Is there a Social Media Bubble?

Social Media BubbleSocial media represents the real world network we all desire but prefer to access from the comfort of our couch, desk, or coffee shop. We can effectively ‘keep in touch’ with many more people at one time than if we were to plan coffee, lunches, dinners and phone calls. The old standard email among friends has diminished. Instead, we say, “Didn’t you see my Facebook post?” For individuals, social networking is a big win. What about for business? Does social media efficiently help businesses grow revenues, reduce expenses, and build a brand? The answer: it depends.

Social media is a powerful tool as part of an overall strategy and aligns well with organizational functions such as customer service, HR, marketing, and sales. DataKey consults with CEOs and leaders of mid-market companies in dozens of industries who are primarily concerned with business growth. Organizations that identify a target market, define their customer needs and fine-tune content to build engagement use social media more effectively than those without a well-defined marketing strategy.

Social media is often more useful in B2C organizations for lead generation, voice of the market / customer and customer support. According to Nielsen[1], there’s a 92% trust level with a recommendation from a friend, vs. only a 29% trust level from the advertiser itself. Social media has enabled a more informed consumer who now gathers third-party reviews, references and ratings before visiting your website or making a purchase. Once a customer (or potential customer) follows your company on social media, they are more much likely to make a purchase. According to one study[2], “64% of Twitter users and 51% of Facebook users are more likely to buy the products of brands they follow online.”

Case in point: Pretzel Crisps[3]. They launched a $1.00 coupon on their Facebook page. Within 36 hours, their fan base grew from 5,000 to 12,000. So, they launched another coupon – Buy One, Get One Free. Only this time, they didn’t tell their fans. No matter – fans found out on their own and the “letting you in on a secret” factor had a viral effect that exploded the fanbase from 14,000 to 29,000.  Now it’s at over 250,000. But fans just tell one side of the story.  The redemption rate for the fist coupon was 87%; the redemption rate for the second was 95%, and annual sales increased 93%.

The case is not as clear for social media for B2B business development and sales. We did a poll of 25 mid-sized B2B business owners and found that none of them are using social media as a major component of their business development strategy. In some cases, it is gaining traction where digital natives are the organizational buyers and leaders. Yet, business leaders are constantly being bombarded with messaging about “getting social” and the new “integrated marketing.” Perhaps we are experiencing a social media bubble where it is hyped to the point of not being realistic. Where is the ROI?

There is a big downside and RISK in ignoring social media – it’s ever-evolving, businesses are constantly innovating new ways to use it, and the last thing you want to do is fall behind. Undoubtedly, the value to all companies in any industry will only continue to grow over time. So even if you’re one of those B2B companies that doesn’t see the value today, it’s essential to keep your eye on social media trends and be ready to invest when you can gain an advantage.  Any well-developed marketing strategy must include a comprehensive social media plan – even if that plan is to watch and wait – now and in the future.

DataKey Difference: Anticipating ever-changing demands in the marketplace has never been more critical, especially when the competition is only a mouse-click away. To make data-driven management decisions, it is essential to fully understand the market, prospects and customers. DataKey will bring knowledge, experience and best practices to your door and translate them into techniques that will create results for your company. DataKey is accountable for recommendations and implementation. Contact us today for an initial consultation.

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3 Ways Mid-Market Companies Can Innovate

If you are a mid-market CEO, you need to be concerned about innovation. If you’re like most mid-market CEOs outside of the technology industry, you’re probably concerned that your core product(s) are or are becoming a commodity where price is dictated by the market. As a result, these you have internal cost pressure while profit growth has slowed or is starting to decline. New competitors are entering the market, competitors are taking your business, and/or consolidation is happening because scale is the only way to get better business results. Innovation is the way out of this dilemma. Here are three ways mid-market companies can be more innovative.

Innovate!Look at Consumer Products

Consumer product innovation happens at an amazing pace. Think about any product, even a commodity – for example, toothbrushes. The toothbrush itself is very basic, a handle with bristles. But with clever innovation, the toothbrush became more than just a plain old piece of plastic. Bristles were produced in different colors and lengths, handles became different shapes, battery operated toothbrushes were introduced. These days, kids listen to hit music in their heads, played by a toothbrush!

Now think about your products: what features or functions can you change? If you sell flowers in pots, make the pots stand out, perhaps the pot can be a different shape or a brighter color than your competition. If you make industrial products, create a distinguishing feature such as the shape and color. Your objective is to make your product more innovative than your competitor’s so it will stand out in the market.

Create Product Roadmaps

Technology companies at the very front end of the innovation process are continually updating their product roadmaps, always searching for new ways to improve their products and services. The search could be done by their own R&D organization, by partnering with startups, or by simply buying key technology components. All the companies that make mobile phones – Apple, LG, Samsung, etc. – have roadmaps that span years into the future. When you buy that phone in the store, you are getting a product that was conceived at least 18 months before.

Do you have product or service roadmaps? Once you identify what features or functions you can change, determine how much investment you need and an approximate ROI. If the financials make sense, then figure out how long it will take you to implement that change. Focus a small team to produce the new features and functions. Build on the first change, making your product or service roadmap into a guide for years to come. Consistent review and updating of the roadmap must be on your management agenda.

Value-Add Services

Product and service companies are often one and the same. The service often takes the lead role in creating value, especially when the product is a commodity. There are hundreds of examples all around you – just look for them! Enterprise Car Rental will “pick you up.” You buy an iPhone from Apple, and then you need iTunes and the app store to go with it. A local store or restaurant gift card is a service that helps you give a gift and helps the store with cash flow and more customers.

Are you creating new value-added services? Just like a product roadmap, services improve your connection to the customer, create repeat business, and generate new revenue streams. The internet makes services easier and more affordable to offer services than ever before. For example, if you sell or rent industrial equipment, connect your equipment to the internet to track usage, then sell customers monitoring services and predictive maintenance plans. Think about the information you have about your customers or the industries you serve and leverage that information to develop a value-added service.

DataKey Difference: Strategy is directly connected to tactical planning to ensure successful implementation. Generate inspiration towards a profitable and sustainable future for your company through innovation.  DataKey has the tools and experience your company needs to create effective strategies to help you creative innovative products and services, specifically tailored to your company’s industry, products and customers. With DataKey as part of your team, make innovation a top priority and start building towards your potential today.

13 CEO Tips for 2013 from DataKey’s Expert Business Panel

Key AdvisorsAt a dynamic panel hosted by DataKey Consulting on December 11th, local area experts raised concerns about key factors that Westchester businesses need to consider when planning for a successful 2013.  Here are the 13 tips you need to know for the coming year:

1.       Now is the time to renegotiate your lease.

As Westchester occupancy rates continue to fall and lease rates drop, tenants have the negotiating power, which means property owners are willing to negotiate.  Take advantage while the market is in your favor.

2.       “Action hubs” are replacing the corporate campus.

A sleek corporate campus is no longer enough.  Companies need to provide amenities to employees to stay competitive, and to do this cost effectively, they’re seeking out mixed-use spaces with easy access to gyms, restaurants, culture, shopping, and transportation right in one place.  Is your business poised to capitalize on this trend?

3.       If you haven’t heard of Silicon Alley, you will.

Move over, Silicon Valley.  New York is the new hot spot for technology, so expect major growth in this sector in 2013.  As the financial services industry licks its wounds, technology and biotech companies are taking the reins.

4.       All companies with 50+ employees MUST provide health insurance by Jan 1st 2014.

In accordance with new regulations, employers with 50 or more full-time employees must offer affordable health coverage to those employees to avoid a possible tax penalty.  If you don’t already offer health care to employees, don’t get blindsided when the law goes into effect – you’ve got 365 days to prepare, so use them wisely.

5.       Think you have a lot of exempt employees?  Think again.

Many business owners don’t realize that non-exempt employees are eligible for overtime.  If your employee works over 8 hours in a day, NY state law says you’re technically liable for paying overtime, even if they don’t work over 40 hours that week.  In addition, many more employees are classified as non-exempt than you might realize.  Re-familiarize yourself with the labor laws to protect yourself.

6.       Know the laws if you have 10, 25, 50, or 100+ employees.

Different laws apply depending on how big your business is, and small/medium/large is not a valid classification.  Visit www.dol.gov/elaws/FirstStep.htm to understand which laws apply to your business and how the regulations change as your business grows.

7.       All employees must acknowledge receipt of a wage theft protection letter.  Have yours?

The Wage Theft Prevention Act requires that employers give written notice of wage rates to all employees by February 1st of each year, including the employee’s rates of pay (including overtime), pay frequency (by the hour, shift, day, week, commission, etc.), regular payday, and other information.  If you’re not already doing this, now is the time to start!

8.       Big Brother really is watching.

Government agencies are adding tens of thousands of auditors to focus on small and medium-sized businesses and ensure compliance with new legislation, not the least of which are the Obama health care bills.  Be proactive about making sure you’re following the new rules to avoid finding yourself in the hot seat.

9.       Like your tough managers?  They may need to soften up if the anti-workplace-bullying act passes.

The Healthy Workplace Bill was introduced to more precisely define an abusive work environment and give bullied workers – particularly those that are not protected under anti-discrimination laws – legal redress against bullying.  If your employees are toeing the line on bullying behavior, be proactive in addressing the situation before you become liable for their behavior.

10.   Tax requirements may expand depending on where you do work.

If you generate income outside of NY state, pretty soon you may have to pay income taxes on those wages.  In fact, laws about out-of-state revenue have been on the books for years, but many states were not enforcing them until the recent budget crises.  To be safe, make sure your accountant is paying attention to where your revenues originate, not just where your company is based.

11.   Surprise!  Taxes are going up in 2013.

We avoided the Fiscal Cliff, but the bad news is that the wealthiest earners in America (households making over $450,000) are looking at a tax rate increase, and those making $300,000 or more are losing some deductions and exemptions.  But even if your personal income tax isn’t going up, you’ll most likely be affected by payroll tax increases that are set to hit nearly every wage earner in the country.

12.   Be glad you’re not in Europe.

The silver lining: even with taxes going up, we’re still paying some of the lowest tax rates of all developed countries in the world.  In the long haul, countries without a strong middle class simply don’t make it.  Here in Westchester, we’ve built the foundation for lasting prosperity.

13.   Never lose focus on your fundamental business profit model.

There is no question, the business climate will remain tough in 2013. The economy remains in a precarious state with high unemployment, there’s an ever widening budget deficit, and the Obama administration has not exactly earned a reputation as business-friendly.  But regardless of all that, the responsibility of the business owner is to focus on what can be controlled. There are many ways to improve bottom line profits, and as CEO, you own keeping your eye on your fundamental business profit model.  Here’s to a bright and prosperous 2013!

Download “13 CEO Tips For 2013” (PDF)

Based on Discussion from DataKey’s 12/11/12 Key Advisors
Featured Panel of Experts

 ChrisOCallaghan Chris O’Callaghan, Managing Director, Jones Lang LaSalleWestchester Real Estate Trends & What They Mean for Your BusinessChris has more than 25 years of experience in commercial real estate and has negotiated some of the most significant real estate transactions in the region involving major companies.  He has negotiated lease and sale transactions valued at $500,000,000 involving over 15,000,000 square feet.  Prior to joining Jones Lang LaSalle, Chris served as a senior director with Cushman & Wakefield Inc. and is also the Immediate Past Chairman of the Board of The Business Council of Westchester County. 
 GregChartier Greg Chartier, PhD, Principal, The Office of Gregory J ChartierTechniques & Skills for Effective ManagementGreg is the Principal of The Office of Gregory J Chartier, a Human Resources Consulting firm, and a well-known management consultant, educator and speaker.  His practice specializes in the areas of Management Training and HR management/outsourcing for firms of less than 250 employees.  Through his management experience at multiple major firms including Pfizer, Chase, The Bank of New York and Johnson & Johnson, Greg has developed a simple training philosophy: management is a skill and you can be a better manager by developing your skills. 
 TonyJustic Anthony Justic, Partner, Maier Markey and Justic LLPSmart Financial Management for the New EconomyAnthony Justic is an audit, accounting and financial consulting partner at Maier Markey and Justic LLP.  Since 1987 Tony has been instrumental in growing his firm from 3 employees to 90 and has built expertise across a wide variety of industries, including manufacturing, distribution, marketing and PR, catering, not-for-profit, healthcare, and legal services.  In 2012, he oversaw the successful merger of an information technology company into Maier Markey and Justic LLP. 
 TedMiller FACILITATED BY: Ted Miller, Founder & President, DataKey Consulting, LLCOver 20 years of National and International Management ExperiencePrior to founding DataKey, Ted held senior positions in worldwide service, marketing, engineering, operations and strategic planning at Fortune 500 companies. As the vice president and general manager of an international technology manufacturing company, he led a $150 million division to being ranked third in the world in customer satisfaction and expanded new business regions in China and Malaysia. Furthermore, Ted has a unique ability to translate those years of best-practice, operational expertise into practical and immediate customized applications for client specific needs.

Constant Progress: Keep Your Eye on the Ball

Successful business owners know that the only way to thrive is to grow and change with the market by making use of smart strategic planning and clearly defined annual goals. Where many companies flounder, however, is in their commitment to those annual goals. Juggling day-to-day demands and unexpected emergencies doesn’t leave much time to even breath, let alone to devote to making progress on longer-term goals. Making time for those goals, however, is often the factor that sets a great company apart.

As you completed your last 3-5 year strategic planning exercise and determined what your company needs to accomplish over the coming years, you likely put much time and effort into creating S.M.A.R.T. goals, that is, goals that are Specific, Measurable, Attainable, Realistic, and Time-bound. If not, start by reviewing your list of goals and revising them to be better formulated. Be specific not only in what you want to achieve, but also who is responsible for achieving it, and make sure that you’ve set a specific date by which this goal needs to be realized. “Someday” or “sometime next year” is not going to cut it – you need to hold yourself (or the goal owner) accountable for achieving the goal in a measurable amount of time. Equipped with your goals, you’ve already laid the foundation for achievement, but you absolutely must follow through to ensure success.

A regular goal review meeting is a critical tool for following through on longer-term goals and pushing everyone within the company to continue making progress against those goals. On monthly or bi-weekly basis, company leadership and managers with ownership of goals should gather together for 30-60 minutes to discuss the status of each goal, in particular focusing on any goals which aren’t progressing or are at risk (e.g., need scope clarification scope, require resource reallocation, or are experiencing budget issues). In addition to creating openness and improving communication, a dedicated review meeting fosters a clear sense of accountability across the company and builds a strong incentive for employees to carve out time each week to devote to longer-term goals, lest they show up to the meeting empty handed in front of their supervisors and peers.

To ensure constant progress a goal review meeting should strive to follow certain operating procedures:

  • Measure progress. With measurable goals and a set deadline, it should be easy to map out major milestones that occur every few months. Hold goal owners accountable for reaching those milestones and at each meeting ask them to provide a numerical estimate (50%, 80%, etc.) of how close they are to achieving the next milestone.
  • Leverage tools. A graphical chart or color-coded spreadsheet that can be projected for everyone to see gives a clear at-a-glance picture of which goals are on track and which aren’t. Utilize a Green/Yellow/Red system to denote which goals are at risk and assign one person who will be responsible for updating the tools before, during, and after each meeting.
  • Prioritize meeting time. Spend the first 5 minutes of the meeting reviewing recent accomplishments and celebrating hitting big milestones on time. The rest of the meeting should be devoted to discussing goals in progress, particularly those that are at risk.
  • Brainstorm together. With all of the company leaders and managers in the same room, there’s a lot of talent and experience in one concentrated area. Use this resource to run quick brainstorming sessions to generate ideas for overcoming challenges and unblocking goal progress. Focus on three key areas, scope, resources and timeline.
  • Set expectations. End the meeting with a quick rundown of who is responsible for doing what by the next meeting so that no one leaves without a clear understanding of what is expected of them. Even better, assign an individual who is responsible for keeping notes and sending a list of action items out via email after the meeting.

DataKey Difference: Strategy is directly connected to tactical planning throughout the organization to ensure successful implementation.  The best laid plans can easily go awry if they aren’t constantly monitored. DataKey has the tools and experience your company needs to create and align effective goals and to help you gauge progress against those goals by designing an efficient review meetings process specifically tailored to your company’s needs and culture. With DataKey as part of your team, goal owners are held accountable for achieving company strategy and equipped with the know-how they need to get there. Take your long-term strategy off the back-burner and start achieving your potential today.

Download a PDF version of this article here.

Keys to Serious Strategy and Planning

Every company, large and small, needs a long term game plan to sustain, and better yet, improve their competitive position. Strategic planning is the only way to ensure that the long term plan for a company evolves with the change in environmental factors, the company’s core capabilities and the competitive factors in the industry.

You believe the leadership team of your company is aligned and working toward the same outcome – growing a competitive, increasingly valuable business. You work hard; your team works hard; managers do their best; employees are loyal.

It’s all great, until you realize that your business metrics are stuck – or worse – sliding in reverse. As a business owner, you want those metrics to be improving every day, every month, every year.

Companies have difficulty fully realizing their vision. Planning is difficult in the face of strong competition, declining market share, and shrinking profit margins. DataKey recommends that the Strategic Planning process be conducted over a short series of working sessions to understand the longer term company strategy and business goals. The best companies tackle strategy and planning to take advantage of new market opportunities, improve profits, and grow the business.

Below are top tips and characteristics to accelerate your strategic plan.

  • Capitalize on your company’s unique strengths which introduce a truly fundamental advantage in the marketplace. Make a move that increases your differentiation; the competition follows you.
  • Clarify the future direction of the company, the desired state over a longer time horizon, as well as, the specific steps needed for near-term success. Your strategic progress needs to be measureable.
  • Facilitate the development of a robust challenge statement and strategic vision that will have the full support of the management team. Your strategic intent must stand up to challenges. Unless your leadership team is aligned to the right strategy, nothing changes.
  • A clear, concise, written strategy will stand the ‘test of time’ and be the compass for business decisions and execution. The leadership team needs true consensus at the strategic level to guide day-to-day decisions and action.
  • Strategies for creating value have shifted from only managing financial or tangible assets to include measuring intangible pieces critical to your success such as brand recognition, internal growth and customer goodwill.
  • Establish goals for the upcoming year or two, and develop the annual action plan to move the company towards the desired state. Action plans need to consist of measurable objectives with target deadlines.
  • Each goal must be assigned to an owner from your management team, who is responsible for detailed planning, progress and proactive risk mitigation.Goals must be fully developed down to specific action plans with budget assigned.
  • The management team can hold each other accountable through a monthlygoal review process to ensure progress towards the goals by managing obstacles and risks.

DataKey Difference: Strategy is tightly linked to tactical plans throughout the organization. By following the above recommendation your company mission, strategic objectives and business goals will be thoroughly defined, aligned and integrated.

Download a PDF version of this article here.