Trailblaze & Grow Month: June 2015

5 Rewards

Five Ways To Reward Employees (Besides Raises)

Your best employees contribute to your company in a variety of ways, and your tools for rewarding them should be just as various. Not only is it not always feasible to raise their pay, but employees often prefer other forms of compensation. Effective employee rewards include:

Casual Days

Many employees find dress codes restrictive, so give them a day when they’re free to wear whatever they want. For every week that your office comes in under budget, employees receive one casual day the next week. Make sure to schedule the casual day when you don’t expect clients to come into your office, and make exceptions for workers who have to go out and meet clients that day (but give those workers the right to dress casually on a different day). This will encourage employees to work together and improve productivity, and it won’t cost you a cent.

Even casual clothing days cannot be rule free; employees shouldn’t be allowed to come to work wearing too little or wearing shirts with offensive wording. Ask your employees to use their best judgment, and be willing to answer any specific questions they have ahead of time. Casual need not mean unprofessional.

Flexible Schedules

If a worker has demonstrated high productivity and a commitment to hard work, give that worker the freedom to set his or her own schedule. Many workers would be happy to work two twenty-hour days in a row and take the rest of the week off; as long as you trust them to get all their work done, giving them the freedom to do this won’t cost you anything. It may even raise productivity. By freeing workers from the constraints of a 9 to 5 schedule, you’ll allow them to schedule meetings with clients when the time is best, use commitment when other workers aren’t around to block them, and adopt more efficient methods.

Dole Out New Devices

One of the greatest sources of workplace frustration is having to use outdated computers and faulty office equipment. To reduce employees’ stress and help them do their jobs more easily, consider updating your most loyal employees’ equipment. Not only will this send a positive message to those employees, but the new equipment should pay for itself through higher levels of productivity and reduced waste. Rewarding employees with new equipment is particularly effective if you allow them to set their schedules at the same time. This way, every minute they save with the new equipment is another minute they can spend as they choose.

Enrichment and Exercise

Install exercise equipment, massage chairs, and other devices that improve health and lower stress. For the low price of adopting and powering this equipment, you’ll let employees break up the monotony of the workday, feel more energized, and counter the negative effects of sedentary office life. A chance to relieve stress will also render your employees more productive, more than making up for the price of the equipment. For best results, offer your best employees extra break time after you install the equipment. This will reward your staff as a group while giving individual workers an incentive to rise above the rest.

Broadcast Their Value

The Internet and social media offer a panoply of new possibilities for recognizing employees’ achievements. In addition to awards ceremonies and physical plaques, you can add a “virtual wall of fame” to your website and update it monthly to recognize the most productive employees. You can also make a video in honor of the employee you’re rewarding, containing a summary of his or her accomplishments and interviews with co-workers who have positive things to say. Just make sure to check with your employees before you upload anything about them to the Internet, as many workers are uncomfortable with having even positive information broadcast about them.

How do you recognize employees and colleagues that go above and beyond?

Photo credit: GotCredit / Foter / CC BY

Pricing Banner

Developing Your Pricing Strategy

A comprehensive pricing strategy is critical in capturing and defending market share. By establishing differentiated pricing strategy for your offerings based on customer priorities, a company can sell expand its customer base, increase customer satisfaction and revenues. The most effective strategies for price differentiation include:

Temporal Tiering

Changes in customer demand are not random. Most companies do the majority of their business during a certain section of the day (or week), and this is largely the result of customer scheduling constraints. By offering discounts during times of low-demand , you can cater to price sensitive customers to improve awareness without degrading the profitability of your current customers won’t be able to take advantage of it. Thus, you’ll gain revenue from new customers without sacrificing revenue from old ones.

Since consumer preferences also vary by time of year, you can offer discounts on a seasonal basis. This is why tax preparation software companies so often offer bargain basement prices to customers who buy their software in February but gradually raise the price as it gets closer to mid-April. Customers who make a point to get their taxes done ahead of time can take advantage of the discount, but most other customers will wait until closer to tax day, ensuring that the companies will still sell plenty of software at full price.  Conversely, offering discounts during periods of high seasonality may be necessary to defend your market share such as back to school season for PCs, software, school supplies and clothing.

Volume Discounts

Another effective discounting strategy is to lower unit prices as the purchase volume increases. Volume discounts can help ensure that your most loyal customers receive a relative decrease in unit price as they increase their spend with you. This will attract consumers who seek long-term savings but won’t affect the habits of transactional customers who only buy your product for immediate use. This is an effective strategy for selling services and non-perishable goods, as there is no disadvantage to buying such goods in bulk and using them over time.

B2B SaaS companies use volume discounts to expand adoption across an organization. You can establish baseline prices for individuals to use your software, but then create various “business packages” to appeal to businesses of varying sizes. Businesses that buy it for 3 employees receive a 10% discount, and if they licenses for 10 employees, they receive an increasing per license discount.

Driving Conversion

Discounts need not only appeal to prospective customers. You can also use them to upsell and cross-sell current customers. Consider a software publisher that provides both word processing and tax accounting products. When customers download or subscribe to its word processing software, the company offers a discount to or a free trial of its tax accounting software during checkout. This may encourage customers to buy its tax software during off-season, pushing the competition in the tax category aside.

Another trick is to offer customers a simple, or lite, version of a product with a clearly defined upgrade strategy to upsell customers to an advanced set of features. Using the word processing software example above. Using the word processing software example above, rather than offering a discounted version of its tax software, the company can offer a free basic version of its offer such as a 1040EZ filing.  The customer can be sent to an upgrade path once he or she has indicated that additional support is needed.  The company can provided a more advanced version or additional services or support for a small additional fee, convincing the customer to spend more money than he or she had originally intended.

You can increase conversion rates and revenue per transaction through bundling by allowing consumers to buy multiple products together at a lower price than they would have paid if you had sold them separately. Say you sell language learning software, charging $30 for the beginner’s program and $40 for the intermediate program. You can get more customers to buy the intermediate program by offering the two together for only $60.  Amazon uses this strategy effectively when selling items such as books, music and accessories.

The strategies above are just the tip of the iceberg.  As always, set your hypotheses and test, test, test.  However, as you set your test strategy, keep in mind that it is harder to raise than it is to lower price.

Sources:

Photo credit: BPPrice / Foter / CC BY

Weekly Roundup

Weekly Roundup: Bridging Gaps, Startup CEO Guide, Product/Market Fit and more!

As you know, we share two of our favorite articles and blog posts each day.  For those of you who do not have time to read each of them, we have compiled the top 5 articles that have been shared the most:

1. Bridging the Gap Between Business and Tech Teams http://ow.ly/2ZlZsn  via Ara Howard and the Unreasonable Group

2. Hot Seat by Dan Shapiro: A Book Every Startup CEO Should Read http://ow.ly/2ZlZrZ via Brad Feld of the Foundry Group

3. Americans Prefer Not to Work for Family-Owned Businesses http://ow.ly/2ZlZsJ Scott Shane in Small Business Trends

4.  Even Collaborative Cultures Need Space for Introverts http://ow.ly/2ZlZs2 via Ilan Mochari in Inc. Magazine

5. Four Steps to Achieving Product/Market Fit. Great products and competitive prices cannot capture market share alone.   via Trailblaze Growth Advisors

Shameless Plug:  I was featured as a StumbleUpon Innovator.  Learn a little about what makes me tick…  http://ow.ly/OcrGq via Andrew Levine of StumbleUpon

What was your favorite?

Product-market fit

Four Steps to Achieving Product/Market Fit

Many startups fail because of the dreaded product/market fit.  Marc Andreesen claims that market is the most important factor in a startup’s success or failure. Great products and competitive prices will not help your company capture market share on their own. To build a solid customer base, gauge consumer desires and build your products to fulfill them by focusing on:

1. Discerning Needs

It’s important to gauge the desires of your target market. You should read review sites and perform a competitive analysis, but the best insights come directly from consumers, or businesses, depending on whether your are B2C or B2B. Survey past customers to see what they liked and didn’t like and open your website to public reviews. Open surveys and review requests demonstrate transparency, honesty, and trust in your customers perceptions. If you don’t have customers, lean on your network or offer your product for free to those who take your survey.

Remember, many consumers look beyond functionality and price. There are many inputs into the value equation, including strong values, ease of use and design can improve the marketability of your brand and maybe capture a price premium.  For example, TOMS “One For One” value proposition drives price premiums and fuels word of mouth marketing.  The company that capitalized on the power of good design, Apple focused on slick design and usability to overtake the consumer electronics category.

2.  Beta Testing

Beta testing can be used to confirm that your product meets your target market’s need, as well as identify the most highly valued features of your product or service. After bugs found during internal (alpha) testing have been addressed, the company offers a select group of customers the opportunity to try the product out. These customers report their experiences to the company, allowing for further improvements before the product is released to general audiences.

Beyond finding bugs, beta testing is useful for getting customers to share their favorite product features, which may be different than the ones you expected. For example, a language learning software publisher may include a microphone to practice pronunciations as well as a feature that translates whole sentences from the target language. While the company expects consumers to focus on the pronunciation feature, it is prepared to update its messaging hierarchy if beta testers report that they valued the translation feature more than any other feature.

Lastly, beta testing can create a buzz — good and bad.  This is why the product must go through extensive alpha testing prior to the testing phase.

3.  Solidifying Your UVPs

With a few changes in messaging and offerings, your company can become wildly more successful.  Once you know what customers want, begin fine-tuning your messaging. Begin building your messaging hierarchy by mapping needs to features to benefits.  Next, understand what your competition offers and describe how your business uniquely delivers these to develop your unique value propositions (UVP).  Focus on using language that your customers will easily understand and avoid company-centric language.

Sometimes you will have to bundle more functionality and service levels into your baseline product. All the features that set you apart from the competition add to your value proposition, even if customers do not pay for them. If your business provides better customer service than the rest, make sure your marketing reflects these superior service levels. Customers may not pay for you to talk on the phone with them, but knowing that you’ll quickly and politely answer their phone requests may earn their loyalty and even encourage them to spread the word.

4.  Generating Demand

Demand generation begins with an effective messaging hierarchy and marketing mix that is focused on the target market. The optimal marketing mix will vary wildly by the target market and the available budget.  If possible, test your way into every channel.  Once you understand the proper mix based on your target and budget, you will be in a better position to create an integrated marketing plan that optimizes PR, social media, email, search and other forms of advertising.

The above steps are as much art as they are science.  I recommend getting advice from people who have experience in achieving product/market fit to help guide you through the (at times frustrating) process.  There are no shortcuts.  The road is paved with unexpected learnings and well-executed pivots.

Weekly Roundup

Weekly Roundup: Joining a Startup, Staying Lean, Thought Leadership and more!

As you know, we share two of our favorite articles and blog posts each day. For those of you who do not have time to read each of them, we have compiled the top 5 articles that have been shared the most:

1. Small, Young, Cash Strapped and Lean? Good.  http://ow.ly/2ZlZsb via Brady Josephson of Huffington Post

2. How To Create A Thought Leadership Strategy That Supports True Innovation http://ow.ly/2Z716T via SAP

3. 5 Things Every Startup Should Know About Hiring http://ow.ly/2ZlZs9 via Carlo Cisco of Tech.co

4. Why I Left a Big Tech Company for a Small Startup http://ow.ly/2Z717j via Adrienne Wiessman

5. Building a Culture that Ensures Your Company’s Success http://ow.ly/NJTrV via Trailblaze Growth Advisors

What was your favorite?

Strong Culture

Building a Culture that Ensures Your Company’s Success

Entrepreneurs often overlook company culture during their first weeks in business. While many prioritize other aspects of their business, they risk sacrificing a potential differentiator. A company’s culture is vital to securing a good reputation, encouraging employee loyalty, and fostering collaboration with other businesses. Whatever your other responsibilities, it’s essential to begin building a corporate culture from day one by:

Veering Toward Values

The first step is to identify specific values that you can easily be put into practice. Generic values like equality, innovation, and employee safety are good at the start, but focus on values that relate specifically to your business. If your company provides home insulation services, for example, you have the potential to reduce your customers’ household energy use and associated pollution, so environmental sustainability will be an easy value to promote in your ordinary business practices. Likewise, if you work in software or network design, information security and privacy protection are ideal values.

For example, Trailblaze Growth Advisors ties its values to helping firms of all sizes improve their appeal and increase profitability. Our values include:

  • Hands-On Operations – The Trailblaze team doesn’t advise from the sidelines. We involve ourselves in your business as directly as possible and offer practical solutions for specific problems.
  • Pursuing Perfection – We constantly seek new information, learning as much as possible, so that we never encounter a problem we don’t know how to solve. Whenever our efforts fall short, we learn from our mistakes and improve our company.
  • Cultivating Collaboration – We incorporate as many experiences and opinions as possible, working with experts from all fields to find the best solutions.
  • Guaranteeing Our Goals – We set clear objectives and always fulfill or exceed them.

Draw Up Documents

Once you’ve decided on values for your business, make sure to articulate them to employees and customers alike. Write all of your values down, incorporate them into training programs, and devote a page of your company website to them. The sooner you make your values clear, the easier it is for your employees to embody them, and the quicker your business will gain a reputation for them.

Articulating company values also gives your employees a chance to become involved in the emerging corporate culture. Encourage them to read through the values, identify omissions, and make suggestions for improvement. The more involved your employees are in this process, the more motivated they will be to promote your company culture and the better that culture will reflect your employees’ attitudes and actions.

Construct a Culture

Putting your company culture into action means giving credit to every employee who promotes that culture. Any of your employees’ actions that embody your values, however small, should be met with praise. Consider holding monthly ceremonies in which you publicly recognize employees who promoted your values and reward them with raises or prizes. Keep permanent records of these achievements on your website or on plaques. You must also negatively sanction employees who fail to live up to your values, giving them an ultimatum to comply. One unfaithful employee can give the whole company a bad reputation.

As the leadership team, you must embody your company’s values in all areas of your life, and not just at work. If one of your values is sustainability, for example, consider insulating your home, installing solar panels, and biking to work. The more commitment you show to your culture, the more it will be taken seriously.

Engender Evolution

As your business grows, attracts new customers, and responds to changes in technology, your company’s culture will have to adapt. Encourage your employees to discuss your values and find new ways of promoting them in the changing market. Your company will change, but as long as it remains committed to its core values, it can continue to garner respect among employees, customers, and the business community.

Don’t overlook something as crucial as culture. Check out our sources to learn more about founding a company on strong values.

Sources:

  • #GIRLBOSS by Sophia Amorusa
  • http://www.inc.com/eat-big-fish/why-successful-start-ups-need-to-build-a-culture-of-overcoming.html
  • http://venturebeat.com/2012/05/14/startup-culture-tips/
  • http://www.forbes.com/sites/groupthink/2013/10/04/how-to-build-a-great-company-culture/
  • http://www.huffingtonpost.com/anne-hill/small-business-success-advice-_b_1564803.html;
  • https://hbr.org/2015/04/why-company-culture-is-a-misleading-term; www.entrepreneur.com/article/242141

Photo credit: Orin Zebest / Foter / CC BY