Business Banking E-Newsletter - April 2011

Insurance Strategies to Help You Protect Your Business

As a business owner, you need to ensure that you have adequate insurance coverage to protect family, business partner(s) and key employees, so that no matter what the future holds, the business can continue to provide for those who depend on it.

With the right insurance strategies in place, you can guard your business against financial loss due to illness, disability or death. Here are some tips for putting in place a proper plan that will help protect your business, yourself and your families’ needs.

Obtain adequate life and disability insurance to cover all assets
Did you take out loans secured with personal assets to start or grow your business? If your family inherits the company and the loans have not been paid off, they might have to sell or liquidate the business (perhaps at a discount) to satisfy the debts. Protect them with an individual life insurance policy that provides funds to cover debts, ongoing living expenses and future plans.

Have a plan in case a business partner becomes the only partner
A buy-sell agreement ensures that you or your co-owner will buy out the other’s share of the business when circumstances take one partner away from the company. 

Develop an exit strategy
Be prepared to leave your business, no matter what the reason, with a strategy that focuses on four key areas: estate planning, retirement planning, succession planning and business valuation.

Insure the right-hand man (or woman)
Purchase key person life and/or disability insurance for employees who greatly contribute to the bottom line of your business; the policy’s benefits can help make up for lost sales or earnings and help cover the cost of finding and training a replacement.

Take care of the employees, and they’ll take care of you
Workers consider employee benefits (health, life, dental, vision insurance, retirement plans) a decisive factor when evaluating a new job opportunity. However, employee benefits can be costly, so if you are a small employer you will want to share the costs with your employees.

Reward the top executives
Section 162 plans (Executive Bonus Plans) are a simple way to reward top employees and offer certain tax advantages. Your employee purchases a cash rich insurance policy and names himself/herself as owner; you receive a tax deduction for paying the premiums, which are considered compensation to the employee.

* Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

Coulee Bank and Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.

Not FDIC insured

No Bank Guarantee

May lose Value

Not a Deposit

Not Insured By Any Federal Government Agency


Building Trust with Your Customers

Small businesses may have a competitive advantage over their larger counterparts in at least one respect: trust. According to a 2007 Harris Interactive poll, 96 percent of people have either "a great deal of trust" or "some trust" in small business. No other private or public institution received this large a vote of confidence.

But what if you are just starting out? Here are some tips for building trust and courting customers whose patronage will give the numbers in your business finances software a boost:

The quickest way to lose trust is through perceived dishonesty. You can help avoid this situation by emphasizing clarity in all communications. Be upfront about your pricing and policies regarding returns, changes to orders and other issues likely to raise questions. Steer clear of concealing extra charges in the fine print.

Consistency can also make a difference. It is your prerogative if you consult your business finances software and decide to give a particular customer a discount on a certain day. But make sure you are clear that this is a one-time offer or you risk offending them the next time they expect a similar price and don't receive it.

A business whose employees always give out their names is more likely to build trust because this practice is recognized as a sign of accountability. Many customers prefer to deal with people rather than impersonal machines - and adding a name will further emphasize this individual relationship.

Small businesses will also gain people's trust if they have a strong guarantee behind their products and services. If a customer is hesitant about whether they should make a purchase, a guarantee can help supply the confidence needed to follow it through.

However, know that sometimes this guarantee may end up costing you a bit of money - for example, if you have to take back a damaged product - but earning a loyal customer will benefit the sales recorded in your business finances software in the long run.

Give face time
Many customers prefer to know more about the business they are dealing with, rather than less. Including a photograph of you and your team on the wall of your shop can help people feel as if they know you better.

This tactic can work particularly well for a web-based business. Pictures of you, your employees or even your family will humanize the process of buying online and help build trust.

If you enjoy writing, consider including a blog or other personal account on your web page to invite customers into the workings of your company. It's probably best to keep this interaction light-hearted, rather than business-focused.

Share your values
Perhaps you already have a company mission statement prepared when you were writing your business plan or for motivating employees. Why not share this vision with your customers as well?

Many people are drawn to socially aware and environmentally friendly companies. If these values are part of what your business stands for, make people aware by publishing the information on your website and in your store.

You can also get involved in the local community by sponsoring local events - a great way to increase name recognition while emphasizing your hometown values.

If you want to find a good local school for your child, a dependable doctor or a trustworthy landlord, where do you start? Most people ask a friend, family member or colleague to recommend someone.

The same practice holds true for small businesses. Once a few people have developed a favorable opinion of your company, word will spread and you will notice a difference the next time you consult your business finances software. Make sure you are devoting adequate resources to keeping your existing customers happy - they can be your best advertising.

Meanwhile, there are always steps you can take to push the referral process along. For example, some firms offer incentives such as giving a customer a free gift or discount if their friend signs up for a service or purchases a product.

Engage in some self-promotion
In the absence of the direct referral of a friend, a potential customer may still respond to the positive words of a stranger. Solicit recommendations and testimonials from some of your current satisfied customers and place them prominently on your website or on the wall of your store.

Once you have these testimonials, feel free to excerpt these quotes for use in marketing materials and advertising - with the speaker's permission, of course.

One word of advice about testimonials - they should be authentic. Don't be tempted to create your own, using stock photos of smiling people. Today's savvy online customers are likely to see through this attempt to build trust, resulting in the opposite result.

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Marketing Tips to Grow Your Business

Who says new plans have to start on January first?

Because marketing is so essential to business growth, the following are some strategies to help you get a strong start to helping your business grow, no matter what time of year it is.

1. Give your website a makeover
Like a house that needs periodic maintenance and improvements, your website should improve and change over time. Take a close look at your site and make a plan to refresh or add content, upgrade site design, or improve the experience for site visitors. Your website can be the first introduction potential customers have to your business so it’s important that it makes the right impression.

2. Commit to blogging
Blogging is one of the most powerful tools available to small businesses. It allows you to connect with your audience, attract new customers, and improve search engine rankings organically. For best results build a schedule that includes blogging at least two to three times per week. Also, share new posts with your social networks for maximum content marketing value. Most importantly, be patient as you build your audience. It takes time to build momentum with blogging, but with consistent effort the benefits will inevitably follow.

3. Hang out with smart people
If you want to get ahead, spend time with people who are excelling. Start collecting smart people in your network. Invite other business owners to lunch or form an official mastermind group so that you can brainstorm marketing ideas and business growth strategies. You might be surprised by how much you can learn from each other’s experiences and how much business growth you can achieve as a result.

4. Test out new marketing tactics
If you want to give your business a big boost in 2011, test out new marketing tactics. Marketing brings in new customers, so continue building your business by adding new tactics to the mix. With so many options – including direct mail, advertising, mobile marketing and social media – think carefully about the new customers you want and what they are most likely to notice. Don’t just pick a new tactic because it will be “fun” to try something new.

5. Measure marketing performance
Big companies go to great lengths to track the performance of marketing campaigns—from the number of clicks generated from an online ad, coupons redeemed, purchases resulting from a special sale, or calls generated from a campaign. But small business owners often are so busy managing daily tasks that they forget to take a step back and look at the results. Take time to analyze your marketing efforts this year. Strategies that produced results should be increased, and those that didn’t perform should be eliminated.

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Help Understanding Your Customers

How surveys can provide an inside perspective

One of the most important things a business can do is to invest the time to understand its customers. This can be accomplished in several ways: by collecting and analyzing business data, by observing customer behavior, or by studying comparable companies.

Or, you could always just take the simple approach and ask them. This simple, straightforward method can be done in a few different ways: by speaking to your customers one-on-one as they visit you or you visit them; by convening a small focus group of your customers and hiring an experienced moderator; or by creating an online survey and asking your customers to participate.

All three approaches can give you excellent results at varying cost and reliability, although the first is not particularly scientific. At crowdSPRING they have been very successful with targeted surveys designed to answer specific questions, or to gather detailed information; on separate occasions, they have surveyed their buyers to better understand their demographics; to get a clearer picture of their satisfaction; and to specifically understand why some projects fail. They have also surveyed separate groups of Creatives on the site to get a clear picture of their professional backgrounds; to understand what new tools they would like us to develop; and to clarify exactly what motivates them to participate.

They approach these surveys scientifically and always recruit a large enough group of participants to provide a statistically meaningful sample. They have learned a great deal through reading and understanding best practices, but also (and of equal importance) through trial and error about how to run a successful survey. Below are tips and tools that will be useful to you as you plan the process of surveying your own customers and clients. Good luck!

1. Define a goal.
The most important thing you can do when planning a survey is to decide what exactly you want to know. Is this about customer satisfaction? Behavior? Demographics? Take the time to determine what you wish to understand and plan your survey accordingly – your goals should, in large part, drive the design and execution of your survey.

2. Recruit the right participants.
If you are fortunate enough to have a large user base, take the time to segment properly. For instance, if the goal of the survey is to understand your customer’s attitudes towards Medicare, you might want to only survey those over 55 years of age. Alternately if you want to know more about your customers tastes in Indy rock, you may want to target the under 30 set.

3. Incentivize properly.
You say you want participation? Tons of responses? Piles of data to analyze? Well then you’ll need to offer something of value in return. Professional market researchers will tell you that you will receive a significantly higher response rate if you offer a prizes (or compensation of some sort) for participation; even a token award or modest raffle will increase response rates meaningfully.

4. Craft your questions well.
Remember that the quality of the responses you receive is in large part a measure of the quality of the questions you ask. First thing first: keep them short and easy to understand; participants will have little patience with long or confusing questions. Next, start with the easy questions, then move on to the more complex – this will serve to draw the respondent into your survey and lead to higher completion rates. Use a variety of question types: multiple choice checkboxes, likert scale, yes/no; by mixing these up you will hold the participants interest and lead to greater engagement and more accurate responses. Finally take care that your questions are not leading or biased; remember you want their answers, not just the ones you’d like them to give.

5. Keep it short, make it fun.
A good survey should take less than 10 minutes for the respondent to complete. Five is even better. For the best results, make sure that your survey is focused, goal oriented (see #1 above), and above all, BRIEF!

6. Use good tools.
Wufoo is an excellent resource to use. There are also other tools out there like SurveyMonkey or Zoomerang. Take a look around and find the service that offers the tools, features, and UI that you like best.

7. Before, during, and after.
Here’s a few pointers for you to remember before you launch, while the survey is open, and after it has been completed.

Before the survey: 1) test the survey: make sure that you and some colleagues take the survey several times to look for glitches, inconsistencies, and errors. 2) Send out a “Heads-up” email: studies show that response rates are greatly improved when a potential participant knows a survey is on the way.

During the survey: 1) Be sure to set up auto-responders to say remind them to come back and finish up if they only complete part of your survey and to send a nice “thank you” message when they finish up. 2) Send a reminder out to anybody on the list who has yet to complete the survey; do this only once – please do not be obnoxious with multiple reminders – just a gentle prod in case they forgot.

After the survey: Say thanks. And mean it. If you offered a prize for participating be sure to send it in a timely fashion and be sure to let everyone know who won. Even if a respondent doesn’t win, they’ll still appreciate that you were good to your word.

8. Track activity.
Most online survey tools can be set to alert you when a new survey is completed and many will track email opens and click-through data. Sometimes something as simple as a great subject line can increase participation and result in more responses.

9. Organize your data.
Plan ahead and make sure that you set up your questions with your data analysis in mind. For instance using a yes/no question may be fine for some questions, while a 10-point likert scale may provide more valuable data for others. Be sure to carefully think through how you will analyze the answers to different questions and design them accordingly. As you start to gather the responses put them in a form that is easily readable and sortable, and give careful thought to how you intend to visualize the results. Charts, graphs, and tables can be set up long before all of the responses have been harvested.

10. Dig in deep.
The real fun starts when your survey closes. Be sure to choose a service that allows you to report directly on their site as well as download into a spreadsheet for more detailed analysis. As in #9, be sure to plan for this from the start and think hard about how you will use the data and what information you will be trying to extract.

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