Can You Make The Story Get Better?

Business transactions can take a long time and require a fair amount of due diligence. This can be painful for both buyer and seller. Buyers, after the initial letter of intent is signed, must verify and validate all the information and numbers on which they based their offer. Sellers must ensure the buyers are provided with detailed information and don’t find reasons to pull out of the deal.

A business broker friend, Scott, who has been involved in a hundred or so business transactions, once told me that the way to get a deal done is to plan the discovery process so that the story got better over time. I asked Scott what he meant by that. He replied that most sellers feed buyers with all the good information up front. Then, as they move through the due diligence process, they run out of new and positive information to share with the buyers. Buyers actually dive into and evaluate the risk factors of the business during the due diligence process. This almost inevitably includes discovering information that does not meet their expectations.

Scott’s belief is that during the due diligence process is the most important time to communicate good news. This helps keep buyer enthusiasm high as the deal gets closer to completion. Scott even suggested reserving some of the good news and information to release during the due diligence process. Careful planning of how the story unfolds for buyers has seen consistent success for Scott across many deals.

I think there are some lessons that service and investment providers can take from Scott’s experience. In any investment transaction that requires research and a reasonable amount of time before closing, it’s important to ensure that the story continues to get better. That’s the best way to ensure the buyer moves forward and closes the transaction. How can you make your story get better over time?

Be Careful With E-mail

I’ve heard many times that only a small percentage of what you communicate when you speak is done with the words. The rest is communicated through body language and tone. This obviously does not apply to e-mail.

In an e-mail, your words are all that matters. That is, unless you have mastered emoticons and characters :). They allow you to tease or be sarcastic in an e-mail without fear of sending the wrong message. Yet teasing, sarcasm and emoticons are not usually appropriate for professional e-mails with your clients. That means your words will have to do. As such, it is important to pay attention to what you write.

Yesterday, one of our editors forwarded an e-mail to me from a gentleman considering contributing some “how to” articles to our website. He suggested she review some of his current articles. She had difficulty finding these on his website and sent him an e-mail asking about where he kept the majority of his articles. She specifically asked for a URL. This gentleman interpreted her URL request as a sign that she didn’t know his website address. He sent her a shocked and curt e-mail asking if she even cared about the quality of content on our site, because he didn’t believe she had even taken the time to review his site.

We absolutely do care about the quality of content on our site. Yet this gentleman’s e-mail was a valid response based on his interpretation of her e-mail. E-mail doesn’t let you communicate tone. It doesn’t allow you to obtain cues from the other party about whether they are following your train of thought. With that in mind, be careful when sending e-mails. Words matter.

Here are two rules of thumb to keep in mind when writing and reading e-mail:

1. As a reader: Give writers the benefit of the doubt. Don’t jump to conclusions and try to ask clarifying questions.
   
2. As a writer: Make sure you express your thoughts clearly. It won’t take you receiving many fiery e-mails from clients or affiliates to figure out where you can improve.

Should I Be Blogging?

If you are a service provider or business that works with investors, you probably should be blogging. Blogging is a great tool for any business that specializes in products or services that cost a fair amount of money, involve considerable research or require a time investment after the purchase. Investments definitely fall into all three of those categories.

A blog allows you to expose a little about your personality, thoughts and beliefs. This can help you build trust with potential clients before you even speak to them. It can also help you explain core ideas that help sell your product or service. You can expand this by not only blogging, but also by writing articles in your area of expertise. People, especially investors, want to work with experts. A blog is a place to let your expertise shine and show people how you do business. It is a classic push marketing tactic.

It will take a not insignificant amount of your time to get going. Blogging, done correctly, requires a consistent effort. Will it be worth it? I guess that depends on what you have to say.

Improve Buyer Confidence: Invest In What You’re Selling

Buyer confidence seems to be at an all-time low. The uncertainty around the economy, who will be the next president and what is happening in the credit markets has cast a lot of doubt around investments of all types. A recent real estate poll revealed that 60% of Americans were not planning on buying a home in the next two years, a significant increase over the percentage reported less than one year ago. This makes it an important time to actually invest in what you’re selling.

It’s one thing to believe in your product. It’s another thing to “put your money where your mouth is.” Whether we are willing to admit it or not, we all like knowing that if our investments don’t pan out, there will be someone else in the same boat. That’s why most investors wait too long to get into a market and take too long to get out. It’s easier to invest when those around you are investing. It’s much more difficult to pull the trigger when everyone you know is stuffing cash in their mattress.

Mainstream media sources are sending conflicting signals of “buy,” “sell” and “hold.” Investors are looking for confidence. If you believe in what you sell, show them your confidence with some skin in the game. If you sell investment properties in Rochester and you think now is a good time to buy, then back it up with some action. It will go a long way toward getting investors to trust you.

What About A Rewards Program?

My wife loves flight miles. It has become the fall back justification for any large purchase we need to make. The car needs new tires: “At least we’ll get flight miles.” We have to replace all of the siding on the house: “At least we’ll get flight miles.”

To be fair, I love them, too. I was going to spend the money anyway, so it feels like I’m getting something for nothing. It also means I end up using my card more frequently. It turns out that’s exactly what the airlines and the credit card companies want.

Over the years, I’ve noticed that the perception of value of a reward or discount is not necessarily based on the dollar value. For example, with many employees, a $50 bonus on a paycheck is not nearly as effective as a bonus of a $50 gift card to Neiman Marcus. A paycheck bonus gets lost in the other money relegated toward bills and expenses. A gift card is a license to spend money on a luxury probably not justifiable otherwise.

Service providers would do well to take note of this psychological phenomenon. The cosmetic industry has used the free gift with purchase technique to drive sales for a number of years. They package up some of their products and sell them in larger bundles with a free gift. Inevitably they end up selling more products using this method. Instead of just giving a discount, they have mastered the art of convincing buyers they are getting something for nothing. In reality, buyers are just receiving a form of a discount for buying more products.

It seems to me there are opportunities for service providers to leverage this idea.

Instead of offering discounts for repeat customers, what about a rewards program?

Lessons From Ryanair: How Do Your Clients Want To Pay?

During the first three months of 2007, Ryanair boosted its profits to £93.6M (roughly $187M)—a more than 15% increase over the first quarter of 2006. That seems astronomical for an airline carrier that offers flights between European cities as low as £1 to £10. So, where does Ryanair make all its money?

Besides some of the cost-cutting techniques that have become commonplace for most carriers, including online booking and ticketless travel, Ryanair has taken its penny-pinching to a different level:

• Forgoing air bridges: Opting for customers to walk the tarmac to their flights saves a few dollars


• Flying to outer-lying airports: Often as far as 100km outside a major city, Ryanair has been able to achieve impressive discounts on landing fees. Some airports have even paid Ryanair for bringing additional routes.


• Sales commissions for flight attendants: Along with traditional a-la-carte meal and drink items, Ryanair flights also offer duty free goods, scratch cards and even bingo. There is also talk about their attempts to get gambling licenses for their flights.


• Overweight baggage charges: This is not unique to Ryanair. What is unique are their baggage weight limits; 10kg for a carry-on and 15kg for a checked bag (which carries a £5 charge, plus £5.50 per kg over 15kg).


• Revenue sharing agreements: Ryanair takes a piece of car hires, bus transportation and hotel bookings.


• Advertisements in and on the plane: Advertisements inside in-flight magazines are commonplace, but Ryanair’s use of the side of their plane for advertisements is unique in the industry.

Despite their cost-cutting and their efforts to “nickel and dime” their customers, Ryanair continues to be one of the most profitable airlines in the world. They offer less and make more than most of their competitors because they have figured out how their clients prefer to pay: not one ticket price which includes the cost of many services, but incrementally for the services they actually use.

It seems to me that there are similar opportunities for service providers in industries where consumers are paying large sums of dollars for commoditized services. Can you say Redfin? Redfin has exploited a niche in the market for consumers who are willing to sacrifice service for savings.

Where do you stand? If you know your customers, how do they prefer to pay?

Newsletters: 5 Tips To Get Maximum Marketing Value

Do you send out a regular newsletter to your clients or prospects? If not, you may be missing out on a valuable marketing tool. I know it sounds like a lot of work, but it doesn’t have to be. Here are five quick tips for you to get the most value out of sending a regular newsletter:

1) Use other people’s content
You don’t have to write all the content in a newsletter you send to clients. There are sites such as www.ezinearticles.com and www.realestateinvestingarticles.org that will allow you to use articles written by other authors in your newsletter. Outsourcing of content can be done inexpensively through sites like elance.com. If you find an interesting article or blog post on the web, ask the creators for permission to reprint their content in your newsletter. If you aren’t posting their content on your website, they may be open to trading their content for some additional exposure.

2) Keep it brief
A sixteen page newsletter is probably overkill. It will not only be a major project to create—it’s also doubtful that your clients will read it. Too much information can keep people from reading your message.

3) Send it via e-mail
Beyond the time expense, printing and postage for newsletters can cost a lot of money. Sending your newsletter via e-mail is cheaper, better for the environment and more time-efficient.

4) Use e-mail newsletter software or service
There’s no need to recreate the wheel: You can send quality e-mail newsletters for very little money. There are many web services—such as www.ezinedirector.com—which offer free e-mail newsletter services for small accounts, and a variety of newsletter publishing programs. Check out the software E-campaign, which offers great flexibility for about $200.

5) Leverage the content you create
You may want to write at least one of the articles in your newsletter. After all, this helps establish more firmly in your clients’ minds that you are the expert. Besides publishing this content in your newsletter, you can place it on your website to drive ongoing search engine hits. You could also send it to an online publisher with greater distribution to get your content and expertise in front of a larger audience.

Lessons From Starbucks: Are You Watering Down Your Services?

Time recently featured an article on Howard Schultz’s return to Starbucks. After a rough year, Schultz has taken the helm to attempt to right the Starbucks ship. His belief about Starbucks’ drop in U.S. traffic (its first ever) is that recent decisions have “led to the watering down of the Starbucks experience.”

If you’ve visited a Starbucks recently, then you likely know what this means. Starbucks now sells CDs & DVDs, charges for Wi-fi access, peddles breakfast sandwiches and has been skimping on the plush carpet and lounge chairs one used to find in each Starbucks location.

This is not an uncommon problem for growing businesses. In an effort to grow the bottom line, a business undertakes selling other goods and services that are ancillary to their core services or products. This is not unusual even in small personal service businesses led by real estate agents, attorneys and investment providers.

I’ve seen many smaller service providers attempt to craft revenue sharing arrangements with other professionals and expand into areas outside their core expertise. Now we have the real estate agent who can also do your mortgage, or the residential investment provider who will also help you find a commercial project. This tends to dilute the focus and reduce the value of a provider’s core service.

In his interview with Time, Schultz posed the question, “We've been selling teddy bears, and we've been selling hundreds of thousands of them, but to what end?”

Are you selling teddy bears?

Business Referrals: Are You Too Busy?

Business referrals are the fuel that powers the business growth of alternative investment service providers such as attorneys, CPAs, real estate agents and mortgage brokers. Acquiring new clients through marketing and advertisement is relatively expensive, and it makes financial sense for service providers to focus on obtaining business through direct referrals. Many service providers unwittingly make this process more difficult by being “too busy.” Here is an exchange I commonly have with service providers:

“How are things going?”

“Good, but really busy.”

As busy as they may be—and I don’t doubt them—they may not realize that saying they are “really busy” will make me less likely to send them business referrals. It isn’t just me who feels this way. People don’t generally want to add more work to your plate if you are swamped, nor do they feel comfortable referring someone to you if they think that you don’t have the time to provide excellent service.

If you want to grow your business, you should never be too busy for referrals. Talking about how busy you are makes others less likely to send business to you, so instead talk about how you’re looking for new clients. That sends a clear message that you are ready, willing and able to take any business referrals sent your way.

Writing Credible Articles

Real estate agents and other service providers in the alternative investment industry tend to write good advertisements. They are used to crafting brochures, flyers and marketing remarks for listings. These involve creative use of adjectives like “cozy” instead of “small,” and pushing the reader to a specific action (e.g. pick up the phone, send an e-mail, etc.). But despite their marketing expertise, these providers often have difficulty writing effective articles and educational content. I have a theory why.

I believe that most web users who visit an article are only looking for initial information to research a topic or idea. They have not decided if or what they want to buy. If the service provider fills the article with fluffy adjectives and sales messages, it is easy for the user to be turned off and to look elsewhere.

The key to writing credibly for articles and other educational content is to focus on emphasizing ideas instead of products or services. This helps sell a provider’s product or service in an indirect way that resonates better in an article format.

Service providers earn business based on their expertise. Writing articles is an excellent way to establish yourself as an expert. It’s also an excellent way to drive traffic back to your website, where the more traditional marketing messages can have better results.