The art of buzz: Reasons people talk about products and services and the best ways to seed discussionsWritten by Guy Kawasaki
Emanuel Rosen is the author of the national bestseller “The Anatomy of Buzz” (Doubleday, 2000) and “The Anatomy of Buzz Revisited: Real-life Lessons in Word-of-Mouth Marketing” (Doubleday, 2009). Prior to writing these books, he was vice president of marketing at Niles Software where he was responsible for launching and marketing the company’s flagship product, EndNote. He holds an MBA from the University of San Francisco. In this interview, he brings us up to speed on the techniques for generating buzz that every small business owner must master.
Q: Going back to fundamentals, why do people talk about products and services at all?
A: Buzzing is in our genes. We are programmed to share information with friends about where to find our next meal and about the tiger who’s about to have us as his next meal. We talk to connect, so when my daughter tells her friends about the new sweater she bought, she’s also establishing and maintaining her social ties. We buzz to talk about ourselves. If I tell you about a 10-day dog sledding trip in Alaska, I’m also telling you how adventurous I am.
Q: Which comes first, buzz or ink?
A: Usually it starts with some buzz that is followed by press coverage, which can take the buzz to a whole new level. Grassroots support can actually help you get ink — sometimes buzz is the best press release because it gives journalists this warm and fuzzy feeling that your story is for real and that there’s true excitement for it. Don’t get me wrong, if CNN calls you before your product is out, don’t tell them that you’re waiting for some grassroots buzz to build, but usually it doesn’t happen that way.
Q: Which comes first, buzz or sales?
A: There are some highly anticipated products — Halo 3 comes to mind — that get tons of buzz before a single sale. This is the exception. Since product recommendation usually starts with product experience, you need to have some people out there who use the product and hopefully get excited about it. How do you get these early customers? Part of it comes from word-of-mouth marketing methods, like seeding and sneak previews, but it also comes from traditional sales and marketing techniques. If your product is contagious in some way, then these early users will start buzzing about it.
Q: What are the essential elements of seeding a product?
A: The key point to understand is that although we’re all connected to each other, information about new products rarely spreads like a wild fire. Information tends to get stuck because we live in somewhat isolated social clusters. To accelerate buzz, companies seed their product in many different clusters. The ideal seeding campaign is done on a large scale and lets people have a firsthand experience with the product. You want to reduce the price barrier as much as possible, so the product is given for free or at a reduced price.
Q: How do you seed a website or free service?
A: The good news is that the price barrier doesn’t exist. The bad news is that the thing you’re seeding is less tangible. The basic idea is the same. You identify clusters of people by geography, area of interest, by academic discipline or whatever other classification makes sense in your case. You then approach some people in each cluster trying to engage them with the service. This is a challenge that is shared by other products. The fact that a publisher seeds the market with advance copies of a book doesn’t guarantee that people will read it. But with some follow up and encouragement and some buzz from fellow users, some more people eventually try the product and start buzzing about it too.
Q: What are the characteristics of a contagious product?
A: The best buzz comes not from publicity stunts but rather from the product itself. A product or service that makes you say, ‘Wow!’ when you use it for the first time is the classic contagious product. Other examples: products that evoke strong emotions — “The Blair Witch Project” — or reward you for talking about them — Facebook.
Products that are visible can be contagious as well — think of the first time you saw someone with an iPod. Even abstract ideas can become contagious this way. The idea of living with cancer was translated into the LiveStrong yellow wristband, which started millions of conversations about the topic.
Q: What can stop the spread of buzz?
A: Since I just mentioned LiveStrong, let me tell you about an interesting study. A research team at Stanford sold LiveStrong wristbands to students who lived in one dorm on campus. A week later, they started selling these wristbands in a neighboring dorm that had a reputation as a ‘geek’ dorm with a stronger academic focus.
What happened once the ‘geeks’ started wearing the wristbands? A week later, the research team measured a 32 percent drop in students wearing the bands at the first dorm. So sometimes, when we detect that ‘the wrong people’ are using your product, we stop using it and buzzing about it. This is true especially for products that have to do with our identity.
The most common forces that block buzz are noise, inertia and forgetting. We’re distracted by competing messages, we like to stick to ‘the good old way’ of doing things, and we forget what our friends told us. It is one reason why buzz needs to be accelerated. Even delighted customers might forget about your product and run out of opportunities to talk about it.
Q: What should you do if someone who has never used your product is bad mouthing it?
A: One of the things that surprised me most as I was working on the new edition of my book was that this type of negative buzz is quite common. One study found that 30 percent of negative word-of-mouth was by people who never owned the product. If you can identify the person who’s bad mouthing your brand, you might want to let them try the product. The problem is that you usually don’t know who they are, which brings us to another reason for why word-of-mouth marketing is so important. You have to counterbalance this constant trickle of negative comments with honest, positive recommendations from happy customers.
Q: What should you do if someone who has used your product is bad mouthing it?
A: First, listen to what they are saying. Our natural tendency when we’re attacked is to fight back, but negative comments may come from an actual bad experience. This gives you an opportunity to do two things. Solve that customer’s problem, which will often turn her from a detractor to a promoter. Even more important, it may help you identify a problem in your system, fix it and reduce negative buzz from others.
Q: Who is more likely in these Internet days to talk about your product: someone who’s had a good experience or a bad one?
A: There are two types of bad experience. There’s ‘I didn’t like this hotel too much,’ and there’s ‘The guy at the reception insulted me when I asked for towels and then sent up a dirty one.’ Frustrated customers are very likely to share their experience. However, it turns out that most buzz among consumers is positive. This may seem like a contradiction, but it has some simple explanations. One of them is that most of our experiences as consumers are actually positive.
Q: What is the role of old-fashioned advertising these days?
A: It is fashionable to say that advertising is dead, but I don’t agree. Very few products can live on buzz alone. Advertising can help a lot — at least good advertising can help a lot. First, in creating awareness and building the pool of people who can buzz about the product. Second, a good ad can prompt me to tell my friends about the product. Third, a good, authentic ad that brings in real people can stimulate buzz.
Q: How has technology changed buzz and word-of-mouth marketing?
A: It hasn’t really changed what we talk about. We still talk about ourselves, we brag, we seek advice, we gossip, we connect. The Internet’s biggest effect is that it accelerates buzz. In addition, it doesn’t only let us tell our friends about the products we use, but also lets us show them these products through videos and photos. It has enabled aggregation tools such as Yelp or TripAdvisor. In essence, it gives more people more opportunities to share information with others, which directly translates to more buzz.
Q: How can a company effectively measure the buzz it’s generating?
A: The simplest method is to ask your customers how they heard about you. You can measure the daily mentions you get on blogs and on Twitter. You can supplement this with traditional marketing research to learn what customers who don’t use these services are saying. Whatever method you choose though, you need to measure on an ongoing basis, if you want to detect any effects. Companies such as ChatThreads, The Keller Fay Group and Nielsen Online provide buzz measuring services. WOMMA, the Word-of-Mouth Marketing Association, offers lots of resources on the subject.
Q: Do you believe that there are key influencers who companies should focus on because of their insight, power and prestige — that is, an ability to lead a market as their wisdom trickles down?
A: The importance of influencers varies by industry. I suspect that they are more important in the pharmaceutical industry than in the yo-yo industry. Regarding the ‘trickle-down’ theory — this is not the way that buzz flows — especially today, buzz flows in all directions. I use the term hubs to describe people who talk more than average, and I make a distinction between social hubs and expert hubs. Both can definitely help a company spread the word, but companies should encourage everyone to talk, not only hubs.
Q: Where do you draw the ethical line on generating buzz and word-of-mouth marketing?
A: One key idea here is disclosure. Word-of-mouth marketing is not about tricking people. It’s about openly inviting them to try the product and talk about it. WOMMA offers a code of ethics that can help. When you’re trying to build buzz, you want to push the envelope and think outside of the box. And when you look for original ideas, you can’t police your thoughts. But after the brainstorming, you have to change your attitude dramatically. This is best done the morning after — over some strong coffee. Think again about your wild new idea. Ask other people what they think. Ask your customers and people in the community if you are crossing the line.
Guy Kawasaki is the co-founder of Alltop.com, an “online magazine rack” of popular topics on the Web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of 10 books including “Enchantment,” “Reality Check” and “The Art of the Start.” He appears courtesy of a partnership with HVACR Business, where this column was originally published. Reach Kawasaki through www.guykawasaki.com or at firstname.lastname@example.org.
There’s a classic line from the 1970 movie “Love Story” that has become a part of our popular culture. In the drama, the dying heroine played by Ali MacGraw says to her husband, played by actor Ryan O’Neal, “Love means never having to say you’re sorry” as he apologizes for his anger. It is certainly a memorable and tear-jerking line, but is saying, “You’re sorry” all that bad if it can soothe a wound caused by someone speaking or acting out before thinking?
Disagreements and anger are a reality in the workplace and in life in general. Various people react in different ways when under pressure. Some lose their cool completely and say things they instantly regret, while others launch into tormenting the perceived offender with the silent treatment. No matter the technique used to punish, all of these methods quickly become tiresome and, more importantly, adversely affect the workplace.
Too frequently in the work environment, many people just can’t suck it up and utter the two simple words, “I’m sorry,” even when they know they’re dead wrong. It’s not a macho thing either, as women don’t behave much differently when they feel put upon. What’s a boss to do when this stubbornness becomes problematic?
In a word: intervene. When not controlled, these unreasonable, obstinate antics can become time-consuming and disruptive. It could all start with an impetuous negative e-mail or a less-than-mature voice mail left in the heat of battle that cascades into a futile distraction, as otherwise effective and seemingly sensible employees act out as if they’re in a 20- or 30-year time warp, behaving as if they’re back in the third grade rather than adults in the workplace.
The most expeditious method that works with either the protagonist or antagonist in an office drama is to call a spade a spade, so to speak, and get the feuding parties together and cut to the chase, making each person agree to bury the hatchet but preferably not in each other’s skull. If employees’ anger management issues are left to fester, they can easily result in other people in the same work environment taking sides, and in short order, you will find yourself in the midst of a Civil War. The only thing guaranteed when this occurs is that there will be casualties. It is incumbent on the ruling manager to make sure that the company doesn’t wind up as the victim, incurring a loss of productivity and causing everyone around the two factions to feel as if they’re walking on pins and needles.
While many times it would be easier for the boss to ask one of the warring participants to approach the other to work out their differences, this tactic just takes too much time and the outcome can be iffy. It really doesn’t matter who is right or wrong but that the nonsense is stopped dead in its tracks. The best way to accomplish this is to make it more than abundantly clear that anger in the workplace is a nonstarter and could be a career-inhibitor.
Allowing employees to exhibit a lack of civility will cause a domino effect that will lead to no good. Civility does not just apply to peers. Instead, it’s applicable to all who must work together, including superiors, subordinates and even fellow board members. Don’t confuse civility with agreeing or disagreeing with someone. It also doesn’t mean one has to believe that someone is effective in his or her role. Instead, what must be required is that those within an organization, no matter what level, simply take the higher road and respect not necessarily the person but the role and make the assumption that everyone has a part in working toward shared goals, until it is proven otherwise.
Once everybody knows the rules of engagement, many times the negative engagement suddenly ends and it’s back to business as usual. When that doesn’t happen, it’s time for offenders to be forced to go to their respective corners so as not to do each other or the company any more harm.
To promote coexistence when no one wants to take the first step and say, “I’m sorry,” it’s up to the adult in the room — and that would be you, the boss — to step into the fray with your whistle to call a permanent timeout to these types of disruptive shenanigans.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at email@example.com.
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Launching a new venture is probably one of the most thrilling moments for any entrepreneur. It’s a birth that often brings forth a long-standing dream for the founders and is steeped in joy, pride and egotism. However, for many new captains of industry, the dream vanishes like smoke shortly thereafter. In fact, just half of all businesses survive the first five years, and only one-third survive 10 years, according to U.S. Small Business Administration statistics. Thus, it’s worth investigating why projects fail.
In a large majority of cases, the business owners failed to raise sufficient capital to fund the labor, marketing, taxes, insurance, legal expenses, bookkeeping, supplies and costs of goods for the business. Oftentimes, they underestimated expenses and overestimated how quickly revenues would increase. In other cases, they knowingly entered the market with insufficient cash because of limited credit and savings.
Other failures are caused by an implosion from within. Specifically, the founding partners reach a point at which they disagree on how to build the business and then fail to come to a consensus that leaves all parties feeling invested in the project. Or the business develops naturally in a way that calls for the founding partners to take on roles they don't want to assume. In either scenario, the remaining partners must buy out the exiting partners in order to stay in business or fold up shop.
In the worst collapses, the venture was just poorly conceived. The founders developed a business concept based mostly on their own personal experiences or anecdotal evidence. They failed to conduct or acquire scientific research on whether there was sufficient demand for their proposed products or services. They made a cursory study of the competition. Or they made assumptions about what drives potential customers to buy when designing marketing campaigns, rather than collecting data that revealed true trends in buyer motivations.
In these cases, the founders could have mitigated their chances of failure with some thoughtful planning before the shingle was hung. Would-be entrepreneurs should clearly write out their vision with detailed specifications and the cash that will be needed to complete it. They should plan contingencies for overcoming potential obstacles.
They also should identify the strengths and weaknesses in any potential management team and seek out individuals who can fill the holes. For instance, a visionary leader who prefers to focus on the big picture will usually need someone on board who loves the details in order to ensure the project is thoroughly vetted and structured.
Patricia Adams is the CEO of Zeitgeist Expressions and the author of “ABCs of Change: Three Building Blocks to Happy Relationships.” In 2011, she was named one of Ernst & Young LLP’s Entrepreneurial Winning Women, one of Enterprising Women Magazine’s Enterprising Women of the Year Award and the SBA’s Small Business Person of the Year for Region VI. Her company, Zeitgeist Wellness Group, offers a full-service Employee Assistance Program to businesses in the San Antonio region. For more information, visit www.zwgroup.net.
Just like software can have bugs, humans have bugs in the way we think and make decisions. As a result, many problems of businesses today are not the result of some outside factor, rather they are self-inflicted as a result of “mind bugs” — bugs in the critical internal processes that occur in the 5 inches between our ears.
The pervasiveness of mind bugs in business decisions is due to the fact that they are a product of human nature — hardwired and highly resistant to feedback. They can affect fact-gathering, analysis, insights, judgments, and decisions — and increase risk accordingly. The challenge is that the very mind bugs that are the source of the problem cause us to resist discovering them. Change the way we think? Our mind bugs tell us there is absolutely nothing wrong with the way we think. Here is a perfect example provided by Arthur Blank, co-founder of the highly successful Atlanta start-up The Home Depot, owner of the National Football League’s Atlanta Falcons, respected businessman and philanthropist.
“A lot of leaders, they listen, but they don’t really want to hear the results to the answers and when the answers come, they find a way to reinterpret them based on their original perspective of what they think the answers should be,” Blank says. “They might give you their honest opinion of what they think you’ve got to do to improve your business, but then you put it through your own filter and look at it through your own rose-colored glasses, and you choose not to see it that way. You say, ‘That’s not really what they meant. They meant some other things,’ and you just believe what you want to believe.”
Here are two mind bugs that are at the source of this problem.
Informed leader fallacy: A belief by a leader that he is better informed and has better instincts than others simply because he is the leader.
We deeply want to be led by people who know what they’re doing and who don’t have to think about it too much. So by the time we achieve a leadership position ourselves, we are good at making others feel positive in our judgment, even if there’s no strong basis. But the amount of success it takes for leaders to become overconfident isn’t terribly large. Some achieve a reputation for great successes when in fact all they have done is take chances that happened to work out. The fierce personal confidence and sense of infallibility that characterizes many leaders serves as a breeding ground for this mind bug. Most decision makers will trust their own intuitions because they think they see the situation clearly. Accordingly, it causes leaders to fall into a trap of believing they are better informed than they really are.
Closed mind: The inability to hold and examine two opposing views at the same time or to consider perspectives other than one’s own.
When we are afflicted with this mind bug we subconsciously shut down the very thing that can help us examine our own beliefs: mindful evaluation of diversity of thought. In essence, things are the way I see them because that is the way I see them. As perpetrators, we are sometimes not aware of doing this. Other times we may even be proud of it. We make the self-serving assumption that we have figured out the way things are and anything that challenges our point of view becomes “unthinkable.” It is not that we shoot the critics or fail to listen. To the contrary, we may spend time demonstrating our listening skills to others to prove we are good listeners, but afflicted as we are, we just don’t hear them. We simply are not aware that we don’t allow ourselves to hold and mindfully examine two opposing views at the same time. We give lots of lip service to others, but true diversity of thought is shut down. Once infected, we feel pretty good until the day of reckoning when we ask ourselves: “What was I thinking when I made that decision?”
Recovery requires courage
The solution to this problem requires courage — the courage to challenge our own thoughts. The real issue is that most of us do not notice our thoughts. We are out of touch with ourselves, and it can be debilitating. It’s like breathing carbon monoxide. You can’t see it or smell it, but it can harm you just the same.
Larry J. Bloom spent more than 30 years helping grow a small family business to more than $700 million in annual revenue. He is the author of “The Cure for Corporate Stupidity: Avoid the Mind Bugs that Cause Smart People to Make Bad Decisions” and the owner of a start-up media and software company that promotes better thinking. For more information, visit www.curecorporatestupidity.com.
Five years ago the economy was humming along, and Service Foods was humming right along with it. The Norcross, Ga.-based gourmet food supplier was growing steadily throughout its five-state Southeastern base. But CEO Keith Kantor was uneasy, because he felt his company was vulnerable. Many of Service Foods’ customers regarded the company’s home-delivered fare as a luxury. If the economy were to turn sour, some customers would start cutting their household budgets — and luxuries would be among the first things they would cut.
“Several years ago, I started to feel like we were headed toward an economic downturn,” Kantor says. “I thought the boom would still continue for a period of time, but with all the signs we were seeing — debt going up, oil prices going up, prices going through the roof, especially in real estate — I didn’t feel like it would last. The bubble was going to burst.
“So I got our leadership together and I said, ‘This is what I think is going to happen, and this is why I think it’s going to happen,’” he says. “And everybody basically agreed.”
Service Foods’ leaders had to do something to reduce the company’s level of vulnerability. After a series of brainstorming sessions, they concluded that Service Foods had to radically change how customers perceive its products and services. It had to change the perception of its offerings from luxury to necessity.
“The overall strategy we came up with was we had to change how customers regard our products and services from a ‘want’ to a ‘need,’” Kantor says. “What I mean by that is, while we’ve always sold mainly all-natural foods, before we made this transition, we simply marketed it as the highest-quality, best-tasting food you could get. And even though a lot of the food we sold was all-natural, we weren’t pushing that aspect of it. That wasn’t one of our key points.
“So we decided we had to switch how people think of our offerings from a ‘want’ — you know, to want high-quality, great-tasting food — to a ‘need’ — where all of the food we offer is all-natural, and it’s needed to maintain a healthy lifestyle. And we knew we would have to create a lot of new services to back that up.”
Break it down
Making the transition from “want” to “need” would be a laborious undertaking for Service Foods. The company’s leadership broke it down into several strategic components, each one an extensive, time-consuming project of its own:
- The company would have to ensure that all of its food offerings were all-natural, and it would have to get them certified as such.
- It would have to hire and train a team of health professionals — nurses, dietitians, chefs, fitness experts — to educate its clients about nutrition and related aspects of healthy living.
- To reflect its new identity as a purveyor of all-natural foods and healthy lifestyles, Service Foods would have to become more tech-savvy in its use of social media, and it would have to overhaul its website and its marketing program.
- To be able to effectively lead this new kind of company, Kantor, who at the time held an MBA and a bachelor’s degree in biology and chemistry, decided he would need to obtain two more degrees: a master’s degree in nutritional science, followed by a doctoral degree in the same field.
“To make the transition, we had to do a huge number of things, and we had to do them fairly quickly,” Kantor says. “We had to resource all of our foods and make sure we got them certified by the USDA as all-natural. That in itself was a big project. You rarely see the USDA all-natural seal, and now it’s on all of our foods.
“It was a long, time-consuming process,” he says. “First we had to get the USDA’s approval to label our products all-natural. Then we had to get the approval of the All Natural Food Council of North America and the Natural Products Association.”
At the same time Service Foods was moving through this certification process, Kantor, in his early 50s, decided it was time to go back to school.
“Although I already had my master’s, I went back and I got another master’s in nutritional science,” he says. “Then I went on to get my Ph.D. in nutritional science. I knew I needed to do this in order to make sure I had tool and skills I would need to head up this program.”
Get the right people
The staffing component was central to Service Foods’ evolution from purveyor of high-quality, great-tasting food to a company that would be able to guide people on how to lead healthier lives.
“We had to hire a team of registered nurses, registered dietitians, all-natural chefs and fitness experts,” Kantor says. “Fortunately, I have family in some of those fields, so that made it easier in some ways. My wife is a nurse. And my daughter is a fitness expert. So she set up that part of the program for us.
“Adding all these health professionals to our staff has greatly increased the value of services we can offer our clients,” he says. “It makes it clear that healthy living and mitigating disease are central to our company’s mission.
“Now, if you’re one of our clients and you want to talk to a dietitian, you can do it virtually 24/7, online and through all the social media. The same thing with a nurse; the same thing with fitness experts. And we even have some doctors and dentists that do this for us.”
Another component of the transition is that Service Foods now accepts referrals from doctors and insurance companies.
“We get a lot of referrals through a company called Vital Healthcare Group, which has about 7,000 doctors in their group,” Kantor says. “What they do is, they’ll tell us this patient has this particular health problem, so please put them on the proper diet. So if somebody has diabetes, we’re able to put them on the proper diet for diabetes, with the proper food. And if somebody has a history of cancer in their family, we can put them on the proper diet for that. Heart disease, et cetera, all those things. So now, you can get the great-tasting, super-high-quality food, but the reason you’re doing it is different. You’re doing it for healthy-living reasons, for the health of your family, versus because it tastes good.
“In addition to that, we’ll send to the doctor in electronic form a list of what we’re giving the people, and they actually break it down into grams and milligrams of cholesterol, carbohydrates, protein, et cetera, and then the doctors can actually put this information into their patients’ medical records, electronically. So this helps them with the diagnosis and treatment of their patients. And we also do this with supplementation — vitamins and minerals. We’re the first company in the United States to do this.”
While Service Foods was converting to all-natural products, getting them certified, and hiring staff, the company also advanced its use of technology to deliver its new message, its new identity and its new services to its clients.
“We totally redid the website, making it very interactive,” Kantor says. “Now we not only list every product, we also include the nutritional breakdown and any allergens the foods contain, such as gluten, peanuts, MSG, et cetera. And we now have special calculators on our site so clients can see the breakdown of products they buy at stores or in restaurants. And we also had this all done on a mobile site to make it easier to use on the go.
“In addition, we developed our own supplement line called Purely Natural Supplements, and our site has videos on the products and a questionnaire so clients will know what they need. And we researched and had articles written on almost every major disease and on what foods and supplements will help.
“Lastly, with the help of my son Ryan, we became active in all the social media — Facebook, Twitter, LinkedIn, Flickr, YouTube — so we can keep our clients informed and make it easier for them to communicate with the health experts.”
As he has led Service Foods through its transition from a company whose products and services are regarded as luxuries to one whose offerings are considererd necessities, Kantor says the key thing he has learned that he would recommend to CEOs facing a similar situation is that it’s crucial to listen to your staff and to trust them.
“The most important thing you need to know is you have to listen to your people,” he says. “You know, you may be the CEO and the head of it, but all the ideas don’t have to come from you. You’ll just want to make sure the ideas are properly implemented. We broke everything down into teams and let them feel free to help and make suggestions and plan goals. That is by far the best way. You have to really listen closely to the feedback you’re getting. Ninety percent of it may be off base, but 10 percent of it will be good stuff — and stuff that you never would have thought of yourself.”
Kantor has one other piece of advice to offer CEOs looking to make a major transition in their company’s mission: “It’s going to take way longer than you think and cost way more than you think, so you’d better be prepared for that.
“If we had come up with this plan further in advance, it would have been much easier,” he says. “We did it in response to what we foresaw as a financial crisis coming on. But if we had been able to do it just as if it were a change in marketing strategy, we would have had more time to ease into it. That would’ve made it a lot easier.”
Turning the corner
Overall, Service Foods’ conversion took between three and four years to accomplish, and the company has at last begun to see tangible results.
“What happened is that mostly because of this transition, during the real recession we didn’t dip much at all, which was a huge thing for us,” Kantor says. “And we started gaining some market share. But at the same time, we were spending a lot more money to do a lot of the same things, and some new things, with a different purpose in mind.
“The volume stayed the same for a while. Then it started increasing, but the profit didn’t increase — in fact it decreased some because of the extra money we were spending making the transition: the sourcing, the labeling, the certifications, the marketing, the education. So the results we saw were that we didn’t lose market share, then we started to gain market share, but we lowered our profits to do it. Now that’s starting to turn, where we’re still gaining market share, and the profits aren’t deteriorating anymore. They’re starting to stabilize and slowly going up.
“The transition took us a number of years, but it obviously worked pretty good, because we’re now the No. 1 healthy living company in the country,” Kantor says. “But it took a long time and a lot of effort.”
HOW TO REACH: Service Foods Inc., (800) 872-3484 or www.servicefoods.com
THE KANTOR FILE
Name: Keith Kantor
Company: Service Foods
Born: Bronx, N.Y.
Education: B.S. biology and chemistry, City College of New York; MBA, Chapman University; master’s degree, nutritional science, Kaplan University; Ph.D., nutritional science, Corllins University
What’s the most important thing you learned during your years as an officer in the Marine Corps Reserve?
If your people feel like you’re truly loyal to them and will go to bat for them, you will get that back tenfold. If you have the trust and loyalty of your people, you can do almost anything. Of course, as a Marine, I always relate it to battles and things like that, but of course it’s not quite that bad in the corporate world. It’s more petty and less deadly.
Do you have an overriding business philosophy that you use to guide you?
I’m very pro-American and pro-veteran. A lot of my employees are veterans or are in the reserves, and we do a great deal of stuff to back those efforts, like Toys for Tots. If any of my people are activated, they get paid in full. Not just the difference — they get paid in full plus whatever they get when they’re on active duty.
What trait do you think is most important for a CEO to have?
Loyalty. And, you know, sometimes loyalty can be a fault, when you don’t change things up quickly enough out of loyalty, but most of the time I think it’s a positive attribute.
What’s the best advice anyone ever gave you?
You can give somebody fish and they’ll eat for a day, or you can teach them to fish and they’ll never be hungry again. My dad told me that when I was little. I didn’t understand it very well then, but I do now.
How do you define success?
Leaving your mark on society in some form or fashion. That’s why we’re so excited about the new direction our company has taken. If we can truly make a dent in the health care crisis, that’s a legacy that any company or organization would be proud of.
Dealing with payroll, employee benefits and workers’ compensation is time-consuming and can be a distraction from the job of running your business.
Engaging with a professional employer organization can remove those obstacles, allowing you to focus on growing your business, says J. Richard Hicks, CEO of HR1 Services Inc.
“A PEO is a single source provider of integrated services that allows business owners to cost-effectively outsource the management of strategic services such as recruiting, risk/safety management and training and development,” says Hicks. “The PEO becomes the employer of record for employees for both tax and insurance purposes in a practice called co-employment.”
As of 2010, there were more than 700 PEOs operating in the United States, covering 2 million to 3 million workers, and that number is continuing to grow.
Smart Business spoke with Hicks about how engaging a PEO can allow you to concentrate on your business.
How does a PEO work?
A small or mid-sized business enters into an agreement with a PEO to establish a three-way relationship among the PEO, the client company and the company’s employees. This now becomes a co-employment arrangement, as the PEO co-employs your existing work force and becomes a legal employer that is responsible for such functions as payroll, record-keeping, benefits and services, and participation in hiring, evaluation and firing.
Dealing with the day-to-day functions of running a business can distract an owner from the big picture and focusing on a strategic vision to move the company forward. Services typically provided by an employer are outsourced to the PEO; the PEO takes over the management of human resources and employment-related issues, freeing up the business owner to focus on the core operations of the business.
The role of a PEO goes far beyond that of a temporary firm, staffing agency or payroll administration firm. Instead of simply taking on one role for a company, the PEO offers comprehensive HR services to clients, either as a bundle or a la carte.
What are the benefits of a PEO?
In addition to allowing leadership to more sharply focus on the business, a PEO can manage your unemployment claims and keep current on tax laws to ensure your business remains in compliance. When employers need to submit employee paperwork to the government, the reporting experts at the PEO will ensure the documents submitted are in compliance with all regulations.
In addition, a business’s employees are eligible for the group benefits offered by the PEO, including medical insurance and 401(k) plans, and it can often get better rates than a single company could on its own. Because it is working with multiple companies, the employees of each of them can be pooled together, creating a larger group and potentially lowering costs. This also removes from the employer the hassle of having to deal with multiple vendors in areas such as health insurance, payroll, 401(k) management and other areas. And because the work in all of these areas is being done by one provider, instead of several, the company’s records are more uniform, allowing for less work in case of an audit.
How can a PEO assist in the area of workers’ compensation?
A PEO can be involved in the management of both workers’ compensation and unemployment claims. In the case of workers’ compensation, the PEO can work with a company to get injured workers back on the job through a light duty program more quickly than they otherwise might return. And as with health insurance premiums, the larger pool of employees created by joining the work forces of multiple employers under the PEO umbrella can often mean lower workers’ comp premiums than an individual employer would pay on its own.
Employers can also receive assistance from the PEO when implementing risk management programs. Having the proper safety initiatives in place can significantly lower workers’ comp premiums and help maintain a more productive work environment.
The PEO also eliminates the need for year-end premium audits, as the company’s expense is billed in the same amount each month.
What are the potential disadvantages of a PEO?
Although the PEO is responsible for all of the above-mentioned services, the employer is still responsible for the productivity and conduct of its employees. Also, some state laws or labor contracts may limit which employers can enter into such an arrangement.
What questions should an employer ask before choosing a PEO?
First, make sure you know what you are paying for. Services are often bundled, and unbundling them can give you a better idea of what you are paying for. Also ask who you will be regularly working with and ask about that person or that team’s background. Determine how often someone from the PEO will visit your office and whether someone will be available on short notice if you run into a problem.
Find out if the PEO will do an analysis of your company before agreeing to take you on. The PEO should be interested in working with you to make things more efficient and help you lower costs and shouldn’t agree to work with you without first thoroughly understanding your business.
Also ask about development and training. A good PEO will be interested in the growth of your employees to help grow your business, so ask if those services are included in your fees, or whether there is an additional costs.
Check with your local PEO expert to ensure that your business is eligible to participate and to get more information about how to proceed.
J. Richard Hicks is CEO of HR1 Services Inc. Reach him at (800) 677-5085 or RHicks@HR1.com.
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Weakness in the job market may well be followed by an increase in the number of cases of resume fraud. Unemployed people are feeling the pressure, and while they likely won’t be fined or jailed for lying on their resumes, that’s no reason to avoid telling the truth. MJ Helms, director of operations for The Ashton Group, says that in most cases, human resource departments should be doing background checks and comparing people’s social media accounts to their resumes.
“Apart from being morally and ethically wrong, lying on a resume can lead to problems for the company that hires this person, and everyone loses,” Helms says.
Smart Business spoke with Helms about how to make sure you don’t recruit someone with fake credentials.
How can employers be sure resumes are accurate?
The information that job candidates most often falsify on their resumes are employment history, skills, education records and salary details. To check the validity of their claims, conduct an initial phone screening with candidates that you as a hiring manager or human resources representative are interested in pursuing. This will save the time you would otherwise spend bringing in people who have not been properly qualified for face-to-face interviews.
What should employers look for if they suspect a resume is falsified?
Recruiters receive many unqualified candidates who apply for positions through Internet job postings. When submitting an application through these avenues, candidates generally omit or falsify information they believe will turn off potential employers, such as positions they held for a very short period of time and being fired. Recruiters and hiring managers should watch for:
? Unexplained gaps in employment
? A reluctance to explain the reason for leaving a job
? Unusual periods of self-employment
Always corroborate the above information by calling references, including clients they had during self-employment periods. Be aware that candidates falsifying this information might provide fraudulent references. Always check the websites of previous employers and use the phone numbers found online for employment verification.
How can you screen candidates’ job experience?
A person submitting a false resume knows that companies and recruiter agencies search for candidates through online job boards using keywords. They also know that to end up in the top two to three pages, they need to match as many keywords as possible, so they add skills to their resumes that are commonly searched for by companies, whether they possess the skill or not. Ask candidates to send updated resume with details for their listed skills, specifying whether they’ve applied the skill on the job or just had a training course. If they have undergone training, find out where that was undertaken and for how long.
If they have hands-on experience, find out when it was obtained and when it was that they last applied it in a work environment. Asking these questions forces them to cut down their list to only those skills with which they are most comfortable. Now they know you’re serious about qualifying them. If you are recruiting for a technical position and they’ve listed skills or experience you’re unclear about, have someone within your company who has these skills conduct the initial technical phone screening.
How can you verify a candidate’s education?
Some candidates might exaggerate their educational history. To screen them, contact the college or university on the resume to verify a degree was granted. Applicants might list a completed degree when they did not finish all courses and graduation requirements. If a college name is unfamiliar, check the website of the school, verify its accreditation and evaluate the nature of the school.
Diploma mills — institutions of higher education operating without the guidance or supervision of a state agency and/or professional association that grant fraudulent diplomas — abound online. There are more than 400 diploma mills in operation, with another 300 websites offering counterfeit diplomas.
What types of candidates are most likely to exaggerate on their resumes?
Faking and embellishment are both commonly found on resumes, especially on those of salespeople. Candidates in this field tend to add their fixed salaries, their sales-based incentives including potential incentives that would have been theoretically paid to them if they had met some highly improbable sales goals and wrap these up into their ‘current salary. Some companies ask to see the last pay stub or W2 form om sales candidates to verify their claims. However, it may be illegal to ask, so check with your state labor department. Make sure you ask someone if his or her annual salary includes a bonus. If it does, look for the amount or percentage of salary and find out whether it is based on individual or company goals.
How can employers be sure candidates worked where they say they had?
Watch for companies with buzzwords such as Tech, Info and Infocom in their names, as these can be fictitious. If you have never heard of the company, check the Registrar of Companies online to see if it is actually registered. At the interview, ask specific questions about which office they worked in, the address, how many people work in that company and the name and phone number of the immediate manager. If a company employs more than 100 people and they give the name of the CEO for everything, look into it further.
Remember that mistakes and misunderstandings do happen. If you find a discrepancy, give the candidate an opportunity to explain. Use common sense and trust your intuition and experience. If something doesn’t seem right, follow up on it.
MJ Helms is director of operations for The Ashton Group. Reach her at firstname.lastname@example.org.
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Learn how SBA Financing can help your business grow & succeed
Thursday, May 31, 2012
10:00 a.m. to 11:00 a.m. EST (US & Canada)
Registration is required: Click Here to Register
If link does not work, type the following address into your URL:
Brief description of the topic:
In trying to grow their businesses, owners often find themselves seeking credit to finance those expansions.
Join Kreischer Miller, Fox Rothschild LLP and PNC Bank for this free webinar that will be hosted by PNC Bank and Smart Business to learn how U.S. Small Business Administration (SBA) loan programs may help.
The SBA offers a variety of loan programs that provide basic to complex financing solutions that business owners might not be able to attain conventionally. Hear from our well-versed panel — a CPA, an attorney and a senior SBA business development officer — who will go through case studies that show the unique ways SBA loans can be structured to help businesses successfully grow and expand.
In this session you will learn:
- How the SBA transformed since the Small Business Jobs Act was passed in 2010
- Benefits of SBA financing vs. conventional financing
- Overview of the SBA 7(a), 504 and Express Loan Programs
- Case studies showing creative ways SBA loans can be structured
Steven E. Staugaitis, a CPA and leader of Kreischer Miller’s Entrepreneurial Services specialty services group. Steve focuses on serving privately held companies with their accounting, tax and business advisory needs.
Thomas J. Kent, Jr., is a partner and Attorney for Fox Rothschild and co-chairs the firm’s Franchising, Licensing & Distribution Practice. He focuses on franchise law as well as mergers and acquisitions.
Lisa Kennedy, Vice President, Senior Business Development Officer at PNC Bank is one of the top SBA lenders in the nation. With over 22 years of SBA financing experience, she has helped fund over $150 million in SBA loans.
The Webinar and/or materials were prepared for general information purposes only and are not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell securities or currencies or to engage in any specific transactions, and do not purport to be comprehensive. Under no circumstances should any information contained in the seminar, and/or materials be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed in the seminar and/or materials are subject to change without notice due to market conditions and other factors.
PNC is a registered mark of The PNC Financial Services Group, Inc. (“PNC”). Banking and lending products and services and bank deposit products and investment and wealth management and fiduciary services are provided by PNC Bank, National Association, Member FDIC.
©2012 The PNC Financial Services Group, Inc. All rights reserved.
Executives are some of the busiest people I know. They are often some of the unhealthiest, as well.
The trend in today’s workplace is towards doing more and more with less and less. This adds strain to the already overworked executive. That strain affects the health of the executive and hinders his or her ability to do their job effectively.
This trend cannot continue. It is destroying the lives of too many top-notch professionals.
Here are 27 tips for staying healthy as a busy executive:
1. Remember to smell the flowers. Take time out to enjoy the little things in life. Being just as impressed by small events as large ones helps to cultivate wisdom and clarity.
2. Stop living a “hit-and-miss life.” Living aimlessly is like shooting multiple arrows that miss their targets. This is a waste of time and not a trait of an effective leader.
3. Anxiety is anticipation run riot. Anticipating the worst keeps us from enjoying the present. Realize that anxiety does not facilitate self-control.
4. Remember to take breaks. Taking breaks during work helps you accomplish more during the time that you are working.
5. Avoid procrastination. Remove temptations around you such as an instant messenger program or magazines, which might tempt you from being efficient at work.
6. Keep things simple. Eliminate the things that cause clutter in your life, such as unnecessary magazine subscriptions, paper and too many unused gadgets.
7. Take care of yourself. Executives who look haggard or tired tend to have more responsibilities heaped on them, because your physical condition and dress sends the message that you permit that.
8. Commit yourself to exercise at least three times a week. Keeping yourself in shape will help you perform efficiently in all areas of your life.
9. Always eat breakfast. Low blood sugar as a result of not eating properly can cause unproductive afternoons.
10. Take your vitamins. If you eat constantly on the run to save time, take vitamins to avoid potential slumps in energy.
11. Bag your lunch. Not only is this cheaper, but it is more nutritious because you have control over what you eat. This can spare you from eating empty calories that exhaust you.
12. Sit down with your family for dinner. This is the one thing that you can do each day to bond with family members. It also saves money and allows you to control your diet.
13. Make dates with your mate. Planning romantic outings keeps your relationship erotic and alive.
14. Get professional help. If you can’t cope due to bad time management skills or emotional problems, get the help that you need.
15. Ask for help if you need it. Pride prevents most executives from asking for assistance from higher ups or colleagues. Being trained wastes less time than trying to figure out something yourself.
16. Make sure you have quiet time. Set personal time aside for yourself each week doing something that you enjoy doing alone. This gives you clarity and is a form of meditation.
17. Get enough sleep. People who are sleep deprived make more time consuming mistakes and are too irritable to lead a quality life style.
18. Never get too hungry. People who are hungry are irritable and make mistakes so that things need to be done over again.
19. Avoid people who suck your time. Needy or emotionally disturbed individuals can seriously throw your plans for the day astray. Avoid them the best you can.
20. Deal with your anger. Angry individuals are hasty, reckless and make careless errors that cause time consuming mistakes.
21. If you are tired, rest. It is better to rest and do a task twice as fast afterwards, rather than do it slowly because you are exhausted.
22. Take life one day at a time. Live in the present, not in the future, and you will accomplish more.
23. Give back to the community. Engage in one meaningful activity where money is “not the goal”. This empowers you spiritually and prevents you from getting too stuck in your own problems.
24. Make yourself inaccessible at certain times. Let others know when you are working and cannot be disturbed.
25. Reward yourself for a job well done. Whenever you complete a big task, make sure to keep motivated by giving yourself a reward.
26. Seek out the good in every situation. Disappointments and delays are a part of life. Learn how to make it up to your family if you are late and can’t be there for them.
27. Realize that you always have choices. Make choices about how you spend your time, and do not be at the mercy of obligations that you cannot fulfill.
As a busy executive, staying healthy has to be at the top of your priority list. It is essential to your job as a leader. Use these tips to guide you into the healthy lifestyle you deserve.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email email@example.com or visit her website at www.delorespressley.com.
In a growing business, the myriad daily tasks of getting whatever a company produces “out the door” can be all-consuming. Lots of energy is typically focused on cash flow management, finding and training new employees, meetings, sourcing supplies, deadlines, etc. In the hustle and bustle, your staff can forget the most important factor of any business: the customers. However, without what our firm refers to as “Level 5 Customer Service,” growth can stall or collapse completely.
In studies, 70 percent of why most clients leave is due to poor customer service. As managers, we need to constantly be reassessing why customers prefer our products or services over the competitions’, whether we are exceeding customers’ expectations, and how we show gratitude to our customers.
Ignoring your customers can be like sitting on a landmine. For instance, prior to social networking online, the typical dissatisfied customer would verbally tell eight to 10 people about a problem with a vendor or service provider. In the post-Facebook-YouTube-Twitter-Interest world, that dissatisfaction is posted online in ways that can travel globally within hours. A single service disappointment can turn into the bomb that crashes sales.
However, Level 5 Customer Service can halt that exponential explosion in most cases. That’s because studies show seven of 10 complaining customers will do business with you again if you solve the problem in their favor.
Service expectations vary by culture. However in Western-educated societies, there are five key customer service practices that should be taught and re-taught regularly in any workplace:
- Greet the customer verbally and with a smile;
- Listen to understand the customer’s need;
- Explain features and benefits of products or services so customers have sufficient information to make decisions;
- Suggest additional items that may address their explicit needs, as well as possible ancillary needs they may not be aware of or may not have considered; and
- Thank the customer. Thank them even when no sale occurs. Thanks – like praise – go a long way toward generating goodwill.
Last, when presented with a customer’s concern or complaint, listen attentively, do not interrupt, be polite, apologize for the inconvenience and any error, and make a decision that resolves the issue in way that leaves the customer as warm and fuzzy as possible. When you provide a customer with more than he or she expects, you create a Level 5 experience. That experience reinforces customer loyalty.
Patricia Adams is the CEO of Zeitgeist Expressions and the author of “ABCs of Change: Three Building Blocks to Happy Relationships.” In 2011, she was named one of Ernst & Young LLP’s 2011 Entrepreneurial Winning Women, one of Enterprising W omen magazine’s 2011 Enterprising Women of the Year Award and the SBA’s 2011 Small Business Person of the Year for Region VI. Her company Zeitgeist Wellness Group offers a full-service Employee Assistance Program to businesses in the San Antonio region. For more information, visit www.zwgoup.net.