The goal of PPP was to keep American workers on the payroll. There has been much controversy surrounding the Paycheck Protection Program, which was meant to support businesses with 500 employees or fewer.
There was a myriad of problems, to say the least. The United States government incorrectly gave numerous Paycheck Protection Program (PPP) loans meant for small businesses battered by the pandemic to firms that already had received a PPP loan or were prevented from transacting with the federal government, a recent report revealed. Moreover, most of the money was disbursed to companies with more employees, rather than smaller ones with minimal numbers of staff.
What actually happened?
The Trump Administration’s Dissemination examined the more than 5.2 million (PPP) Paycheck Protection Program loans totaling $525 billion since April of last year based on the Select Subcommittee report on the COVID Crisis:
Some loans, around 10,000, totaling more than a billion dollars went to companies that received more than one PPP loan and were a violation of the program.
The government handed out more than 600 loans to companies removed from doing business with the government because they were “suspended or debarred” from receiving federal contracts. These totaled about $96 million.
They gave over 350 loans totaling $195 million to businesses that have been flagged for “integrity issues and significant performance.”
Over 11,000 loans totaling $3 billion were awarded to companies that did not include complete information from applications.
For some, even if PPP only offered a small loan, it still helped to keep their businesses going.
The PPP helped keep more than 5 million small businesses afloat during the pandemic. The Paycheck Protection Program fund has about $140 billion left unspent from the roughly $660 billion Congress provided.
What should be done?
The Senators were in discussions to revise the program so that the smaller businesses that may request a second loan still can receive funds. Republicans submitted that those with up to 300 employees should be eligible, and Democrats proposed a cap of 100 employees.
Numerous businesses have credited the PPP with keeping them alive when much of the economy closed down. But the need for such support has been reduced somewhat by the decision by many state and local governments to alleviate social distancing restrictions.
Under the PPP, businesses with over 500 or fewer employees were eligible for loans up to $10 million, which becomes forgivable if they spent at least 60% of the amount on the payroll. Republicans defended the total success of the PPP, which reportedly rescued 51 million jobs by the administration’s count.
Created by the Coronavirus Aid, Relief and Economic Security (CARES) Act that Congress passed in March, the PPP stumbled out of the gate due to technical issues posed by a massive volume of loan applications.
Accusations arose that private financial institutions in charge of processing the loans favored clients at the head of the line as smaller businesses were forced to wait. Moreover, the fund ran out of money, and Congress had to approve a second round.
Over 400 publicly traded companies like Shake Shack and Professional sports teams like the NBA’s Lakers also took advantage of the businesses associated with members of Congress.
There are profitable firms with access to loans, a loophole that would not be allowed under the revised PPP lawmakers are now discussing.
Moreover, USA Today’s investigation found that at least 700 vendors that scored lucrative federal coronavirus contracts also received emergency aid, including PPP loans.
Treasury Secretary Steven Mnuchin mentioned that the federal loans exceeding 2 million dollars would get a full review after it was disclosed that the Lakers received a $4.6 million PPP loan. At the time, Mnuchin mentioned that it was inappropriate for such businesses to apply for and receive PPP loans.
The committee’s report found that the decision to check loans valued at $2 million or more thoroughly left the other 99.4% of loans with little or no oversight.
Mnuchin told the committee that he expected smaller loans would get some level of scrutiny as well.
The Paycheck Protection Program is a government initiative that aims to help small businesses keep their employees and tide them over until the economy recovers. The speed at which this program was implemented was both its success and failure. It is quite unfortunate that the funds were misallocated, but at least right now the government is trying to address this problem and give it to businesses in the most need.
In the past, advertisements were the main way consumers received information about a brand. Indeed, it is an easy way to get a company’s message in front of the appropriate audience. But social proof is just as important if not more so in the age of social media.
It would be unwise for companies to rely on advertising alone for their marketing efforts. With the rise of social media platforms, businesses must see that they include social proof in their marketing messages.
Millennials’ and Gen Zs’ buying behaviors are not much different from the previous generations’ buying behaviors. Making that final decision to buy takes time, and consumers often seek the advice of friends and family who have already tried the product they are considering buying. The difference now is that consumers of today look for social proof no matter whom it comes from. It helps businesses convert their leads into buying customers.
Such is the power of social proof. It utilizes psychology to make your target audience take action by showing them that other customers are happy with your products. It is easy to do, as long as you do it right.
What is social proof?
Social proof is a psychological effect that brings us to imitate other people’s behavior. It has become a significant part of how organizations communicate because it encourages consumers to choose who and what to trust online. In an unpredictable climate, social proof gives consumers a way to make better choices.
It is human nature to imitate the actions of other people to become part of a group. Marketers worth their salt recognize that people trust individuals they perceive to be like them way more than any million-dollar ad campaign for a product.
People know social proof by its other names: informational social influence, herd behavior, mass conformity, and public acceptance. Whatever you call it, social proof is a marketing tactic worth considering.
How does social proof work?
To give you an example, imagine you are inside a mall looking to buy an office chair for your home. You come across two furniture shops, one is teeming with customers, and the other has none. Your attention gets instantly fixed on the store with customers, which eventually is the one you approach. After all, there must be a compelling reason why these people chose Store A over Store B. Perhaps it is the better one. The proof is right before your eyes.
Social proof works under these four core principles.
As mentioned earlier, it is natural for humans to imitate people who are similar to them. It explains why fashion trends, no matter how outrageous, continue to happen.
Parting with your hard-earned money is always a risk. Even though most stores offer refunds, it takes up too much time, and consumers do not want to go through all the hassle. Consumers try to mitigate the risk by searching for reviews of the product by neutral people around them. That is why products coined as “best sellers” are, well, best sellers.
People believe experts, and they are drawn to social proof that involves them. For this reason, we see dentists in countless toothpaste commercials or dermatologists endorsing a brand of soap.
When a significant number of people buy a particular product, then perhaps it is a safe buy. You can see this principle at work when watching a movie. People want to watch movies that are box-office hits because they have heard about them from friends, relatives, or reviews.
Marketers are now scrambling to use social proof as a tool to influence consumer decisions.
Types of social proof
Getting testimonials is the most common type of social proof. These are either written or video endorsements from customers who have tried a product or service and are willing to share their experience.
Testimonials are probably the most compelling reasons to buy a product because potential buyers can learn from a recent customer who was happy with their purchase.
Customer reviews and ratings
With information now readily available, consumers turn to reviews before buying a particular product.
Nine out of ten people say that they read online reviews and these reviews influence their buying decisions, whether positive or negative. You can encourage and even reward your customers to review your products on Facebook, Trustpilot, Google, and your website.
Time was when celebrities ruled endorsement deals. It was expensive, as stars demand millions of dollars in exchange for promoting a brand. Thus, only large corporations were able to afford endorsement deals.
These days, even small businesses can approach an influencer to endorse their products for free or at minimal costs. A study made by Google reveals that influencers are just as likely to bring in sales as celebrities. That is because these influencers already have thousands of followers who regularly watch their content and trust them completely.
Marketers covet social shares because it is one way to spread awareness for their brands for free. However, this can be challenging since you need to be creative in coming up with ways to get users to share your content.
Certifications are a great way to show the public that you are an expert in your field. These can come in many forms. For example, a digital marketing agency with certified staff will help boost trust. A management consulting firm should have a team of certified business consultants.
Companies often use case studies in the B2B space to show an in-depth account of how they handled client situations. It helps gain customer confidence.
Why social proof is important
Social proof can drive traffic
Most consumers report that they immediately visit websites after reading a positive review of those sites.
It shows off your skills
Testimonials and case studies can exhibit your skills and expertise.
Social proof helps gain trust
Millennials and Gen Zs trust reviews and read them before making a decision.
Again, people trust people more than the companies themselves. If you have a million customers, your brand becomes worthy of trust.
Companies are all in the business of gaining the public’s trust. The more people trust you, the better for your bottom line. Consumers reject brands that are unreliable.
Consumers also do not want to be sold. They do not want advertisements interfering with their daily lives. What they do seek is reliable information online about the product they wish to buy. Social proof like testimonials, case studies, and reviews help them find that information.
Once you have earned the social proof you need, do not keep them to yourself. Promote your social proof, and make sure your prospects see them.
Today, more and more industries are opening their doors to data as an asset and are rapidly discovering its power. Good data allows upper management to make better decisions for their companies.
It is safe to say that the reliability and strength of data are crucial to business operations. That is regardless of whether it is data collected through internal reporting, market research, straight from the customers, or through any other means.
The use of good data can be essential to a successful business. This article will cover how data quality can affect an organization’s efficiency and, eventually, its bottom line.
What is data as an asset?
In recent years, the remarkable growth of advanced data technologies and the growth of connected devices, plus the availability of economical data storage, transmission, and processing capacities, has allowed businesses to achieve competitive intelligence on demand.
Despite realizing the potential of data, many organizations face challenges due to data storage and inadequacy of understanding among shareholders. Data assets can generate future income for companies. They can differ according to business models since what is valuable to one organization may be useless to the other.
Factual data is the fuel that drives organizations toward accomplishing their mission. Increasingly, companies agree that it is time to look at data as a vital strategic asset and treat it as such.
Much of the managing and leveraging of data falls in the hands of the chief data officer. A recent survey showed that 41% of business executives think that CDOs and their ability to utilize data properly should be a company priority. Unfortunately, many companies do not invest in the necessary resources to take advantage of data’s inherent value.
Benefits of data to businesses
Carry out decisions with confidence
The biggest impact that data quality has on organizations is that it helps decision-makers form sound, informed decisions. Data is vital to fostering confidence in organizational strategies, as long as it is reliably sourced at a statistically substantial sample size and sanitized by expert analytical professionals.
In turn, it lowers the risk businesses make when they opt for a particular strategy. It also lets them respond with better agility to the marketplace.
On the other hand, unreliably sourced data can harm businesses. That is because it can adversely affect the decisions made by management. The quality of data that companies use has always been a concern of most CEOs.
Business analysts and CDOs who can bring clarity to data effectively and tell their story compellingly will be able to help their companies gain a strategic advantage over competitors who do not use data effectively.
Create value from data insights
Decision-making based on data aims to generate value and gain a competitive advantage for the business. If they handle quality data well, the organization can have a positive and significant bottom line.
Mckinsey & Company provides a breakdown of three separate levels at which quality data insights can give value to a company.
Customer-facing uses of strong data that can affect marketing and pricing decisions
Internal process improvements like fraud prevention and supply chain management
Development of new business models
Quality data enhances product and service development
Developing a new product or service and then bringing it to market can be overwhelming. For most companies – especially those that are still in the startup stage or recently passed it – launching a new product effectively can either make or break the business. This can affect everything from market valuation to a business’s ability to attract and keep investors for future growth.
Companies can streamline this process if their products generate strong user data that can provide information to future innovation and development. The various smart objects that you can find on the Internet of Things collect very nuanced information about the behaviors of consumers. With an excellent data strategy in place, companies can set up future launches for success.
Data quality is vital to mergers and acquisitions
Mergers and acquisitions are an extremely complicated process. They depend on the exact valuation of both companies involved. Today, these complicated processes usually include the use of data as an asset.
The quality of the data assets acquired by these businesses can in turn show profound impacts on their eventual valuation.
For instance, the acquisition of a social networking site with huge amounts of user data will rely on high-quality data. Users sometimes provide incorrect information, and inaccurate data will diminish its value. It could lead to a jeopardized agreement.
Data quality can ensure compliance
High-quality data does not just mean the kind of data that companies collect. It also refers to the responsible handling of information that is collected in good faith. Companies that establish strong data security will be at an advantage over their competitors in an increasingly complicated regulatory atmosphere.
Data strategy is all about the people
A data strategy must also consider the human side. That includes the owners, management, stakeholders, analysts, and other users. Companies that allow staff to think about data as a strategic asset can get more value from their systems.
The coming years will provide many opportunities and challenges for data management. Business analysts can position themselves to guide companies through the process of data management and extracting as much value as possible from it. Companies must have a nuanced understanding of their current data, resources, and opportunities for improvement.
When businesses fail to use data properly it can result in a poor customer experience, interrupted processes, and squandered opportunities could result. Simply put, organizations need to treat data as they would any other asset if they want to succeed.
The consumer landscape has radically changed over the last ten years and will continue to do so because mass markets are splintering into niche markets. Does this mean that traditional advertising channels are obsolete?
Along with the shift in practice comes a change in approach, as traditional marketing makes way for the new. Thus, we see the increased use of digital marketing strategies, such as social media marketing, pay-per-click, search engine optimization, and web analytics.
With that said, it would be a mistake for marketers to dismiss the value of old-school marketing. Promoting your products via traditional means such as radio, billboards, and bandit signs, among others, is still a powerful way to catch the attention of consumers.
This article focuses on how these traditional forms of marketing, when utilized properly, can help boost your brand awareness and increase your sales.
Before television was introduced, people counted on the radio to bring entertainment, news, and information about products and services. It never lost its relevance through the years, which is why businesses still include radio in their marketing strategies.
Technology has vastly changed radio for the better. Aside from the traditional radio stations that continue to thrive today, there are also satellite and internet radio. Companies still use radio advertising because it is a more affordable form of advertising compared to television ads.
Advancements in technology have become a boon for radio advertising, making them compelling and engaging. Radio still captures around 243 million people, according to Nielsen Audio even with competition from other forms of marketing.
Advertisements on the radio are called spots, which companies buy to promote their products or services.
Three types of radio spots
Live reads usually occur during live events, wherein the hosts or commentators perform live reads expecting to reach more people. Brands also hire radio DJs with plenty of followers to read an advertisement.
Onsite broadcasting events
Radio DJs are celebrities themselves and attract quite a huge following. This in turn brings in a large number of listeners to the radio stations. Often, these stations offer onsite events where they will invite advertisers to their site to talk about their business.
The third type of radio spot is sponsorship. Radio stations place commercials within a show. The host will announce to listeners that a certain brand is sponsoring specific traffic, weather, or sports segments. Sponsorships are used for branding purposes to increase the name recognition of a company.
Traditionally produced spots
Traditionally produced spots are advertisements that use voice actors, a storyline, and a jingle.
Advertising on the radio usually costs much less than television and billboards. You can buy 200 to 300 radio spots for $1,000 – $2,000 a month depending on the station and market reach. Radio stations have become more specialized and more ”niched” so they can offer the ability to reach a very targeted audience.
Billboards utilize visual imagery and written words. Some argue that this is a more effective form of advertising because humans are hard-wired to look at colorful images and attractive designs.
Another advantage of using billboards for advertisers is that it is always visible 24/7. Billboard advertising targets commuters, so the copy must be brief but impactful.
Since producing billboards requires weeks of planning, it cannot offer timely messaging. Advertisers need to formulate a message that stands the test of time and will have the same impact after a few month’s time.
Benefits of billboard advertising
Billboard space owners always pick high-volume traffic areas, meaning there will always be eyeballs looking at your display. While people can opt not to click on an internet ad or switch to another radio station during a commercial, they cannot escape seeing your billboard each time they pass through a busy section of the road.
You can take your pick of the location you want because billboards are everywhere. As long as you choose the right billboard location for your business, you can easily reach a lot of your targeted customers.
Builds brand awareness
Billboards are very useful for building brand awareness. A beautifully designed ad is a very powerful presentation, one that will leave a lasting impression on consumers.
Targets different types of customers
Billboards let businesses reach different types of customers. It allows you to grab a large part of a niche in the general population. It also brings the consumers to you, so you do not have to spend extra money and effort trying to reach out to them.
There is no switching off your billboard ad, and unlike TV and radio ads, it runs 24/7.
Bandit sign advertising is also one of the old-school methods that businesses tend to neglect. It is rather unfortunate given how effective they can be in finding customers who may buy your products.
Bandit signs are commercial signs posted on a utility pole, street sign, or other street furniture; or any other sign placed within a public right of way or public property or on private property such that it is visible from a public street or another public area.
Producing and placing bandit signs can be quite laborious though, so many companies hire someone who specializes in this arena and can do it for you.
One more issue about bandit signs is that most cities have strict regulations about placing bandit signs. If asked there may be instances where your company may be required to remove signs or relocate them.
Radio ads, billboards, and bandit signs are still a great way to draw attention to your brand. Nevertheless, they should only form a part of your entire marketing strategy and are typically not used as a standalone medium to message consumers.
As consumer behavior and the marketing environment change, so do marketing methods. The top marketing strategy today is going digital, but that does not mean you should forget about traditional methods. A combination of both is often the best and most cost-efficient way to reach your customers.
We all know that skilled employees make a business function. Without these talented individuals, businesses can never turn strategies and ideas into reality.
A business needs a pool of talented employees who can provide a good quality of work. If a company has a hard time recruiting candidates with the right level of skills and experience, then that needs immediate attention.
Unfortunately, studies have shown that talent shortage is indeed a common problem today. And, this issue does not exempt huge corporations. In fact, larger companies have more difficulty filling roles than micro-companies, probably because larger companies have higher standards than the smaller ones.
There are many factors that contribute to this emerging issue of talent shortage, but the number one reason is the fast innovation of technology. Not everyone can keep up with how fast technology is innovating. Sadly, most people don’t spend time investing and making time to learn and upskill. Neither do some companies invest in their employees to train them with new skills.
For companies to survive the talent shortage that every business is currently facing, either company retain high-performing employees and invest in different training for them to keep up with the business needs or reevaluate the current hiring process that the company has.
How will your businesses cope up with the talent shortage?
Reevaluate your current recruitment process
If skills shortage is becoming a serious issue for your business, you probably need to sit down and rethink your current process of finding and recruiting new staff members. That means you may need to shift from hiring someone who has all the skills needed to be a successful candidate for the role to hiring someone who has the potential to perform.
Take advantage of the contingent workforce
These days, a massive number of people choose to work as freelancers, contractors, and consultants. Businesses should make use of these resources to fill in the gaps in your day to day operations.
This pool of talents is highly equipped and can offer flexibility, availability and can provide specialized work that is set to be delivered in a certain period of time.
Make use of the potential of your existing employees
One of probably the brightest ideas to deal with the skills shortage is maximizing your resources if you can’t find and recruit a candidate who has the right skills. Why not start investing in upskilling your top employees. Allow them to improve their existing skills to fit in the business needs. Aside from being cost-effective, this is also efficient since you do not need to find, recruit, and onboard a new employee.
It could also be an effective way to retain star employees. After all, your employees are a good investment for the company’s future, plus they already have the knowledge on how the business works. After all, knowledge transfer isn’t always as effective as working with someone who has the ability already. If top employees are getting advanced skill education and feeling they have a path for advancement they will likely stay longer within your company.
Affiliate with educational or training facilities
This could mean creating an apprenticeship, internship, or hiring fresh graduates from your affiliates. When you consider this option, there will be in-depth training that needs to be conducted since they have little prior experience. But, partnering with an educational facility from either local or international sources would be a great way to start developing the next generation of skilled employees.
One thing that a business can also consider is making use of third-party service providers. There are headhunters, executive search firms, and managed services providers (MSP) who can help you with the increasing threat of scarcity of skilled employees.
These third-party service providers can help a company gain access to a pool of highly qualified candidates. They can also provide contractors or consultants who can work for you on a particular project or in a specific period of time.
Headhunters have established databases and connections that can give you an edge to screen a pool of candidates with the skills needed for your business. Some MSPs specialize in providing consultants or contractors, which can help fill in urgent business needs when you are not able to see the perfect candidate yet.
Make use of technology
Millennials and Gen Zs are guilty of spending much of their time with their mobile phones. There are a lot of ways you can reach the right people you need through social media. Make use of social media algorithms in your quest to hire top talent. You probably need an expert on this one. Ensure you are targeting the right audience. You might have to allot a budget for this, but certainly, it will help your cause.
Because of the increasing demand for skilled workers, the competition with different companies has become tighter. Employees now have a lot of options on where they will be employed, especially those who are in a very niche position. They have the power to demand salary, location, the flexibility of schedule, etc.
Having said that, businesses should rethink their edge over other companies. Perhaps, they can be flexible in terms of location or schedule. Do you really have to hire someone who needs to be in the office five days a week? Or you can entice potential employees by letting them work from home? Simple things like that may mean a lot to your target candidate.
A business can also consider looking in different places. Because if you are having a hard time looking in your current pool, you might be looking at the wrong place. Expand your search. Do not stick with only one strategy. There are tons of sources of applicants, so maximize all of them.
The talent shortage is definitely a major setback to achieve a company’s goal. But there are tons of ways to overcome it. A company has to be creative with its strategies and ideas in order to keep up with the tight competition that’s going on in the talent market.
Ideas are limitless. Always consider the most efficient, effective, and of course cost-effective as well. When a business doesn’t use an optimized talent acquisition strategy, you’ll end up hiring the wrong candidate, or you will lose the chance to hire the best candidate for the role you are filling. The lack of a modern talent acquisition strategy may eventually lead to low productivity and quality issues, and in the long run, it might result in lost revenue.
What is the difference between features and benefits? Some people use the terms interchangeably, but the truth is they are worlds apart.
Isn’t it frustrating that each time you look for information about the newest laptop you are considering buying, sellers present your features like a 15.6″ screen with 8G RAM, IPS display, and a backlit keyboard?
Most consumers don’t understand this industry lingo and walk away thinking, “so what?”
From an average person’s point of view, these features are pretty bland. They do not entice a potential customer to part with their hard-earned money and drive them to purchase. Well, at least not in the same way benefits do.
Features vs. benefits
When we talk about a feature, it is simply what your product or service has. For a laptop, it is the screen’s size, how big its memory is, what it looks like, etc. A car has a power output of 89 hp. A razor has twin blades.
When presented with features, the next thing you want to find out is “what’s in it for me?” Features can be too technical, and unless you are an expert, these pieces of information are not convincing or emotionally stimulating. The problem with that is consumers are emotional buyers.
On the other hand, benefits show the consumers what is in it for them. They stir the emotional desires within the consumer and connect them with what you are selling. Benefits denote what a product does to improve the lives of consumers. Benefits appeal to prospects, first-time buyers, entrepreneurs, end-user, and top-level executives. And eventually, the key benefits will be the main reason why a consumer buys your product or service.
Marketers and salespeople should always keep in mind that consumers only care about themselves and how their needs will be met. They do not care about your company or how much effort you put into creating your product.
Selling: The three basic rules
People do not like to be sold
On its face, this statement may not make any sense. Consumers buy trillions of dollars worth of goods and services every year. No doubt, people love to shop.
That does not mean they like to be sold, however. While people want to buy, they do not wish to be sold. Buying implies they are in control while being sold is the opposite. When marketing your product, offer to give them something they would want and the information to sell themselves.
People buy for emotional reasons
If people acted rationally, you probably would not be able to sell a piece of candy. There is no logical reason to buy one. It is not nutritious and could potentially ruin your teeth. But why is candy a multi-billion dollar industry? Because it makes you feel good.
To be successful, you have to appeal to people’s desires and emotions. Provide them with benefits. Sell to the heart and not to the head.
Once they buy, people need to justify their purchase
People need to justify their purchases to make them feel good about their decision. After you show them the benefits of having your product, then that is the time you present the features.
For instance, car commercials typically show a beautiful, stylish new car with a mountainous landscape in the background. It will also show how comfortable the leather-covered seats are, with air conditioning that will keep you cool at all times. Put them all together, and you have a short advertisement designed to appeal to the emotion.
Car commercials do not stop with presenting the benefits, however. They also provide you with the engine’s size, data on fuel economy, speed, weight, and so on. These bits and pieces of information are not meant to sell but make the consumer feel better about buying the carn for the hefty price tag. In the final analysis, this information is just as important as the benefits.
Communicating more profound benefits
It is essential to highlight that each customer is interested in different benefits. There is a range of social clues that can help you recognize what particular consumers are interested in and identifying their pain points.
Here are a few tips that can help you enhance the impact of the benefits that you offer to your consumers.
Tell a simple, straightforward story
You can show social proof to tell a story. Promote testimonials provided by current users and show how your product has changed the lives of real customers.
Being authentic will help you build trust. Trust leads to more sales.
Lay down the details
Present rich details of the product and the benefits so you can draw interest to your product.
Address your prospects’ needs
When creating a marketing campaign, keep asking the question “so what?” in each step of the process. The trick is to continue asking this question until you are satisfied with the answer.
This laptop has 8G RAM, so what? It will run faster. So what? You will complete your tasks in less time, giving you more time for your family. Ah, now you’re talking! Those are important customer benefits.
Promise your prospects that their lives will be better with your product
Tell prospective buyers that you will address their pain points and that their lives will be better when they purchase your product.
Each time you start your marketing campaign, these words should start running through your head: benefits, not features.
Keep in mind that while features appeal to the consumers’ logic, it is the benefits that connect the consumers’ emotional desires with the product or service you are offering.
Sell with benefits, then rationalize with features. You will never go wrong.
Every form of company, even the ones identified as non-profit, rely on revenues. To justify the fixed and variable operating costs, the business must produce sales. Wouldn’t it be great if this income was streaming in on a recurring basis?
We will explain the revenue, the different forms of income, and how they function in this article and include examples to clarify.
The total earnings generated by your company is known as revenue. It could be through its primary activities, such as selling goods or services, rent on the land, interest on borrowings, and others, minus any discounts or returns.
Ice cream vendors will make money by selling ice cream, barbers will make money by selling their services, and banks will make money by charging borrowers interest on their loans. Service or sales revenues are the most common terms for your company’s revenue, recorded on the first line of your income statement. After subtracting your taxes, revenue is the sum you receive from clients and consumers.
Revenue Strategy Defined
A revenue strategy is a business strategy that focuses on raising revenue by optimizing both short-term and long-term sales opportunities. Getting a committed plan like this is crucial to your long-term success.
Types of Revenue Strategies
Nowadays, many businesses are suffering due to lower sales volume during these challenging periods of lockout during the COVID-19 crisis. Since they have developed recurring business models, some companies have become more resilient in sustaining continuous revenue models.
There are two types of revenue strategies to generate revenue: recurring revenue and non-recurring revenue.
The backbone of Software-as-a-Service (SaaS), such as Adobe and subscription-based businesses, is recurring revenue. Customers buy a service daily from these firms, enabling them to predict potential sales more reliably. For a good view of the company’s potential profits, recurring sales can be measured using churn rate and user growth rate measures. This level of predictability is essential.
Non-recurring revenue is made up of one-time payments that may not occur again. Consider the following scenario: a SaaS company hosts an event and sells 50 tickets. Since it is impossible to predict whether visitors will visit the following year, this event’s revenue is non-recurring (if there is a next year). Grocery stores and short-term housing providers are examples of these. While recurring revenue typically follows a subscription model where clients are paying monthly or quarterly over a contract period of years which gives the company predictable recurring sales.
For this article, we will dive into creating recurring revenue.
Advantages of Recurring Revenue
Knowing future cash flow allows for improved capital distribution and future investment planning; having a buffer of stable cash inflow allows for a higher-risk portfolio with the potential for higher future growth and returns. Predictable revenue increases creditworthiness when applying for loans and makes the businesses more appealing as an investment target.
Higher margin potential
Once fixed expenses are covered, the cost of serving new users is typically low in comparison to the increased revenue they generate.
High return on investment
Many recurring revenue services are offered as an add-on to a previously purchased product or service. The financial and human capital resources needed to complete this regular revenue sale are significantly lower than those required to produce and sell a new, unrelated product. It increases the return on investment for this form of selling.
The disadvantage of Recurring Revenue
The drawback is that creating a fixed marketing, operational, and service infrastructure to deliver recurring revenue requires time and resources.
Before hitting breakeven, you will need to budget to retain a recurring revenue customer for several months. In the case of software development, for example, a 9-month breakeven timeline is standard. The majority of the costs are upfront, with software development costs to pay, followed by some lower recurring costs for software upgrades and operation.
Most Common Types of Recurring Revenue
Under this model, consumers are provided with a service for a set period for a fixed price. It protects the company’s potential sales from unforeseen cancellations and delays.
An excellent example of this model is mobile phone contracts. When a customer signs a contract, they agree to pay a certain sum for a data plan for a certain period. Customers may be required to pay a small one-time charge in addition to the annual contract fee when signing up for specific mobile contracts.
A hard contract’s distinguishing characteristic is that the consumer is locked in before the contract period ends; if they wish to cancel early, they must generally incur a termination charge, which can be considerable. With a rolling monthly contract, the customer will usually keep using the service at the same or similar rates after the contract duration has ended. Even though the hard contract has ended, the business’s monthly recurring income will continue in this manner.
Sunk money consumables
Consumers buy a product or invest in a network, then make ongoing transactions that enable them to use the product or service indefinitely.
A common example is Gillette razors. The company’s founder came up with the concept of selling the razors themselves for a low price and profiting from purchasing disposable blades regularly. Customers develop a habit of buying blades, disposing of them, and replacing them with new ones in this manner, resulting in lifelong consumption of the commodity.
Do you crave a grande, three-pump cinnamon dolce, soy, no whip, and no foam latte? Maybe just a cup of drip coffee? In any case, if you are a regular Starbucks customer, you will return for more of the company’s goods on a fairly predictable basis.
The company receives revenue automatically in this model before the customer cancels their subscription voluntarily. Auto-renewed subscriptions are also known as evergreen subscriptions because they will last indefinitely. This model can be used in streaming services like Netflix and product box subscriptions like Birchbox.
Customers with usage-related subscriptions are billed at predetermined intervals based on their product usage. For example, MessageBird offers enterprise customers an API service for SMS and voice calls. Users are charged on a schedule according to how many SMS messages they send and how long they talk on the phone.
There are several rates or levels of usage in this pricing system. When a customer’s use exceeds the amount permitted in one tier, they advance to the next, which usually includes more features and used units. Tiered billing is popular in SaaS products with multiple pricing levels, such as Basic, Professional, and Enterprise plans.
The consumer is billed based on the number of users who use the product per month or year in the user-based or per-seat billing model. The fees increase in direct proportion to the number of users.
This model is used to create recurring revenue for whole teams’ software products, such as Customer Relationship Management (CRM) apps and team communication apps like Slack.
A hybrid billing model is created when the features of two or more revenue models are combined. Birchbox, a customized beauty box delivery company, operates on a hybrid model that mixes recurring and one-time sales. The company charges a $30 monthly membership fee and also sells items such as brush kits and makeup bags on a one-time basis.
Customers can use a freemium model to get lifetime access to a product or service, but they must switch to a paid plan to get new or advanced features. For example, you can use Spotify for free to listen to music and create playlists. However, you’ll need to switch to the paid plan to get extra features like ad-free listening and high-quality audio.
Ways to encourage recurring revenue
Encourage your clients to take a continuous solution rather than limiting your bid to a narrow one-off product. Setting up preventative maintenance contracts, selling access to future updates and planned maintenance, offering subscriptions to access advanced information and advice related to your product, or providing “on-call” services are all examples of ways to do this.
Suggestions for Increasing Recurring Sales
Create faith in good policies, products, and customer service
Bill your customers automatically and regularly
Educate your sales staff on recurring revenues
Have simple and clear cancellation policies
Recurring revenue is regarded as a highly desirable quality by many industry experts. They make an organization more stable and predictable, both operationally and financially, reducing the likelihood of a dramatic change in business from month to month.
Stability typically comes with a price tag. Investors are often willing to pay more for recurring revenue companies’ earnings because their estimates are thought to be more accurate. Of course, this means that any indication of a drop in revenue will cause even more anxiety. Contracts expire, and company fortunes and market strength will change over time as customer tastes shift and new rivals enter the battleground.
Businesses ideally suited for the recurring revenue model
The recurring revenue model has proven to be very popular for businesses that provide access to media content such as audio, video, and books. Some well-known examples include Netflix, HBO, and Spotify.
Instead of one-time purchases, several tech companies provide subscription-based access to their applications (SaaS). The cost of initial software setup and the complexity of introducing product changes are eliminated with SaaS. While the conventional one-time sales model makes it difficult for app developers to offer product updates to end-users, the SaaS model simplifies and automates the process.
Subscription boxes are a typical example of the product-based subscription model. Consumers sign up to receive boxes of a specific type of product at predetermined intervals. It could be weekly, monthly, or quarterly. These boxes are divided into two groups based on demand: comfort and curated.
The recurring revenue business model has become an enticing alternative for business owners as well as consumers. If you wish to have a pre-determined amount of income at regular intervals, consider creating recurring revenue streams. If utilized properly, this model can help you anticipate revenue, expand your market, retain more customers, plan growth, and increase your profits.
Bringing the customer to the center of the business is the be-all and end-all of a strong Customer Relationship Management or CRM. Indeed, CRM is not just a concept, it has a purpose.
Today, we will look at CRMs, and how they can bring added value to your business.
To accomplish that, you need to identify what your customers truly want and how they see your business and use that information to provide better products and services, enhance customer service, and boost sales opportunities. Businesses that adopt CRM systems can find out even more about their customers and provide more personalized goods and services because they constantly gather important information in a manner that allows them to track trends.
What is CRM?
CRM is a systematized structure of managing data that is utilized to set up, plan, and administer both the pre-sale and the post-sale activities participated in by a marketing agent or a company. CRM’s purpose is to develop long-term profits and growth of a business.
CRM covers field support, call center activity, indirect and direct sales, and marketing campaigns. CRM systems also provide more definitive assessment and better-focused data regarding these areas.
People have this notion that CRM itself is a technology and that it is something tangible. The truth is, it is not. CRM reflects a methodology of doing marketing, sales, and customer service supported by data and the relationships you have with each customer or prospect.
CRM platforms, meanwhile, permit a sales or marketing agent, or a frontline or customer service representative, to immediately access all of the most significant data about a consumer when they contact them. They then can use that data to provide relevant, personalized, and up-to-date feedback to the client.
CRM technology implementation allows you to have seamless transitions in-between stages of a customer’s relationship with your company in terms of projects and a client’s activity. Also, you get to keep precise notes about every contact with a customer.
The value of the C in CRM
There is nary a doubt that the C in CRM is more important than the other two letters. Too many firms make the mistake of employing CRM to concentrate solely on Customer Acquisition Management. This involves moving possible and current clients through the sales and marketing process. While CAM or Customer acquisition management is an essential part of CRM and a starting point, you can get more than that from your CRM software.
For customer service, the secret is to combine the best elements of customer care, the power of technology, and human skills to provide a holistic approach.
Any company that is serious about being successful realizes that customer service has become more crucial than ever and that CRM makes great sense to use.
Benefits of a CRM
Integrate all your data into a single, easy-to-access location
CRM software centralizes your client data so that every authorized person at your company can access the information they require from one platform. You can store and access contact information, communication, and customer history.
Sell more at a faster rate
You can say goodbye to cumbersome manual data entry with CRM software. Automate repetitive administrative tasks using CRM, so your team can focus on selling and less time typing.
You can focus more on your clients
Since CRM gives your team more access to customer information, your sales representatives can have the right opportunities at the right time. It also helps you forecast your clients’ needs even before they reach out to you.
Improve customer support
Utilizing all that customer data in your hands makes for an improved customer experience. Your organization can be ideally organized while maintaining customer relationships in a way that makes each customer’s journey personalized, timely, and freed of different friction points. With a CRM system, customer service agents can pinpoint issues and solve problems quickly.
Improve your bottom line
Utilizing a CRM platform has been proven to deliver positive results – including directly improving the bottom line.
Tips for CRM
Many businesses have made the mistake of rushing into a CRM platform without a strategy. Here are some things to remember when investing in a CRM.
Have a CRM strategy
Launching a CRM initiative without a game plan will lead to more pain than benefits. Never think of CRM as a separate project from your overall business strategies. CRM becomes effective only when there is a clear objective, usually to improve service, cut costs, or boost sales.
Pick the right CRM partner
The best CRM solutions are flexible. They should also have complete integration capacity with any other processes in your organization.
Understand the CRM technology
Often, companies consider CRM as a project best left to the IT department and not a business initiative. This manner of thinking should change. You have to understand the technology and what it can do for your business. It is also important to know its limitations. The biggest benefit will come from the integrated efforts of all business users, IT, and suppliers. Training it key.
Focus on business processes and not the technology
CRM is about a company’s internal and external business processes being more customer-centric. Figure out your customer flow. The processes are solely the facilitators, not a goal in themselves.
Do not try to change the organization overnight
Look for and prioritize the highest return areas first. Take baby steps and do not try to take giant leaps all at once.
Assign someone who will ensure the correctness and completeness of data
Make it someone’s task to own the data and to ascertain that it is correct and complete. It may seem obvious, but plenty of projects overlook this detail. CRM systems stand or fall by the integrity and quality of their data.
As valuable as CRM is to a company, a study has shown that more than half of CRM initiatives do not succeed. The problem lies in how the collected data is used by these businesses.
Most companies have shelled out huge amounts of money to compile all kinds of information about their clients but never use this information to help their business. Money invested in CRM software and implementations is thus wasted.
Before your company spends any money on CRM software and implementations, you need to have complete planning that ensures your success. The goal is to develop your relationship with your customers and boost customer satisfaction.
For some people, the be-all and end-all of a business are profits. But what is a business without customers? Thus, it is clear that the customers you have now are the lifeblood of your business. Making them happy should be your top priority.
Acquiring new customers is great for your company because it will help you grow. But here is a better idea, why not take care of your current crop of customers? It makes sense because it is seven times cheaper to sell to existing customers than acquiring new ones. Moreover, the success rate of selling to a current customer is 70% while attempting to sell to a new customer will give you only a 20% chance to succeed.
Customer retention – why your business should care
The most typical drawback for businesses is that they assume that if they have a strong product or service, customer retention will follow. If it were that simple, then most companies would be worth billions, but they are not. Having a great product may attract customers in the short-term, but when they do not see the value in being loyal to you, they will leave.
The biggest reason why a customer leaves a company is that they feel that the business does not care about them.
All companies need new customers, but the easiest source of income is the ones you already have.
You will need less marketing
You have already built a relationship with your existing customers, so use that to your advantage. You no longer have to convince them about you and your brand. That means less time, effort, and money spent.
Get better conversion rates
Your existing clients have already bought your products or services, so there is no reason to believe they will not buy from you again. That is if they were not disappointed with the experience. You have already done the hardest work, and that is to build trust. And, as you already know plenty about them, it is easier to know what their next moves will be.
Who would not want higher profits? When you sell to existing customers, the focus will be less on the price. It becomes easier to upsell or cross-sell your other products.
Room for improvement
Take the opportunity to improve your products and services by listening to your current customers’ feedback. Nobody knows your business better than your customers.
Times have changed. It was easier to get consumers to be more brand-loyal a decade ago than it is now. Today, consumers have easier access to a wide range of competitive brand information, and brands big or small similarly have easier access. Consumers actively look for different brands and are willing to try other companies that offer similar products.
Still, this does not take away the importance of brand loyalty to the customer. Even if they are inundated with information, as long as they find that a brand they have tried has matched or even exceeded their expectations, they will remain loyal.
Consumers have more power now than ever before. They can go on social media to either praise your product or rant about it. You also cannot assume that your customer will be loyal forever.
If they are not happy with their experience, they will not hesitate to search Google and look for your competitors and then buy from them.
Take note that even the largest brands with huge budgets for advertising face the challenge of holding on to their existing customers.
This underpins the need for companies to become aggressive in expanding their customer loyalty initiatives. That is if they want to stay competitive.
Building customer loyalty
All consumers demand that their needs and wants be taken care of. They want to know that they are appreciated and understood as a customer on an intimate basis. They want sales or discounts that are adapted precisely to their needs. By developing a Customer Loyalty Program, you can provide your patrons this sense of being valued and needed.
Build a customer loyalty program that addresses their pain points
Customer loyalty programs are not just offering them discounts in exchange for their loyalty. It should pay attention to the customers’ pain points and find solutions for them. That way you add value to their lives.
Provide an omnichannel marketing experience
A great way to deliver brand experience is to offer customers that experience over multiple channels. The purpose of omnichannel marketing is to provide customers an enjoyable experience regardless of their preferred medium.
For instance, a customer using your website should have the same access to products and services, discounts, and promotions that you offer in your physical store.
Referral programs give incentives to customers who encourage their family and friends to buy from you. It is a strategy that can help retain your customers and gain new ones as well.
Use customer feedback to improve your products and services
In this digital age, customers can express what they feel about a brand faster and easier. And when they speak, brands should listen.
Asking for your customers’ opinions is one way to show them that you value them. Of course, you need to listen and incorporate their ideas.
Personalized marketing is one of the most efficient mediums of communicating with your customer. It helps build trust and also allows consumers to distinguish your brand from your competitors.
Today’s consumers are very smart. They can tell if you are sending them generic messages, which they do not want. They now expect personalized messages that cater to their needs. You can even make them feel special as a real human being and not just a statistic by sending holiday greetings or birthday cards.
Making your customers feel like they mean the world to you will ensure their loyalty to your brand. Offering them perks for being a loyal patron can make them feel appreciated when they enter through your doors or visit your website.
In essence, customer loyalty is one of those foundation stones you need to put in place if you are going to establish a successful business.
Unless you have a scholarship, education can cost an arm and a leg. And let’s face it, even after all those years in school, you still may not feel you are armed with the necessary knowledge. Free online courses are becoming a popular method of developing one’s self.
Even business schools are taking the heat these days, as an MBA degree from top schools will cost you up to six figures. This makes it difficult for the average Joe or Jill to go back to school to pursue further studies.
There is no better investment than investing in yourself, and education is one of the best ways you can do that. For that reason, some colleges and universities have begun to provide free online courses for people interested in enriching their lives through learning.
By making quality education that was previously not available to individuals more accessible to everyone, the increasing incorporation of digital technologies in the academic sector stimulates more learning and helps level the playing field.
While it is unusual for a university or college to grant a completely online degree for free to the student, some do provide a variety of courses to pique the interest of people to reignite learning.
Universities and colleges that provide free online courses
You read that right. While Harvard University is considered an exclusive school – a year’s tuition will cost you $50,000 – you can consider yourself a Harvard student as long as you have a computer or smartphone and an internet connection. You do not have to pay a single cent to enroll.
Here is a list of free courses from HarvardX. Take note that if you want to have a verified certificate, you will have to upgrade by paying a fee.
Justice. This is a 12-week course taught by esteemed professor Michael Sanders. Learn more about classical and contemporary theories of justice.
Rhetoric: The Art of Persuasive Writing and Public Speaking. Learn how to use a variety of rhetorical tools in writing and public speaking. Professor James Engell leads this journey. Expect to devote 2 to 3 hours per week for 8 weeks to complete the course.
Science & Cooking: From Haute Cuisine to Soft Matter Science. You are in for a delicious treat once you enroll in this course. After studying for 16 weeks, you will never look at food the same way again, and we mean that positively.
CitiesX: The Past, Present, and Future of Urban Life. Get an expert look at the past, present, and future of cities with this course. It will help you better appreciate and improve urban areas.
PredictionX: Omens, Oracles, & Prophecies. This is one of the shorter courses that HarvardX offers. It will only take one week to finish since it is only an introductory-level immersive course that studies pre-scientific prediction systems.
Backyard Meteorology: The Science of Weather. This backyard meteorology course from Harvard promises its students that they will learn to forecast weather just by peeking out their window. It can also be a life-saver, as it teaches students how to avoid getting struck by lightning. Other topics include estimating the speed of wind and cloud identification.
Fundamentals of TinyML. Tiny machine learning is one of the most popular topics today. This course offers a foundation for students to have a firm grasp on this emerging field. Get the basics of deep learning, machine learning, and embedded devices and systems, like smartphones and other small devices.
Brigham Young University
This institution provides free online university courses in a wide array of subjects. Family life, family history, and religious scripture study are just some of the courses that you can take. They are generally called Independent Study Personal Enrichment courses on the internet but are always free online university courses.
The University Of Washington UW Educational Outreach
This is a program created to do just what its name suggests. The free online courses here are outstanding because they deal with a wide range of subjects, from Hamlet to HTML basics to World War II. These free online courses are bound to have even the wariest academic become interested!
This British institution provides free online learning in fields related to basic computer language and web design. These free online university courses are created to introduce students to the extensive world of the Internet.
Eagle Forum University
This online school website provides basic free online learning with courses about American history and government. These courses are interesting, fact-based, and are available to anyone with an Internet connection and a computer or smartphone. They are solely designed to inform all Americans and outsiders of the basic history of the United States of America.
University of California at Berkeley
You can find UC Berkeley’s free online courses on edX. They offer writing courses, including business, academic, and social media writing. Learn the best practices for writing business letters, reports, emails, and social media posts. You can upgrade for a fee to get a verifiable certificate.
Why invest the time?
Unlike your investments in stocks, you will never lose the person you have become. Pushing yourself out of your comfort zone allows you to grow.
Here are a few more reasons why investing in yourself through learning is important.
You can keep the best people
Finding and keeping the best people are two different things. The best talents can get restless. They are ambitious, and they need you to challenge them. That is why you should always be one step ahead of them, otherwise, they may look for new challenges elsewhere.
You will be ready to face any opportunities that come your way
Getting the necessary training provides you with valuable tools to thrive during uncertain times. Always find ways to learn so that you will be ready to face new challenges that show up.
Your new skill will remain with you during good times and bad
The knowledge you will gain from studying will stay with you no matter what. If you do not upgrade, the skills you have now might eventually be obsolete.
As useful as they are, the free online education that most universities and colleges offer is not for credit. You cannot use the courses as part of a degree.
Still, the content may serve to stimulate a field of interest in you. If it does this, then the free online university course that you take has served its purpose. After all, it is there to promote learning.
You should also be suspicious of for-profit colleges that offer expensive online courses that may not help you in the job market.
To make the most out of these free online courses, choose the ones that interest you, then set aside some time to learn. If you are disciplined enough, they can help you advance your career and expand your options.