offerings, iRobot monitors negative incidents, which are automatically pushed to a centralized queue for customer service reps to monitor and reach out to those people quickly. And when reps open a customer's history on their screens, all previous surveys pop up. If a customer has had a negative survey in the past, the rep is empowered to offer discounts to ensure he wows the customer.

iRobot is also currently developing some interesting voice recognition strategies to enhance the customer experience. Robots will soon be able to "speak" error codes and serial numbers into the phone to dispatch correct replacement parts. A dedicated registration line where the robots can give some of the information and the customers can easily get their free software updates is also in the works. ... The system routes the calls based on product and issue, and each contact center's agents get training on a specific product.

... Even more crucial is that iRobot knows how, when, and what to respond to customers. "Especially these days, customer retention is important," Abreu says. "We can build more robots, but we can't manufacture more customers. Customer retention is absolutely critical."