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Thursday, November 6, 2008

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."

Friday, October 31, 2008

10 Ideas To Power Up Your Green IT Agenda

As IT teams scramble to figure out a green strategy, here are some ideas to fuel the brainstorming.

InformationWeek

By J. Nicholas Hoover September 20, 2008 12:01 AM (From the September 22, 2008 issue)

Green isn't just an emerging trend anymore. ... It's the kind of issue a CEO just might bring up with the CIO. That, along with energy costs punching holes in profits, makes this a fight the IT team can't sit out.

Green IT efforts must look past the data center. ... But companies have bigger ambitions than that. As IT teams try to do their part, here are 10 often overlooked aspects to consider about going green.

1. Look Beyond The Data Center


Too many PCs are left on too long, a problem that IT can combat with both technology changes and awareness campaigns. ... "There's a cool factor about it, and we want to take advantage of that now," says David Buckholtz, VP of enterprise architecture and planning at Sony (NYSE: SNE) Pictures Entertainment, which has been laying plans for a broad green IT effort.

InformationWeek Reports

... Miami-Dade County Public Schools has cut the amount of time PCs are on by more than half, from 21 hours to 10.3 hours daily, estimating it will save about $2 million on energy annually by deploying active PC management from BigFix to centrally control power settings. ...

Companies choosing software as a service do it for the cost savings. But it also can be seen as a green investment. ... Microsoft's San Antonio data center ... has sensors measuring nearly all power consumption, uses internally developed power management software called Scry, has mass-scale virtualization, and recycles the water used in cooling. ...

Cutting travel is another way companies are going green. Monsanto CIO Mark Showers notes the company's telecommuting and work-from-home programs have grown in popularity over the past year as gas prices have risen. ...

2. Culture Is The Biggest Barrier To Green


... "It can be in some ways a politically charged endeavor," says Rich Siedzik, Bryant University's director of computer and telecom services. At Bryant, employees worried that the efficiency gains would lead to job cuts. Yet culture can work for the good... With the successful rollout of its new data center, Bryant is now discussing broader green initiatives, such as buying electric vehicles for maintenance staff.

... Though companies often set default PC power management settings, Living Life Green says that 70% of employees will turn the settings off. PC power management software from BigFix, Living Life Green, Verdiem, and others can lock settings in and automatically power up just before employees get to their desks in the morning.

Or, with a major awareness campaign, companies might be able to get some of those gains without a technology change. Coca-Cola has done simple things like encouraging employees to print on both sides of paper and cut duplicate printing as a way to push employees to be more green. Sony Pictures ... [is] starting a campaign to get people to turn off their screens if they're going to be away. That will piggyback on a larger company effort to turn off the lights. The IT team will start by working with the most influential PC users: administrative assistants. ...

3. Share The Data--And Perhaps The Pain


Microsoft (NSDQ: MSFT) is trying is trying a new way to keep energy costs low: charging business units by the amount of power they use in the data center, rather than the space they take up on the floor. That's forcing developers writing in-house and SaaS apps to think about how much power their apps will use even as they code them.

... Developers are paying attention to which of two data query methods might save a watt of energy, and choosing that method even if it might make the process slower by a nanosecond or two. Business units are driving efficiency in the selection of the hardware they'd like to see and making the right choices in the amount of hard drives. ...

But that might not be the right fit for everyone, depending on whether the gains from doling out energy costs are big enough to merit line-of-business managers spending time on it. An interim step might be just sharing that information, publicizing any progress the companies' green efforts deliver.

4. Recycle More


... Forrester Research found earlier this year that 40% of companies have some sort of computer hardware recycling initiative in place. But that's not enough with millions of computers and cell phones reaching end of life every year...

Donation is a potential alternative or supplement to recycling. Health insurer Highmark donates PCs to nonprofits and churches and is working to do recycling also. Programs like Dell (Dell)'s Asset Recovery Services promise to overwrite or shred hard drives, remove labels, and confirm the data disposal complies with relevant regulations.

Cell phone recycling is worse. A Nokia (NYSE: NOK) study found only 3% of cell phones are recycled worldwide, and nearly half in that study didn't know recycling phones was possible. Yet, from Nokia to Hewlett-Packard to private companies like ReCellular, cell phone recycling programs are free or cheap.

5. Don't Forget To Measure ...


Bryant University built an energy-efficient data center. But Bryant's Siedzik says the university made one mistake: It didn't take good measurements of its energy use before it started down its green data center path. "We needed to get better data on where we were coming from to measure how successful we were once we arrived," he says.

Green Grid board member Roger Tipley, who works for HP (NYSE: HPQ), recommends companies measure total data center energy use every 15 minutes and monitor at the subsystem level as well to help companies develop baseline metrics and find trouble spots, taking measurements over the course of a year. ...

There are plenty of tools out there from companies such as Johnson Controls to measure power use by circuit or by device, as well as things like airflow. Bryant ... can cap the power that's fed to the system by strategically turning off individual CPUs.

6. But Don't Expect Perfect Data


IT leaders are finding that their green IT impact is going to be a hard number to nail down too precisely. ...

... Commonly used metrics praised by groups such as the Green Grid and used by Microsoft (NSDQ: MSFT) and other companies include Power Usage Effectiveness and Data Center Infrastructure Efficiency, while others, like McKinsey's Corporate Average Data Efficiency, also have made appearances. ...

For most companies, the best benchmark will be the past, using that to set aggressive improvement goals. ...

7. Alternative Energy Isn't Cheap


... Alternative energy sources don't come cheap, and for many companies it won't be practical to locate data centers where wind or hydro power is widely accessible, and the payback is a long time coming from solar. Highmark is looking into solar for energy and propane rather than diesel for backup.

In some parts of the United States, companies can choose alternative energy; customers of Baltimore Gas & Electric in Maryland, for example, can choose to have their power generated by green sources if they pay a bit more. ...

Hosting company AISO.net has 120 solar panels on its California data center. Installation cost nearly $100,000, which has been paid back in energy savings over the past seven years, says CTO Phil Nail ...

8. Buddy Up To Facilities


IT typically consumes only about 10% of an organization's energy costs, says Living Life Green's Scott. So the biggest opportunity is for IT to help companies tackle that other 90%. To do that, IT needs to build a closer partnership with the facilities management team, to implement sensors and automated facilities management software that can go as far as monitoring and controlling everything from lights to air conditioning remotely.

Florida's Ave Maria University is doing just that. The school ... uses off-the-shelf hardware and software from Johnson Controls and Eaton to monitor and manage water, power, lights, and air conditioning throughout its campus. ...

For example, Brian Mehaffey, Ave Maria's VP of technology systems and engineering, found electric bills just for the school's church were running at as much as $22,000 a month, so he used the system to view the airflow, quality, temperature, humidity, and power use. He found the air conditioning systems were running at full blast to handle the church's maximum capacity, even though most of the time the church was empty. During downtime, Mehaffey and his team turned off systems one by one, watching in real time how temperature, humidity, air quality, and power use changed with each adjustment and turning the next system off if the environment inside the church found a comfortable equilibrium. Mehaffey now has the church running on monthly energy costs of only $5,000, while remaining comfortable. "Over a year, we're talking about $150,000 in savings in energy alone," he says.

9. Consider Water Use, Not Just Power


Cooling data centers takes a lot of water. ... Highmark collects rainwater off its roof and stores it underground in a 100,000-gallon tank for cooling IT systems. ...

10. Challenge Conventional Wisdom


IT teams need to be ready to do things differently to get more green.

Even hot aisle/cold aisle configurations and raised floors, long standby practices in the data center, are getting second looks. If racks are too short and air conditioning setups inefficient, hot aisle/cold aisle strategies save less than believed, says Bob Hunter, CEO of power-monitoring company TrendPoint. ...

Companies will struggle to balance green IT efforts with other business needs. Outsourcing firm HCL Technologies finds that storage and backup, two demands that seem only to go up for U.S. businesses, are the largest drains on power in IT, says Anubhav Saxena, associate VP for America. The more firewalls and intrusion-prevention and intrusion-detection systems companies run, the more power those systems use and the more power it takes to get data from one end of the network to the other. Yet no one's suggesting it's time to ease off those efforts.

But security's a good comparison for what IT must do to go green. Information security works best when it's considered at each step of a business initiative, not bolted on during implementation. For green IT to make an impact, it needs that same presence in the process.

-- with Chris Murphy

Photograph By Getty Images

10 Ideas To Power Up Your Green IT Agenda -- Green IT -- InformationWeek

Planning for Succession

Baseline Magazine

By Dr. William Moskal
2008-09-29
The torch-passing that will soon take place in the corporate world as baby boomers retire will pose challenges for many organizations.

For many organizations, succession planning ranks high among corporate priorities—and it should. Millions of baby boomers (born between 1946 and 1964) will leave the workforce by 2020. Known for their corporate loyalty and strong work ethic, the boomers will be succeeded by Generations X and Y.

As a result, some of today’s corporate policies and practices need to be revised to reflect both the different values of these younger generations and changes in the marketplace. Organizations, therefore, must create protocols to identify tomorrow’s managers, as well as to develop the requisite knowledge and skills for them to lead.

...Gen Xers (born between 1965 and 1980) are actually quite career-oriented. They simply prefer a good deal of independence and exhibit more entrepreneurialism than did previous generations. Meanwhile, Gen Y employees (those born between 1981 and 1994) have witnessed how corporate America has treated their parents: not very well. That experience, coupled with technology advances, helped foster Gen Y’s need for constant feedback and a flexible work situation.

... How will this generational shift be handled? How will a smaller Gen X talent pool fill the gaps of the previous generation?

How will organizations retain and keep motivated, talented individuals amid the generational shift in values? And what leadership skills will Generations X and Y need in order to work with a more virtual and global workforce?

Managing these challenges will require a systematic talent-retention, succession-planning process. It must be designed to ensure a continued high quality of organizational performance by developing employees at all levels, while paying particular attention to identifying and training high-potential candidates.

Here are some points to consider when planning for your company’s future:

Recognize Key Competencies

... The competencies—knowledge, skills, talents and sensitivities—that are critical to achieving strategic goals now and in the future should be a blend of traditional corporate values and the ability to change. While leadership choices should reflect overall vision and mission, it also is important to be aware of how technology, political factors, and generational and cultural differences will impact an organization’s future.

... Retention and succession planning is a mindset that starts at the top. Beginning with the CEO—and with the guidance of human resources professionals—identifying high-potential candidates and implementing a plan to retain them should be the responsibility of all managers.

Organizations gain a great deal by developing exceptional performers and keeping them. According to Marshall Goldsmith, executive coach and author of Partnering: The New Face of Leadership and What Got You Here Won’t Get You There: “The marginal gain for helping a highly successful person move from the top 5 percent to the top 1 percent may be greater to the organization than the gain from helping the average performer move from the top 50 percent to the top 20 percent.”

...Today’s managers might not always be the best judge of who is promotable and who will be an effective manager in the years to come. This makes 360-degree feedback—confidential performance reviews by direct reports, peers and managers—critical when identifying high-potential candidates, because it provides a well-rounded assessment of a candidate’s performance at, and from, all levels.

When building a high-potential candidate pool, look for employees who excel in 360-degree reviews, are interested in career advancement and possess the leadership attributes that are important to the organization. ...

Develop and Retain

An organization’s core assets are employees’ intellectual capital, skills and talents, and commitment. Cultivating employees’ talents, developing their professional abilities and preparing them for greater responsibilities are among the most important and challenging organizational goals.

To address the needs of high-potential Gen X candidates and up-and-coming Gen Y leaders, firms must pay close attention to mentoring and career-path programs. Employees who believe they are growing and developing professionally, learning new skills and gaining experience are more productive, have higher morale, and are more loyal than employees at organizations that don’t emphasize talent development and knowledge management.

... Gen X employees work an average of three hours more per week than did employees of the same age in 1977. But this generation wants the flexibility to set their own schedules and not be chained to a desk from 9 to 5.

Planning for the Future

Effective succession planning and talent retention nurtures those employees responsible for the organization’s future vision, strategy and success. It assures a sequence of qualified, promotable people as the boomers move on.

Over the next few years, organizations face record-high retirement rates. ... This—coupled with a smaller, younger talent pool and evolving management requirements—will make it extremely challenging for organizations to retain and develop the best people.

It should be a companywide priority to develop strategic talent retention and succession plans that reflect and support the mission of your organization, its culture and values; the goals of its employees; and the skills needed to bridge the gap between current competencies and future organizational expectations. Enterprises that commit to these processes will have a significant advantage over their competitors.

Dr. William Moskal is a principal with IRI, a human performance consulting practice based in Detroit.