The New Cape Cod
Talk to some businesses, and they feel under siege. Talk to others, and they see only new opportunities.
Change is not easy, but change is what we all face across Cape Cod. Old customers are disappearing; new ones are arriving. Technology threatens the status quo, but opens new horizons.
Cape Business is partnering with business consultant Barry Neagle and technology expert Peter Karlson of NeuEon to provide you with a rapid-fire tour of what we call the New Cape Cod.
We introduce you to a series of dramatic changes to the landscape. For each, Neagle suggests business management steps you can take – regardless of your business’ size – to not only cope, but prosper amid these transformative trends. Finally, Karlson introduces you to technology tactics you can employ to further benefit from the new realities.
These business and technology steps are by no means comprehensive. They give you a taste of the strategies and steps you can take in 2007 and beyond – once you gain your bearings and fully appreciate the New Cape Cod.
Cape Business, Karlson and Neagle will be hosting several morning seminars on the New Cape Cod. To learn more and register, go to capebusiness.net.
Defining trend no. 1:
Shifting from a seasonal to year-round 24/7 global economy. It’s building online stores; it’s working anywhere from a laptop; it’s staying open on weekends to serve second-home owners.
Your business strategy:
• The Cape doesn’t go dark in the winter, and your business doesn’t have to either. Embrace the year-rounder. You may downsize a bit – close off a room to save heat, open four days instead of seven to keep payroll under control, or reduce hours. But make sure everyone knows you are open for business. Post your ‘relaxed’ hours prominently on your storefront and in your advertising.
• Do business over the Internet. Offer ‘free’ shipping, which can help you keep prices high. People will pay almost anything for items if they get ‘free’ shipping. Web sites with secure shopping carts can be up and running for a modest investment, and you can make that investment back in the first year. Make sure your busy summer trade knows your Web site. Print it on business cards, bags and sales receipts. Include it in your advertising. Work to get it found by Internet search engines.
• Take advantage of inexpensive voice communications. If you are a personal lifestyle coach, you probably do more than half your work with clients by phone. Don’t stop at local people. Ask your customers whom they know anywhere in the world who could use your services. Offer to call them from your office, and help their lives thrive, too.
• Pay attention to your current clients. Look back to how you got them the first time. For example, an IT firm looked at their last 10 customers and found that five came from client referrals, three from local graphic designers, one from a networking group, and one from a family friend. The business owner realized he should focus his marketing attention on referrals from current customers and graphic designers. They all had contacts over the bridge, and now his biggest new clients are from off-Cape too.
Your technology strategy:
• Take digital pictures of your inventory and post items on eBay or other online marketplaces. With today’s digital cameras and photo manipulation software, even amateur photographers can achieve better-than-average results. Microsoft Office comes with a free utility called “Picture Manager” that allows you to manipulate your photos for online and e-mail use by compressing and resizing quickly and easily. These files can be e-mailed or posted online to sell your products more effectively.
• If you do take advantage of time off during the winter, you need to keep your online business going. This means designing your work habits to become more portable. A good laptop computer with WiFi capability will do the job in both locations. Be sure to use an Internet Service Provider and/or hosting vendor that will allow you to send e-mails from anywhere. Webmail or outgoing SMTP servers will accept your connections from anywhere, not just your ISP’s connection. If your Web site is designed correctly, you can check orders remotely, respond to customer inquiries and alert your staff back on Cape Cod that there’s an order to pick, pack and ship – all from the comfort of a warmer clime.
• Just because you operate a business on the Cape, it doesn’t mean the phone has to ring at that location. The same sophisticated virtual phone systems that you use during the season to give callers information about hours and directions can also allow you to route the calls to anywhere in the world. This gives a proprietor the option of forwarding calls to a cell phone or second home.
• Make time in your daily schedule to check your e-mail frequently or move to a more mobile e-mail solution like Blackberry to reply when you’re on the road. If your business is structured to provide ongoing customer service and support, you may need to invest in a ticket-based system to answer customer inquires as they come in and not rely on one person to service the requests. In general, these systems are best suited to businesses with more than one person answering requests, and you have to train your customers to send e-mail to service@yourcompany.com or support@yourcompany.com versus an individual’s e-mail address.
Defining trend no. 2:
It’s all about demographics. The fastest-growing population ranges from ages 45 to 65. More people between 65 and 75 are leaving the Cape than coming here. Baby boomers are reinventing themselves rather than retiring as their parents did.
Your business strategy:
• Today’s Cape Codders are a bit older, and have a lot more money to spend. They demand the same level of service that they enjoy in Boston, New York or London. Make sure that you provide upscale services to gain customer loyalty.
• Two rental divisions of leading real estate companies in Chatham are adding concierge services for their weekly and monthly tenants. One recreates the B&B experience in a private home by delivering the New York Times, fresh-squeezed orange juice, homemade scones and rich dark coffee, all in a basket with fine china, linens and silverware. Expensive, yes. Valued, you bet.
• Property management companies are growing and offering turn-key services to the well-heeled homeowner. One call can get the lawn mowed, deck replaced, screen door fixed, dining room painted and leaky toilet replaced. While the homeowner is away, they offer home-watch services, with a combination of electronic monitoring and periodic home walkthroughs. If a homeowner now needs one-floor living, they can arrange to have a first-floor bedroom added, or refer the client to a preferred realtor to help them buy and sell. One relationship, many valuable services.
Your technology strategy:
• Track everything. This includes the likes, dislikes, habits, favorite media, everything. Twenty years ago, this meant customer relationship management software created for your business. Today, salesforce.com, NetSuite.com, Intuit and Sage are among many offering off-the-shelf software tools to help you provides world-class customer service by helping you know what your customers need.
• To take advantage of these tools, start with a comprehensive customer list, add custom fields for characteristics about your customers that are important to your business, i.e., age, skin type, type of boat or car, hobbies, favorite type of wine, other service providers, etc.
• You can use this information two ways: Proactively contact them about something they may be interested in such as special pricing on their favorite wine, or reactively to answer requests in a more personal manner.
• Train your staff to listen to the wants and needs of the customer and record specific details. Start with the fundamental accounting system, add a good CRM system and a ticket-based service system, and you have a very complete picture of what your customer looks like based on what they buy, what they like and how many times they ask for something.
Defining trend no. 3:
Four of 10 households are second homes. In many towns, the percentage exceeds 50 percent. This fraction rises even higher among homes valued above $600,000. The vast majority live elsewhere in Massachusetts, close enough to come here year-round.
Your business strategy
• Retailers, restaurateurs and other businesses that cater to Cape Codders will have to take notice. No longer can you only do a good job on a transaction by transaction basis. Formerly one-time customers are coming back, weekend after weekend, year after year, so build a relationship with them. Get them on your mailing list. Learn their favorite items. Learn their names. Ask what you can do especially for them. They will love it and tell their friends, both here on the Cape and off-Cape as well.
• Serve your customers in their off-Cape homes by letting them buy things or make appointments or reservations with toll-free numbers or Internet services. A candy store on the Lower Cape offer coupons in-store that are good for winter Internet purchases only.
• Develop specific offerings for seasonal and weekend repeaters. Loyalty cards are a popular option (one free muffin after you buy eight). If the customers who love your products include snowbirds who disappear to Florida or Arizona, make sure you offer bulk packaging so they can take a winter supply with them.
• If you provide services such as landscaping or home repairs, develop an alliance with a similar business in the Boston suburbs. Maybe they like your cleaning service so much they’ll let you clean their Wellesley home in addition to their Centerville home. Maybe they like your PC repair business so much they’ll bring you a laptop from Concord, drop it off Friday night, and pick it up Sunday on their way back ‘home’. So plan for weekend hours.
• The strategies for each business will vary. Brainstorm with your suppliers, your friends, even your competitors, for ideas that work just right for your business.
Your technology strategy:
• Your business will need the right technology to communicate with these customers. This means enhancing your Web site to feature customer self-service. The big guys do it; and you should too.
• Allow customers to schedule appointments, check on status and communicate with you on their terms.
• Talk to your Web developer on ways you can make your business more “transparent” and open for your customers. This includes giving your customers a login to your site, posting information relevant only to them, such as their next service appointment date and what their account looks like – payments, invoices, etc.
• Make sure this is a two-way street: posting to a site is nice but allow customers to request changes to schedules, make special requests (this can mean more business) and provide a vehicle for feedback on your services.
Defining trend no. 4:
Call it coopetition instead of competition. For example, 10 companies joined together to create the Senior Resource Alliance to focus on the senior economy. Eight credit unions established a separate company for commercial lending. Competing eye health services combined forces to build a single surgery center. Two technology firms built a virtual network to serve customers across the Cape.
Your business strategy:
• Keep your customers close, and your competitors closer. You’re a house painter in Falmouth, and you specialize in power washing and natural shingle restoration, with some trim painting. Does the painter in Orleans fight you for business? Of course not. Do you know the painter in Orleans? Could you buy her a beer and share ideas about the latest mildew treatments, sprayers, or sales ideas? You don’t compete; you complement.
• There are three Web developers who have their own businesses in Chatham, Yarmouth, and Marstons Mills. A Web site is a Web site. Right? So they compete, right? WRONG!! They actually work as subcontractors to each other, each retaining their own customer relationship. One is a trained graphic designer, whose work we guarantee you’ve seen on book covers, posters and advertisements. The second has a specialty with database applications. He does shopping carts, customized for the most particular clients. And the third is great with Web page layout, navigation between pages and project management. They can each do it all, but together they can specialize and do the best work you can get anywhere.
• A carpet cleaner in Yarmouth is partnering with carpet retailers. Through the retailer, the cleaner offers a spill cleanup guarantee. When the carpet is installed, the cleaner makes a house call to tell the homeowner how to best take care of their new carpets. They get unlimited spill cleanup and a thorough in-home carpet cleaning for 18 months after the carpet is installed. All this valued service for a charge less than 10 percent of the cost of the carpet.
• Figure out who your collaborators should be. Who does the same thing, but in a different market? Who offers services or products that complement yours? Who uses the same suppliers as you? Who drives the same routes as you? Whose business is nearby and whose traffic could be your traffic?
Your technology strategy:
• Collaboration is only possible when you know something about your collaborators. Just like you track everything about your customers in a CRM system, track everything about your partners with a PRM, partner relationship management system.
• The same system that you’re using to track customers can be used to identify current competitors and turn them into collaborators. First, learn about their business – what their territory is, what specialties they have. Next, overlay your services and identify the gaps in your services with your potential collaborators. Contact the owners. More than likely they’re looking for an excuse to learn more about their competition.
• If you have the ability to open a portion of your CRM system to your partners, you can provide them with access to customers that you need help on. When collaborating on Web projects, a graphic designer may need the branding files for a specific client. They can be stored on a project management server for easy access by the designer. The designer can then upload their finished designs to the same server for review. There are tools like BaseCampHQ and Project Insight that help project teams stay on the same page.
• Allow your new partners to update your system to communicate with your customer that something has been done. Let’s take the chimney sweep example. You’re a concierge service provider; you subcontract the chimney sweeping to a local partner. They can receive the request and schedule the cleaning in your system so that the homeowner knows when and who is providing the service. Your PRM alerts the partner company of the appointment. The partner vendor may even bill you so that the homeowner doesn’t receive 10 bills from 10 different providers. You can then provide this consolidation of services as an administrative fee on top of all the services you already provide for the homeowner.
Defining trend no. 4:
There are an estimated 2,500 businesses on the Cape conducting their operations at home. Many of them are invisible, with their client base often exclusively off-Cape. They may be grossing millions a year, and while that money comes from elsewhere, they spend it right here.
Your business strategy:
• They work hard and don’t have as much time as they would like to go out and get the services they need. Pick up and deliver to them, whether it’s dry cleaning, prepared meals, package pickup and delivery, etc.
• Build offerings especially for the home-based business – PC repair or Vista upgrades at their place of business, in-home computer networks, office furniture shop-at-home services, training on how to run a Web-based seminar they can do from their home office.
• If you are one of these home-based businesses, form a breakfast club with others in your village or town. Get together once a month to swap stories about who the best business attorney is, or whose cell-phone service works best in Truro, or which travel agency is most reliable, or the best ways to get to the Providence airport without taking your car.
• Get a business coach or mentor. Maybe you and one of your new collaborators can do this for each other; or maybe you should hire one of the many talented people on the Cape who offer this service. As one business owner says, “When I work for myself, I work at my most comfortable level, but when I work with a coach, they keep me on track and I work at my most optimal.”
Your technology strategy:
• It’s not just location, location, location. Today, it is presence, presence, presence. For less than $100 a month, you can have a phone system and online tools to look, act and feel like the best big company in the world.
• Microsoft has dedicated millions in R&D to service mark its Office Live services. These tools allow you to collaborate and communicate with customers, partners and employees for a low per-month fee. When coupled with virtual phone systems, you have a complete virtual company.
• These virtual office frameworks set up the basic collaboration environment you need, from files to calendars to contact sharing to more sophisticated intranet/extranet capabilities. Some services such as Office Live and HyperOffice also have complete business class e-mail services.
Defining trend no. 6:
Banks and other lending institutions have discovered the small business and home-based business. They not only want to lend you money, but they are prepared to provide business development support. Some will even train you on QuickBooks. And they are spending millions on Internet technology for you.
Your business strategy:
• Shop around. Evaluate courier services instead of going to the bank. Investigate remote checking deposits and the incentives being offered by competing banks. Insist on free everything.
• Whatever you do, have a separate bank account for your business that doesn’t commingle family funds. Pay yourself a salary, complete with all the legal deductions you must make. Look for free payroll services that may be offered for businesses. (And don’t ever try to do payroll yourself. You’re almost guaranteed to make errors, forget quarterly filings and spend countless hours getting your business out of a jam.)
• Form a relationship with a local banker who can make decisions based on who you are, not on how you look in a business plan or on a spreadsheet of cash flows. They are harder to find, but they’re coming back to the Cape.
• Whenever possible, look to your accounts receivable to finance your business. Many small businesses have about 15 percent of annual sales sitting in accounts receivable all the time. That’s an average of 60 days sales tied up in collections. Bill as quickly as you have earned the right.
• Set payment terms that are fair to your customers. If you send out invoices via e-mail, good for you. But insist that customers acknowledge receipt of them with a return e-mail.
• Don’t let money get old. Once it’s over 30 days, set up a process to send a ‘gentle reminder’ to your customers. At 40 days, if not sooner, make a phone call to collect. Follow up again in 50 days. At 60 days, threaten (nicely) to stop services. At 75 days, warn them. At 90 days, fire them as customers. Let them drag down someone else, not you. You’ll be surprised how much money you can collect by simply trying, and you’ll have your customers trained that when they have a bad month, they pay you first.
Your technology strategy:
• Most banks are rolling out remote check deposit, which lets you scan checks directly from your office, saving you time. The cost of the scanner can reach $2,000. Many banks are providing discounts or incentives; some are developing lease programs.
• Look at the new offering by Intuit’s QuickBooks Online Edition or NetSuite to save time and provide access to your accountant and employees without installing any software. These tools allow you to provide visibility to key advisors to your business – from bankers to accountants.
• Sending invoices by e-mail with QuickBooks is an easy way to solve the problem of customers with multiple physical and mailing addresses.
• Another service to use is online bill pay, offered by most banks and credit card lenders. This can be a low-cost, sometimes free service that will be a sure way to reduce postage costs and time.
• For receivables that are getting too old, consider online services from Dunn & Bradstreet. You can sign up online for a fee.
Barry Neagle is president of Neagle & Associates, a business consulting firm in Cotuit. He can be reached at bneagle@gmail.com. Peter Karlson is president of NeuEon, a technology consulting firm with offices in Orleans and Falmouth. He can be reached at pk@neueon.com.
NOTE: Cape Business is holding a series of seminars on on how your business can adapt and grow in the New Cape Cod. To learn more, click here.
Published in Cape Business Sept/Oct 2007
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