Five Common Business Challenges

In working with small  and middle market companies, I have discovered several common financial related issues with which they struggle. When I first start working with these businesses, most if not all of these issues exist. All of them are critical to their success in managing and growing their businesses. The good news is that with time and focus they can be rectified. In no particular order, here are five that I see most:

1. Lack of Timely and Accurate Financial Statements

In today’s business environment, decisions are made at a fast pace. Information is readily available via the Internet, yet internal financial information to improve the decision-making process is sadly deficient. Most business decisions have financial implications, and without this basic financial information, it may be a shot in the dark. Many times the financial statements are put in a drawer and never reviewed because the information is too old (not timely), the business owner doesn’t believe the information is correct (not accurate) or the financial statements support the preparation of the income tax return, not running the business (not operational). They usually only become important when the business owner needs to meet with the bank.

2. No Cash Management
As we all know from operating a business, cash is king! It is the common denominator for all businesses NO CASH = NO BUSINESS. Other than the current cash balance (most of the time determined by looking at the bank’s balance) most small businesses don’t manage their cash. Cash management includes understanding your business’s “operating cycle” (i.e. cash to cash cycle). To improve your “operating cycle” it is imperative you understand what it means, how to calculate it, and what influences it before you can improve it. Many times I will ask “what do you expect your cash balance to be in 6 months?” Most of the time they are fighting cash flow problems today and can’t think about the future past this week. Managing cash flow will provide a real sense of control over the business.

3. Poor Pricing Management
Setting the price of our products or services will drive revenues and just as importantly the “gross margin” for the business. Unfortunately, not enough time and attention is provided to this aspect of business. In working with small business owners, I find many have not revised their “pricing formulas” for some time, while others don’t really know their underlying costs to derive a sales price that provides profit. Many products are market driven because of competition, so it is imperative to know not only the direct costs but all costs necessary to produce a profit. Gross margin analysis by product line, products or customer is critical for small businesses.

4. Lack of Systems & Processes
Processes, whether documented or not, exist in all businesses. It is the way we perform the work necessary to produce our products or services. In most small businesses, the underlying processes to accomplish the work are rarely documented or reviewed as a whole (i.e. system). Developing efficient and effective systems and processes generally reduce costs and/or improve productivity. In businesses where there is a high turnover of people, documented processes are critical for training to ensure employees achieve higher productivity quicker.

5. Minding and Grinding Not Finding
Jerry Mills, founder and CEO of B2B CFO®, developed a simplistic organizational model for small businesses. He identified the 3 roles in small business as Finders, Minders and Grinders. Grinders represent the employees whose focus is about today. They generally work in the production side of the business. Most Finders start as Grinders. The Minders live in the past; their work is in the administrative, accounting, customer service or warranty departments. Minders are just as critical as Grinders to the success of the company and must be led. All Finders live in the future. They are the visionaries, innovators, and relationship builders. They are the passion and the drive for the business to grow and succeed.

The entrepreneur is the Finder and must stay in the Finding role. Unfortunately, as businesses grow the Finder gets pulled into the company and works in Minding and Grinding activities. Without a change back to the Finding role, the entrepreneur/small business owner severely limits the business’s ability to grow. In working with small business clients, they almost always identify with this organizational model.

As I mentioned at the beginning of this piece, these challenges for the small business owner can be corrected. Most of them are fundamental changes. As with most challenges and the related changes, awareness is the first step.

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Vianova guest blogger Grant Brisacher, CPA, is a Partner a B2B CFO®. B2B CFO® has grown to be the nation’s largest Chief Financial Officer firm serving small and middle market companies.

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10 Lessons Learned In 2009

Wow, what a year!

holly2009 has come and gone, and many of us are taking a huge sigh of relief. Going through one of the worst recessions in U.S. history will certainly take the wind out of your sails. But we appear to have weathered the worst of the storm. And while the economy might not rebound with the speed and vigor we would like, it at least appears to be heading in the right direction again.

So what did we learn from the trials and tribulations of the past year? And how can we apply those lessons going forward?  Here are 10 things I believe that leaders need to do differently to position their businesses for success in 2010.

1. Get used to the likelihood there will be no normal anymore. The old business world that most of us knew and loved went away with the recession, and it’s not coming back. To adapt to today’s business realities, question all your beliefs and assumptions, get comfortable with uncertainty and adjust your expectations.F or most, the new ‘normal’ will be slow and sustained growth rather than a hockey-stick curve and it will continue to surprise us.

2. Break the rules. If you’re not breaking rules on a regular basis, your customers and markets have probably already left you behind. The new rule for today’s chaotic markets is to constantly challenge the status quo. Don’t automatically assume that what made you successful in the past will continue to make you successful in the future.

3. Recognize and minimize your “MSUs.” We all constantly MSU (make stuff up) about our company, industry and markets. During the strategic planning process, put everyone’s beliefs and assumptions out on the table and ask, “What do we think we know to be absolutely true about our customers, competitors and markets? Is it still true? If not, what has changed and how do we need to respond to that change?” Get data and question your long standing beliefs constantly.

4. Embrace social media. Embracing social media can be a real competitive advantage. In addition to instantly connecting you with customers, social media enables you to “mindshare” with industry peers, demonstrate thought leadership, recruit talent and more. Study the social media habits of your customers, and use the appropriate tools to make them part of your community.

5. Expect more transparency. With the advent of social media, you can no longer control public perception by limiting information about your company and products. When you withhold information, today’s bloggers, twitterers and forum posters will make it up for you. The next generation of market leaders will excel at using social media to create transparency and build trust with their key stakeholders.

6. Communicate to fill the void. Today’s employees are beset with doubts, uncertainties and fears about their jobs. If you don’t tell them what is going on, they will fill the void with rumors and misinformation, usually negative.Constantly let employees know where the organization is going and what your plan for winning is. In today’s world, you can’t over-communicate.

7. Encourage strategic thinking. Strategic planning involves a formal process whereby senior management peers into the future and charts a course of action for the organization. Strategic thinking occurs when the entire organization begins to act in concert with the strategic plan. Teach your people to anticipate opportunities and threats while managing the day-to-day tasks that fall within their scope of responsibilities.

8. Make innovation a way of life. Innovation needs to become an integral part of the way you do business, not just a one-time event. Constantly challenge the way you do things, even when they have always worked well.Strive to create new products, services and ideas that have real value for stakeholders. Look for different and novel ways to deal with ongoing challenges. Constantly seek to implement new and better ways of achieving results.

9. Slow down to go fast. In times of uncertainty, prepare to pause, focus and plan. Learn to anticipate the unanticipated by making scenario planning part of your daily routine rather than an afterthought when plans don’t pan out.Take the time to consider multiple perspectives and engage others who have diverse views. This may feel like slowing down, but will actually help you get where you want to go much faster.

10. Get back to basics. When everything around you diverts you into complexity, get back to basics.Make strategic planning a way of life in your organization. Use a strategic planning framework to drive what you do and where you focus your energies. Constantly check for internal and external forces that may impact where you’re going, what you need to do and how you need to do it. Organize your day around achieving your destination, and focus on informing, inspiring and engaging others in getting there.

Those are my top 10 tips for success in 2010. I’d love to hear what you plan to do differently going forward. 

Here’s wishing you clarity, focus, and great success in the New Year!

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Vianova guest blogger Holly Green is the CEO of THE HUMAN FACTOR, Inc. and is a highly sought after and acclaimed speaker, business consultant, and author.

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Top 10 Tips for Ringing in the Bully-Free New Year

Workplace bullying is damaging to targets, witnesses and the organization as whole. Targets become depressed and they lose their luster for work. Witnesses lose their loyalty to management. Organizations lose good employees and positive bottom line results.

Meanwhile, organizations that focus on maintaining positive and healthy workplaces have motivated and inspired employees, invest in success, increase retention and reduce turnover, have effective internal communication, demonstrate quality work product and customer service, attract better talent, and minimize costs on workers comp and potential litigation.
That said, here are 10 tips to help your organization have a bully-free 2010:

1. Understand that workplace culture is a business strategy. Strategic culture adjustments can only be made after obtaining buy-in from as many employees as possible. To do this, get them involved in developing a vision of positivity and the corporate policies that back it up. When employees feel included, they are more likely to take heed simply because they are personally invested.

2. Use communication strategically. Leaders and management can use language to deliver a healthy workplace culture, and encourage open discussions and employee empowerment. Develop rituals that applaud interpersonal communication skills, empathy, optimism, conflict resolution and positive attitudes as a part of the routine.

3. Use anti-bully corporate policies as a nail, not as a hammer. I’ve seen a lot of stuff out there claiming the answer to your bully problem is a corporate policy. We can implement policies all day long, but if they don’t have management’s transparent support and employee back up, then who cares. Policies are meant to help the process, but they won’t fix your problem.

4. Use training programs, but they only work if they are backed by performance measurements. Trainings should include topics such as conflict resolution, negotiation, interpersonal communication, assertiveness, empathy, stress management, leadership, optimism and self-examination. Now, just like corporate policies, we can train all day long, but if these programs don’t have performance measurement attached to them then they don’t matter. So expectations regarding proficiency in these areas should be tied to performance and career advancement, and show up in employee goals and awards programs.

5. Implement leadership programs. Bullies bully because the organization has given them permission (whether implicitly or explicitly). So let’s look at Allstate, who went through a systemic and strategic long-term leadership process that started in 1995. They defined leadership as “achieving results and creating a supportive work environment.” During the program, they did things like develop mutual expectations from employees to company and vice versa, utilize 360° reviews, develop resource guides for leaders, and identify internal coaches and potential leaders. It must have worked – they remain the second largest personal US insurer (Phillips & Ashby, 1999).

6. Use behavior-based interview questions when hiring new folks. Behavior based interview questions encourage interviewees to tell you stories, instead of spewing out rehearsed answers. They are probing, involve follow up questions and seek real results in their answers. Instead of asking, “Did you get along with your last manager?” try asking, “Tell me about a time you did not get along with a manager. Why didn’t you get along? What did you do to resolve the problem? What was the outcome? What did you learn about yourself?”

7. Don’t blame the victim. Unfortunately it seems that most organizations blame the target of bullying and ultimately let them either suffer until they quit or terminate employment first. Understand, however, that targets are often extremely high producers, so you’re shooting yourself in the foot by taking the aggressive, money-wasting bully’s side over the loyal high producer.

8. Don’t ignore bullying. Management often ignores the behavior in hopes that it will just go away, or if the bully is given what he or she wants the behavior will stop. This teaches the bully that aggression is okay, and they will continue to treat others with severe disrespect that only becomes worse and more frequent as time goes on. Unfortunately others will learn that bullying is okay as well, and then you find yourself with a culture accepting of bully behaviors.

9. Act on grievances immediately. Treat them just like you would treat a sexual harassment grievance. Enough said.

10. Know that positivity in the workplace starts with you. Lead by example. Maintain a positive attitude at all times. Treat others with respect and dignity. Avoid yelling and losing your temper. If you’re frustrated, step away from others until you can calm down. Smile and laugh. You spend so much time at work you should definitely be enjoying yourself while you’re there.

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Vianova guest blogger Catherine Mattice, MA, is an inter-organizational communications professional with several years experience in customer relations, human resources, strategic business development & management, and training.

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What would it take to make your company one of the top small or mid-size companies to work for?

For a little inspiration, check out the 2009 Top Small and Medium Company To Work For In America list.  The Great Place to Work® Institute and the Society for Human Resource Management (SHRM) has released their list of the top small and medium size companies in the US to work for.  Congratulations to Badger Mining of Berlin, Wisconsin for earning the # 1 spot in the Small Company (50 – 250 employees) category.  Congratulations to Ultimate Software of Weston, Florida for earning the #1 spot, again, in the Medium Company (250 – 999 employees) category.

For a complete list:  2009 Best Small and Medium Company To Work For in America 

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6 Steps to Creating a Healthy Workplace, Saving Your Bottom Line

A study published in the Handbook of Workplace Violence (2006) indicated more than 70% of employees are victimized by a bully at work. Bullies use ongoing negative, aggressive, unprofessional, inappropriate and hurtful tactics against subordinates, peers and even superiors; creating a power imbalance and inviting serious damaging consequences to targets, witnesses and organizations.

yelling2Targets experience distress, humiliation, anger, anxiety, discouragement, hopelessness, depression, burnout, reduced quality and quantity of work, lower levels of job satisfaction, increased absenteeism and turnover and in some cases even Post-Traumatic Stress Disorder (PTSD).

In turn, a single American business could spend thousands, if not millions, in absenteeism and turnover, workers’ compensation claims due to stress, reduced quality and quantity of work, lower levels of job satisfaction, communication breakdown and even a bad reputation within the community.

Bullying is not a simple case of a bad behaving employee. It is a systemic problem caused by many organizational factors, including the organization’s culture, changes (e.g., downsizing) and bureaucratic management styles.
Identifying, fixing and preventing bullying can make the difference between a successful organization and one that fails. For example, companies that openly promote civility among employees earn 30 percent more revenue than competitors, are four times more likely to have highly engaged employees and are 20 percent more likely to report reduced turnover, according to a study conducted by Watson Wyatt in 2003.

Here are six keys to successful implementation of a healthy, and bully-free, workplace.

1. Use internal communication strategically. Organizational success depends on a climate of fairness and supportiveness; where members are listening and being sensitive to one another’s needs and aware of how comments might be perceived by others. Leaders and management can use language to deliver a healthy culture and encourage open discussions and employee empowerment. Developing rituals and employee reward systems that applaud interpersonal communication skills and compensate positive attitudes will solidify management’s intentions.

2. Perform periodic audits of internal processes. Audits offer a comprehensive review of communication patterns that provide information about the structure of the organization, effectiveness of communication, and employee support for the organization, leaders, superiors and each other. This facilitates strategic planning and learning the success with which internal information is conveyed, and of course detects whether some employees feel others are bullies (or bottlenecks, buck-passers, know-it-alls, chronic complainers). Outside consultants are the most effective people to conduct the audit because organizational members often say things to external auditors that they would not say to internal auditors.

3. Roll out an anti-bully policy. An anti-workplace bully prevention policy must be implemented and include management’s commitment to a healthy workplace, a definition of bullying, management and employee responsibilities for maintaining the policy, a training program schedule and a formal grievance procedure that includes investigation of complaints and appropriate disciplinary actions. The policy should also stress the importance of written documentation from all parties involved in any complaints; including target(s), bullies, witnesses and investigators. Of course, the policy is only as effective as management’s commitment to it.

4. Conduct management and employee training. Establish training programs for all levels to occur during new hire training and at scheduled intervals thereafter. At the very least, training should remind employees and managers that they have a responsibility to contribute to achieving a healthy and civil work environment that does not tolerate bullying. Offering conflict management and leadership skills training will complement these trainings nicely.

5. Take grievances seriously and investigate them immediately. When a grievance is filed, the target should present written documentation and precise details of each incident of bullying. Human resources should follow appropriate disciplinary procedures as laid out in the policy, and is encouraged to continue to keep the situation under review.

6. Use 360-degree reviews. A 360-degree review provides every organizational member with reviews from everyone they work with, including peers, managers and subordinates. This provides an avenue for managers to learn from the people they direct, rather than only those who direct them. If done right, 360-degree reviews receive high employee involvement, have the strongest impact on behavior and performance, and greatly increase effective internal communication.

Bottom Line
By addressing workplace bullying and developing techniques for sustainable change, you can increase employee retention and reduce turnover, reduce absenteeism and medical leaves, manage and leverage organizational brand, motivate, inspire and develop staff, minimize workplace politics, improve communication among staff and managers, protect your company’s reputation, increase the quality and quantity of work product, improve community awareness, reduce workplace stress, and improve the health of employees and your organization.

On a final note, be weary of the anti-workplace bully law in our midst. David Yamada, a professor at Suffolk University, wrote the Healthy Workplace Bill that has been under review in 15 states, including California in 2003. Only the government of Ireland (since as early as 1997), and the province of Quebec, Canada (since 2003), currently have specific laws against the act of bullying at work, but all that is soon to change.

Reference:
Schat, A.C.H., Frone, M.R., & Kelloway, E.K. (2006). Prevalence of workplace aggression in the U.S. workforce: Findings from a national study. In E.K. Kelloway, J. Barling & J.J. Hurrell (Eds.), Handbook of workplace violence (pp. 47-89).Thousand Oaks, CA: Sage.

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Vianova guest blogger Catherine Mattice, MA, is an inter-organizational communications professional with several years experience in customer relations, human resources, strategic business development & management, and training.

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Getting Creative: Start Small

j0309330As the economic stress continues to take its toll, businesses should stray from playing it safe. Settling into a comfortable routine puts a halt to any form of innovative thinking, and prevents surviving businesses from thriving.

Acceptance of new or “unconventional” ideas takes time. So before your company can fully embrace into its office culture creative thinking on a grand scale, consider integrating a few simple yet practical exercises that can be implemented immediately.

For the workplace

-  Take a cue from the most basic and important Feng Shui* principle, and first clear the physical clutter in the office to create mental space for new business ideas. Store away, archive or get rid of idle or irrelevant paperwork, office supplies, equipment or electronic data (emails, folders, pictures, etc.) that tend to bog down production flow.

-  Rearrange work areas to better suit the functionalities of work flow, contribute to energy-saving efforts, and improve the general aesthetics of your work environment.

For the employee

-  Challenge your staff to write individual mission statements. It’ll be interesting to learn if their perspective aligns with yours or the business. Do some roles need to be redefined or reassigned?

-  Allow employees to personalize their work stations where they can embellish with their own reading lamps, plants, artwork, floor rugs, or kitschy collections. Provide corporate guidelines on what’s appropriate.

For the staff

-  Conduct quick, on-the-spot brainstorm sessions with your team to solicit ideas for product, service and production improvements. Limit the session to 30 minutes. The freshest ideas emerge when there are time constraints.

-  Hold training sessions, conferences or meetings outside, if weather permits. Your staff will welcome the occasional change in scenery.

 *Feng Shui is a Chinese philosophy that governs spatial arrangement and orientation in relation to patterns of yin and yang and the flow of energy.


 Vianova guest blogger Shirley Day is a training and communications professional with a combined experience of 25 years in corporate and consulting environments.

 

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Motivating Each Generation

picture101Create more respectful workplaces and make connections with customers of each generation by committing to understand where each generation is coming from. We have clues from generational research that tell us what is important and what motivates them.

What do we know about Traditionalists (ages 64-84)?

Traditionalists are frugal, known for purchasing national brands and choosing inexpensive options.  They believe loyalty is earned. Motivated by safety, security and stability, they like conservative images and longevity.  Known for communicating face-to-face, they appreciate direct conversation inside a company and word of mouth as a marketing tactic. Their handshake on a deal is as good as law. To optimize profits, maximize credibility and relationships.

How do you connect with Baby Boomers (ages 45-63)?

Boomers have mellowed with age and yet still continue to transform whatever they touch. Bouyed by power, prestige and process as motivators, they are concerned about image and keeping up with the Jones. They also appreciate the back-story. 

They are becoming more holistic, spiritual, and are into living more simply after a wild ride of consumerism.  They still value choice. The 60s have been reawakened, working into their love of a cause and being of service.   They are ambivalent about change so do not introduce it too fast. To maximize profits, emphasize relationships and status.

What’s with Gen X (ages 29-44)?

Gen X is the don’t pussyfoot around generation. They appreciate direct communication and results.  No need to warm them up. Just get to it.  Gen X is a bit cynical and appreciates humor. They listen intently, get the point quickly and make their own decisions. They intensely dislike hype and are skeptical. They embrace and value technology as a lifestyle need.

Gen X works smarter and has better work/life balance than Boomers. They can say no .  They want down time and will take it for themselves and their families.  They like to create hybrid products and services that match what they need. To maximize profits, emphasize results and efficiencies. 

How do you work with Gen Y (under 28 years old)?

Gen Y is all about cause, community and creativity.   Using the newest and greatest technology is the way to their hearts. They will choose socially conscious products and services over those that are not.

Gen Y also values fun, freedom, friends and family. They want a say whether that be input or feedback. Unlike other generations who might have hoped for happiness, they expect it. They desire different experiences, stimulation and authenticity. They embrace diversity and see through race, religion and sexual orientation as a barrier. Isn’t that beautiful? To optimize profits, maximize relationships and uniqueness.


Vianova guest blogger is Sherri Petro, co-founder of Workplace Evolution. Sherri has been educating executives and managers on how to leverage what we know about the motivation of each generation to make more productive and profitable workplaces.

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Transforming Ideas Into Impact: New Vianova Webinars

istock_000003531272medium1Vianova is pleased to announce the first in a series of webinars designed to help organizations improve performance while leveraging best practices in social responsibility.  We begin with two project planning webinars.  Click on the links below for details.  

July 14, 2009, 10:00am - 11:30am PT

Project Planning Basics for Nonprofit Organizations

July 15, 2009, 10:00am – 11:30am PT

Small Business Project Planning Basics

For a list of upcoming complimentary webinars, visit Vianova’s  Webinar & Training Calendar.

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Deliver the Right Results – On Time and Within Budget

As a forward thinking leader, you know that your success depends on your ability to adapt to change while delivering the right results – on time and within budget. Not an easy task in today’s fast-paced, competitive business environment, with evolving customer demands, new competitors, and pressure to do more with less.

Do any of these experiences sound familiar?

You spent time and money on what you thought was a great idea, only to realize it’s not what your customers wanted.

You spend too much of your time putting out fires rather than preventing them.

Your competitor comes up with a brilliant idea – one you have been contemplating for a while.  Ouch!

You spend all your time “in” your business rather than “on” your business.

path1If so, you are not alone.  These are a few examples of common frustrations community service project leaders experience at one time or another. So, the question is: How can you eliminate these frustrations and keep up with all the demands?

Even if you can’t afford to hire a professional project manager, you can learn project management tools and integrate them into the way you run your business. Don’t make the mistake of assuming that project management is cumbersome, time consuming, and irrelevant. On the contrary, principles of project management include valuable and effective tools that yield exceptional results that are simple and easy to use.

The first important tool of project management is the simple “Project Plan.” Before you take another step, you must have a Project Plan that includes the following elements:

Goals: Define the opportunity to be seized or problem to be solved. Write your goals using the SMART method. (Are your goals specific, measurable, achievable, realistic, and time-bound?) Be sure to clearly identify all your stakeholders’ needs and expectations (i.e. customers, employees, etc.)

Deliverables: Create a list of things (items, features, services, etc.) the project needs to deliver to meet these goals. Specify how and when each deliverable must be achieved. Assess whether each deliverable is absolutely necessary to achieve your project goals.

Tasks and Schedule: Identify the specific tasks required, estimate the time required to complete, and who will carry out each task. Be sure to include your project team in estimating the work effort required to complete each task.

Resources: Define the roles and responsibilities of the individuals on your team.

Reporting: Define how you will report and track your progress and establish a mechanism to ensure your team is aware of all key milestones and work planned.

Risks: Identify the risks that may impact your project and how you plan to deal with them.

Your Project Plan is just one of the many simple project management tools and techniques available.

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Marketing Metrics: The Emperor Has No Clothes!

Clip books, impression numbers, web hits: who believes them? Maybe no one, according to a study reported on by AdAge. Such metrics are commonly used as indicators of ROI, but, according to survey findings, “the problem is that CFOs don’t seem to buy the CMOs’ claims” and meanwhile, “marketers don’t believe their numbers either.”

One example: “Only one in 10 marketer respondents said they could forecast the effect of a 10% cut in spending.” Why? Most approach marketing as an art, rather than a science. Sure, who wouldn’t want to know the relative value of a radio spot vs. a TV campaign vs. a guerrilla marketing effort. But, there are so many variables: how to separate out the power of the message itself, the state of the economy, or the impacts of other campaigns running at the same time? Hard stuff. As a result, many simply default to familiar strategies and metrics, making adjustments around the edges based on logic or intuition.

Indeed, “perfect” ROI evaluations can be demanding and costly. But opportunities abound for “good enough” approaches that are practical to implement, more likely to earn respect from executive management, and actually provide useful marketing insights. A few examples:

  • Simple tracking. Charting discrete marketing efforts against contemporaneous sales can, over time, reveal valuable trend information to guide decisionmaking and estimation.
  • Replace “reach” with “customer value.” When considering a marketing investment, weigh the cost against the value of the desired sales outcome. Even if this requires highly speculative assumptions about response rates, engaging in “what-if” scenarios can be a powerful tool for revealing weaknesses of traditional strategies.
  • Targeted testing. Tracking trends and modeling what-if scenarios will often reveal key questions worth spending some additional resources on answering. Designing “surgical strike” pilot studies or sampling efforts will limit their cost and complement your tracking and modeling efforts
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Farron Levy is President of True Impact (www.true-impact.com), which provides web-based software, and consulting services, to help organizations quantify the social, financial, and environmental return on investment (ROI) of their corporate citizenship activities.

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