Creating a B2B social media strategy

Paul Furiga, President and CEO, WordWrite Communications LLC

Paul Furiga, President and CEO, WordWrite Communications LLC

Paul Furiga can get the attention of a business-to-business company’s CEO with a pretty alluring deal.

“I can get you to your 100 customers more often, more efficiently and with more fresh dialogue using social media than using any tool you can possibly imagine,” says the president and CEO of WordWrite Communications LLC, a Pittsburgh public relations agency. “How could they say no?”

Surprisingly, they do; the B2B market seems slow to embrace social media. Sure, business is moving online, acquainting corporate America with platforms from Facebook and Twitter to Yelp! and Foursquare. But when the best social media strategies and case studies seem to come from big consumer companies (ahem, Zappos), where do smaller B2B companies look for their social media guideposts?

Of course, some strategies are successful despite your structure, so mimicking some proven approaches from the big boys is a start. But the inherent differences between B2B and business-to-consumer companies necessitate that you tailor your strategy for your customers and goals.

“A $10 million B2C company, the average transaction size might be $100, so they are going to have 10,000 customers,” Furiga says. “The average $10 million B2B company might have 10 to 50 customers who are spending a heck of a lot more money on their average sale. For a B2C company, it’s all about how many followers you have and how much activity you get. For a B2B company, it’s not about quantity; it’s about quality — does your social media directly drive business results?”

Social media equips you with practically free tools to connect with each customer — and when you have 50 customers to their 10,000 consumers, that’s a definite advantage.

“B2B companies should be — and actually are, although you don’t see the trend yet — having much more success in social media,” Furiga says.

And here’s how.

Start with a hypothesis

Jennifer Horton, Best Practice Consultant, Eloqua

Jennifer Horton, Best Practice Consultant, Eloqua

Your first concern is probably something like, “Are business customers even using social media?”

It’s a valid question, and it’s the launch pad to creating your social media strategy.

“The first step is understanding: Are your customers there? Are they participating in those channels?” says Jennifer Horton, best practice consultant in the customer success and strategy group at Eloqua.

Eloqua, based in Vienna, Va., develops marketing automation and demand generation software to help companies “measure the digital body language of their buyer,” Horton says. The first step in that process is the same as any campaign.

“If you’re just getting started and you’re trying to understand, then let’s pick a hypothesis, i.e., ‘I think our customers are on Facebook,’” Horton says. “Then let’s prove that out or disprove it. We’ll get our Facebook page created, start to develop our fan base and use it to promote thought leadership content or upcoming events.”

To build that hypothesis, some of Eloqua’s clients use website analytics to identify which sources drive traffic to them. If they see significant volume through Facebook — which Eloqua found to be the top-referring social source of website traffic in a study of their entire client base — they dig deeper.

To prove a hypothesis, just like in a science experiment, you need research. Here, that comes from tracking what’s happening. Start with baby steps: Look at quantity before delving into quality.

“One of the places that a lot of people start is just understanding the total number of fans that they have or the total number of followers on a Twitter handle or the number of members that have signed up to receive e-mail updates,” Horton says. “Understanding your reach is definitely first and foremost. It gives you a good understanding of your potential to drive opportunities out of this group of people.”

Maybe people are already buzzing about your company, giving you a head start in building a fan base. But don’t forget about current customers on other platforms. Bring them with you, from newsletter subscriptions, e-mail opt-in lists and direct mail databases to the social space.

Then find ways to inject yourself into conversations, positioning your product or service as the answer to a question.

“Listening would be the first part of that, listening and understanding the topics that are being discussed, who’s participating in those conversations, and then identifying the appropriate response,” Horton says.

If they’re not talking about your specific company yet, back up and see what they’re saying about your industry or service. For example, Horton was on a user group one morning when someone asked for a recommendation of an e-mail tool. Knowing Eloqua’s software would be a good fit, Horton alerted a sales rep for follow up.

“The companies that are doing (social media) well are … looking at ways of identifying where in the conversation in those social channels it makes sense for them to insert themselves and … providing a relevant and compelling offer to get them to continue the conversation that maybe started in a social community,” she says.

How to maintain a family-centered service while advancing into the future

Jay Miranda, CEO, Coral Gables Hospital, Tenet Healthcare Corp.

Jay Miranda, CEO, Coral Gables Hospital, Tenet Healthcare Corp.

When one thinks of a boutique, a hospital is not usually the first thing that comes to mind; however, it’s a trend that makes sense.

A boutique hospital is small, specialized and dedicated to delivering highly personalized health care services. And, this is exactly what you will find at Coral Gables Hospital.

“A boutique-like influence is imbedded in the culture and mission of an organization and its employees,” says Jay Miranda, the CEO of Coral Gables Hospital, which is a part of Tenet Healthcare Corporation. “It’s integral for a small hospital to advance with top-notch technologies yet remain small in size, which allows it to focus on what’s most important: patients and their families.”

Smart Business spoke to Miranda about the small hospital trend, and how to maintain the culture of a family-centered service while advancing into the future.

Describe the boutique or smaller hospital trend.

Many South Florida communities, and Coral Gables in particular, have been recognized for exemplifying a particular type of style and living by creating a small town feel within a larger city. This feeling of community and identification with it creates a pleasing environment. As part of the local community, a smaller hospital strives to emulate this theme and bring this same feeling of comfort and familiarity into the health care environment.

The boutique hospital trend is growing because communities are becoming more educated and selective when it comes to their health care; they want very high quality care delivered with service excellence. It is generally smaller in size, distinguished by specialized service lines, and can offer high-quality health care within a more intimate, family-centered setting.

What are the advantages of maintaining a smaller, more family-centered health care delivery organization?

A smaller hospital often strives to put the patient first. It often has the resources to treat each patient and his or her family with respect and understanding in a family atmosphere. In a larger facility, patients and their families can get lost in a mass of ‘bricks and mortar,’ and because of the larger number of employees and organizational loopholes, it can be difficult for patients to get the special attention that they may need. With strategic planning, smaller hospitals can deliver a high degree of attention to patients, yet still maintain the same level of clinical equipment and diagnostics as a larger facility.

A smaller organization may also have more control over selecting employees that have a passion for quality service and who reflect the cultures of the community they serve. For example, at Coral Gables Hospital the majority of our staff is bilingual in English and Spanish. Our employees can relate to our diverse patients and cater to their needs. We look only for employees that exemplify the same feeling of compassion, warmth and service that our hospital is known to provide.

How can a company maintain the influence of a small, specialized company while continuing to develop and expand into the future?

Just because a hospital or ‘boutique’ organization is small in size, it is not necessarily short on resources. From a service line perspective, many smaller hospitals advance technologically and expand specialized services based on community needs. One example of this at Coral Gables Hospital is our stroke program. Many of our patients were coming to our emergency room experiencing signs and symptoms of a stroke. We knew we had to expand this level of service to meet the needs of our patients so we went through the proper processes and recruited neurologists to establish our hospital’s stroke program.

Every hospital — despite its size — must continue to upgrade its facility; continue to seek the most qualified employees that fit the organization’s cultural environment; and continue to recruit experienced physicians that can appreciate practicing family-centered medicine.

What are the challenges of running a specialized health care delivery organization and how have you overcome these challenges?

The challenges one faces today are challenges within the complex health care industry as a whole. A hospital is merely one piece of a much larger structure that is constantly evolving and changing. We have to adapt with the ever-changing industry, but as a small hospital, our No. 1 priority will always be maintaining our family atmosphere and patient-centered culture. Every day, it’s the patients who experience health care and it’s a hospital’s job to simplify the process for them and make it as comfortable as possible.

While the challenges are great, there are also many rewards, such as helping people and being a positive influence in the local community. When each staff member walks out of a hospital, he or she feels an intrinsic reward knowing that he or she has had a positive impact on a human being’s life. In patients’ most important critical, vulnerable and often anxiety-driven moments, they are helping them to feel secure that they are receiving the best care possible. This motivates them to achieve the most positive outcomes possible with each patient.

What strategic advice would you give other smaller, boutique-like companies on advancing into the future while staying true to their very consumer-oriented environment?

In a small hospital, building a family-like culture starts from the top, down through interactions between administration and management, physicians and nurses, and, most importantly, patients. This is the true challenge. Machines don’t talk to or touch people; people touch people. Purchasing equipment is something you to do to advance and support the medical professionals in their ability to deliver the best patient care, but the culture is created through the relationships fostered each day. For any boutique business, building relationships is key.

Jay Miranda is the CEO of Coral Gables Hospital, which is a part of Tenet Healthcare Corporation.

How to benefit from a better understanding of Illinois’ tax regime

Pam Huelsman, Manager, State and Local Tax, Brown Smith Wallace

Pam Huelsman, Manager, State and Local Tax, Brown Smith Wallace

After some challenging years in a recessionary economy, businesses aren’t the only ones feeling the crunch.

States — including Illinois — are hurting, and to regain strength, they are more closely enforcing tax law and, in some cases, increasing taxes.

According to Pam Huelsman and Susan Nunez from Brown Smith Wallace LLC’s Tax Services Practice, the state of Illinois is in a difficult financial position. The state currently imposes a multitude of taxes, and recent legislation increased the personal income tax rate by 67 percent, increased the corporate income tax rate by 46 percent and suspended the net operating loss carryover deduction for taxable years ending after Dec. 31, 2010, and prior to Dec. 31, 2014.

Susan Nunez, Principal, State and Local Tax, Brown Smith Wallace

Susan Nunez, Principal, State and Local Tax, Brown Smith Wallace

Senate Bill 2505 was signed into law by Gov. Pat Quinn on Jan. 13, 2011. The tax rate for individuals, trusts and estates will increase from 3 percent to 5 percent for taxable years beginning on or after Jan. 1, 2011, and prior to Jan. 1, 2015, with reductions thereafter. The corporate income tax rate will increase from 4.8 percent to 7 percent for taxable years beginning on or after Jan. 1, 2011, and prior to Jan. 1, 2015, with reductions occurring thereafter. The personal property replacement tax remains unchanged.

In addition to the income taxes on both personal and corporate income, the state imposes a Retailers’ Occupation Tax on sales of tangible personal property and a Service Occupation Tax on transfers of tangible personal property incidental to a sale of a service. Retailers and servicemen collect these taxes at rates which range from 6.25 percent to 9.75 percent, including both state and local taxes.

Both the Retailers’ Occupation Tax and Service Occupation Tax have a compensating use tax applied to tangible personal property acquired from out-of-state vendors. Certain exemptions from these taxes are available to qualifying taxpayers. But despite this foreboding tax climate, there are still opportunities for businesses to earn tax credits.

Smart Business spoke with Huelsman and Nunez about Illinois taxes and how your business can benefit from sound tax planning.

What is the current business tax climate in Illinois?

The financial situation in the state is serious. Illinois isn’t paying bills, and everyone is feeling the pain. The state imposes many taxes and, as shown by the rate increase for both personal and corporate income taxes, it will likely continue to look for ways to raise revenue through taxes.

What tax credit opportunities are available for businesses in Illinois?

The good news is that, despite heightened audit activity and increased taxes, there are tax breaks for businesses that qualify. An example is the Manufacturer’s Purchase Credit. Qualifying manufacturers earn a state sales tax credit of 50 percent of the state sales tax that would be paid on purchases of exempt manufacturing equipment. This credit can be applied toward the sales/use tax imposed on production-related purchases that do not qualify for the exemption.

Let’s say a manufacturing company purchases a $100,000 piece of manufacturing equipment, which would incur a state sales tax of $6,250 if not for the exemption. The company would earn a credit of half that amount, which is $3,125. It’s a win-win for companies: They are able to utilize the exemption and earn a credit to apply to tax owed on purchases of production-related equipment.

What opportunities are available for businesses to help them create jobs?

Effective June 30, 2010, businesses with 50 or fewer employees can take advantage of Small Business Job Creation Tax Credits. Every new job created and retained for one year earns credits against the state withholding tax.

The maximum credit is $2,500 per employee, and businesses must meet certain salary thresholds to qualify. The credit will be available beginning July 1, 2011, for those qualifying companies that have, since June 30, 2010, hired and retained new employees.

What are enterprise zones, and what benefits do those in Illinois provide?

The Illinois Enterprise Zone Program is designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state. Illinois’ enterprise zones offer a multitude of tax benefits for businesses located in the zones, including sales and use tax exemptions for building materials, property tax abatements and investment tax credits for business income taxes.

To illustrate, Madison County has three enterprise zones and St. Clair County has four. You should consult your tax professional regarding these zone benefits.

What are some tax compliance issues that businesses should be aware of?

Many businesses understand and collect sales tax but are unaware of a compensating use tax due on purchases made from out-of-state vendors.

Given the current environment, it’s a particularly good idea to consult with a knowledgeable tax accountant to determine your potential use tax liability and avoid costly state audit liabilities.

Also, businesses should keep current with the applicable sales tax rates in their local jurisdictions. Businesses that do not collect the proper rate will be required to furnish additional taxes not collected from customers.

It’s definitely a case of pay now, or you’ll really pay later.

Pam Huelsman is manager, State and Local Tax, at Brown Smith Wallace in St. Louis, Mo. Reach her at (314) 983-1392 or [email protected] Susan Nunez is principal, State and Local Tax, at Brown Smith Wallace in St. Louis, Mo. Reach her at (314) 983-1215 or [email protected]

How alternative funding of your health plan can benefit your business

Steve Freeman, President, USI San Francisco

Steve Freeman, President, USI San Francisco

The idea of funding your own company’s health insurance plan may seem riskier, but this alternative funding method is actually no riskier than participating in a fully funded plan. With alternative funding, your company — not the insurance company — benefits when the plan shows a profit, says Steve Freeman, president of USI San Francisco.

“The benefits are twofold,” says Freeman. “If you implement any type of claims savings strategies, you, as the employer, get to participate in those savings. And second, you get the underlying claims data that you don’t typically get under a fully insured plan, which can allow you to better manage the plan to meet your employees’ needs.”

Claims data includes the number and length of hospitalizations, frequency of emergency room visits, outpatients visits, pharmacy usage and any other useful information.

Smart Business spoke with Freeman about why self-funding an insurance plan can be a smart move for companies with as few as 50 employees.

Isn’t it risky for a company, especially a smaller company, to use alternative funding for its health plan?

The available products have taken those risk elements out as far as monthly claims fluctuations, large claims and termination of the program. The insurance company provides cost limits insurance for any large catastrophic claims to cover that liability, and if you want to get out of the program, it also provides insurance for that. Liability under a self-funded program is no more risky than that of a fully insured program.

What are the cost benefits of alternative funding?

The alternative funding programs that are available allow smaller employers to self-fund while providing safeguards that the overall premium will be no more expensive than in a fully funded plan. And if an employer has good demographics, encourages wellness and for its employees to be smart consumers of health care with consumer-driven health care solutions, the resulting claims savings have a direct impact in reduced premiums. You don’t have to wait until the end of the year to see what the entire pool has done and how it will impact premiums.

If you have a group that’s fairly healthy and your employees are taking care of themselves, but they’re in a fully funded insurance pool, they are supporting groups that aren’t healthy and are paying the same rate as those groups. But being healthy drives the cost down, and in a self-funded program, the employer pays less immediately in reduced premium.

It also eliminates the surprise of large rate increases, because the employer is aware of exactly what is going on in the plan. With fully funded, you wait until 60 days before renewal and your insurance company delivers the rate increases. With alternative funding, there are no surprises because you know how the plan is running during the year, so there’s more predictability as to what your pricing is going to be year to year.

What are the other benefits of alternative funding?

Employers have access to underlying claims data, which provides information on how employees are using the health plan without disclosing specific employees’ or dependents’ information as protected under HIPAA.

Having access to that data allows employers to really understand the underlying costs. And based on that information, an employer may decide to install a wellness program, or laser in on the conditions that affect employees, allowing it to customize the health plan for its population. Another benefit is the elimination of state mandates, which can account for 5 to 10 percent of premium costs. If a state mandates coverage of bariatric surgery and you have a young, healthy population, the flexibility of plan design can help you avoid that mandate. You can also reduce your premium tax, as the tax will only be based on about 25 percent of the premium, versus the 100 percent in the case of fully insured premium, allowing that savings to come directly back to the employer.

Finally, because you’ve unbundled the components of the plan, the insurance company is showing you the actual cost of each component instead of having it all rolled up into one rate.

Why are more smaller businesses choosing alternative funding?

Employer groups are spending a lot of money per employee for health care, and a lot of them are facing large increases and asking why. Employers are saying, ‘I don’t understand it. My employees don’t go to the doctor, no one’s been hospitalized. I want to see the data that shows actual utilization, and I want to see the underlying cost of what is driving the rate increase.’

It’s like the difference between your electric bill and your cable bill. With the cable bill, you pay the same amount regardless of usage. But with utilities, you can control your usage and you only pay for what you use.

What should a company consider when deciding whether to self-fund?

Regardless of industry, a company should look at its underlying claims cost, whether it has a high-risk business or low-risk business, whether its employees are older or younger.

If you’re fully insured, the insurance company will apply a certain creditability to your claims experience, so if you have had bad claims, the pricing in the next year will be higher than normal. If your claims have run favorably, they may be less than the average.

Self-funding works the same way, except you don’t pay the average rate. Once CEOs understand how this works, the usual reaction is, ‘This makes all kinds of sense. Why would we not do this?’

Steve Freeman is the president of USI San Francisco. Reach him at (925) 472-6772 or [email protected].

How you can take advantage of tax changes while they last

Marc Berger, shareholder, Burr Pilger Mayer, Inc.

Marc Berger, shareholder, Burr Pilger Mayer, Inc.

When businesses began planning late last fall for 2011, there was a lot of uncertainty surrounding taxes. Congress had yet to act, and with no solid numbers in place, businesses were left with no clear direction.

The passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 in December settled some of those questions in a way that will benefit businesses through the end of this year, says Marc Berger, a shareholder at Burr Pilger Mayer, Inc.

“The passage of the act provided a greater incentive for businesses than expected,” he says.

Smart Business spoke with Berger about how companies can take advantage of changes in bonus depreciation, Section 179 and the qualified small business exclusion.

How did passage of the act impact bonus depreciation?

Bonus depreciation increased from 50 percent to 100 percent for purchases made on or after Sept. 9, 2010, through the end of 2011. Instead of depreciating an asset over its useful life, bonus depreciation allows you to write off the entire amount in the year of purchase. The act is retroactive, so equipment bought on or after Sept. 9 qualifies.

There are no limits on the tax deduction, but equipment must be purchased new, and it must be placed in service in the year in which it is claimed. Because the legislation was passed so late in the year, unless the order was already made, few companies would have had the opportunity to order equipment and have it in service by the end of the year.

However, for almost any business, this is a tremendous incentive to purchase equipment in 2011. This is a push to get the economy moving this year, but bonus depreciation is scheduled to revert to 50 percent for purchases made in 2012.

Almost any company can benefit, but if a business has the research and development credit, it may want to compute taxes both ways to see which way gives it the best benefit: taking the bonus depreciation and reduced R&D credit, or taking regular depreciation and the entire R&D credit.

How can businesses take advantage of the changes to Section 179 expensing?

Section 179 limits were increased as a result of the Jobs Act of 2010. The section specifies the limitation on how much can be written off in the first year of an asset purchase and is different from bonus depreciation in that it can apply to used property, as well as new. It also applies to certain classes of assets that don’t qualify for bonus depreciation, such as certain leasehold improvements.

With the increase in limitations, a business can write off up to $500,000 in qualified capital expenditures. Because the intent is to encourage smaller businesses to spend, you can only take this credit if your business is purchasing total equipment valued at $2 million or less. Typically, a larger corporation would choose bonus depreciation over Section 179 because its purchases exceed the $2 million limit, but use Section 179 for certain leasehold improvements.

This increase to $500,000 is only in effect through 2011 and will revert to a limit of $125,000 in 2012.

How can the purchase of qualified business stock provide increased returns to investors?

If an individual owns qualified small business stock and meets all of the requirements, when that person sells it, the entire amount of the gain is nontaxable

Previously, there was a 50 percent exclusion for small business stock, but Congress has tinkered with that over the years to make it increasingly beneficial, to the point where, in 2010, stock acquired after Sept. 27, 2010, through the end of 2011 will qualify for a 100 percent exclusion. None of the gains will be taxable, and they won’t be taxable for the purposes of AMT, either.

To take advantage of qualified business stock, the company from which the stock is issued must first be a C corporation — LLCs, S corporations and partnerships do not qualify. As a result, one of the emerging issues is whether a company that is an S corporation or an LLC should convert to a C corporation to take advantage of this provision.

To qualify for the nontaxable gain, the investment must also be in an active business — it can’t be an investment entity — and it has to have had assets of $50 million or less at the time of the business’s inception. In addition, the stock must be held for five years. Finally, there’s a limitation on how much gain can be excluded of $10 million, or 10 times what the taxpayer paid for the stock, whichever is greater.

Qualified business stock is essentially providing a benefit to people who are willing to invest in a venture-funded company, making this a good time to invest.

How can a business benefit from being located in an Enterprise Zone?

There are five California tax incentives available for a business located in an Enterprise Zone. The incentives are a hiring credit, sales or use tax credit, business expense deduction, interest deduction and net operating loss deduction. There is a common misperception that enterprise zones are only in blighted areas, but that is not the case; there are areas of the financial district in San Francisco, for instance, that are in enterprise zones. To qualify for the hiring credit, potentially the most beneficial incentive, a company must also have qualified employees. One of the criteria for qualified employees is that they reside in a Targeted Employment Area (TEA).

With so many changes in the tax laws, businesses should consult with their advisers to see whether they qualify for credits and to plan their year to take maximum advantage of the tax laws.

Marc Berger is a shareholder at Burr Pilger Mayer, Inc. Reach him at [email protected] or (925) 296-1030.