On Internet Business

Google’s latest algorithms go after content farmers and bad online retailers

Posted by Michael under Business Growth, customer service, Entrepreneur Resources, Leadership, Online Retail, Paid Search, Search, Social Media

Back in December, the Google algorithm was tweaked to deal with a surreal business scenario that was played out through the search engine rankings of an American eyewear retailer, the pages of the New York Times and the number-crunching desks at Google HQ.

Bad Retailers Punished

Essentially, one online retailer had realised that its many extremely poor online reviews and customer comments were actually pushing it up the search engine pages. So (it is claimed) it made an explicit company policy of ill-treating customers and abusing them when the complained, so that they would make negative ‘flaming’ online reviews which served to put the company at the top of the Google searches again, and again, and again.

When the NY Times wrote about this bizarre scenario, the comments redoubled and the company made the top spot on Google … at which point the Google mavens decided to do something. They designed a substantial revision to the search algorithm that stopped negative reviews driving a company up the popularity ladder.  How they did it has not been made clear, and there are still some questions about whether businesses can use this tweak to drive down their competitors by posting false negative reviews to drop rivals back down the rankings. Even so, the tweak made many online retailers happy.

Content Farmers Cut Out

In February a new algorithm, nicknamed Farmer, came into play, and now we’re seeing the results. The familiar name is the clue – this algorithm goes after content farmers who regularly top searches with content that is either derived from other sources (aggregated) or just packed with keywords (spammy).  This is meant to give more content-heavy, original-material sites a chance to reach the top 2 or 3 position, ahead of some of the sites that exist purely to link content to paid-for ads in the hope the viewer will click on them.

Together, these new algorithms herald a substantially different future for online retailers and information providers – they attempt to stop bad retailers using their poor reputation as a search engine tool and they aim to stop content farmers clogging up search pages with keyword-rich but content-poor information.

For many online retailers this heralds a new opportunity – the chance to revamp their own content format to deliver quality information and good customer engagement, not just for its own sake, but because it’s worth competing for a first page ranking again. Or at least it is for now, until the farmers and cowboys work out how to beat this new system …

algorithm billboard courtesy of toastyken

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Great Service and Great Results the Pret A Manger Way

Posted by Michael under Business Growth, customer service, Leadership

Every week of the year, every Pret store in the UK is visited by a mystery shopper who assesses the store, the server and the overall ambience of their experience. Marks out of 50 are given and a store that achieves more than 43 is rewarded generously: every team member gets paid £1 an hour more for every hour they’ve worked, and if an individual is singled out for praise, they get a £50 cash bonus. If both the store and the individual are given high marks, that bonus rises to £100. Management bonuses are linked to store performance too.

It’s a bitter experience for the 9% of Pret stores who regularly fail to hit their targets, but an empowering one for the 91% who do – it must be, because retention rates are high and it’s a competitive process to get employed: the whole store votes on which candidate should be given the job.

Costs of Customer Service

This costs £9 million annually – a massive investment in customer service for a short order, fast turnaround business but Pret’s executives think it’s worth it to ensure competitive advantage. Their annual report comes out any day now, and it’s expected that they will, once again, be at the top of the table for profitability, staff retention and market share.

To keep their customer service tip-top, Pret also have an A-Team system of swift response workers who fill in for sick leave or holidays, but they aren’t the also-rans, they are the cream of the Pret staff, so their arrival brings customer performance up, not down.

Benefits of Customer Service

Pret starts by employing happy and outgoing people, but not trying to straitjacket them into performing a certain way. While they role-play every morning to explore how to ‘do’ good service, they don’t have a manual that they must stick to. This regular exposure to potential scenarios and different responses to them means that the team has a wide range of tools to call on when dealing with customers which stops the staff becoming blasé and the customer feeling they are getting a rote response.

Measuring what pleases the customer allows the Pret staff to judge their own performance, even if English is not their first language – by having clear metrics that work for all staff (only 18% of the UK team have English as their first language) there’s a great incentive to outperform the previous week, or a rival store. And cold hard cash is what people understand as a reward, regardless of the language they speak.

What do Pret A Manger do differently

1.       Pret a Manger have a clear focus on outstanding customer service as a competitive advantage.
2.       They have a culture that demands happy and outgoing people.
3.       There is clear understanding of what outstanding customer service means and there are clear metrics for measuring it.
4.       Staff are rewarded for delivering outstanding customer service.

Pret storefront courtesy of realSMILEY

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Gift-Giving as Business Growth Trigger

Posted by Michael under awards, Business Growth, customer service, Entrepreneur Resources, Leadership

John Ruhlin of Ruhlin Promotion Group may be unusual in this time of belt-tightening and cost-cutting. He’s just quadrupled his spend on gifts to employees (and their partners), clients and prospects because, he says, it brings rewards in greater productivity and higher profits. His tips for gift success are an interesting blend of common-sense and hard-earned experience.

1 – Don’t be cheap. He points out that team members may give up to 2,000 hours a year to their employer and to be given a trinket in return is hardly an adequate reward or evidence of thought or appreciation. If it can be found in a cut price store or a promotional catalogue, Ruhlin doesn’t want to know: his gifts are chosen with care to match the recipient and their role in the business.

2 – Make gifts or rewards, not catalogues. This is a point that is only just starting to impact UK businesses, although many have a ‘catalogue’ of options around flexi-time, further learning or selling back holidays to the company, not that many offer a catalogue of incentive items you can ‘earn’ and ‘choose’. Ruhlin’s point is that this throws the initiative back on the recipient, and that the whole point of a gift is that it’s chosen with care. He tries to select items that will match with the individual’s life and dreams, so that people know they are appreciated for who and what they are, as well as for their contribution to the company.

3 – Gift or Salary? Ruhlin suggests that if you pay a little less, and make up the difference in thoughtful and valued gifts, you’ll get more engaged employees because they feel appreciated. This is a very non-British approach, where salary has always been considered the determining factor to a ‘good’ job, and I can imagine it’s an idea that would meet some resistance from both employers and employees, but lots of psychological research into motivation shows that people are more motivated by feeling they are achieving that by monetary gain, so perhaps Ruhlin is right to suggest that higher productivity can be obtained through paying $1,000 a year less, but making up the difference with five or six gifts, totalling that amount, throughout the year.

4 – Partners Matter more. Perhaps the most ‘out there’ claim, to British ears, is the one that by spending more on a client’s partner or spouse than you do on a client, you get a better return. I don’t know if that would be true here, or how it would be measured, but he says that one Fortune 50 Executive claims to spend 3 times as much on gifts and events for partners as on clients themselves, because the spouses and partners ensure the client never moves their business away from the company that treats them so well. I can’t think of a British company that would admit to doing this, but it would be really interesting to compare the two cultures and to see if the same return on gift investment could be found in the UK.

Gift cake courtesy of Ken’s Oven

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Planning Your Business Exit

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

In a recent EO publication, Clifford Holekamp talks about the way he designed his business, from the outset, to allow for the day he decided to sell. His key principles to building a good exit into a business start-up are important to consider, even if you intend to run your business until the day you die!

1.    Designing operational absence – When you set up your business, you might find you get an offer to sell much sooner than you anticipated, or life circumstances might mean you have to take a sabbatical. In either case, if you’ve created a business that can run autonomously without your presence, you are well equipped to cope with whatever life throws at you. Operations have to function without the founder/entrepreneur at the helm and they need to be scalable so that any buyer can see how the business will grow.

2.    Make Marketing Matter - Often companies and brands are built around the founder – just look at the swings in confidence around Apple Inc when Steve Jobs takes a break – so making your company’s marketing focus on brand rather than individuals is a key component to creating a marketable business that has an appeal to potential acquirers.

3.    Easy Accounting – Simple business books, obvious bottom lines and straightforward ownership structures allow a potential buyer to investigate your business and develop immediate confidence that they understand, and can master, the current operating systems and won’t experience nasty surprises down the line.

4.    Legal Niceties - Where a business has assets that involve intellectual property rights, property, investments or research partnerships, there will be opportunities for road blocks to appear in the acquisition process. Ensuring that nothing your business does requires the approval from parties outside the organisation can mean that a buyer moves swiftly from interest to acquisition.

These are all concepts that any business can benefit from, even those businesses that intend to become family dynasties, because they help create organisations that are attractive to buyers, investors, customers and partners.

Exit sign by Mark Hillary

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Making the workplace fun

Posted by Michael under awards, Business Growth, customer service, Entrepreneur Resources, Leadership

An article in Director magazine highlights the importance of fun and creativity in the workplace. Happy team members take fewer sick days and work harder for longer

Define your differences and use them to achieve more

By offering a different kind of ‘perk’ and a clearly defined brand experience to your employees as well as your customers, you can help shape your employment policy and recruit the right people to grow your business. Competitive businesses like the Richmond Group really incentivise their teams by giving them capital to run with on new projects and acquisitions and pitting them against each other.

Do more for them, they’ll do for more for you

Ikea gave all their staff free bikes after the UK government gave companies a cycle to work tax break and several UK companies give their employees free mobiles or free minutes – all this might sound like freebie heaven but it’s a way of showing the quality of investment you have in your employees. In the same way, measuring stress and monitoring workplace issues can really help a company and its employees to manage what matters – which is performance in action. Pret a Manger uses a mystery shopping programme to measure performance and reward ALL staff in a shop, not just the manager, if the results are good.

Reward what matters

Some companies offer holidays in return for performance, others give bonuses and incentives for greener lifestyle choices. Whether it’s onsite gyms or having dry cleaning picked up by a concierge, knowing what your staff want and what they’ll really work for is a way of getting them to respond to challenges with a gusto rather than groans.

Offer choice

Shine Communications lets the employees design their own incentive packages – other companies let staff bid on what they want to achieve or opt out of benefits rather than opting in. It’s all part of empowering the employee and that produces a more satisfied and dynamic team

Reproduced image courtesy of daily sunny

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Scaling your business

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

Robert Craven has an interesting think-piece in Real Business, exploring the balancing act that’s required to master the relationship between planning and delivery in a small or new enterprise.

His point is that the problem is rarely a poor plan. It’s usually some kind of impediment to delivery because the organisation isn’t balanced in its structures and the weighting given to different aspects of management. In other words, the love and affection that most entrepreneurs lavish on their creations is misplaced – they work in the business rather than on the business and instead of making scalable businesses using systems, they make successful start-ups that then resist scaling upwards precisely because of their initial construction.

There’s a lot of anecdotal evidence that suggests many entrepreneurs actually have to move away from their business (willingly or unwillingly) during the scale-up process. Quite a few return when it’s over, but it seems the skills that make an entrepreneur may not be those that make a business grow from SME to large enterprise. ‘Systems, processes and controls’ says Craven and those are often dirty words to the streamlined, workaholic, visionary founder.

So finding space to deliver—even if the delivered item/idea/service is less than absolutely perfect—is vital to longevity. That means moving away from planning and perfecting and into the grittier business of meeting deadlines, consistency and reliability. A balancing act that allows for growth.

Photo by banalities

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The 5 key questions to ask a previous employer

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

According to Geoffrey Smart, there are five vital questions to ask when taking up references on a potential employee. Smart is the author and co-creator topgrading: a talent management process and an expert in obtaining the right people for a role.

The 5 key questions are:

1.    In what context did you work with the person?
2.    What were the person’s greatest strengths?
3.    What were the person’s biggest areas for improvement when you worked with them? (bearing in mind that it may be some time since they worked together)
4.    How would you rate his/her overall performance in that job on a 1 to 10 scale? What about his or her performance causes you to give that rating?
5.    The person mentioned that he or she struggled with ……… in that job. Can you tell me more about that?

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Vision – a vital component of business success

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

If anybody can be said to have vision, it’s Ari Weinzweig of Zingerman’s deli in the USA – his book on customer service has become a bible for small customer facing organisations, and a handbook for bigger businesses that want to up their game in customer relations.  If he says visioning can be used for just about anything, it probably can.
However his steps, as outlined in a presentation at Inc. are quite structured and worth looking at. To begin he says you must be ‘clear about what you’re working on. Is it a vision for your organization overall? Or just for a particular piece? For today’s shift? Or your retirement?’ While he says that Zingerman’s do visions for all these, and more, knowing what your vision purpose is stops you drifting off target.
Then you need to pick a time frame – and ideally, his suggestion is to choose a period that gets you past present-day problems but not so beyond them that you can’t have a sense of how you’re going to get to your vision – so he suggests five years may be a good place to start.

The third step is fascinating – it’s to make a list of past positive achievements: anything from contributions to past successes to specific skills and resources – anything good counts, he says.
Four is actually the key, to my way of thinking – it’s when you start to write. Weinzweig offers five simple tips to get you started:

•    Put something wild out there. Get past the 59 reasons why it won’t work.
•    Put down what pours out, not what other people want to see.
•    Write as if your vision has already happened.
•    Keep writing for 15 to 30 minutes, regardless of how silly you sound.
•    Build your passions into what you write. Don’t write a vision that you aren’t a part of.

These tips make you fluent and integrated into the vision, and stop you giving yourself, or your organisation the excuse not to strive for excellence.

Steps 5 and 6 are revisions – 5 is about changing language to make it positive, action filled and inspiring and 6 is more of the same but only three more drafts are allowed – A,B, and C, after that you’re getting into procrastination territory!

Step 7 is where you invite those you trust to give you some feedback on your vision – try to keep them focused on that, rather than the actions needed to achieve the vision, but jot down practical ideas that they come up with, as those insights may be invaluable when you actually put your vision into operation.

And 8 is where you share. Weinzweig makes a great point here that ‘it’s inevitable that people will ask questions about how you intend to achieve the vision. They’re asking you about the how. The vision, however, is the what. It’s totally fine if you don’t know how you’re going to get there.’ The idea of sharing the vision is to allow others to help you travel from the what to the how – which is what leads to business success!

Photo of Zingerman’s by surlygirl

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Signs of economic recovery: entrepreneurs are hiring again

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

The Entrepreneur’s Organization has recently collated some research that suggests economic recovery has begun. They found that:

•    Over the past 12 months, 52% of entrepreneurs (globally) increased their full-time employee base
•    More than two thirds of entrepreneurs (globally) say they intend to increase employee headcount over the next year.
•    59% of entrepreneurs reported a profit increase in the last quarter, compared to 37% in the previous one, suggesting that overall global profits are rising.
•    73% of entrepreneurs (globally) anticipate a profit increase in the next quarter, as compared to just 48% who predicted an increase last quarter.

This suggests that the more than half of entrepreneurs who are optimistic about the economy are seeing some evidence that underpins that optimism. The research also reveals that entrepreneurs may be flexible and fast moving enough to lead the field in creating economic change, two third of global entrepreneurs say they have seen their debt loads decrease in the last quarter and 63% predict that they will shed debt over the year ahead.

Capital Problems

There are still difficulties: 51% of entrepreneurs globally are still finding it tough to access capital and exactly 50% of entrepreneurs feel it will even harder to do this in the coming quarter.

Future Predictions

And what do these entrepreneurs suggest will be the growth areas in the immediate future? 70% say that Environmental; recycling; green energy; health and medical services industries are the place to be, but fascinatingly only one in ten entrepreneurs are planning to invest in those sectors.

Economy image courtesy of Duchamp

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Kickstarter – netwise, networked, business funding

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership, Social Media

Kickstarter is an online platform that gives just about anybody, making, selling or designing just about anything, the opportunity to raise funds for their project.

It’s a very simple model: the ‘creator’ who has the project idea sets up a page on which he or she details fundraising goal, deadlines, and an optional set of rewards for backers. If the goal is reached by the deadline, the backers are charged by Amazon and they get the goodies offered by the creator. If the goal isn’t reached, nobody gets a thing.

Who Gets What?

Creators retain total ownership of the project but have to incentivise their backers, usually by offering some project related outcome. Kickstarter is the venue through which creators chart their progress to their goal and keep their backers informed.

Over a thousand projects have been funded on Kickstarter and they range from music albums to textile design studios to juice blending outlets. They all have one thing in common – seeing support for one-off ideas rather than long-term funding for business ventures. Each project is finite and has tension built in – will the creator make their deadline or not.

How It Works

Kickstarter isn’t intended to launch an empire – the idea is to test the potential of an idea and to give the initial traction that could lead to the development of a small enterprise.

Every project has to be approved by Kickstarter before it goes ahead, and then has to produce an outline of the idea, pluse photos, videos, and a request for pledges. The goal has to be met within an agreed time frame. If it isn’t there are no donations made and it doesn’t proceed, if the goal is met or exceeded, the funding goes ahead.

Who Can Use Kickstarter?

In theory, almost anyone, in practice, those with a well-developed online network are likely to find it easiest to meet their pledge amounts. Previous successful creators highlight the need for good video and project outlines but most say that half their funding came from people already known to them, or known to people they knew, so isolation is no likely to benefit even the best idea.

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