Zane Safrit

Where’s small business with this recovery?

There’s some good news out there for small business in this recovery.

Fewer Small Business Loans in Arrears - Reuters

Delinquencies among small and medium-sized U.S. business borrowers fell in October for a third straight month, according to PayNet Inc, which provides risk-management tools to the commercial lending industry.

Arrears. I had to think about that word for a minute. Arrears...oh, yes. It means: 1 : the state of being behind in the discharge of obligations.

Everyone else might write that title as:

• Fewer Small Businesses Miss Their Loan Repayments.

Or, let's put it in the positive:

• More Small Businesses Stay Current with Their Loan Repayment Schedule.

I like that last, positive, version the best. I like the previous version some. And the arrears title brings up the rear.

The fewer here, in arrears, the better.

We Think the Economy is Worse than It Is - NY Times.

When recessions begin, people generally think current conditions are good. After recent recessions, the current-conditions index continued to decline for a number of months after the recession ended, and the economy began to improve..

By contrast, expectations about the future have a good record of beginning to rise before the recession is over, as has happened this year. The proportion of Americans who expect there to be fewer jobs in six months has fallen from 47 percent in February to 23.1 percent now. Similarly, just 15.1 percent now think business conditions will worsen, compared with 40.7 percent in February.

Awright, so the proverbial We is conflicted about our economy’s prospects. Who isn’t these days?

Generally, speaking I tend to bristle a bit at experts who say We the consumer or the We the People don’t know what we’re talking about. We do, actually. That’s been confirmed repeatedly again and again over the history of our country. And, if I wasn't a parochial American, I'd say it has been confirmed again and again around the world, throughout history.

Look closer at these two sentiments. There is no contradiction. We see the economy getting better. We see the economy getting better without possibly generating the boost in jobs that usually accompanies, generates, results from any economic recovery.

What that means is that we face the higher risk of a double-dip recession. Why? You can’t grow an economy on the back of unemployed workers.

Even in a Recession, Some Small Businesses Grow - NY Times.

According to a recent survey of 300 small-business clients conducted by SurePayroll, a payroll service based in Chicago, about 30 percent of respondents said their sales increased over the last year.

How have they done it? Turns out, in a bad economy, successful small businesses tend to be successful in their own ways.

There’s the secret sauce of small business success. It becomes less secret in a recession. Success...comes in our own ways.

Our own way...that’s the ultimate niche marketing. Your own way is a way no one can duplicate. If no one can duplicate then no one(s) can commoditize.

A recession is illustrated by the demise of commoditized industries and unsustainable business models. Think Big Trucks and the Big Three automakers for the first. Think of the recent global financial crisis for the latter.

A sustainable recovery would emphasize the growth and sustainability of small businesses doing it their own way.

SBA Runs Out of Stimulus Funds for Small Business Loans - Reuters

This is a good-news bad-news story.

Good news is there were stimulus funds for that part of the economy that will drive us out of this recession and keep us out. (Sustainable recovery sustained with job creating small businesses.)

Good news is that many small businesses were able to take advantage of this program, albeit...maybe not as soon as they would prefer.

Bad news is that the 2 loan programs that received Recovery Act funds, 7(a) and 504 Loan Programs, were exhausted after only $375 million in loans were made. This is tip money compared to the amount of TARP/Bailout money alloted to bonuses of key executives at some of the financial institutions those key executives played some role in creating the need for those funds.

Frankly, I think this $375 million will generate more new jobs. Over 60% of new jobs created in hits country between 1993 and 2008 were created by companies with fewer than 500 employees.

Good news is that it appears additional funds will be made available to sustain this very popular lending program that reduces fees for small business and risk for lending institutions.

SUMMATION

How does small business survive and in some cases thrive in a recession? Clearly, their success is not accomplished with TARP or Recovery Act funds. What is it that small business does so well despite the lack of lobbyists and PR firms to push their interests before Congress?

There's the key to success, sustainable success, for our economy.

2010: The Year of Customer Penance?

It's the week after Christmas. And many of us now...see who we forgot on our Christmas list. ( Yikes. I see 2010 being the (another?) Year of Christmas Gift Penance.)

How many companies forget the same, very important, people every year? You know who I'm talking about: Customers.

Did you forget your customers this year? Its ok, if you did. It's too late to change, anyway. The only positive to this oversight is that... you're not alone.

But, that's the point. You're not alone. You're lost in the crowd of all the other companies who forget their customers, each and every year.

And there's your opportunity. You can stand out from this crowd of millions...by instead remembering your customers in 2010.

Make 2010 your own Year of Customer Penance. Remember your customers every call, every email, every service, every feature, every day, every week, every month.

Jeanne Bliss and Jackie Huba remind us why in Jackie's interview of Jeanne: 4 Questions with Author Jeanne Bliss:

Q: Do companies need to be customer-driven to grow?

Companies forget that customers keep them in business. Customers who love companies grow them. To understand this, think of customer math -- a rigorous way to track incoming customers by volume and value and then reconcile that number with the lost customers in that same period, comparing incoming and outgoing customer volume and value. The ‘aha moment’ comes when the math reveals that company marketing dollars are spent replacing customers lost rather than growing the business with the addition of new customers.

I bolded and repeated the key points. Her answer is the essence of a sustainable business model.

Companies forget that customers keep them in business. Customers who love companies grow them.

Customers....grow companies. Customers who love companies...grow those same companies.

The 'aha moment'? Maybe, in hindsight, we can call it the Moment of Regret. That's the moment you regret seeing those customers and their referrals and revenues leave. So you take your marketing dollars and chase after those customers you neglected, ignored, insulted...forgot. The ones you lost.

Again, if by chance, as you review your year-end reports you experience a few moments of regret, don't worry. Have the regret. Recognize it for what it's taught.

And make 2010 your Year of Customer Penance.

And, this time next year we'll celebrate what's in your year-end reports with:

• added cash-flows

• higher sales conversion rates

• more upsells, cross sells,

• lower turnover among employees

• more referrals

• more testimonials.

NOTE: I'm a big fan of both Jackie and Jeanne. Their clarity and focus on the power of customer-driven organizations makes it easy to riff.

3 Metrics to Confirm Your Customer Service is Serving Your Customers

Barry Moltz was a guest on my radio show in December. We talked about his latest book*, what role customer service plays now (hint: VERY important), first steps to create your own version of BAM Good Service, and more. Just listen in streaming on-demand at this link.

I’m a fan of the correct metrics to correctly measure the correct results. I wanted to ask his thoughts on metrics that measure BAM-Good Customer Service. I asked him, In your current business, what would be 3 metrics you would use to confirm you are delivering the Customer Service you want your customers to have?

And he answered:

• How much business do people do with me?
  

• Do they pay their bills on time?
  

• Do they refer me to other people?

I loved his answer. Clear, concise, to the point. I also loved the theme of his points: cash-flow.

Cash-Flow is the ultimate metric for business performance. Why? It is the one metric that shows whatever you are doing, people want it and you are doing it efficiently and you have created a sustainable business.

From a cash-flow perspective these same three metrics could be written as:

• How much cash do they give our business?

• How promptly do they send me cash for our products and services they have purchased?

• Do they encourage other people to send us their cash?

And they would be just as accurate.

Cash is King. And Cash-flow makes YOU King. And when your customer service is serving your customers...you (your company) is King.

Here are more highlights from my conversation with Barry Moltz.

* His latest book is B-A-M: Bust-a-Myth. Delivering Customer Service in A Self-Service World.

Healthcare Reform: Has it changed our lives...yet?

Rush Limbaugh announced that our healthcare system is just fine the way it is. Fantastic.

Unfortunately, there remain those who can't afford the care El Rusho received, or vacation in Hawaii where its healthcare system is considered among the most progressive, or whose health insurance policies have been rescinded before they could receive it, or whose treatments were denied by nameless faceless administrators at health insurance companies.

Fortunately, there remain those who are not threatened by this reality, nor have vested interests in denying it. And they remain committed to making Rush's reality affordable for everyone who makes just a wee bit less than Rush ($28 million, annually?).

2 imperfect versions of healthcare reform have moved their way through Congress. 1 version for the House; 1 for the Senate.

Has it changed our lives...yet? I don’t see the changes yet, do you?

Will it change our lives? Yes.

When and how? Details for both questions remain...uncertain.

But, let's use the metaphor of learning to walk. When and how did we learn to walk as a baby? First come...baby-steps, then some toddling with knee scrapes and finally, we’re up and running confidently by around year 4 or 5. There are moments of delight and celebration as well as scraped knees, bonged heads and some tears shed a long the way. Well, it was for me anyway, from what I’ve been told and remember.

Baby-steps: Coordination: Left-foot, right-foot...Balance. Repeat.

The current baby-step in healthcare reform is coordinating the terms in both versions, the House and the Senate, of healthcare reform bills. That’s akin to coordinating the right and left legs in walking. (Read no significance into right and left leg other than their positions on the body. )

One step: Take our medicines.

Drug-coverage donut gets bigger; donut-hole grows smaller.

People on Medicare might well see the "doughnut hole" in drug coverage shrink by $500 this year from what it would otherwise be. Jim Gallagher, St. Louis Dispatch.

Kids are alright.

Both versions of the current healthcare reform bills extend coverage for children to 26 and 27, respectively for House and Senate versions.

Cadillac Plans Tax. The Senate version includes a provision for a 40% (!) tax on so-called Cadillac Plans. These are plans whose costs exceed $8,500 for individuals and $23,000 for families, for the cost of combining health savings accounts, medical, prescription drugs, dental, vision, etc.. The tax is charged to insurance companies, but it is widely assumed they would passed it on to employers. - Megan McCardle, The Atlantic

Toddling, soon:

Coverage is guaranteed, even for pre-existing conditions. Those with pre-existing conditions would have to either pay a premium, not to exceed 25% over those without it, and this would be made possible by a federally supported high risk pool.

Unfortunately, this will not be implemented until 2013 or 2014, if approved.

Stumbles and Scrapes ahead:

Rising Healthcare Costs and The Cadillac Tax Plan. The majority of Americans with health insurance have this benefit provided through their employer. That means the potential tax on these cadillac plansfirst assessed health insurance companies will then be passed on by the health insurance companies to the employer as part of the costs of their group plan that provides this employee benefit. (My prediction: This tax would be itemized so clearly, prominently, with attached documentation in striking contrast to all other items listed on our health insurance invoices.)

Companies will then have three choices:

1. pass the cost on to their employees,

2. absorb it

3. lower the benefits and costs included in their group insurance plan.

Individuals would face two choices:

1. pay it

2. lower the benefits and costs of their health insurance plan.

There will be a lot of stubbed knees in the future as we see the impact of annual premium increases of 10 - 15%. Oh and these increases are compounded...annually.

So, the minority of Americans facing this tax today...will become the majority of Americans facing either a tax on their health insurance plans or reduced health insurance benefits or both.

If you’re current health insurance premiums increase by oh, say 15%, annually by 2013...will you be subject to that tax? Do the math.

Could you afford the tax along with these higher premiums to maintain the coverage you receive today?

OR, will you reduce your health insurance benefits to avoid both affordable healthcare and this tax and sustain your ability to pay for food, rent, gas in your car to get to work, college for your kids, care for your parents....?

This question, with its unpleasant answers, applies to the cost of healthcare. We are an aging population. We are an unhealthy population. Annual rate increases for our healthcare will continue. Their amounts will increase.

What can we afford? This leads us to our next stumble and scrape:

Rationed Healthcare. We'll ration our healthcare and that of our families, ourselves. Health insurance plan administrators will be right-sized. There will be no need. We will ration our healthcare needs. When the slaves control themselves...life is good and profitable for their master.

Public Option. This one makes me laugh. Well, not its intent, but its opponents. Their reactions are one of two or both of the following:

#1 Unfair competition. The health insurance companies would not be able to compete with...the federal government. There’s some reason to agree. Medicare benefits are administered with up to 3-4% administrative costs. While our very efficient, free-enterprise, competitive industry needs 15% or more to administer their plans.

#2. The federal government is inept. They would be unable to respond to the needs of the consumers. Bureaucrats would dither in approving procedures. (That is somehow different than health insurance administrators niggling over costs or coverage in their approval of procedures...) In other words, the feds cannot compete with the competitive marketplace. There’s some reason to agree.

On the other hand, wouldn’t that be a competitive edge FOR the health insurance industry?

#3. Both arguments. I have seen and heard opponents of healthcare reform share both arguments in the same conversation.

What about the uninsured? Of the 45 million uninsured Americans...only 20 million or so will be able to afford health insurance if these reforms end up being approved and enacted...in 3 years.

Can we wait? Can we wait another 3-4 years for all of us to enjoy the same healthcare that Rush enjoyed this past week? Should you, or your family, need to wait that long?

Additional links:

Cleveland Plain Dealer blog

Baltimore Sun

Open Congress

AFL-CIO blog

A Less Than Honest Policy, Bob Herbert, NY Times

Firedog Lake

* iStockphoto from freehelski

Avatar: Awesome Eye-Candy

Avatar is awesome eye-candy. But, it's not an epic.

The graphics astonish, dazzle and amaze. So many times in the movie I marveled at their details and the fluidity of the movement. I jumped back sometimes when the 3-D effects seemed to drop things in my lap. I grew woozy at some of the flight scenes and mountain scaling scenes.

Avatar is awesome eye-candy.

But, as much as I marveled at the graphics, the scenes they concocted, the creatures and worlds created....I ignored the story. Actually, I think the story ignored me. With an hour left I turned to my watch. With 45 minutes left I thought to leave.

The characters were barely 2-D. They seemed chosen to not interfere with the graphics.

The script must have been bought in a cheap book:” Tired cliches of war movies, sci-fi movies, and jungle movies.”

The soundtrack was standard orchestral anthems of grandeur. We’ve heard one, we’ve heard...a hundred? (Well, in every scene where you could hear it over the explosions. )

But, the graphics were so compelling, mesmerizing. Their service to my visual experience was so grand, that the lack of a story, script or soundtrack was...tolerated. I stayed and yawned. I’m glad I did. I’ll see it again. But not at my initiative.

Avatar is an awesome piece of eye-candy. But it could have been an awesome epic movie.

What would it take to create an awesome epic with the current Avatar?

Here’s my 1% Solution for Avatar as Epic.

1%* for a story. There was so many opportunities for a compelling story here. But it seemed the attitude of the director and producer was “That’s good enough. We don’t want anything to interfere with our amazing graphics.”

1% for a script. There were so many bland lines. They were so bland, I stared at the screen. “That’s the line?”, I thought, even in the midst of these amazing graphics rushing at me.

1% for a soundtrack. I mean if Where the Wild Things Are can create a wonderful, charming, original....!, in-synch soundtrack that captured the vision of the movie and the book, and the characters and their little island world...I’m thinking with $4 million or 1% of the total budget ($400 million) a soundtrack could have been conceived by an original, creative...composer.

* Assuming Avatar's budget was $400 million...this 1% comes to $4 million.

Nine Lessons From Twitter in 2009

Twitter is us. The good, the bad, the inspiring, the demoralizing, the petty, the grand, the global, the local, the spam, the scams, the community of trust and help and resources...it’s all us. Twitter is us, in all our grandeur, power, weakness, strengths, passions, inspirations and...not. That’s its power. Our power.

Real-time comes with a real price. Real-time is like the cool new friend with the cool clothes and car. Yeah, they’re flashy. They’re cool.

They’re...real-time. Real-time is immediate, instant, global. Flashy-y-y-y! But connection and community are built together, one conversation at a time, one mistake and lesson learned at a time, connected over a long-time. That last part is key. Connected. Over a long period of time. Weave ‘em together and you have a tapestry worth keeping. But, kept separate they are just...fragments of time. Real-time, though.

We change. Twitter’s power is its power, our power, of self-discovery in our hands or fingers and aps and community. That produces, reveals, a lot of change, disruption, churn. It’s ok. In fact, it’s great...over time. See above point.

Twitter is still a cocktail party. See above. Conversations bore. They excite. We lose interest. We get distracted. We get obsessive. We get silly, argumentative. At the end of the day...it’s still a cocktail party. It’s what happens AFTER, ELSEWHERE, that makes cocktail parties worth our time. One cocktail party does not make a social season. Even IF that cocktail party goes on 24 hours a day.

Be nice.

More conversation, less promotion. Someone tweeted recently that they saw fewer conversations. I looked closer. Nearly all the tweets were links to something, like headlines. And those were mine....

It seemed the conversation had deteriorated into shouting.

Kinda like what happens as a cocktail party grows larger...and louder.

But, Twitter is us. We can change. We can change the conversation, the setting, the tone, the place even. Tools like Lists and Groups help build cozy rooms for those conversations worth developing and remembering.

Twitter is only one tool. One tool a social media campaign does not make. Blogs, YouTube, Vidler, Vimeo, Facebook, podcasts....in-person networking, hand-written notes, phone calls, personal visits, dinners...a product worth talking about, employees engaged and passionate...all are important tools to reach your personal and professional goals.

You don’t have to Twitter, every day. Absence makes the heart grow fonder. Silence makes us look, smart, thoughtful. And a little rest for the brain can make us speak, tweet, smartly.

What’s yours? Or, it’s not always about me. Twitter is a wonderful listening tool. At a glance, a whisper, you can hear the world. I’m learning. I’m listening. What’s your lessons learned with Twitter?

Rants are revenues.

Jeanne Bliss shared this insight as guest on my radio show. We were talking about customers, customer service and her great new book: I Love You More than My Dog: 5 Decisions that Drive Extreme Customer Loyalty in Good Times and Bad.

Rants are revenues. I love this quote.

Rants are revenues.

• Customer rants tell you what you need to do better, faster, more frequently.

• Customer rants tell you what others are doing better, faster, more frequently.

• Customer rants tell you this person wants to be recognized, wants someone to care. Customer loyalty...is built on caring. Here’s your opportunity.

Rants are referrals

• Customers will tell everyone how their rant was handled.
• • Did you listen?
  • Did you acknowledge?
  • Did you use a plastic script or were you allowed to be a real person who has the real resources to solve their real problems?
  • Did you show that you cared?

Rants are also savings.

• Customer rants also tell you what you should do less, slower, or not at all. Rants make this very clear.

• Listening to them frees your resources to pursue what you should do, what they’ve told you.

Or they can, if we listen.

Just a reminder for the next time a customer’s on the line waiting to rant: Rants are revenues. Rants are saving. Rants are opportunity. If we listen.

Somedays...

Pic from Ace Concierge in reply to the comment of her client (me).