A Most Unpleasant Stay

August 19th, 2008 Chris

I’m very glad we’re on vacation this week. Although vacation is always a bit relative with us. Like most with a micro business, there never really is 100% down time as you’re in critical path for so many activities. But that does mean that I get to drink a beer in the afternoon while being mildly productive.

One of the reasons why I’m glad is I was completely frustrated last week just as we were winding up before leaving to drive to P.E.I. As I’ve mentioned before, I am always loathe to outsource activities that we can do ourselves. With the exception of where we clearly don’t have the skills. Things like accounting, large volume printing, etc…

Well, I found another one. I’d like to think that I’m not a completely useless as contract negotiation. I’ve been fortunate to work on deals big and small in the high tech community. Folks in these negotiations run the range from reasonable to out-right snakes. But at least I could always figure out a way to make a deal happen.

Then I went up against the hotel industry. And I was ill prepared.

As I hope you know (and our encouraged to attend), we hold an annual event in Ottawa. It’s been growing every year so we now need to plan quite a few months in advance. So off I went down the list of of hotels that we were targeting.

One by one I called and one by one, my attempts to do business with them were thrarted. Not because we didn’t agree on terms. Because I was told no dates were available, my event wasn’t big enough or they simply couldn’t be bothered to return my phone calls. It was like they didn’t want to do business with me at all.

Finally, I started to deal with one hotel who suggested a date and told me that our budget would fit. Awesome.

Then came the delays: I’d turn around contract comments in one day, they’d take one week. We’d agree on something verbally, then it wouldn’t appear in the contract. The final straw came when after one month of back and forth, the hotel announced that in that month they had had a lot of bookings and to secure my dates, my price had gone up, by 75%. All happening the day before our vacation.

In other words, after slow-rolling me for a month, they jacked up the price because of the delay from their slow-rolling. I walked away.

So, I now realize that I do not have the time, patience or Machiavellian acumen to deal with the hotel industry. I contacted a great event management company Colleen had met and asked them to make the problem go away.

Some things I did learn:

• Room count is king. When booking an event far out, the hotel will be looking for a large room commit.
• Without a big room count, they’ll be looking for a very big food and beverage commit.
• Booking something just a couple of months out can be done, but it’s relying on the hotel not having moved all their meeting space and looking to fill it.

And, consider an event planner when looking at conducting a good size meeting - even if just for contract negotiations. As they say, never bring a knife to a gun fight.

C.

Posted in Marketing, Operations | No Comments »

Are you a CEO or a COO?

August 14th, 2008 Chris

I was out for dinner and drinks with a few friends last night (surely not again). We went to our regular sushi place and then to the pub for a few pints. These are guys that I used to work with so we get to share our war stories of working in a mid/large company and all the insanity that ensues. I do suspect our company had more than its fair share with the prevailing hypothesis that there was way too much lead in the water in Dallas. What company you ask? I’m afraid that discretion demands that its identity stay private although evENTUally I may reveal it…

There is always an interesting contrast between life in the big company versus the micro business. Apparently, it is very surprising that Colleen and I haven’t killed each other. When I joined Colleen about a year ago, I did say that my criteria for staying in the business after one year was that we had to raise revenues enough to keep me in the lifestyle to which I had become accustomed and there were no homicides.

This perception of our potential for mutual-violence is not uncommon. When I left the big company and went to work with Colleen, about half of our friends predicted that our bodies would be found by authorities, interlocked in mutual strangulation.

What’s the source for this perception? Probably it’s because the way Colleen and I approach business is very different. And I believe that is precisely why we work well together.

When discussing this last night, my friend asked if I behave the same way now as I did in my former company. He was kind enough to clarify his question along the lines of the following: “I mean, are you still a real a**hole?”

I’d like to think that this is a kind of euphemism for someone who is focused on business objectives and makes honest feedback a priority in all his communication. But it is true that sometimes this has been at the expense of people’s feelings. The way my brain works is very simple: what’s the business strategy, what is the plan to achieve it and is a particular activity in-line with that plan.

So when someone suggest working on something that is less important than other activities or does not contribute to the business strategy, I tend to provide honest feedback. The other night, Colleen made the suggestion that we develop a particular piece of marketing collateral, a welcome package for some customers at a conference. In three separate emails, I immediately responded with the following feedback on the idea: (no word of a lie, these are verbatim):

• We do not have welcome packages. Please feel free to add other stuff for us to give you that doesn’t exist.
• And I think we should have revenues of one billion dollars every day. How’s sales going?
• And I would like the magical beer fairy to give me a beer every night while I work on stuff that we needed one month ago.

OK, it seems I really am an a**hole.

But here is the great part - it works for us. Why? Two reasons: 1. Colleen is used to my foul mouthed drama and 2. It complements her strengths. We’ll focus on #2… and leave #1 to Dr. Phil.

Not only is Colleen a fantastic sales gal, critical for our business, she also is a great visionary. And she believes there is nothing we can’t do. This is fantastic as it challenges us to do stuff that a more conservative person wouldn’t. She is open minded and constantly looking for ways for us to think different. And it has paid off huge dividends.

And here in lies the balance - we can both agree what the overall strategy for the business is and then come up with a compromise plan to do it. Compromise in that Colleen will want to do 1000 things and is easily distracted by “bright-and-shiny” objects, and I will want to do three things and ignore everything else less critical. In the end, we come up with a balance between boundless optimism and pessimistic realism in our ability to execute.

As I said, in the end it works. Colleen will challenge us with doing new, crazy things without any thought to how it will actually get done and I will ensure that what we do lines up with what we’re trying to achieve as a business and make sure we can actually achieve it.

I would challenge you to figure out what type of person you are: crazy, creative CEO or grumpy, focused COO. That’s the easy part. The hard part is being willing to find someone: co-worker, friend, mentor, etc… who gives you contrasting thoughts about your business and taking them to heart.

Luckily for me, I’ve got no choice. I live with that person…

C.

Posted in General | 1 Comment »

Walking the Fine Line

August 12th, 2008 Chris

I’m not sure what you’re like, but we are notorious for taking pictures on vacation, uploading them onto the computer, and never looking at them again. We rarely even go through and purge all the extra shots we take to make sure one is perfect (’cause with digital they’re free!).

So the other day I was going through my amorphous pile of photos from the past ten years, thinking that I really should do a purge. I have to admit I did a quick calculation of the value of my time versus just buying a bigger hard drive. The latter won.

One thing I did do is take note of our trip in ‘05 to Hawaii when we went to Kauai and saw the spectacular Waimea Canyon. But it was the sudden flashback of panic that really got my attention. As some may know, I am deathly afraid of heights.

In the Waimea Canyon, one hikes for 10K along very, very, very steep cliffs. In fact, I still remember following a particularly narrow path with 3,000 foot drops on either side (see photo). My panic was peaked to a near “Sir Robin” level when Colleen, who was following me, stepped on the back of my shoe, tripping me (when I got home, I did check for any unusually insurance purchases). Never has the expression, walking a fine line, been so viscerally real.

Often in our business, I feel like I’m walking a fine line between revenue and expenses. That’s not that dramatic, but what I always forget in that process is actually there is a third factor that is even more critical to manage related and seems much less deterministic - cash!

I’m definitely spoiled from my big corporate experience. While the CFO and his team constantly worried about cash, the business decisions were largely made on generating the right return on investment in the right time frame.

In our micro business, even if revenues equal expenses - they are lumpy. Which means cash can float negative and positive throughout the course of affairs, even if the business is breaking even. And some expenses can’t be dodged or delayed - like employee payroll or taxes.

The tool that I’ve seem most often used to address this is the line of credit. We had one in the business that could be tapped in case of those negative cash swings. Interest rates are quite low so the borrowing costs from interest weren’t that bad. What ticked me off, though, was the non-interest fees.

I dug into our banking charges one day, only to find that we were paying something like $30 a month just to have the line of credit and another $200 a year for an annual credit reassessment. So, even in the last year when we didn’t use the line of credit at all, we paid over $500 in fees. Screw that.

We were very fortunate over the last year and Colleen, our selling machine, managed to generate a very healthy revenue flow. Rather than ramp up expenses, we put the extra cash into our own contingency fund and eventually built up the equivalent of three months of operating expenses.

That way, pretty much anything short of a full disaster could befall us and we’d be OK for cash. And we don’t need that expensive line of credit any more. Even our banker couldn’t argue with the strategy (our banker from RBC, by the way, is fantastic).

So, do a couple of things regularly:

• Review your bank records to see exactly what fees you are paying and for what.
• When you do your revenue and expense planning (you do that already, right?), plot your cash impact.
• If your revenue is healthy, think about managing expenses so you can throw off some profit and build your own war chest over time.

By doing those things, we’ve been able to get our cash situation under control. Except for the meeting we just had with our accountant who pointed out our huge tax liability because of the profit that allowed us to build our contingency fund. Now - where do we get the cash for that. D’Oh!

C.

Posted in Financial | No Comments »

Should I Stay or Should I Go

August 7th, 2008 Chris

Last night, I was out with a couple of friends for a couple of beers (kindest reader, it would be polite to now express some modicum of surprise). As it turns out, two thirds of the people around the table have a blog. One was mine and the other belongs to Ian at Eclipse.

Ian’s blog is about the Eclipse software development tool empire where he runs marketing. I used to work with Ian, where he was known for brilliant marketing and technology insights. He was not known for his graphical design capability. His blog is true to form.

The only reason the third gentleman doesn’t have a blog is that he’s just too darn busy (again, kind reader, any temptation to contrast his situation with mine should be avoided).

Anyways… the topic came up about whether to host your own blog or stick it on one of the popular hosting sites (workpress.com, blogger.com, etc…). Interestingly enough, there has been a fair bit of debate on this topic over the last couple of years.

Originally, the consensus from guru’s I spoke with was that you wanted to stick your blog on one of those hosting sites and then cross-link it with your normal web site. That way the search engines would give you extra credits for more cross-links.

However, in the interim, SEO credit for cross-links has been greatly diminished and you actually do much better having your blog on your site. Plus it makes it easy for everyone that visits your site to see the blog and vice versa.

At this point in the conversation, despite their high geek coefficient, my two friends asked: but is it complicated to host your own blog? To which I replied, boldly, Absolutely Not!

Having heard the concern that it’s complicated to host your own blog, I tell the story of how it took me about three hours to move Colleen’s blog to our company’s site. The steps were quite easy and it should take your web developer even less time given I’m a fledgling, self-taught web guy:

1. Download and install WordPress. Following the instructions and it should take 30 minutes (max!)
2. Customize the template to match your web site. This is the hard part but who ever did your web site should be able to do this.
3. If you have an existing blog, use the WordPress import tool to suck in your previous entries and comments.
4. Post an “I’ve Moved” notice on your current blog. We even have it automatically redirect after a couple of seconds (again, no sweat for a web guy).

Once you’ve moved your blog, there are a couple of cool things you can do to better promote and track your audience. More on that next time…

So, in short:

• If you don’t have a blog for your micro business, seriously consider starting one. It’s a great way to attract visitors. The sooner you start, the sooner you can build up your membership (it does take time).
• Host your own blog and don’t let anyone tell you it’s too complicated… You’ll reap the benefits of increased search engine performance for your site and you’ll get more blog subscribers.

C.

Posted in Blog | 1 Comment »

Give Me Some Credit

August 5th, 2008 Chris

Every few months, a few buddies and I head off to a city for a couple days of good food, drink and (no comments please) shopping. This time, we were off to Montreal - just a couple of hours down the road. If you’ve never been - it’s a fantastic city with some of the best food and most fun nightlife in North America.

One of the logistical challenges of such an outing is figuring out who owes what. We have long given up trying to “split” the bill every time we have a drink or something to eat. At 1am when the bar bill comes, it’s simply too complicated for us to haul out our credit cards and calculate the split. And it’s cruel and unusual punishment to ask the bartender/waitress/waiter to do it.

So we have a system, we all randomly pay for things throughout the weekend and keep our receipts. Taxi’s don’t count but hotels, meals and drinks do. We make sure we use credit cards so we have a record of our expense.

At the end, we simply assemble our credit card receipts and figure out who owes what. In the past, it’s just been a big spreadsheet that we enter data into although recently we found a really cool tool. OK, my friend Eric (the MacGyver of high tech - remember the iPhone?) found a really cool tool that does all the heavy lifting for you. Everyone just enters your expenses at expensure.com.

Of course, none of this would be possible if it weren’t for the credit card. Cash is just too complicated and too easy to lose track of. And of course, you don’t get travel points for cash.

Credit cards are, likewise, critical for our business too. It is what really makes continuity programs (aka subscription services aka membership programs) possible. A small monthly charge each month to participate in Colleen’s sales coaching program is convenient for the client and convenient for…not so fast!

Credit cards, while a key enabling technology because they are convenient for the client, are a huge pain in the butt. There are many reasons for me to make sure a bold statement:

• Pain to set up as a merchant - especially if you are not an American company yet have half you business in the U.S. You need a PhD in payment systems to sort it all out. More on that some other time…
• Pain to manage - with the advent of PCI regulations from the credit card companies, data security has reached new heights and it makes it very difficult to manage. Want to know what credit card number you have on file? I give up - cause I can’t tell… More on that later too.
• The one that really has got me frustrated is the ongoing management required to deal with declined and expired credit cards. It is expensive and time consuming. Allow me to elaborate…

We use a the typical collection of shopping cart, merchant account and payment gateway - nothing too exotic. Clients who sign up for Colleen’s sales coaching program pay a very reasonable fee each month via credit card. At the time of enrolment, we check the credit card for validity and off we go. Each month a very reasonable membership fee (surely an under-priced and amazing value!) is charged.

And that’s where all the problems begin. I am amazed at the number of declined and expired credit cards we get. No exaggeration - every month 5% of cards we have on file bounce. Every month!

For every problem card, we start calling. And calling. And calling. Everyone’s busy and returning a call about a declined or expired credit card just isn’t at the top of anyone’s radar. My guess is that for those that eventually we do speak with, it takes an average of five calls to get a hold of them. That is a lot of time and effort.

We’ve actually have begun to automate some of the processing of these declined transactions:

• If it’s declined, we try a client’s card another four times, waiting three days in between. The rationale being that sometimes people max out their credit cards and need a bit of time to pay them off.
• With each decline, our system automatically sends the client a note asking that they contact us with updated card information. The notes get a bit more insistent each time.
• After the third decline, we start calling three times a week.
• After a month, we don’t have any choice but to stop their membership.

For expired cards, we actually start sending notes every week starting four week prior to their card’s expiry, along with phone calls starting a week before it expires.

We’re also trying to figure out a self-serve card update capability but with the PCI security requirements, it’s quite painful as we can’t access customer credit card information in our own system!

All in all - a major pain. But what are you going to do? As I’ve often said, business would be much simpler if we could somehow get rid of the customer…very simple.

C.

Posted in Financial | No Comments »

All You Can Eat

July 31st, 2008 Chris

For those who don’t know me very well, I have a dangerous combination of deadly or near-deadly sins: gluttony and cheapness. First, I love food - ranging from chicken wings to foie gras - and I love them in quantity. And I am cheap - I love getting good value for money. That’s why “all you can eat” always appeals to me in theory. Unfortunately, in practice I usually find the product sorely lacking.

For example, I’ve never found an all-you-can-eat sushi meal that I like. It’s always a bunch of kappa maki and no tuna or salmon to be seen. And God help you if you get between the big overweight guy and the shrimp tempura roll…

While I can’t always find satisfaction with the all you can eat buffet, I am increasingly finding great all you can eat deals in service offerings for our micro business, especially in telecommunications. Much of it happening in the last 12 months.

Here’s a couple of examples:

• Long Distance. In the past, we’ve paid per minute charges for our long distance and toll-free lines. In the last few months, different vendors have introduced flat rate or bulk minute plans. At home where I sometimes work, we have a $20 a month, all you can call 24 x 7 in Canada and the U.S. At the office, we just switched to a bulk minute package that meets our needs and is cheaper than what we were paying before.
• Teleconferencing. Again, we’ve been paying per minute per participant in teleconferences. We recently switched to a vendor who gives us unlimited use of teleconferencing up to a certain number of phone lines for a monthly rate. This is really cool - we can have as many teleconferences each month and we just pay one rate.
• Web conferencing. Here is an area that has seen substantial pricing changes over the last six months. It started with Microsoft changing their web conferencing package to an unlimited use, per month charge. Adobe has also entered the fray with similar pricing. There are some restrictions on the number of participants at different service levels, but regardless, the price difference is substantial (I mean like 80% less than conventional plans).

If you’ve not re-examined all your vendors and their price plans in the last year you should. Ever year virtually every market gets more competitive and you can reduce or even slash costs which, for the micro business, means more direct money in your pocket.

And it’s not just saving money that makes these all-you-can-eat plans attractive. It’s the change of behavior that results when you know you have essentially eliminated variable costs.

For example, if you’re paying flat rate for web conferencing, why would you ever do a customer presentation with only a teleconference? (OK, there are probably some examples but bear with me as I make my point). If you’re paying flat rate long distance, why would you ever hesitate to contact a prospect via email when you can give them a phone call. Etc…

By shifting to fixed service costs and eliminating variable costs, you put yourself in the position to expand marketing efforts, to increase customer touches and improve the professional look of your company.

So make a list of your top 5 service costs (start with telecom) and go see if there are better deals out there. It is time well spent.

C.

P. S. Bonus points if you can identify where this post’s image is taken from.

Posted in Financial, Telecom | No Comments »

Boy, Did I Look Goofy…

July 29th, 2008 Chris

I have to admit, I am a bit of a techno-file (aka geek). I’m easily attracted by new, shiny electronics. I even bought my first PC in grade ten. That may not seem that early but not only was it my first PC, it was essentially the first PC.

OK, probably not the very first PC but the first popular one. In fact, to call it a PC is not fair and some may even suggest sacrilegious. It was an Apple II+ and in the early 80s, it was very cool.

Fast forward several years (I would appreciate you not doing the math) and, while having dinner with a friend from New York, I first saw the iPhone. No two ways about it, it was cool. And on July 11th, when they first came to Canada, I had to have one.

Luckily, a friend of mine at my former employer had a line on an unlikely place for a stache of iPhones that morning - the corporate head office of a local reseller. So, I crawled out of bed at 6am and headed out to their office where, along with my friend, we perched in our lawn chairs in line for the phone.

While lots of people lined up at other retail stores that morning, there was perhaps no more pathetic sight than that of two guys, sitting in lawn chairs for hours, all by themselves. Yep, it was such a good plan that no one else came. We sat there by ourselves as every employee coming to the office walked by, shaking their heads. We looked goofy.

Of course, after we got our iPhones, all was good. It is indeed everything that people say. After years on a Blackberry, it was very cool to see our company’s emails coming in with all their full HTML formatting, looking good…

That was now. Three months ago, those emails would have looked goofy. Month after month, we’d been pumping out emails that looked great in Outlook 2003. Then a friend of mine in the email marketing business warned me about Outlook 2007. Turns out that Microsoft’s implementation in 2007 depricated a bunch of different HTML functionality. The result is when I looked at our emails in Outlook 2007, the formatting blew up - it looked goofy. And our emails never looked quite right in GMail. And I don’t even want to think what they would have looked like on my iPhone.

What did we do?

The first thing we did was to remove all <style> commands and moved to in-line CSS. In addition, we converted everything to tables. This is the kind of stuff your web developer should be able to do.

A really cool tool we used was provided by Campaign Monitor. Their testing site allows you to pit your email against virtually every web, thick and mobile email client. For the micro business, this is a god-send. You literally get something that looks like the screen shot below… Do up your template and test it - it only costs $10 a shot.

So - if you haven’t done testing on what your emails look like, how do you know you don’t look goofy?

C.

Posted in E-mail, Email | 1 Comment »

Is Free a Dirty Word?

July 24th, 2008 Chris

Last post, I discussed the scourge of evil “free” offers and how they can be used for good… But how do you get that message to your users. Especially with email where you always run the danger of being tagged as a spammer?

We have debated the use of “Free” in our emails to our base. Would it get through or would it be stopped as spam. For about a year, we’ve avoided it and used terms like “no-cost”, “complimentary” or “it’s fizzle my bizzle” (that one’s just for Snoop).

All those words are lammo campared to FREE but if half the emails aren’t going to get through ’cause they get tagged as spam, then it’s better not to…

So, like most things, we put it to the test… And the envelope please…

“Free” kicked butt - again and again, our response rates have been higher using the word. Debate closed!

But not so fast: that one word is just one of the myriad of factors used to decide if your email is spam. The reputation of your sending ISP to the percentage of HTML code versus text to the use of specific words can all impact your score. And of course, it varies from one spam filter solution to another.

If you’re a big company, you’ve likely got an email provider with all sorts of helpful services on this front. As a micro business, however, it’s tougher.

What do we do? We take a sample of our emails (a newsletter, a sales tip, a promotional offer, etc…) and run it through a great service from Campaign Monitor. They do a bunch of stuff but one thing that we use is their spam testing service where for about 10 bucks, you can test your email against a variety of spam filters (example screen shown below).

Occasionally test your emails, find out what is driving your spam rating and fix it. That way you’ll maximize the number of emails that actually get to your clients and prospects. And you can say “Free”.

Chris

Posted in E-mail, Email | No Comments »