The Word Strategist

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Are Keywords Still Relevant?

Posted on: June 17th, 2015 by Wendy Gittleson
Featured image via eSocialMediaShop on Flickr.

Featured image via eSocialMediaShop on Flickr.

In the prehistoric days of search engine optimization (SEO), keywords were, well, the keyword. Writers scrambled to make their content fit with a predetermined set of words.

When used right, keywords were an excellent tool to help guide content. When used badly, the content was an obvious afterthought and keywords looked like puzzle pieces, with obvious seams.

Fortunately, keywords don’t have quite the same hold over writers that they did in the past. Google, being Google, is always a step or six ahead of us, so that could change, but for now, Google’s bots search far more comprehensively and they look for good content, not just a cheap attempt to fill in all the keywords.

That being said, Google isn’t psychic. Your site still needs to tell it and your customers what you do, you just don’t have to repeat it. In fact, Google frowns on repetition.

Google’s first focus is going to be on the body of your homepage. If you own a furniture store, “furniture store” should be in the body of the homepage, but you already knew that. If furniture delivery is a big part of your business, your delivery area might be important as might the main lines of furniture that you carry. Don’t save those crucial bits of information for the subpages.

You should also mention other search terms. You might, for example, mention “sofas” or “tables” but you can do that on subpages.

Google also does something these days called “semantic search,” which basically means that Google’s gotten a lot smarter. With semantic search, instead of searching for keywords, it’s searching for meaning within your website. For example, if you own a Subaru repair shop and a user searches “oil change Outback” your shop should show up, even if your website doesn’t mention oil changes.

The site is just as important

Google ranks sites that are good and popular higher than sites that are bad and unpopular. A quick loading site will rank higher than a slow one. Easy navigation is key. Run your site by a 3rd party or two before releasing it to the public. Does the layout make sense? Is the navigation bar intuitive? Take advantage of headers, footers and sidebars.

Fortunately, though, gone are the days when writers are slaves to keywords. Google can pretty much figure out that if you’re an art supply store, you probably sell stencils. If your content is accurate and relevant and your site offers a positive user experience, you will see your ranking climb.

 

How Small Businesses Navigate the Digital World Better than Big Businesses

Posted on: May 30th, 2013 by Wendy Gittleson

Katy Keim of Ad Age recently wrote an op-ed in which she warned of the fickleness of social media followers.

A customer’s love for a brand is nothing close to the unconditional positive regard we give and receive in relationships. The second you slip, deliver a disappointment, stop giving them reasons to engage, or stop acknowledging and rewarding their participation, they’ll drop you in a heartbeat.

Today’s brand-consumer relationships are not balanced. Make no mistake, the consumer is in control. Never before have consumers been so empowered. Social media today lets customers broadcast their sentiment over brand experiences – good or bad – to enormous audiences.

……..

Today’s consumer-brand dynamic is decidedly lacking in many of the characteristics we normally associate with relationships. There is little forgiveness, zero privacy and customer love is 100% conditional. There’s no kissing and making up with social customers when you disappoint them. Further, they turn others against you when they go. Fifty-seven percent of social customers say they won’t buy any more of a company’s products or services after a single negative experience, and 40% say they are also likely to warn others to stay away after a poor experience.  And with social media at their fingertips, they can exercise those inclinations in just 140 little characters.

There is a lot truth to Keim’s observations, although I’m not comfortable placing the blame entirely at the feet of social media. Never before have consumers had so many choices. Gone are the days when a trip to the grocery store meant choosing from a handful of brands of toothpaste or laundry detergent. Supermarkets and big box stores have doubled, tripled and quadrupled in size just to keep up with all the product they need to stock – and their selection dwarfs in comparison to what you can buy on Amazon.

Services are no different. In the past, the best even an educated consumer could do was to pick up the Yellow Pages and maybe talk to a few friends and neighbors. Today, we have not only social media, but auction sites and sites like Groupon which offers dramatically discounted coupons for everything from cruises to yoga classes to plumbers. Some of the most savvy shoppers I know refuse to buy anything without a Groupon.

A popular trend in TV reality shows is “extreme couponing,” where consumers, generally women, spend countless hours collecting coupons and arranging their shopping schedules around supermarket sales. They often walk away with hundreds of dollars in free groceries. While the wisdom of making buying decisions around coupons can be debated, coupon shopping is not a behavior that leads to brand loyalty.

Consumers are fickle but it doesn’t have to be that way. The reality is that consumers don’t complain as much as Keim would have us believe. Two years ago, a Spanish company conducted a survey of 90 million reviews – across the review site spectrum. The result was that 60% of reviews were positive and only 12% were negative. The rest were neutral. Granted, if one of my small business clients had only 60% positive reviews, I would consider it something to work on, but those statistics are a good place to start.

Small businesses have a tremendous advantage in the social media world. People are far more likely to post positive reviews and (more importantly) to return to a business if they establish a personal relationship with someone at the business. Recently, one client had a customer who was relatively unhappy with the service but because he had such a great rapport with the owner, he still gave a four star review. The owner, of course, did his part by bending over backwards to rectify the customer’s complaints. The customer is now expected to change his review to five stars – the maximum.

A restaurant I frequent knows me by name. Like all businesses, they’ve made mistakes. There have been times when the food wasn’t up to my expectations, but for the most part their food is excellent. I forgive their occasional screw-ups in the same way I forgive the screw-ups of my friends and loved ones – because they feel like friends to me. I doubt I could ever have the same sort of relationship with an Olive Garden or a Red Lobster.

Another example of how less is more when it comes to navigating shrinking brand loyalty is Trader Joe’s. While Trader Joe’s is far from a small business, they act like a small business. They treat their employees very well. The employees generally stick around long enough to know many of the customers by face, if not by name. A funny thing happens to businesses that treat their employees like numbers – they also treat their customers like numbers or in the case of many big box stores, bits of data.

Trader Joe’s also contradicts the idea that consumers want vast amounts of choice. They do have a large variety of goods, but they carry only a limited number of each item. For example, they carry “only” 10 varieties of peanut butter while a supermarket might carry forty. The perception is that Trader Joe’s opts for quality at reasonable prices instead of quantity. Sure, they have some products that are really awful, but people have learned to see the bad as an anomaly as they return time and time again for the good.

Big businesses have another disadvantage when it comes to social media – the number of fingers in the Twitter pie. Giving a poorly trained employee the passwords to a company’s social media campaign can be disastrous. Last October, an employee at KitchenAid sent out this tweet:

@KitchenAidUSA: “Obamas gma even knew it was going 2 b bad! ‘She died 3 days b4 he became president”.”??? Wow!” #nbcpolitics

Most (although not all) companies try to stay above the political fray. It seemed that KitchenAid was no exception. They were forced to issue an apology and they said they would fire the employee.

How can this sort of thing happen? I’ve worked in large marketing departments. Passwords to social media campaigns are not locked in a vault. If a social media manager is busy, that job might be delegated to even an unpaid intern. The same thing could happen in a small company, but typically, only the owner and maybe two other people have those passwords. When employees are more vested (either financially or emotionally) in the success of a company, they are less likely to do something so risky.

Social media, as Keim says, is a double edged sword, but if a small company treats their customers well and responds to negative reviews, they will be in a much better position than their larger competitors. All in all, it’s an exciting time to be a small business owner.

 

 

 

 

 

 

In Perhaps its Most Modern Move Yet, One McDonalds Goes Very Low-Tech in Marketing (VIDEO)

Posted on: May 13th, 2013 by Wendy Gittleson

While the quality and nutritional value of McDonald’s food is under constant scrutiny, McDonalds as a marketing mecca is indisputable. Their advertising budget alone is estimated to run about $2 billion a year. They are often criticized for the fact that much of that budget is geared toward children – and it is, but without cooperative parents, marketing to children is a waste of money.

For that reason, McDonalds is attempting to rebrand itself – somewhat. It’s trying to represent itself as a place for fresh and even healthy food and since “fresh and healthy” often harkens back to days when life was simpler – when people grew their own food – McDonalds is taking a decidedly low-tech approach with a very modern and high-tech twist.

Nationally, McDonalds started a TV advertising campaign which featured farmers who grew McDonalds’ food. The back-to-the-earth advertising campaign was followed by YouTube videos and a Twitter campaign with the hashtag, #MeetTheFarmers. The Twitter campaign turned sour once McDonalds moved the conversation to #McDStories where people started tweeting their own opinions about McDonalds, but still, it was an attempt at old meets new. Whether it was a net gain or a net loss is still up for debate, although I suspect that Twitter might not have had the negative effect some might imagine.

McDonalds, according to Neil Gordon, their Chief Marketing Officer, can either change their food or change the way their food is perceived. The problem with changing their food is that a whole lot of people love their food.

One McDonalds in Poland is taking a unique approach to changing their perception. Inspired by local restaurants who have chalk menu boards, McDonalds took that idea and turned it into a billboard – one which is designed and changed twice a day from a famous graffiti artist. From AdWeek:

“If the crowds seem larger than usual at a certain McDonald’s in Warsaw, Poland, chalk it up to the menu. We’re talking about a billboard-sized menu, hand-drawn in multicolored chalk twice daily by graffiti artist Stefan Szwed-Stronzynski as part of a campaign cooked up by the local office of DDB, art studio Good Looking and Krewcy Krawcy Productions. The goal, per the creative team, is to capture “the freshness of McDonald’s food” and the breadth of its offerings in a highly flexible way. I’d say they’ve succeeded, but no matter what this McD’s is serving, the menu itself is the special of the day.”

Of course, a billboard, no matter how hip and creative, won’t ever have a mass audience, so they made a commercial. Here’s the video:

While the video hasn’t yet gone viral, you can be sure that with Americans looking for ways they can feel good about spending their money, we’ll be seeing more personal, old school messages being taken to a very modern place.

What Would You Do if You Had a Billion Dollars?

Posted on: May 6th, 2013 by Wendy Gittleson

For many, capitalism means unfettered greed. Philanthropy, it seems, is a legal way to dodge taxes instead of an exercise in social responsibility. In today’s economy, poverty is growing, the middle class is shrinking. Overall, the only people who are getting richer are the already rich. Fortunately, some of the very rich are quite willing to share in their wealth.

On Sunday’s 60 Minutes, Scott Pelley profiled the “Modern Day Robin Hood,” billionaire hedge fund manager, Paul Tudor. The goal of his “Robin Hood Foundation” is to end poverty in New York City. His board of directors is worth a whopping $25 billion.

With expenditures of over $130 million last year alone, Tudor’s organization funds over 500 projects with goals toward feeding, educating and housing the poor. His methods are not without controversy. He approaches his giving like he approaches business. For each dollar the organization gives, they expect a $15 benefit to the community. If an investment isn’t paying off, he pulls funding, presumably leaving an organization worse off than they were before he stepped in.

Watch this video from 60 Minutes and tell us your opinion of Tudor and the Robin Hood Foundation. What would you do if your business became that successful?

It’s Time to Realize that 18-34 Year Olds Don’t Hold All The Advertising Power

Posted on: April 29th, 2013 by Wendy Gittleson

A few weeks ago, an owner of a successful blog lamented the fact that his demographic reach was strongest with women over 45. “My readers should be 18-34 year old men,” he complained.

“Women over 45 are reading your blog,” I stressed, “I would just go with it.”

The blog owner wasn’t happy with the answer, insisting that it was his blog that needed to change, not his target demographic. He needed, he felt, to feature articles that appealed to a younger audience in order to stay viable.

In the blog owner’s defense, he’s not alone in believing that 18-34 year old men are a magic goal – that if he were to reach the proper number of that elusive subset then advertisers would start pouring money in his direction.

There was a time when people over 35 were seen as set in their ways. They already knew the type of detergent or underwear they preferred and they were unlikely to deviate. In other words, young people’s minds could still be manipulated by advertisers.

That idea (largely mythological), began during the “Mad Men” era of advertising. 20+ years after the beginning of the Baby Boom, the American population was young. Specifically, in 1966, 45% of the population was under 25. That meant if a product didn’t appeal to younger audiences, they were potentially cutting their market in half.

But even then, not all advertisers thought of the young Baby Boomers as a gold mine. If a product – like a luxury car – symbolizes having arrived in life, there’s little point in targeting people who probably won’t be able to afford it for another 20 years. Even during the 60s and 70s, much of the advertising had a stodgy feel. Advertisers did know, however, that if they could convince a young person to buy a Ford Mustang, brand loyalty might encourage them to graduate to a Lincoln once they did achieve financial success. But they also knew that if they advertised Mustangs as younger, more sporty vehicles, Lincoln buyers might also purchase a Mustang as a speedy fountain of youth.

Brand loyalty has all but died since the Golden Age of Advertising. Americans are getting older, but we are also becoming increasingly youth obsessed. It’s not uncommon to see parents and teenagers wearing similar clothes, listening to similar music, buying the same electronics and being “friends” on various social networking sites.

18-34 remains the gold standard in advertising demographics, even though today’s  older consumers are nearly as malleable as younger buyers – and the older consumers generally have more money to spend.

From MediaPost.com in 2009:

“According to McKinsey Consulting, by 2010 (3.5 short months from now) 50% of all consumer spending in America will be by people over the age of 50. People 50+ earn $2.4 trillion annually compared to $1 trillion for the 18-34 group (and they spend at the same rate). Also according to McKinsey, people 50+ generate 41% of all disposable income, while they represent only 30% of the population. They buy 60% of all packaged goods, over half of all new cars and spend 75% more per vacation than consumers under 50. And in 2007, those over 50 spent 3 times the national average holiday shopping online.

And yet, less than 10% of all U.S. marketing dollars are spent against the 50+ consumer, and nationwide research shows that the majority of consumers over 50 feel that advertising and marketing either portrays them negatively or ignores them altogether.”

So, why don’t advertisers target older consumers? Perhaps it’s because many 50-year-olds see themselves as 30-year-olds or perhaps it’s because despite the fact that advertising is a creative industry, ad buyers are slow to discard decades-old notions. Perhaps it’s simply because it’s what they were told in college.

If you run a successful business, like the blog owner above, analyze your market. If women over 45 are reading your blog or buying your product, don’t reinvent the wheel. Embrace your market. Expand it if you can, but unless you have the reach of a product like Facebook, there are many millions more that can be tapped in your existing demographic. In other words, often the best marketing plan is simply to do more of what you’re already doing and never, ever, turn your back on your existing customer, no matter how old they are.

 

 

10 Ways to Get People to Open Your Emails

Posted on: April 22nd, 2013 by Wendy Gittleson

Like most people, I receive hundreds of emails a day. Most are from businesses trying to sell me something. Typically, of the few that get past my spam filter, only a handful a day attract my interest enough for me to open them. An even smaller amount will prompt me to take action by clicking on a link in the email (clicking through).

Depending on your industry, it’s estimated that between 20% and 30% of recipients will open an email blast. Smaller companies do better than larger, simply because people often feel they have relationships with the smaller companies. About a quarter of that number are interested enough to actually click through.

Done right, an email blast is an inexpensive but effective advertising campaign. Done poorly, an email blast is like throwing darts while blindfolded. Done very poorly, you could even lose customers.

Here are tips to help ensure that your next email will be opened:

1. The first time you meet or speak with your customers, send them an email – Do this immediately and tell them to expect it. If an email is opened and not reported as spam, it should flag your email address as safe with the server.

There is nothing more important than the subject line. It’s like the headline of a news article. The fact is, people are inundated with digital information. You have to be sending them something really intriguing for them to even bother.

2. Be direct and specific – Tell your customers why they want to click on your email. Your customers don’t care if you are just saying “hi” or if you’re checking in. You’d better have a reason for emailing them and you’d better announce it in the subject line, or you’re wasting your time.

3. Don’t be cute – This week, I’ve received at least two email blasts where the sender tried to go cute. They did get my attention, but with juvenile sounding words like “squeeeaaal!” and “supercalifragilisticexpialidocious,” (yes, these were both real) in the subject line, I only rolled my eyes and hit the “delete” button. The flip side of that same coin is that unless you are emailing a group of writers or English lit majors, literary references are likely to fall flat. Obscurity is unlikely to win you business.

4. If possible, personalize the email – include the name of someone they know in the company along with the recipient’s name in the subject line. Customize the email so the “from” line is an address where they’ve already had correspondence. For example, the email should come from the sales rep or customer service rep’s email, not from a generic company email. This can easily be done with most third party email companies and with some email software.

5. Don’t use all caps or lots of punctuation – Spam filters are programmed to look for things like caps and exclamation points. Words like “save,” “sale,” “pre approved,” “mortgage” and even “business” can be red flags.

6. Keep it clean – By that, I mean the standard meaning, but I also mean keep your emails free from fancy fonts, lots of graphics or extra links. Not only do spam filters tend to look for emails that look like brochures, customers appreciate a more professional approach.

7. You don’t always have to be selling – Sometimes the most effective way to a customer’s heart is to win them over slowly. Send them information that might interest them. Demonstrate your expertise.

8. Time it right – The best time to send an email is at about 6:00 in the morning. You can also get a little creative. With smartphones, an email can stand out on a Sunday, when there isn’t much competition and when people are usually a bit less busy than on a Saturday.

9. Don’t send too many – A bunch of emails, especially of the same emails, will trigger the spam filter, but they’ll also annoy your customers. Only send emails when you have something to say. If you don’t have something worth emailing at least once a month, think of something. Don’t send your customers something more than once a week.

10. Be courteous – If you are asked to take someone off an email list, do it. Always include an “opt out” option in the body of the email. In some states, it’s the law and it’s always good form.

 

 

Is Your Small Business An IRS Audit Trap?

Posted on: April 15th, 2013 by Wendy Gittleson

If your business is a sole proprietorship, there’s a better than average chance you’re cheating on your taxes – or so the IRS tells us. The IRS tends to target small businesses and in particular, sole proprietors in the real estate and construction industry. From the Kansas City Star:

A new study by the National Taxpayer Advocate used confidential IRS data to look at tax compliance in different industries and found that people who own construction companies or real estate rental firms might be more likely to fudge their taxes than business owners in other fields.

Lawyers, accountants, architects and other people involved in professional services are less likely to cheat, according to the IRS.

Every year, the IRS audits about 1% of returns. Rather than spend their resources on big corporations, who are able to shelter their tax burden or spend years in court defending their claims, the government targets the low hanging fruit. In many cases, it’s small businesses – people who might be fudging and don’t have the resources to fully protect themselves.

How does the IRS find the low hanging fruit? They run each return through a computer program. The program will assign each return with a score called a Discriminant Inventory Function (DIF). While the criteria behind your DIF score is a secret, many believe they have at least partially decoded it.

“If you’re reporting $8,000 of charitable contributions when you’re only making $50,000, that’s a red flag,” said Bob Meighan, vice president of TurboTax, an online tax preparation service. “Likewise if you’re reporting business or employee expenses that are out of the ordinary for your income range, that would attract the interest of the IRS as well.

Dr. Amir Aczel, professor of statistics at Bentley College, thinks he has done better than that by breaking the code.

According to the Pew Research Center, home offices are the number one trigger for IRS audits followed by job expenses, rental losses, business deductions and charitable contributions.

So, how do you improve your DIF score, thereby reducing your chances of being audited? Obviously, the first piece of advice is, don’t cheat. Check, double check and triple check all your numbers. Think realistically – would you believe your deductions were legit if you were an IRS agent?

The IRS claims that if you file electronically, your chances of being audited go down. On the other hand, the pervasive idea that filing your taxes on April 15th, with the flood of other tax returns, will reduce your chances of being audited, is a myth.

Fake Twitter Followers A Boom Industry

Posted on: April 8th, 2013 by Wendy Gittleson

As a marketing tool, Twitter is – well- better than you pay for in that it’s free and it does offer some benefits. That is changing as a new industry is sprouting up – selling fake Twitter followers.

If you aren’t familiar with Twitter, you should be. In 140 characters, Twitter users express their opinions on everything from breakfast to politics. It’s a bit like Facebook only instead of “friends,” Twitter users have less reciprocal relationships. They have what are called “followers” and in most cases, a follower does not become a followee.

Twitter is particularly good at making people feel as though they have a personal relationship with celebrities. That’s why nearly all of the top 100 most followed Twitter accounts are entertainment figures.

The most successful Twitter users are very prolific. You’ll often find them on their smart phones, posting or “tweeting.” Twitter moves very quickly, so posting often is the best way to stay near the top of your followers’ feeds.

Twitter’s use as a sales tool is limited (although you can tweet special offers), but it can be useful for relationship building. The best Twitter users have fun with it. It’s an opportunity  to express a little personality, within professional limits, of course.

A certain amount of credibility comes from the number of followers you have. While I am of the school that quality is better than quantity, people are more likely to follow those who have a lot of followers.

Politicians know that. During last year’s election, Mitt Romney was caught artificially inflating his Twitter numbers by buying fake followers. Now, it seems, it’s caught on and for not that much money.

Twitter, unlike Facebook, will allow people to have multiple accounts, which makes it easy for companies to create thousands or even millions of fake Twitter accounts. It’s estimated that there are about 20 million fake Twitter followers and while most of them, to a trained eye or software, are easy to spot, some of them look real enough to fool even the pros.

At a rate of about $.05 a pop, it’s easy to see why a company might be tempted to artificially inflate their Twitter account. For a bit more money, one company claims to sell real Twitter followers and not “bots” (robots). For large companies, a few thousand new followers might not raise any red flags, but for a small company, to go from hundreds to thousands of followers overnight might.

Bought Twitter followers, whether they be real or fake, will not be a targeted audience. A million bought and paid for followers might make a Twitter account look more respectable, but you won’t be communicating with your customers.

If used properly, Twitter can help your ranking in search engines (more on that in the future), but that requires a mutually active Twitter account – one in which your followers are as likely to tweet and re-tweet about you as you are to post. Fake followers, as tempting as they might be, will simply not get you there. However, if your company is one in which popularity for the sake of popularity is important (like with entertainment or politics) then, well, it won’t make you more credible and you run the risk of getting caught, but it could be worth a gamble. Of course, on the heels of the fake Twitter peddlers are software companies that specialize in detecting the fake Twitter accounts.

 

 

Is ‘Happiness’ Missing From Your Small Business Model?

Posted on: April 1st, 2013 by Wendy Gittleson

Image courtesy of Perivolas

A handful of years ago, before I relocated to California, I frequented a wonderful little store in Northwest Denver called Urbanistic Tea and Bike Shop. It was a charming brother and sister owned establishment. She served tea and he fixed bikes.

The shop wasn’t much bigger than my living room. The tea area was at the front with no tables – just lots of aromatic tea. The bikes and the bike repair were in the back. I was a customer of both.

The business model was unconventional but four years later, it still resonates in my mind – not because of it offered anything new, other than the somewhat unique combination – but because of the fact that the brother and sister seemed so genuinely happy. Imagine my delight when my Google search found that they were still there.

Every small business owner has a story. For many, layoffs or other dramatic events forced a change. Some simply decided it was time to share their talents and expertise with the world. I suspect that for many, it’s both.

A couple of years ago, Inc. Magazine surveyed small business owners about why they were in business and their answers were somewhat predictable, but most of them come down to some sort of control, whether that means controlling the direction of the business or controlling the balance between work and personal life. Interestingly, out of 10 reasons, “happiness” didn’t even make the cut. Perhaps the word is too vague. Perhaps many entrepreneurs think that discussing emotion weakens them on the business front.

Bolt Insurance did another study, which painted a much different picture. The majority of small business owners are happy. In fact, despite the built-in stress of being an entrepreneur, 70% say they’re “very happy.” 90% say they’re happier running their own business than working for someone else.

We also tend to live our businesses, with 80% saying they can never truly stop thinking about their business. The other 20%, I’d imagine, are probably in denial. Only half owned up to having trouble separating their business lives from their personal lives. I believe that number is low as well.

Confucius said “Choose a job you love, and you will never have to work a day in your life.” Beyond that, I would argue that happiness is the key to success. Happiness gives small business owners the strength and momentum to navigate the inevitable bumps in the road. More importantly, happiness is contagious. Clients are much more likely to want to do business with someone who is happy with what they do.

Happiness, in my observation, is why the brother and sister bike mechanic and tea trader are still making life just a bit more pleasurable for the people of Denver.

 

 

 

When Do You Spend Money On Your Business? (VIDEO)

Posted on: March 25th, 2013 by Wendy Gittleson

When your business is still in the startup phase, and even when it’s not, the most tempting thing to do is save money for that proverbial rainy day. Of course, having a reserve is always recommended, but in my 20+ years in the business world, the number one reason I have seen for business failure is not failing to set aside enough money. The number one reason I have seen for business failure is a refusal to spend money.

Of course, that’s not to say that you should spend your money indiscriminately. In fact, regardless of the level of your success, every dollar spent should be seen as an investment. If you are not getting a return for your money, it is simply not worth it.

So, how does one calculate ROI? It’s not always as simple as one might think. The basic formula is Gains – Costs/Costs. The video below uses an example of $1,000 in advertising bringing in $2,000 in sales. Based on the formula, the ROI would be 100%. Not bad until you start to calculate other factors in, such as the company’s manpower.

So what should you spend money on? 

Marketing – When times are tough, cutting costs is important, but more a more important strategy is marketing. Make sure your website is search engine optimized. Advertise intelligently. Now is not the time for a risky new advertising campaign. It is a good time to kill campaigns that are not working. While full rebranding might not be in the cards, if your logo looks dated, you could be losing sales – same with your website.

Your Office – Do you regularly entertain clients in your office? If so, do not cut back on the cleaning team. Ragged and dirty carpet says a lot about a business. So does old furniture. You don’t have to invest in top-of-the-line, but make sure everything is clean and not chintzy. A fountain in the waiting room might be a bit extravagant, but a comfortable place for a client to sit, is not.

Employees – There was a time when employees were the last to go. Today, it seems they are often the first. Before cutting back, calculate each employee’s ROI. You may find that hiring more sales people could help bring you out of a slump. You may find that more office people, not fewer, will free you up to do what you do best.

Computer Hardware and Software – This can be a tough one. If a computer or piece of software can dramatically save you time, it might be worth it. If not, you might wait till times are a little better. Outside sales people should have relatively new equipment and reasonably fast software.

Green Investments – Green investments have both a tangible ROI (savings in utility bills and potential tax savings) and intangible. Many customers, especially in the Bay Area, prefer to spend their money with green businesses.

Clearly, if you have an immediate cash flow crisis and credit isn’t in the cards (no pun intended), cuts sometimes have to be made which could hurt the future of the business. However, if it’s not an immediate crisis, a healthy business is built with increasing revenue, which often involves spending.

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