- What I
Learned on the Inside
- Want
to keep customers coming back? Use email!
|
 |
54%
of small businesses rate e-mail as the top online promotion to
drive site visitors and customers to their web sites and
storefronts* |
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A
2% retention rate is equivalent to cutting your sales costs by
10%. ** |
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In
marketing I've seen only one strategy that can't miss -- and
that is to market to your best customers first, your best
prospects second and the rest of the world last. -
John
Romero | | 
| Editor's
Note: The most difficult hurdle for most new businesses to
overcome is financing: you have the idea, but how do you get it off
the ground? Should you borrow from friends and family, seek private
angel investors, try to attract a professional venture capital
investor, or eschew outside investment completely and pursue a
slower, self-funded strategy? Jeff Kearl, head of sales and
marketing here at LogoWorks, came to work with us from the heart of
the dark and mysterious world of start-up financing, the venture
capital firm. Since his intimate knowledge of this important subject
is regularly sought, we have asked him share some of his insights
with you in a series of articles. The first installment was "Sources
of Capital." (July Issue) In this issue, Jeff tackles the issue of
valuation in "How Much Do I Give Up?" Next month, he'll ask the
question "To Raise, or not to Raise." We wish you success in growing
your business.
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What
I Learned on the Inside: Part 2
BY
JEFF KEARL
 ValuationPerhaps the most common
questions about valuation are, "How much do I have to give up?", and "How
much money should I ask for?" The answers to both questions will of course
vary from business to business, but I will try to give some general
guidelines. To some degree, the best way to raise a lot of money
at a high valuation and favorable terms is to get your business to
profitability by bootstrapping. I discussed this at length in last month's
article. This gives you flexibility in your fundraising and allows you to
be picky about when and how much you raise. Alas, I concede that some
businesses are not good bootstrapping candidates and will need to raise
money before they have revenue or are profitable.
The first consideration is the distribution of equity among founders,
management, employees, and investors. Smart investors know that the
alignment of self-interest is critical for success. In one of the
investments I was involved with, we actually purchased a company with $5
million in annual revenues from the founder. In turn, we created an
incentive stock option pool as a vehicle to allow the employees to earn
equity. However, the pool was less than 15% of the total equity of the
company. Not long after the transaction closed, the company decided to
open a credit line for inventory financing. The bank wanted a personal
guarantor. We knew the equity incentives were too small when the CEO
called and said, "You do it, it's your company". I've heard equity
compared to manure. If it piles up in one place then it really stinks, but
if you distribute it across a large area then the smell goes away and
things start... Full
Article Want
to keep customers coming back? Use email!
BY
CONSTANT CONTACT
 Improve customer retention with targeted emails to your
customers and prospects and see how repeat customers can dramatically
increase your bottom line. Learn how email has made customer marketing
affordable for even the smallest business. Email newsletters and
announcements can be your best (and most affordable) way to increase
loyalty and repeat sales.
Experts agree and evidence abounds that profitability is all about
creating loyal customers and driving repeat business. And since it is
roughly six to twelve times less expensive to sell to an existing customer
than it is to acquire a new one, the value of customer loyalty and repeat
business is just too compelling to ignore.
How do you get repeat
business and earn customer loyalty? Take a lesson from small businesses
that long ago grasped the dynamics and importance of building customer
relationships through communication. They nurture their customers over
time by learning and remembering individual preferences and interests.
They acquire this customer information directly from customers through
personal interaction. And they keep in touch with customers on a regular
basis ensuring their business remains "top of mind."
Statistics show that it takes six to seven contacts before you can turn
a prospect into a customer. All that contact can be expensive and time
consuming. That's where email marketing becomes a critical part of your
marketing efforts.
Email marketing enables you to proactively communicate with your
existing customers, prospects, or members instead of passively waiting for
them to return to your Web site, visit your store or office, or call
you... Full
Article »Visit Constant Contact
*DMA
Interactive
**Jerry Hocutt, Hocutt &
Associates |
 |
Costa-Azul
|
|
|
Costa-Azul
specializes in fast-casual Mexican Dining. Location: Provo,
UT. President: JD
Gardner
Tips from JD:
| |
| 1. |
Spend money where it counts. |
| 2. |
If you have a great image (logo), then you can sell
merchandise. Customers become walking ads for your
business. |
| 3. |
Make sure customers feel like they are getting
value - don't skimp on portions. |
| 4. |
Make it fun - employees work harder where the
atmosphere is enjoyable. |
| 5. |
Share profits with managers and employees. Everyone
thinks like an owner.
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Full Spotlight
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