Archives for December 2010

Why Logos & Branding Are So Important.

First off let me say that a logo is not a brand but the face of the brand.

To understand what a brand is you could switch it with the word reputation. Every business has a brand whether they want one or not. In branding perception is reality. For instance: if you were to go into your closest city and asked consumers what they thought of the daily paper, what ever they said would essentially be that paper’s brand. If it was negative then the daily’s management would have to determine if they were going to fix it and change the conversation or allow it to stand and risk having the competition define your brand for you – never a good thing.

A brand is the relationship a company has with its stakeholders (Stakeholders being customers, suppliers and employees). The better the relationship the stronger the loyalty. This loyalty to brand can result in removing the company from commodity hell. (This is when a purchase is determined solely on price) If a brand is powerful (Apple for example) the company can command a higher price. People react favorably to strong brands because they live up to their brand promise and in many cases over deliver. People who love brands become advocates for them. They wear logoed apparel, they tell all their peers how great they are – they become sales people for the brand.

In Business – Does Following up Work

I have been in business for the past 12 years and it started when I was 17 in high school. I have always been told that consistent follow up and persistence is key with a new prospect. This seems to work well for customers that sign up quickly. However, it does not appear to be the case if they may only be interested in the near future, such as in a few months or years later. I am in the merchant account industry, a very competitive business where merchant loyalty is nonexistent. Some merchants will switch providers without a second thought. This brings me to a couple of stories I have that are not only entertaining but questions the effectiveness of long-term follow up.

The first story has to do with a prospect named Sean that contacted us in January of 2007. He was calling for an Internet company he owned that sells XM radio equipment. We had a nice long conversation that went really well. After following up numerous times over the next few weeks, he ended up going with another provider. Sometime in 2009, I came across a familiar name in the Inc’s 500 fastest growing companies. I did some searching in our database and there it was, Sean and his XM radio company. I decided to start following up again on this lead hoping he wasn’t thrilled about the company he selected back in 2007. I did this for the next 6 months.

Sometime late 2009, I come across this credit card processing comparison site. I contacted the owner whose name happened to be Sean to become a participating vendor. We had a nice phone conversation, but nothing matured as he wasn’t interested in adding any more vendors. Earlier this year the XM radio lead popped up again in the database as I was still following up on it. At this point, I then put the two together. This is the same Sean. He started this new comparison site out of frustration with our industry at his radio company. So, after all my persistence, Sean never considered me or my company for this new comparison site. Obviously it didn’t matter or impress him that I was still following up on his prior contact from 2007.

The second story is about a merchant that called back in 2006. They own a chain of bio fuel stations. After about a month of perusing this customer, he signed up with Chase. I then continued to follow up every 4 months or so by calling and leaving a message. I did this for the next 3 years with over a dozen phone calls. By this time, he knew exactly who I was. I was hoping Chase would eventually slip up, leaving the customer dissatisfied and I would come to the rescue. In January 2010, he finally responded by saying that though he was impressed by my persistence, he is not interested in switching and does not see it changing anytime soon.

So the question is how effective is it to follow up on leads that may only mature in the far distant future? After all my experiences and countless stories, I’m starting to question the whole concept. Do you have any experiences that say otherwise?

Ecommerce Merchants – 5 Ways to Prevent Fraud

Fraud is big business and something every ecommerce merchant must deal with on a daily basis. There are lots of tools and tips you can use to help your business fight against fraud and I have outlined a few of them below.

Before I go into what you can do to prevent fraud, you need to know some of the warning signs of a fraudulent transaction. The items listed below are not intended to be conclusive, but situations where you should scrutinize more than normal.

Possible Warning Signs of a Fraudulent Transaction

1. Orders larger than your average
2. Orders with several quantities of the same product
3. Any big ticket item
4. Any order with rush or overnight delivery
5. Shipping to an International address
6. Multiple purchases in a short period of time
7. Different shipping and billing addresses

Always use Address Verification Service (AVS)

Always use the AVS service that is provided by Visa/MasterCard. This service allows you to verify the billing information submitted in the order with what is on file with the card issuer. You should spend a little more time scrutinizing the order if any parts of AVS didn’t match. However, the mismatch could very well be due to human error or a sign of something more serious.

Take Advantage of IP Addresses

If you have the order information emailed to you, then I would definitely take advantage of an IP Address reverse look up tool. An IP Address is a numerical label that is assigned to a computer by an Internet provider. Let’s use the Whatismyipaddress web site as an example tool. This particular tool provides you with the name of user’s Internet provider and their physical location. For example, if the IP tool said the purchaser is using Verizon in the state of Texas and they are located in FL, then this could possibly be a red flag. The way to use this tool is to have your web site setup to collect the IP address and include it in the order email using the following format:

http://whatismyipaddress.com/ip/173.64.201.229.

By showing the IP in this format, it becomes a hyperlink in the email. Depending on whom the provider is, this kind of information can be very accurate. For example, if the ISP is a cable or phone company, then the physical location information should be fairly accurate. The reason for this is those types of Internet providers have a hard wired connection to the customer vs a wireless connection using a wireless provider. Keep in mind this information is not fool proof, but should be helpful regardless.

Card Issuer Verification

One of the least known tools available is the help of the credit card issuer. All you need to do is ask the consumer for the 800 number on the back of their credit card. You would then call the card issuer and ask them to verify the purchase with their cardholder. They will then call the real cardholder directly to verify the purchase. This will usually always eliminate any possible ID theft. This can be time consuming, but well worth it for big orders.

Phone Number Lookup

If you need to do a deeper and more thorough investigation, then a reverse phone number tool may be of help. A site called Anywho allows you to do a reverse look up on any phone number that is publicly listed anywhere in the country.

Avoid International Shipping if Possible

For some merchants, International is big business. It does come with a lot of high risk as some of the tools mentioned above are not available like AVS. You can use the IP address tool though. Ultimately, it is hard to verify the legitimacy of the person placing the order unlike it is here in the states. If you do plan on shipping Internationally, it is best to completely avoid the following countries as the vast majority are fraudulent:

1. Belarus
2. Estonia
3. Ghana
4. Hungary
5. Indonesia
6. Latvia
7. Lithuania
8. Macedonia
9. Malaysia
10. Nigeria
11. Philippines
12. Romania
13. Russia
14. Singapore
15. Slovak Republic
16. Thailand
17. Uganda
18. Ukraine
19. Yugoslavia

Business Transfer: How to nail the biggest economic decision of your life

Handshake
The old saw of selling is “I’ll let you set the price if you let me set the terms.” What it means is that the Devil is in the details and if you are selling a business that you have lovingly built with your sweat and sacrifice (and that you now want to get the maximum value from) then you had better be prepared to get to know your buyer very well and be prepared to spend some quality time with your lawyers and accountants. Understanding what it is that your potential buyer really wants and what it is worth to her can be the difference between a happy and harmonious transfer and a would-be suitor and a jilted bride snarling at one another while the lawyers circle, cackling madly like hyenas.

What your buyer wants:

When a potential buyer approaches you about buying your business they could actually be after many different things: your client list, your brand equity, your physical assets and real estate, the talent of your employees, even your tax credits and loss carryforwards.
Conversely, what your potential buyer does not want is any unseen baggage or hidden or unknown liabilities. What keeps him up at night is nightmare of buying your company only to face a class action lawsuit the next day from tiny elves claiming they were forced into slave labor by a now defunct affiliate at their bakery in Keyblurville. Therefore, ideally the buyer would like to separate the items of interest and value from the company from potential liabilities and only buy the good, not the bad.

What you, the seller want

This one is the easy part, because you know very well what you want… Or do you? Usually if your selling a business either someone is offering a price that you feel like you can’t refuse or you are looking for a way out to move on to other things. Considerations include whether you will continue to have an interest in the business (through an ownership stake, a long-term note or continued employment), whether the buyer will want a non-compete agreement and whether you could afford one. Also important will be payment terms and making sure that you are protected in the event of a default. Finally, the tax burden upon the sale should weigh heavily on your mind. Your goal is scheduling as much gain as possible as long-term capital gain, which is taxed at a maximum of 20% and in delaying the gain over a period of time, which can be possible with an installment sale. Also, you current tax situation can play a big part in structuring the sale.

Coming to terms

Essentially, a well-structured business sale involves both parties putting their cards on the table in the company of their lawyers and accountants and coming to terms. While no one wants to show their hand as to what is the minimum price they would accept nor the maximum price they would pay, it is in the interest of both parties to have clear communications and trust. Keep in mind that many sales of small businesses are a long time in the planning and a still longer time in the transition. Treat the other party like a business partner and remember, if they are someone that you can’t trust or stand being around now, how do you think you are going to feel about them many months into selling your most important asset?

I’m Going To Be The Next Google!

How many times have you heard this one – “I’m going to be the next Google!” ? Who was Google going to be when they started out? It’s as though the road to internet success is so easy to accomplish with a build it and they will come mentality. When I ask how they hope to achieve this with no foreseeable budget in place, I get another gem – “I’m going to make a cheap video and have it go viral.” Wow! I had no idea it was this easy. Why aren’t we all Google?

The internet is a fantastic promotional channel that definitely puts a small business brand on an equal footing with big business brands. One thing hasn’t changed though – that is the shear effort it takes to build a successful business and remain in business. The web offers no easy road any more than traditional channels offer. Google themselves were not over night successes, as it took them roughly seven years to really make an impact.

Don’t do your personal and professional brands a disservice and tout about being “the next anything.” It only cause eyes to roll and lessens the interest of anything further you have to say. The people I have heard “the next Google” comment from are all without exception brilliant people. I only ask that they aim high on their own vision not someone else’s.

Their audience will be more receptive.

The Difference between Creating a Logo and a Brand

Some would believe that the logo is the brand, hence there is no difference. But the fact of the matter is the logo is merely the face of the brand and the brand is essentially a company’s reputation – it’s perception in the marketplace.

Creating a brand by definition is somewhat misleading as every company has a brand whether they want one or not. What they can do to some extent is develop and guide their brand. To do this they must first understand where their brand sits at this point in time. Knowing this allows the company to determine whether they like their brand or whether they’d like to move it in another direction. They could take any number of initiatives to achieve this, the most effective I believe is a differentiation strategy. By analyzing the competition, choose a road that separates you and positions you as a leader in your category.

Creating a logo is traditionally designed in a vacuum with no consideration to a differentiation strategy, but more to the tastes and whims of a graphic designer, who really doesn’t understand your brand or at the very least has a passing gut feel. Since the logo is the face of the brand it must accurately reflect the brand values and personality if it is to resonate with its audience. To view the brand logo an accurate perception of your brand should take place. How many logos do you see in a day that bear no relation to the company they represent? This is the disconnect that a poorly developed brand logo suffers from.

Examples might be highly technical logos for companies where traditional service are brand values not technical innovation. The only reason for this design direction is the designer and clients desire to look “modern and high tech.” The color palette is based entirely on this year’s color trends. The result is a disconnect. The logo must reflect the brand. If a company wishes simply to design a cool logo then they are ignoring what its job is to do. It should never stand alone from your brand.

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