Sharon Hadary dreaded making the call, but she had no choice. Like many start-up business owners, she'd reached a point where she had two big obligations and resources to meet only one in full.
So she called her creditor-American Express, in this case-and explained anxiously to the woman she'd never met that, this month, she had to choose between paying her employees and paying her finance company. To her surprise, the American Express adviser insisted Hadary's employees come first and that the finance payment could wait for better days.
"I am so loyal to American Express now," says Hadary, executive director of the National Foundation for Women Business Owners in Washington, D.C. "It's not only how you bring women to the door, it's how you treat them after they get there." Loyalty is a trait women business owners share, according to Hadary and others, with an intensity that may be foreign to many male entrepreneurs.
Women are starting businesses at twice the rate of men, according to the U.S. Small Business Administration, and today own nearly 40 percent of all firms. These eight million companies contribute $2.3 trillion to the nation's gross domestic product and employ more than 18 million people. Yet NFWBO research shows women are less likely to be involved in selling to government and corporations. While set-asides have guaranteed access to some government contracts, some companies are just beginning to realize the profit potential of women owned businesses.
"The situation is improving, but it's not a level playing field yet," says Susan DeFife, president and CEO of womenCONNECT.com, a McLean, Va.-based online community facilitating contacts between female professionals and business owners. Financial service companies, banks, brokerages, insurers, technology and telecommunications providers are in the forefront of marketing and selling to women entrepreneurs. So are household consumer-oriented businesses that recognize that women make 80 percent of the nation's purchasing decisions. "If half the population isn't responding to your marketing campaign, it's costing you more in lost opportunities than in sales dollars."
Loyalty is only one reward many women bequeath on companies responsive to their needs.
"It's much more important to women than to men that a relationship is built," Hadary notes. Price and a good sales pitch aren't going to count for as much when a potential suitor for new sales has established a relationship of mutual trust and respect with a woman entrepreneur. "When someone is patronizing you, it is quite obvious," cautions DeFife. "Relationships build sales; sales don't build relationships."
Women expect results. "Women are asking, 'How does this make it easier to manage my company?'" says Joan Steltmann, market development executive for women owned businesses and Internet initiatives at IBM in Chicago. Research shows women surf the Internet less than men, are more likely to visit the same sites repeatedly and communicate by e-mail. Hadary adds, "I don't mind going into a company and saying, 'If you can't follow through on your promise, forget it.'"
Women want information. "When women ask a lot of questions, that doesn't mean they're not going to buy," Steltmann says. "It means they're doing their homework before they buy." Sales reps should be prepared to provide, or at least quickly find, as much detailed information about their product or service as a woman requests. And high-pressure, high-turnover sales pitches are likely to fail. "If she says she will think about it and get back to you, she will think about it and she will get back to you."
Women communicate with women. That's one reason IBM decided to concentrate much of its outreach on women business organizations such as NFWBO, Steltmann says. The nonprofit NFWBO recently started offering consulting services to companies that want to reach out to women business owners, Hadary says. "I think we are comfortable giving advice that they don't want to hear but that maybe they need to hear."
"Companies are now seeking the opportunities [with women owned businesses], rather than waiting for us to come to them and provide the opportunities," DeFife believes. Meeting women's buying needs need not be wrenchingly difficult for male owned companies, Hadary insists: "Many of the things that you're doing with your markets in general you can just strengthen and intensify them for women.
"It takes longer to make the sale, but that's a customer that's going to be with you a long time, as long as you give good customer service."