Your Best Customers

Who is the best customer for you? Knowing the characteristics of a good customer for your particular company versus a bad one will benefit your business tremendously.

Generating a description of the ideal customer will help you to seek out more of the same while weeding out the least profitable ones. The following exercise will help you get started.
Start out by listing your five best customers. Next to each, describe as many characteristics and identify as many demographics as possible. Helpful characteristics might be: how do they operate; how do they think; how big is their company; what level of financial success are they having; do they have multiple locations; how did they become your customer? Key demographics to identify would be time in business, number of employees, annual revenue, credit profile, and geographic location.

Next, do the same for your five worst customers. These are those customers who are the most difficult to work with, hardest to please, and generate the least profitablity compared to how much time and effort is required to service them.

Once this is complete, compare your best customers to the worst and identify the distinguishing characteristics and demographics. Then ask yourself what prospecting methods could be employed to find more of these best customers and avoid the worst customers? By profiling your best clients it becomes much easier to identify and target additional desirable prospects for your company. Good quantified prospects have a higher likelihood of turning into good customers.

Don't have enough time in the day to do this? There are companies that will do all the work for you, assuming that the majority of your customers are other businesses. Most of the big data sources such as InfoUSA or D&B offer a profiling service. They are very easy to use- you simply provide a list of your best customers (just the name and address of the company-no sensitive data required) and they will generate a demographic profile of each of these companies. They can then take this "best customer profile" and query the entire database of businesses (currently there are between 13-14 million individual companies in the US) in order to identify how many other companies fit the profile. You can then purchase this data for your prospecting efforts or even narrow it down further before purchasing (say you are only interested in those companies that are in your state, etc.).

If good customers start with good prospects, then good prospects must come from good market research.

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

Get the Most Out of Advertising

This year, spend less on advertising and get the same or even better results! Here are a few ideas to get you started:

• Don't go too big. You may not need full page color print ads or animated online advertising. Try two-color or black and white print advertising and test your response rate. There is some indication that people will pay more attention to ads with less color because it is out of the norm.
  
• Wait until the last minute to place your ad order. The advertising salespeople will be more inclined to drop prices in order to meet their quotas.
  
• For print advertising, demand that you get the right-hand page in the front of the publication. Studies show this area can generate twice the results as a left-hand page towards the back.
  
• Avoid advertising in places dominated by your competitors. If you are competing against similar companies, you will inherently attract a lower percentage of potential customers.
  

Following these simple tactics can help decrease your advertising spending while maintaining or increasing your marketing results.

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

Protect Your Identity

As a business owner, it is vital to know what's on your credit report so you can prevent errors that can inadvertently harm your company. One of the biggest threats out there today is identity theft. The ability to grow a business through help from lending institutions depends heavily on the credit profiles of the owners. Protecting your identity from thieves is crucial.People whose identities have been stolen can spend months or years and thousands of dollars cleaning up the mess the thieves have made of a good name and credit record. In the meantime, victims of identity theft may lose job opportunities, be refused loans for education, business, housing, or cars, and even get arrested for crimes they didn't commit. Humiliation, anger, and frustration are among the feelings victims experience as they navigate the process of rescuing their identity.

The US Federal Trade Commission recommends taking these precautions to avoid identity theft:

• Shred documents and paperwork that contain personal information before you discard them
• Don't give out personal information unless you know who you are dealing with
• Use firewalls, anti-spyware, and anti-virus software to protect your computers
• Don't use obvious passwords, like your birthday or mother's maiden name
• Be alert for discrepancies in your financial bills and statements and query them immediately
• Report fraud to the police as soon as you detect it and file a complaint with the FTC

If you have lost personal information or identification, place an initial fraud alert on your credit report with any (or all) of the three consumer reporting companies:

• Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374- 0241
• Experian: 1-888-EXPERIAN (397-3742); http://www.firststarcapital.com/www.experian.com; P.O. Box 9532, Allen, TX 75013
• TransUnion: 1-800-680-7289; http://www.transunion.com/; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

The Possibilities with "One"

One is a tiny number. However, it can have a tremendous impact on your revenues. Here are some ideas to consider:

• Make one more cold call every day. One extra call per work day equals 260 calls in a year. Consider your current conversion ratio and think of the impact on your business.
• Suggest one additional item to every customer. This is particularly important if you sell lower-priced items or work in retail. Too many salespeople are focused only on getting the initial sale. However, almost everyone has additional items, products or services that could be beneficial to their customers.
• Invest one day per month developing your skills. Many successful people invest in themselves. They attend workshops and conferences, and participate in Web seminars and tele-seminars on a regular basis. Considering that the majority of people do not invest in developing their skills, you can quickly outpace your competition.
• Get to the office one hour early. Remember the expression "The early bird gets the worm." That one extra hour first thing in the morning can be the most productive time of the day. You have a better chance to reach decision makers, there are fewer distractions and you can often achieve more in that 60 minutes than in several hours.
• Suggest one more idea to help a customer improve his or her business. Offer solutions that do not include your products or services and your customers will begin to see you more as a partner than a supplier.
• Send one more thank you card or note. You can stand out in the crowd by sending handwritten notes to thank customers for their most recent order, meeting with you or sending an on-time payment.

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.

A Simple Way to Cut Expenses

The bottom line of running a successful business is to make all your dollars count. Cutting back unnecessary energy use keeps hard-earned money in your pocket. This is especially important now as we've seen states face critical energy shortages and blackouts. Even as the summer is drawing to an end and temperatures will start to cool off, reducing your company's unnecessary energy consumption is a simple way to cut costs even during the winter months.

Here are a few ideas, including some you can put to work in minutes at no cost to you to good energy saving investments when you are ready to replace equipment or do remodeling.

• Set the thermostat in your workspace to 78 degrees during work hours, and raise the setting to 85 degrees when the space is unoccupied. The energy savings can be significant - as much as 2 percent of your air conditioning costs for each one degree that you raise the thermostat.
• Many offices, stores or factories can easily reduce lighting without affecting productivity. Turn off as many unnecessary lights as possible. Use task lighting instead of overhead lighting, and light only those areas that are needed at the time. Providing the right lighting can save up to 15 percent on your lighting bill.
• Turn off your computers and any other office equipment when you're not using them, especially overnight and weekends. This practice costs nothing and can potentially save as much as $44 per year, per computer, depending on what you pay per kilowatt-hour. "Smart" power strips are being marketed that sense the presence or absence of office workers and turn the attached equipment on and off accordingly.
• Whenever possible, don't use large equipment during the peak hours of 3 p.m. to 7 p.m.
• Buy products that have the Energy Star label on them. All Energy Star products meet strict guidelines set by the US Department of Energy.

An energy audit might be the best investment you can make for your business. Many states are offering incentives for businesses to improve their energy efficiencies. Check with your state as to what kind of tax breaks or discounts for which your company may qualify.

Brad Harmon is the President at a leading financing company, First Star Capital (http://www.firststarcapital.com/ ). Brad is a frequent contributor to online publications and newsletters, and is the author of this blog on commercial financing topics.