Archive for the ‘pricing’ Category

Flex, Remote Workers — Should Your Business Be Using Them

July 17, 2016

When JetBlue Airways Corporation first launched, many if not most of its reservation personnel operated from their own homes.

This highly successful approach reduced start-up costs and worked until more centralized operations were installed as it grew much larger.

For years the typical worker sat at a desk under the watchful eyes of a manager. But much like Jet Blue’s initial workforce, tomorrow’s employee may be miles away working in their home and/or not the standard Monday through Friday 9 am to 5 pm schedule.

While the jury is still out as to the overall effectiveness from such an approach, there are compelling reasons companies are considering flex and/or remote workers.

  • Bigger, more diverse pool of talent for a larger geographic area to choose from
  • No need to relocate employee
  • Less time commuting leads to fuller work days
  • Happier workers, reduces attrition and enhances quality of work
  • Accommodating a worker’s schedule nurtures loyalty and increase productivity
  • May not have to pay benefits, if not full-time jobs
  • Provides ability to adapt to seasonal, cyclical, and growth needs of the business
  • Workers spend more time working, less time commuting
  • Save money: real estate, parking, capital to run the business, etc.

Employees benefit in some of the following ways:

  • Flexible schedule: not everyone is productive during the same time of day, this allows them to work the hours they prefer and/or what fits their lifestyle
  • Saving money: commuting expenses, out-of-home meals, work wardrobe, child- and/or elder-care
  • Feel more in control of work life
  • Way to keep working while balancing other commitments
  • Less exposure to others’ illnesses and sick days off
  • Fewer days off for personal reasons such as errands, deliveries, appointments
  • Fewer office politics to deal with
  • Limiting in-person contact causes employees to make the most of their time on conference calls and in meetings
  • Inspiration to others seeking work

No matter how one feels about these matters, some clear trends are emerging that should be considered by leaders of all sizes.  They include:

  • Job sharing and telecommuting is on the rise
  • At-home employees continue to rise
  • Most organizations are not monitoring their ROI when it comes to flexible work
  • Moving full-time positions to non-full-time workers (contingent workers)
  • Online communities developing to support these types of workers
  • Millennials are the largest generation in the work force; they prefer to telecommute ad flexible work options
  • Flexible work positively impacts health, providing more time to exercise

Mitigating against these trends are:

  • Not all employees adjust well to remote or flexible work
  • It is harder to mentor and train remote and flexible workers
  • Company culture may weaken because personal relationships and contact between staff members is limited
  • Harder to schedule in-person meetings with a group
  • Communication becomes primarily digital, losing the body language communication can lead to communication being strained and miss-communications via email and text
  • Workers may feel more isolated
  • People who tend to overwork may struggle with work/life balance if working at home
  • Need for worker to have at-home dedicated work space suitable for their personal productivity
  • Technological issues are more detrimental and can isolate remote employees
  • Workers’ comp and other liability issues can be associate with remote work
  • Remote work can also be a way to avoid third-party child- or elder-care costs, causing less productivity
  • Lack of interactive feedback may lead to less creative ideas and brainstorming

 

Company leaders should consider all of these factors when thinking about future employment practices for their organizations.

There may be different answers for different companies. Find the best answer for your company.

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Small- and Medium-Business Employee Healthcare Insurance: Yes Or No

September 11, 2015

Shock waves are hitting a majority of smaller businesses receiving notices about the premiums due for employee healthcare insurance policies in 2016.
The new rates exceed 20% for many enterprises based on surveys done by Information Strategies, Inc. and other organizations.
An average 23% increases were reported in ISI’s survey of 233 randomly selected businesses under 50 employees. Other soundings surfaced similar increases ranging from 19% to 24%. One respondent reported a 49% increase.
Many companies are pondering alternatives such as providing stipends in lieu of benefits, increasing deductibles, reducing coverage to the minimums required by the Accountable Care Act (ACA), or doing away with any coverage.
For companies with under 50 employees, this last alternative does not involve government sanctions.
Organizations with 100 or more employees have weighty penalties for abandoning employee healthcare insurance.
Perhaps hardest hit are enterprises with 51-99 employees who are seeing massive increases in healthcare insurance premiums.
During the past two years, companies have held down premium costs by shifting the burden to employees either through higher deductibles, increasing the percentage paid by employees, or trimming benefits.
Most of these savings have been wrung out and there are few other alternatives.
While last year, only 6% of respondents said they were considering eliminating healthcare insurance benefits (believed important for employee recruiting and retention), in 2015 the number more than doubled to 13% in ISI’s survey and two other surveys reviewed.
Here are two ways small businesses can attack the cost hurdle.
The first involves a government program offering subsidies to smaller enterprises. This program is complicated and less than 100,000 companies have attempted to use it. The program is called the Small Business Healthcare Options.
The second involves setting up a private exchange enabling employees to purchase individual policies and obtain government subsidies under the ACA.
It has been reported that such programs can save companies significant dollars while providing individually tailored healthcare insurance. To learn more about this approach small business leaders can go to HealthMarkets.com.
If you know of other alternatives, please share them.
No matter what course of action is taken for 2016, small- and medium-businesses can expect 2017 premium rates will be higher.

Many Pluses For Small Businesses In 2015

January 10, 2015

Unlike the previous five year turns, 2015 promises significant pluses for small businesses.
Perhaps the most important is reduced energy costs. With oil trading at half the cost just six months ago two trends are already apparent.
While the energy component varies by industrial sector, economists expect a significant energy cost savings for most enterprises. Information Strategies, Inc. (ISI) estimates an average 7% cost reduction for most small businesses in all sectors.
The second trend comes from lower fuel costs for consumers. Economists predict the average American family will save $430 in the first six months of 2015. These savings will most likely be spent on non-basic items in the form of consumer goods and personal services which are purchased although smaller enterprises.
Adding to the plus side of year, interest rates are expected to remain low while the ability to borrow is expanding for small businesses. Increasingly, alternative lending sources for small businesses are coming online and ISI predicts this year will see a 15% gain in market share for these lenders. Large banks are expected to increase their lending to small businesses but not reach pre-recession levels in 2015.
Contributing to the brightening picture are signs of returning consumer confidence in the future which usually results in increased spending. However. this is not expected to have a significant impact until later in the year. Next year’s holiday shopping may be the most robust in six years.
As cloud services and smarter use of the Internet drive down costs and expands their sales opportunities, small businesses are expected to further benefit from the online revolution. This trend could fundamentally change how even the smallest enterprise conducts day-to-day operations.
At the least, it means average organizational management costs will decline in 2015 adding to profits.
After seven years of federal gridlock and despite media fears, Washington may at last be focusing on some of the key issues facing smaller enterprises. Legislation to ease some of the more egregious regulatory and tax impediments for small businesses may be addressed in the new Congress.
The average cost of regulatory compliance has gone up each of last five years. The coming year may see a decline in these costs.
In particular, some of the tax uncertainty for small business owners may be eased, if Republicans fulfill their post-election promises.
Finally, new business start-ups are expected to increase over 2014, which bodes well for the B2B marketplace, a prime driver for many smaller businesses.
There are clouds on the horizon but trends seem to be in place for a good year for small businesses.

Creative Ways Of Adding To Your Small Business’s Marketing Efforts

October 17, 2014

Adding A Company-Wide Approach To Grow Your Enterprise

In today’s difficult economic world, small business leaders can’t ignore the importance of a unified, integrated marketing effort that goes beyond direct sales and media efforts

While smaller enterprises are aligning their traditional marketing efforts, they often ignore every day company communications as channels to added sales, profits.

Encouraging employees to repeat the company mantra; act as brand ambassadors; identifying new communication channels; and building a unified persona will drive added sales.

At Information Strategies, Inc. (ISI) our surveys and reader feedback indicate a majority of small businesses concentrate on insuring the “look” and “feel” of online and offline marketing are complementary.

In these efforts the logo, type, message, and response mechanisms are often in sync and carefully match their targeted audiences.

Once they have aligned these efforts, we found many small businesses think of their marketing efforts as “totally integrated”. In short, they assume their marketing begins and ends with their online and offline efforts.

That is really not true!

An effective branding effort just starts there. By not extending the sales effort to other parts of the company that touches the public they are wasting precious resources and opportunities that can add to the profit picture.

Here are some ways of making these resources be part of the marketing solution:

  1. Customer service: Every day, employees are communicating with current or potential customers. In instance after instance, smaller enterprises who have turn these workers into an auxiliary sales force. To do this companies who have implemented training programs designed to make them aware of their role in the sales effort, What’s more, they have seen dramatic profit increases.
    Small businesses in particular can benefit from this approach because studies have shown their employees are more committed to the company’s immediate and long term success than counterparts in large corporations. Therefore, they are more willing to speak highly of the company and its offerings to the customers they interact with. Highlighting the need for this effort often falls on willing ears. Consider implementing some form of program to encourage these efforts. The results may astonish management.
  2. Bills and other forms of communication: Many small companies ignore the potential marketing inherent in the bills they send out. Credit card companies, banks, department stores include promotional materials in their monthly statements. Why can’t a small business do the same? Announce a forthcoming sale, new product, coupon in every bill. Once a year have a letter from the president about the state of the company and how appreciative it is of the customer’s business.
    Offer an incentive for referrals as well. By carefully weighing the package being sent to customers, there should be no additional mailing costs. Smaller companies who have taken this suggestion to heart have seen improved sales.
    Another often neglected sell channel is the company’s business card. Use it creatively to tell more about the company’s offerings.
  3. Be creative: We often run into unusual ways of gaining new customers. One local dry cleaner bought space on pizza boxes used by three local pizzerias. They were pleasantly surprised by the number of tomato sauce stained coupons they redeemed. To spur this creativity review every day interactions of a personal and/or business nature. The channels to reach potential new or departed customers will appear.

Social media is becoming more and more prevalent as a marketing tool. Take advantage of it but also remember it is as two-edge sword. Read negative comments carefully. They will tell management more than they might want to know. However, it will give it a gauge on how successfully its message is getting heard.

Above all, do not be satisfied with the marketing effort unless it includes the whole company’s efforts to sell and communicate with your customer.

Listen Actively to Your Customer: Hear and Respond to What They Are Saying

July 10, 2014

There is an old sales adage: “The more the customer talks, the surer the sale.”
This approach should be continued after the sale is made.
Too often, large and small companies fail to take the most elementary efforts to find out why customers buy their product/service.
This trait is especially true of smaller enterprises who often blame lack of resources as the primary reason.
Yet, there are considerable rewards to be had for truly understanding why consumers/clients are buying a company’s goods/services.
More importantly, the company may learn that what they believe the reason their product is selling is not why customers are buying.
In talking with groups specializing in “listening” for companies, this is the case in many instances.
Many entrepreneurs fall in love with their product, as do technical and engineering based developers. They look at their product as something people will appreciate and adopt as they conceived it. Sometimes success and failure results from customers seeing the product differently.
Knowing how others see offerings can lead to success.
That’s why listening is so important for smaller enterprises.
It can be way of insuring success at a relatively low cost.
In this world today, the cost of learning what and why customers are buying is relatively low.
Moreover, social media and other avenues make the listening part easier.
Smaller enterprises need to make a concerted effort to reach out to current customers and ask them such open ended questions as:
• What most appealed to them about their purchase?
• Why their choice of the company’s offering over another?
• How did they reach their decision?
• Where did they make their choice?
• When was the choices made?
• Who consumes the offering?
• How do they use the offering?
There are many avenues for soliciting this information. Here are several:
• With many purchases done online today, it is easy to ask purchasers to take a short survey after their purchase, perhaps with an incentive coupon on their next purchase.
• In establishment, purchasers can be asked to fill out a quick five question response card, again with a coupon attached.
• Monitoring chatrooms and other social media venues can lead to a treasure trove of information. This includes competitors’ accounts as well.
• Hiring a professional “listening” company is more expensive but the results may provide not only a roadmap for the success of current offerings but new products/services as well.
• If the purchaser or consumer contacts you directly, listen carefully to what is being said.
Small businesses are more nimble than their corporate competitors. Finding and identifying what customers want and fulfilling that desire or need is an advantage not to be overlook.
If not being done today, small business leaders should start listening to their customers. They have a lot to say.

Pricing In This Chaotic Era Requires Thought, Care

August 20, 2011

Small business leaders are facing increasing pressures from a number of different places.
Among these factors are lower staff morale, stagnant economic growth, higher material costs with limited availability and increased competition for sales.
In a recent survey 40% of respondents told Information Strategies, Inc. they were reviewing their pricing models.
While reviews of key marketing elements are always welcomed, changing pricing strategies while in a recession is wrought with danger.
Pricing is probably the least understood and most misused component in the marketer’s toolbox.
Building a case to increase or decrease the price of a product/service requires thought, testing and yes, even a modicum of luck.
In an era of stagnant growth, many buying decisions are made on price alone.
This trend is putting significant pressure on firms to reduce their sales price.
While winning the order is important, gaining a profitable sale is equally as critical.
In response to competitive pressure, the argument can be made that maintaining current clients at any cost justifies losing money.
In fact the argument goes, by lowering the price far enough, sales volume will eventually reach a point where it will compensate for the fact that the company is losing money on every sale.
This commoditization is often the result of actions by the company or industry rather than happenstance.
Absent a robust economy, it is also recipe for disaster.
Experts also argue there is a corollary to this action in that if the focus is on offering the lowest price alone, a company can even end up actually reducing satisfaction among its customers.
The price of a product or service is often a reflection of the value buyers place on the offering.
Some experts argue that in industries where product and/or service values have been made an important part of the offering, pricing can vary dramatically from one competitor to another…and, at the same time, all parties can be profitable businesses.
Changing this equation can result in more damage than help.
In most cases, moving a product or service to a price based buy decision will prevent a company from rebuilding it to a premium offering.
While no single situation fits all criteria, it is important for small business leaders to think about the following when revisiting their pricing model:
• Buyers don’t always buy on price alone…even the government. In fact, they rarely do.
• Buyers buy based on values provided in terms of quality, ease-of-use and other factors.
• Buyers incorporate the cost of ownership into the purchasing decision.
• Buyers factor in the trust they have in the brand or company.
• Buyers know how products or services should be price.
Even in today’s chaotic world, these dictums still dominate and it is important to keep them in mind when reviewing a pricing algorithm.