The call center industry often gets lumped with used car sales as a business with no scruples. These days, that’s both untrue and unfair. The better companies in the field do subscribe to a solid code of ethics and toe the line on industry-approved standards.
A call center with high standards will do a better job selling itself and, more importantly, selling its clients. It goes beyond simply being polite when dialing — today’s call centers must deal with credit card numbers and other personal data.
“As with any business, a teleservices company must find the best way to be profitable while also being a good corporate citizen and respecting the effects of its decisions on consumers, clients, employees and the community in general,” says Steve Brubaker, the senior vice president of corporate affairs at InfoCision Management Corp.
Smart Business spoke with Brubaker about the new standards of business ethics, where to look for ethical guidance and how to conduct ethical teleservices.
How are business ethics important to the teleservices industry?
There is a link between firms that practice ethical behavior and firms that are successful. According to a piece in the May 15, 2007 Harvard Business Review by Lynn Sharp Paine, research shows that avoiding misconduct and practicing good corporate citizenship contributes to a positive reputation, and that firms convicted of wrongdoing often experience lower returns in succeeding years. In addition, Paine states that a company’s ethics have important implications for its functioning as an organization, its ability to manage risk, its reputation in the marketplace and its standing in the community.
Ethics are also important to the teleservices industry because companies deal with sensitive consumer information, as they can generate tens of thousands of transactions on a daily basis. At a time when we hear horror stories about identity theft and security breaches, how you collect, store and transmit consumer information is of the highest importance. A single breach can severely hurt a teleservices company’s reputation and the reputation of the client on whose behalf it is taking or making calls and incur strict action from the Federal Trade Commission (FTC).
What organizations help define ethical standards for teleservices companies?
The American Teleservices Association (ATA) Self-Regulatory Organization (SRO) was formed in 2006 with the goal of vetting practical standards to create positive interactions between teleservices providers and consumers. The SRO interprets all of the complex laws and regulations at both the state and federal levels. However, the SRO goes beyond current legislation, in that it attempts to find the practices we can use to eliminate negative factors for consumers while also protecting our legitimate business interests and those of our clients.
The SRO has published standards that cover areas of interest, such as privacy, call monitoring, calls from charities, compliance, state registration requirements, and a host of other topics that affect teleservices companies, their clients and consumers. The standards address these issues as they stand currently and leave open the door for further dialogue in the future.
What is considered when forming an ethical standard?
The SRO examines duties, rights, best practices and commitments to determine the proper course of action in given circumstances. What are the moral obligations of teleservices companies? What kinds of conduct are desirable, even if not required? What behaviors are other entities, including clients, consumers and suppliers, entitled to expect? What behaviors fulfill our own vision of our industry and our individual companies as one that is highly ethical? What will be the effect of a given decision on each stakeholder involved, and are we maximizing benefits and minimizing negatives for all? These are the questions we ask when formulating ethical standards for the teleservices industry.
How do you ensure that your company and employees follow these ethical standards?
This is critical. Clients expect you to operate in an ethical manner at all times. Build ethical and legal behavior into your IT infrastructure to take ethical decisions out of employee hands and make sure those decisions are being made at the senior management level. This way, the employee does not have to be responsible for checking do-not-call lists or following specific calling regulations, which can vary from state to state. Audit these IT processes regularly to make sure that the systems work as they should.
A dedication to corporate ethics, in any company, must come from the top down, and management should provide employees with a solid example of how to utilize the ethical standards the company has adopted. Ethical behavior must be stressed to new employees as part of their training programs, built into employees’ daily routines, and be rewarded at bonus and review times.
STEVE BRUBAKER is senior vice president of corporate affairs at InfoCision Management Corp., Akron, Ohio. In business for more than 25 years, InfoCision Management Corporation is the second-largest privately held teleservices company and a leading provider of customer care services, commercial sales and marketing for a variety of Fortune 100 companies and smaller businesses. InfoCision is also a leader of inbound and outbound marketing for nonprofit, religious and political organizations. InfoCision operates 32 call centers at 13 locations throughout Ohio, Pennsylvania and West Virginia. For more information, visit www.infocision.com.
Injuries happen they happen on the job, on the road and at home. While the trauma of an injury is severe, the rehabilitation process can be just as grueling. The boss’s reaction at work can either make the situation easier or more painful.
According to Michael Delahanty, D.O., the medical director of Edwin Shaw Rehab and chairman of physical medicine and rehabilitation at Akron General Medical Center, prevention of injury should be an employer’s first consideration.
“Look at workplace injuries and make interventions to reduce the risk of recurrence,” Delahanty says. “For an injured employee, it is important that the employer help that worker return to work and become productive as soon as possible.”
Something as simple as a phone call lets employees know you value them, he says. Talk to the worker and ask how he or she is doing, but do not put pressure on them to return. Let the employee know you are interested in his or her health and welfare. That helps even if it is not a long-term absence or rehab situation.
Smart Business spoke with Delahanty about what business owners can do to help employees recover from serious injuries or illnesses.
Why is flexibility important in rehabilitation?
Flexibility on the employer’s part is important to help workers recover. But, the employee must be flexible, too. People get out of the habit of going to work. If they stay in that groove, it becomes increasingly difficult for them to get back to a regular work schedule. But the employer should avoid demanding that a worker come back full time, doing all the work he or she did before. This can create difficulties for a recovering worker, and you end up with an adversarial relationship. Start with a modified schedule or modified duties. In the end, you’ll have a happier employee who gets back to full productivity sooner.
Are there mental/emotional concerns as well as physical ones?
Definitely. The less satisfied and less empowered employees feel, the more likely they are to prolong their period of unemployment and not return to work. Most workers who are off the job will experience frustration. Being off work is stressful it is financially and emotionally difficult. Most people want to get back to work. After extended illness, some people become clinically depressed. The longer they are off work, the more likely this is. Chronic pain and disability meet the traditional definition of depression. In general, lower educational levels, lower job satisfaction and the presence of other issues in a worker’s life put him or her at greater risk. It’s a challenge for employers to deal with all of these aspects.
Isn’t workers’ compensation supposed to address much of this?
In my experience, the workers’ compensation program is frustrating to employers, employees and doctors. Doctors are asked to make a judgment about when workers are able to return full time to their duties. But determining a worker’s condition is not an exact science. It is a lot easier to phase in an employee’s work. Remember, medicine is not an exact science. Under workers’ comp, 80 to 90 percent of workers will get better and return to work no matter what we do. The other 10 percent will require a longer course of treatment and will be at greater risk of not returning.
What are common work-related injuries?
Back ailments are among the most common injuries at work. The whole scientific basis of the concept of back injury is very much in question. A fracture or herniated disk is obvious. But it is hard to get an objective finding on a stiff, sore or painful back. Is the pain in the head or in the back? Well, it’s both, and both have to be treated simultaneously or the patient will not get better. In general, bed rest is not recommended after back injuries unless there are clinical indications like fractures. Patients should be as active as they can tolerate. Passive physical therapy like ultrasound or hot packs are unlikely to help much. The physical therapist should get the patient as active as he or she can be under supervision, of course. Exercise is the best medicine. When a worker is off the job and it appears his or her recovery and return to work is being delayed, it is always good to have a second opinion, no matter how good the doctor, surgeon, chiropractor or physical therapist is. Build a second opinion into the company’s program through the human resources department. High-risk employees and those with other issues are the ones who need it the most, early on. The sooner they get a second opinion, the better.
Are there physical facilities, beyond the Americans with Disabilities Act, that one should provide?
For some employees, allowing them to stand on an anti-fatigue mat will make a huge difference. A bib-type lumbar corset can help workers who lift repeatedly. The employer should be flexible in providing conditions that will help the worker get back to work. Workplace ergonomics was gospel a few years ago. But the science behind it is not that great. What works for you after a back injury might not work for me.
MICHAEL DELAHANTY, D.O., Fellow, American Academy of Physical Medicine and Rehabilitation, is the medical director of Edwin Shaw Rehab and chairman of physical medicine and rehabilitation at Akron General Medical Center. Reach him at email@example.com.
While it may already be too late for baby boomers to take preventive steps to avoid painful chronic diseases, there is still plenty of time to encourage the next generation to avoid health care mistakes.
“The main thing we can do about today’s chronic conditions is to lessen the pain,” says Tim Stover, M.D., senior vice president of the Akron General Health System.
Stover strongly advises younger generations to take the right steps today for wellness and prevention to avoid the painful issues they could face tomorrow. Chronic disease prevention and management programs should be a critical component of anyone’s wellness program, he adds.
“We didn’t know so much about front-end prevention and wellness back then,” Stover says. “But, today, we do have good wellness programs that can help younger generations avoid the same situations.”
Smart Business spoke with Stover about chronic conditions and how chronic disease prevention and management programs can help you and your employees, now and in the future.
What are chronic diseases?
These are things that will probably not kill you but will be with you for the rest of your life. We are talking about issues like diabetes, heart disease, the rheumatoid complex and autoimmune system diseases. All chronic diseases cause pain and discomfort. Chronic illness defines those disease processes that patients will have for the remainder of their lives. Many will have more than one. These co-morbidities include diabetes, cardiovascular disease, renal disease and congestive heart failure. When any one of these requires acute hospitalization, the other issues always add a potential for complications.
What can individuals over 50 do about their situations now?
Health care today is not about health care, it’s about sick care, and we are headed for the perfect storm of sick care. Older individuals will demand more care resources, but there will be a scarcity of primary care physicians and a Medicare program that will be insolvent. With Health Savings Accounts becoming more popular today, patients are paying higher co-pays or deductibles out-of-pocket. Paying for these chronic conditions will be a hardship for many. But, even if you’re over 50, it is not too late to change your choices. The problem is, many of us don’t do this until we have that ‘fox-hole’ experience the heart attack, the stroke, getting adult onset diabetes, an auto accident; then we decide to change what we’ve been doing.
A wellness program helps you make those choices before the fox-hole event hits. Simple everyday things such as eating healthy and exercising will make a difference. These things are not difficult or expensive but actually doing them is another thing altogether. Besides being generally good for you, exercise is a well-documented treatment for many ailments, including hypertension, diabetes, rheumatoid arthritis, mild congestive heart failure, post heart attack and stroke, joint disease, chronic back pain and headaches.
For each age group, will wellness programs help avoid problems?
Many of these chronic problems could have been prevented by better lifestyle choices. Five choices are responsible for 70 to 80 percent of chronic health care expenditures today smoking, alcohol, obesity, driving fast and lack of exercise. These are choices we, as a society, make every day. Health care should be exactly that, health care. Do what you can to stay out of hospitals wellness is free.
How do you push wellness to the younger generations?
It is important for people to inform their children of their medical histories, so the children are aware of the possible conditions that they may face. And, show them that wellness is important to you. Once you start making the changes and it becomes part of your lifestyle, your children will listen. Advise any younger person that there are many things that he or she could be doing now that could prevent osteoporosis and other chronic diseases. Tell younger people to think of one of their relatives who has had that fox-hole experience, and then ask that person how he or she got there. Except for accidents, congenital illnesses and some cancers, there was a choice that put that person in the condition he or she is dealing with now. Most people recognize that fact.
There will always be illnesses that can’t be avoided, but many patients do not realize how much of their futures are in their hands. This is why I think the message for wellness has never be more important to the younger generation if the patient is now responsible for paying for the result of poor lifestyle choices, and we know staying as well as we can is cheaper, which would most choose? I think most people would choose wellness. But as long as someone else pays for our bad choices, what incentive is there to stay well?
TIM STOVER, M.D. is the senior vice president of the Akron General Health System and the medical director of Akron General’s Health and Wellness Centers. Reach him at firstname.lastname@example.org.
Wedding and birthday toasts always include wishes for a long and healthy life. For businesses that run employee wellness programs, there are other benefits in addition to longer, healthier lives for executives and employees. These benefits accrue both to the business and to the worker, as long as the company’s executives move the program in the right direction.
Phyllis Marino, senior vice president for the Akron General Health System, says there are multiple benefits to programs that keep workers fit and healthy. She emphasizes the hidden payoff of keeping employees fit, healthy and ready to work, as opposed to the lost time and productivity caused by sickness and the resulting absenteeism.
Smart Business spoke with Marino about employee wellness programs, what employers should look for in them and how they can enhance business.
Other than better health, what are some typical benefits one would expect from a wellness program?
Wellness programs offer many benefits for the companies that offer them. If you analyze the U. S. health care system today, providers get paid for taking care of people when they are sick in some way. It’s not really health care; it’s sick care. As a nation, we have become dependent on our employers through our health care providers to fix us when we’re better, and many of us don’t take care of ourselves like we should. At Akron General, we believe in what we call ‘well care.’ We believe that in the long run, it is less expensive to keep people healthy than to pay to cure them after long illnesses or chronic diseases. So if companies were to spend their dollars with wellness programs, it will eventually decrease their overall costs.
The general rule of thumb is that a company saves $3 for every $1 spent on a wellness program. In addition to the cost benefits, companies that offer wellness programs have employees with better morale and lower absenteeism because healthy employees are more productive, engaged and creative. Because these programs are viewed positively as an employee benefit, companies offering these programs have a more engaged work force.
What sort of payback and savings come from wellness programs?
The length of the payback period differs from company to company. Much of the payback period depends on how many employees are at risk for serious health issues, such as chronic diseases. Not a lot of data are available, but some companies can see results in one year. For many people, simply beginning an exercise program can start to lower blood pressure and cholesterol levels. Of course, dietary changes can also do the same thing.
A few astute insurers are beginning to offer cost savings to employers who offer wellness benefits. What generally happens, however, is that insurers are more likely to offer their own wellness programs such as smoking cessation or lifestyle coaching instead of offering discounts to companies that provide their own wellness services. One of the most common programs is assistance with smoking cessation. Companies with more employees who are at risk for greater occurrence of chronic diseases would probably see the most savings.
How does a business assure a reduction in health insurance costs from its provider?
At this point in time, few insurers offer such assurances. However, the trend toward this movement is gathering steam. Certainly, the long-term viability of consumer-directed health plans will mandate that people become more responsible for keeping themselves healthy. Companies that work with reasonable insurance providers should be able to negotiate good faith reductions with them. It really is a matter of collaboration. Insurers will opt for working toward the greater good. Even though a company may not receive a discount on insurance premiums yet, the day will come. And we still have many reasons to offer wellness programs a more engaged work force, lower absenteeism, increased production. The cost benefits of better health will prove themselves.
Do wellness programs make workers less injury prone on the job, as well?
All people gain alertness when they engage in a regular exercise program. A higher degree of alertness would translate into fewer injuries.
Is there a particular area exercise, smoking cessation that pays off best?
Not really. It’s often easier for companies to begin with smoking cessation, however, due to the assistance provided by insurers. Some companies begin with fitness programs; others begin with a complete health risk assessment. Research shows that 25 percent of Americans lead sedentary lives and that is particularly true of people who have desk jobs. Any program that gets them on their feet and active will help throughout their lives.
PHYLLIS MARINO is the senior vice president of marketing and public relations for the Akron General Health System. Reach her at email@example.com.
When The Fair Labor Standards Act (FLSA) was enacted in 1938, it was to ensure workers a living wage via the minimum wage requirement; to protect children from hazardous working conditions by limiting their working hours and prohibiting certain types of work; and to encourage more hiring via the disincentive of mandatory overtime pay. Record-keeping requirements were included to provide evidence of compliance, and there is a poster employers are required to display. Today, employers can find themselves in trouble by ignoring the law’s requirements, incorrectly applying the rules, or failing to consider more protective state and local laws, says Audrey Mross, who leads the labor and employment practice group at the Dallas-based law firm of Munck Butrus Carter, P.C. We asked her to help steer us through the thicket of laws and regulations.
Do employers only need to be mindful of the federal wage and hour law?
No. Employers who are not in interstate commerce will look to state law and possibly local wage and hour ordinances. Businesses in interstate commerce need to be aware of the requirements of all three. For example, if an FLSA-covered employer has employees in a state with a minimum wage that exceeds the current federal standard of $5.85 per hour, the employee is entitled to the higher state minimum wage. You can find a complete list of state minimum wage rates at www.dol.gov/esa/minwage/america.htm.
Are there many such local ordinances?
Yes, and they are increasing in numbers, although last year’s increase in the federal minimum wage may slow the spread. Years ago, these so-called ‘living wage’ ordinances applied to employers who did business with the local government. Today, many of these laws are not conditioned upon being a contractor with local government (see Albuquerque, N.M.). Instead, they may apply to any business within a specified geographic area (see Santa Monica, Calif.), and some have a two-tier approach, mandating a higher wage if the employer does not offer employee health insurance (see San Diego, Calif.).
What about overtime pay?
Under the FLSA, an employee is entitled to 1.5 times the ‘regular rate’ for time worked in excess of 40 hours in a work-week. While that hasn’t changed, several states, including Alaska, Calif. and Colo., and Puerto Rico and the Virgin Islands require overtime to be paid on a daily basis or at more than 1.5 times the regular rate. A bill in the 2007 session of the Texas Legislature proposed daily overtime for day laborers, but the measure was not enacted. We may see a similar bill in 2009.
What is the workweek?
The employer defines its own workweek. It’s a period of seven consecutive 24-hour days, which should be published in the employee handbook so that everyone knows when overtime is earned. In states with daily overtime, the workday should be similarly defined. Many employers mistakenly think overtime is paid at 1.5 times the worker’s hourly or ‘straight time’ rate. That’s correct if no additional pay, such as shift differentials or productivity and attendance bonuses, is offered. However, if other pay is received, those amounts are included in the regular rate upon which overtime is based. Don’t let the exclusion for discretionary bonuses fool you; their definition of ‘discretionary’ is not the same as yours.
What are other common employer mistakes?
One is misclassification of some contractors and nonexempts as exempt, which results in the failure to keep records of time worked and, often, failure to pay overtime. Once the misclassification is shown, there is usually no time record to rebut the worker’s sometimes-inflated opinion of how many hours were actually worked, making back-pay settlement amounts unduly large.
A similar problem occurs when the employer fails to capture and pay for all time worked by nonexempt employees. This can happen where an employee works ‘off the clock’ due to improper recording of meal breaks and when work starts and stops each day. Employers should not automatically dock an hour of pay each day for lunch, unless agreed to in a collective bargaining agreement. They should not allow employees to work at home or come in early, unpaid, and chalk it up to ‘showing initiative.’ They should not use the ‘manager override’ feature on automated time-keeping systems to reduce recorded hours when they feel an employee goofed off or otherwise did not give a full day’s work. They should know the acceptable ‘rounding’ practices under the FLSA. Here’s a hint: If you’re always rounding down, your practice is not permissible. Another hot area of debate is the compensability of time spent driving between home and first and last assignments of the day, for employees who work in the field out of their own cars or company-issued service vehicles.
AUDREY MROSS is a shareholder and leads the labor and employment practice group at the Dallas-based law firm of Munck Butrus Carter, P.C. She chairs the Employee Relations committee for the Dallas chapter of the Texas Association of Business and is on the TAB’s board of directors. Mross pens a monthly update on employment issues called Legal Briefs for HR. To be added to the e-mail group, send your request to firstname.lastname@example.org.
From the time we are youngsters, looking across the classroom at that special someone, the idea of building a relationship becomes an important part of our lives. As we grow older, we wish we could know what the “other side” might be thinking about our relationship.
The situation is no different as we mature and run a business. It is true that people prefer to do business with people they know and like. And a bad relationship will result in worse than a few tears or a broken heart. But how does one build a solid, lasting relationship with a bank? One of the biggest challenges many businesspeople face is getting to know and trust someone in the financial world. Like any relationship, it must be a two-way street.
“The more familiar your banker is with your company, the more proactively he or she will be able to provide solutions and be there for you when an unforeseen event occurs,” says Mary Patton, a commercial banker with FirstMerit Bank.
Smart Business spoke with Patton about the relationship-building process and how to ensure you’re getting the most out of your banking affiliations.
Who are the key people to know at a bank?
You should know your primary banking officer, who is often referred to as a relationship manager, along with the other key decision-makers at the bank. These may include the credit officer, the commercial banking manager and the bank’s president. Your relationship manager might suggest bringing in other people on the bank’s team, too.
To start a relationship, should I first approach a local lending officer?
You can always begin with the local branch personnel who can refer you to the appropriate individual based upon your needs. Typically, this will be a business banking or commercial banking officer who will be able to meet with you. Remember, relationships are a twoway street. It is always helpful for the banking team to be able to visit your business to fully understand your operation. The more the team knows about what you do and how you do it, the stronger the relationship.
Whom should my business bankers know on my team?
They should know all owners and key decision-makers as well as any key operational employees. This likely will include the chief financial officer, controller and, perhaps, the office manager.
What should I discuss with my local bank manager about our relationship?
It is important that the local branch manager and his or her staff know you and what they can do to effectively meet your day-to-day transaction needs. This may include change orders, special deposit requirements or requests. They want to foster a good relationship, too.
Typically, your relationship manager will provide introductions to specialists who will support your business. These specialists may include people involved with treasury management, foreign exchange, international or merchant services depending on your business needs. Your relationship manager should be viewed as an extension of your team. He or she should be proactive in learning your business and providing unique solutions to help your business succeed. This person is an advocate for you and should provide ongoing value.
Is it OK for me to have relationships at more than one bank?
There are benefits to being with one financial institution. These benefits can include more aggressive pricing, enhanced relationships and efficiencies, since you are only dealing with one institution. However, if your capital needs expand due to growth, there are times in which it would make sense to have multiple banking relationships.
How often can I call a banker before I get annoying?
You should feel comfortable calling your relationship manager as much as you need to. The more they work with you and build the relationship, they will be positioned to bring value-added ideas to your organization.
If I encounter an unforeseen problem in my business, do I contact my banker?
Absolutely, your banker is your advocate, and you should be comfortable with sharing both good and bad news with him or her. By keeping your relationship manager informed, there may be more solutions available to help you get through the difficulties you are experiencing.
MARY PATTON is a commercial banker with FirstMerit Bank. Reach her at email@example.com.
Every company is in business to make money. One of the best ways to generate a solid profit is to take care of your customers. The input costs are low; the returns are good. This is true whether the customer interaction is face-to-face or over the phone. However, customer care is a complex area.
Smart Business spoke with Paul Derbyshire, director of strategic marketing at InfoCision Management Corp., about the issues of customer care and the potential return on investment of a well-planned customer care initiative.
How low are customer care input costs?
When considering the cost of your customer care activities, spending the ‘talk time’ to introduce new products and services through a thoughtful, coordinated cross-sell program more than pays for the additional per-minute cost, effectively turning customer care into a profit-generating activity instead of a cost center. The budgets that companies allocate to handle customer care are substantial and, as a result, the trend historically has been to pursue a unilateral cost-minimization strategy. From putting the squeeze on talk times and employing impersonal IVR (interactive voice response) solutions for in-house centers to courting less effective, less costly third-party solutions from the other side of the world, the perception that a customer care solution must remain a cost center has become firmly rooted in corporate psyches.
Is customer care generally an expense or a profit-maker?
We have taken a more holistic approach to serving clients, adopting the philosophy that customer care applications need to be viewed as profit-generating activities. We’re not talking about hard-to-define metrics like customer loyalty and brand image here; we are talking about real revenue generated by the cross-sale of appropriate products and services that fit with your customers’ needs and wants.
So beyond warm-and-fuzzy relationships, are there hard-dollar returns?
A customer who calls your inbound customer care line and receives assistance that satisfies his or her needs is the most receptive candidate for a cross-sell — more receptive than if you had placed an outbound call or sent that person a mail piece. Adding a well-thought-out matrix of add-on products and services to your customer care process can turn this costly but necessary service into a profitable activity, covering the call center costs and providing a profit back to your enterprise.
Do you have some numbers to back that up?
Consider the following example (see table) of a customer care program we run for a nationally recognized bundled media services provider. We proposed a shift in strategy away from cost minimization toward profit maximization by using additional talk time to cross-sell add-on services. Before cross-selling products, InfoCision was handling the customer’s service questions and politely exiting the call. With a talk time of 5.5 minutes, it was costing our client $4.13 per call that came in. Over the course of the 99,696 calls received during this period, the billing and, in turn, the cost to our client was $411,744.
After adding a series of cross-sell opportunities, which were tailored to the services the customer already had, we handled 126,220 customer care calls. Because of the extra talk time necessary to cross-sell these products, our talk time increased to seven minutes per call, thus the billing to our client was $5.32 per call. The annualized net income that we generated through the sale of these add-on services was equal to $8.25 per call, meaning the client’s customer care was essentially free and, in addition, it received $2.93 in profit for every call that used to cost the client $4.13. Everyone wins in that scenario.
PAUL DERBYSHIRE is director of strategic marketing at InfoCision Management Corp. Reach him at firstname.lastname@example.org.
Without a plan or a road map, you never know where you will end up. That is just as true for businesses as it is for long, cross-country drives.
“Financial plans are great banking tools,” says Kim Snyder, vice president of business banking, Fifth Third Bank.
The key, she says, is to get the banker and all other members of the financial team involved early and often. “The balance sheet of a company is the company’s history,” she adds. “A good business banker will know that history intimately.”
Smart Business spoke with Snyder about financial plans and how they can help shape the future of your business.
When should a business get its banker involved?
Get them involved as soon as possible the earlier, the better. Banks can bring in experts who can provide helpful insights. Bankers have a lot of resources, both inside and outside of the bank. You should be sitting down with your banker for years prior to an exceptional need. This allows the banker to monitor your company during times of slow growth and have a better feel for the situation when an opportunity arises for faster growth or a one-time contract that needs to have an exceptional line of credit funded. The bank should play a role in all stages of your growth.
What should a business expect from its banker in this case?
In addition to lending money, the bank is a great source of advice. But, the success of any plan will depend on the openness of the client and how financially sound his or her business is. Banks bring the money to the table. They really want to lend money, but they also want to be repaid. Your bank needs to be involved in the preplanning stage, so it can follow your business into the growth stages.
How much time does a bank put into understanding a firm’s plans?
Banks will put a lot of time into analyzing and understanding those plans. Your business banker is the one who fights for your company and speaks for your company. The banker has to understand what you’re doing and why. If the bank doesn’t believe in your plan, then nothing is going to happen. However, in a situation that could go either way, if your banker has a good understanding of your business, he or she can do a much better job as your advocate.
How often should a manager have this sit-down with a banker?
At the very least, the whole management team should sit down with its business banker once a year, but quarterly meetings are best. This gives everyone a chance to review the financial plan and to talk about how the company is growing, how cash is flowing and how stretched the credit line is. The plan should define the first year and the next two years. You have to know your numbers. If you are not hitting them, it is better to see that right away to figure why you are off. Then you can adjust longer term.
Those plans should be communicated to all employees at all levels, not just the management team. That way everyone can buy in to the growth plan and know the risks and rewards.
Other than the chief financial officer and president, who on the management team should be involved?
All members of the firm’s internal strategic planning team should be present. The company’s certified public accountant and attorney should be present, too. The attorney is important. Many times, the attorney will not have the same advice or perspective as the financial members of the team. They are legal, not numbers, people. They look at protecting the business.
It is good to know how the accountant views the financial plans, as well. If a business is asking for a $4 million loan but shows an operating loss, the accountant can explain that the loss was taken for tax purposes. But, the business team needs to know that it can’t have it both ways.
What are some key metrics on a well-designed plan?
One key metric is the leverage ratio of the company three times the debt to the equity in the company ratios. Another key area is the credit score of the individual guaranteeing the loan, especially where the business relies heavily on one person. Over 750 is a good score it shows how the person manages his or her own money.
While ratios are important, all banks look at the Five C’s: character of the borrower, cash flow, collateral, capacity of the owner to repay and inject his or her own funds, and condition of the market. Sometimes the conditions in an industry segment are not right, such as gas stations and dot-com companies right now. But that does not mean that another bank might not be willing to lend. Different banks can be at different places on the cycle.
KIM SNYDER is vice president of business banking at Fifth Third Bank in Cincinnati. Reach her at Kimberly.Snyder@53.com.
Most business leaders devote some of their personal time to work with charitable groups, industry associations or their favorite political party. In many cases, the group’s activity includes soliciting people, either for financial or voting support. At this time of year, the phone seems to ring off the hook with political candidates’ prere-corded messages. Meantime, charities need to replenish their donor lists. Boards of directors at nonprofits should be consulted for guidance on phone solicitation practices.
“Generally, charities and political groups are exempt from the Do Not Call list provisos,” says Steve Boyazis, executive vice president at InfoCision Management Corp.
Smart Business spoke with Boyazis about nonprofit organizations and their phone solicitation practices.
Are all nonprofits and political groups exempt from Do Not Call (DNC) restrictions?
Most nonprofit and political organizations are exempt from the DNC restrictions. However, they are required to keep an organization-specific DNC list. If a client says that they no longer want to be called by that specific foundation, it must honor that request. So it is very important to handle each and every phone number as a long-term resource.
How should a company manage outbound expectations?
We’ve all had that situation where we get home and someone has left 20 hang-ups on our answering machine. That is certainly one way to reach people, but it is also a sure-fire way to get people to ask you not to call them back. Any outbound calling strategy just needs to be examined from the client’s perspective. It makes sense to call clients when they want to be called, make your presentation quickly and enthusiastically when you get a hold of someone, and treat his or her time as valuable. We found, time and again, that after 10 attempts or so, we basically have gotten more than 95 percent of the donations you can gather from the prospect list. Calling more often leads to a dissatisfied customer and wasted resources on the charity’s end.
From the economic viewpoint, are there certain times when it does not make sense to make outbound solicitation calls?
There’s really no right answer because if you call too much you run the risk of alienating your donor base. If you don’t call enough, you could lose the public’s affinity to your organization and what you do. In a perfect world you’d have a way to touch the donor every six to eight weeks or so — but not always with a gift request.
Sometimes, it pays to provide them with a data-rich direct-mail piece that helps explain what your organization is doing and current challenges. Other times, it may be with a quick thank-you call or e-mail. Then you mix in a request for people to get personally involved. A well-balanced multimedia campaign that is tied to current events and what is going on in the world is ultimately what builds the strongest relationships. There is really no simple, prescriptive plan you can follow.
Should DNC preferences ever be ignored?
It is absolutely OK to make fundraising calls for nonprofit organizations, but the key is understanding the full body of commercial regulations and their intent because much of it is founded in just good customer service practice. For instance, if a specific region of the country is in the midst of a natural disaster, like a hurricane, it doesn’t make sense to call in to that area. Our research shows there are specific times when people are more likely to pick up the phone, so you don’t want to make calls when they are not likely to answer.
Ultimately, the message here is all the same: You need a thoughtful, planned approach to prospecting and cultivating your clients. Just because the DNC regulations are less restrictive for nonprofits, doesn’t mean it makes good business sense to do whatever you want.
What is a good outbound-call template for a nonprofit or political group to follow?
A good call is one where you get a ‘No, thanks’ quickly if you are going to get it; and, when you get a ‘Yes,’ it comes with some real buy in. That means that the caller has made a connection on the topic at hand. You can do that by building from personal experience, reminding them why they’ve given in the past, letting them know that there is a tipping point soon to come that will help us find a cure, pass a law, explaining all the good that has come from their donations in the past or whatever. The key is all about building a relationship. When you build that with consistency over multiple calls and different media you have a much better long-term connection. So a good call flow is to start by understanding why the prospect supports the issue and quickly funneling that down to a specific and timely need to give.
STEVE BOYAZIS is the executive vice president at InfoCision Management Corp. Reach him at Steve.email@example.com or (330) 670-5877.
Remote deposit capture allows business customers to deposit checks on-site at their business location, as soon as they are received. What could be better than having a check deposited into the company’s account almost as fast as it comes through the door?
While there definitely are major benefits to remote deposit, there are some issues the prudent manager should be aware of and some procedures that must be in place before committing a firm to remote deposit.
Smart Business spoke to Lori Wood, treasury management and public funds officer with FirstMerit Bank in Columbus, to find out exactly what a business needs to know about remote deposit capture.
What does remote deposit capture do?
Remote deposit allows business customers to deposit checks on site. The checks are scanned for deposit using a computer and check scanner that is right in the company’s office. The deposit is then transmitted to FirstMerit via a secure Internet connection. Check images and data are captured, inspected, corrected and balanced right at the customer’s location. Being able to scan and deposit checks on-site reduces transportation costs by eliminating trips to the bank and fees associated with couriers. It speeds up cash flow and working capital due to the extended cutoff time, and reduces paper-handling errors along with providing for a better audit trail. Saving time is essential to a company in today’s business environment.
What can a business expect to gain from remote deposit capture?
Remote deposit not only allows for scanning and depositing checks but also allows front and back images to be stored for 24 months by the bank, at no additional cost to the business. Image files can be searched based on amount, posting date or account number. Employees can use time gained from the elimination of trips to the bank in a more productive manner. This change in the deposit process enables your corporate staff to focus on more value-added tasks within the company.
What does it cost?
Although every bank will be different, the cost of such a program is fairly comparable across most major banks. Customers should check with their treasury management banker for promotions and pricing. Remote deposit capture is sold through your bank’s treasury management department. Customers are welcome to make their initial inquiry with any branch banker or by contacting their commercial or business banker. The treasury management banker will help them with the set-up and training.
What are the risks involved in remote deposit capture?
There are several risks that should be taken into account with this product, and it is not meant for everybody. Clients retain the deposited checks for a maximum of 14 days per NACHA rules (National Automated Clearing House) before they are destroyed. As long as the customer has possession of the original check, the customer could unintentionally or intentionally deposit the check through a bank branch in addition to remotely depositing an image of the check. Checks must be secured and maintained with proper security procedures. Other risks could include employees of the client or third party stealing the checks and depositing them. Holding onto the original check creates an opportunity for fraud, funds availability exposure, kiting and forged endorsements.
Do I have to be doing online banking?
Yes, it is the responsibility of the client to reconcile all deposits the next day. While not unusual, this is something that must be worked into the accounting department’s daily workflow for deposit capture to be successful.
Isn’t there a danger of losing control of my cash flow?
Quite the opposite. Remote deposit helps improve cash flow by extending the cutoff time of making deposits for same-day credit.
Is it possible to deposit checks into multiple accounts?
Yes, the typical remote deposit program can handle up to 999 different business accounts. The client simply clicks on a drop-down box and picks the account to deposit the funds into. Should the client have offices in remote locations, a check identifier can be placed on that location for easy tracking of each separate location’s deposit.
Are there certain computer requirements for remote deposit capture?
Yes. We recommend that our clients have a high-speed Internet connection along with certain hardware and software specifications. Most businesses will meet those specifications, but, sometimes, remote offices might require upgrades.
LORI WOOD is an officer in the treasury management, public funds banking group with FirstMerit Bank in Columbus. Reach her at Laureen.Wood@firstmerit.com.