Business Banking E-Newsletter - October 2012

Why Most Loyalty Programs Are Missing the Point

There's nothing new about loyalty programs. One of the first programs was created by S&H Green Stamps, which got its start in the late 1800s. Today, if you check your wallet, favorable odds suggest there will be at least one card attached to your local grocery store, pharmacy or lunch spot. And that doesn't even include membership in airline programs, hotel chains and the myriad of other options available to consumers.

As of last year, there were more than 2 billion loyalty programs in the U.S., amounting to roughly 18 memberships per household, according to a 2011 report from Colloquy, a loyalty-marketing researcher in Cincinnati.

While the idea of rewarding customers for frequent purchases is cemented into the ethos of many companies, new ways of thinking about loyalty are helping fix outdated programs and ensure that they aren't "bad for business." Loyalty programs have never been a one-size-fits-all strategy, but when well implemented, a loyalty program can enhance customer relationships and drive bottom-line results.

The trouble is, too often loyalty programs are reduced to transactions. A customer comes in, purchases an item or uses a company's service, and once she has bought enough to reach a pre-determined threshold, she is rewarded with a discount on future sales. Unfortunately, in today's world, that's no longer enough.

The foundation for deeper customer relationships -- and subsequently, actual brand loyalty -- has expanded beyond the point of sale to the various platforms and channels that surround a brand's ecosystem. Relationships are being built and value is being created for brands in more places than ever before. Therefore, creating a loyalty program that simply focuses on transactions is missing so much of the value that comes from customers daily.

In today's multi-channel world, customers have an increasing number of outlets to express their views and people are paying attention to what's said on those channels. A customer can tweet when they've enjoyed a positive experience with your brand or product. They can "like" a company on Facebook, inviting them into the coveted social feed of that consumer. They can check in on Foursquare at one of your locations, broadcasting out to their network where they are and what they're doing.

On top of this, the consumption and sharing of your website's content is valuable. And these are just social actions which don't include all the other engagement which is equally important across e-mail, mobile, online and more.

These actions and activities can and should be rewarded, as purchases are just one part of the equation. When companies take advantage of all channels where people interact with their brand, not only can they acquire a much more comprehensive understanding of their customers, but they can build stronger relationships and reward them for true loyalty.

Encouraging and rewarding loyalty is an incredibly powerful strategy that has driven phenomenal results for many companies across various industries for decades. There is not, however, a single recipe that works for everyone, and companies need to look at their business' economics as well as desired results to construct a program that makes sense for them.

Even more important is that companies start to think about loyalty programs in a more holistic capacity. Gone are the days when the only customer interaction which could be measured was the purchase. The ecosystem has evolved and it's time for loyalty programs to do the same.


Here’s What Your Employees Want: Are You Listening?

When it comes to what your employees want, too many small business owners are in denial. At least, that’s the finding of a new study by MetLife, which polled small business owners and employees and found that while employee loyalty has dropped steadily since 2008, employers mistakenly believe it’s on the rise.

More than one-third of the work force (36 percent) hopes to find a new job soon, and among younger employees (Gen X and Gen Y), that number hits 42 percent.

If you’re looking to replace lost workers, be aware that benefits were also an important factor in attracting younger workers—even more so than in attracting Boomer-age workers.

One reason younger workers are more likely to be influenced by benefits is because they’re having a harder time financially, with 50 percent saying they’re more reliant on employee benefits for financial security than they were in the past.

However, that’s not to say Boomers are carefree. More than half of employees in all age groups are worried about making ends meet, paying for health insurance and paying down debt.

Employers are also in the dark about what benefits contribute most to employee loyalty. Asked what benefits were key drivers of loyalty, more than half (52 percent) of employees named retirement benefits, 44 percent said nonmedical insurance benefits (such as life insurance) and 38 percent want to have a choice of benefits.

While employers in the survey were well aware of the importance of benefits, 65 percent report it has become more difficult to pay for them.

The good news for cost-conscious employers: Two-thirds of younger workers and more than half of Boomers say they’d rather pay for more of the cost of their benefits than lose them altogether.

Give Employees What They Want


The title of the study, Are You Listening? offers a clue. Start by asking your employees what kinds of benefits they care about most. You may find, based on the age group of most of your employees, that the results are not what you expected.


Figure out what kinds of benefits you can offer. Is there something that would make you a more desirable employer because none of your competitors offer it? Conversely, is there some type of benefit that’s considered “essential” or basic in your industry or your area?


Figure out what you can afford and how much your employees are willing to pay. If something that employees care about deeply is out of your price range, can they contribute part (or all) of the cost?

You might be surprised: MetLife found that more than one-third of employees were interested in having access to disability coverage, life insurance, dental insurance and vision insurance—even if they had to pay 100 percent of the cost.


Letting employees know what you offer and how much it costs is key to building loyalty. Be transparent about the cost of policies and how much of the tab you are picking up. Employees often underestimate these costs, and showing them the reality will make the benefits more valuable to them and build loyalty.


Don’t “set and forget” your benefits. Do an annual checkup to ask employees what benefits they used, what they care about and what they don’t care about. Also talk to your insurance agent(s) each year to assess whether you have adequate coverage, what you can drop (and add) and ways to lower your bill.

Going forward, the trend toward employees contributing more for coverage won’t end anytime soon. As the war for talent heats up, having employees chip in for their benefits will make it easier for small business owners to win at least part of the battle.


12 Tips for Business Success

What's important to the success of small-business owners and entrepreneurs? Knowledge, skill and talent.

However, many competitors have the same traits you do. The key to beating the competition and achieving success is mental, reflected in one's attitude, totally controlled by the individual and requires no cash. This holds true in most human endeavors besides business — in sports, the arts and politics.

How many times have we seen the underdog team or player win over the more talented opponent? The difference is often attitude.

These 12 attitude attributes can put you in the right mind-set for achieving entrepreneurial success.

1. Have passion for your business
Work should be fun. Your passion will help you overcome difficult moments and persuade people to work for you and want to do business with you. Passion can't be taught. When it wanes, as it surely will in difficult times, take some quiet time. Whether it be an hour or a week, take inventory of all the reasons you started the business and why you like being your own boss. That should renew your passion.

2. Set an example of trustworthiness
People have confidence in trustworthy individuals and want to work for them in a culture of integrity. The same is true for customers.

3. Be flexible, except with core values
It's a given that your plans and strategies will change as time goes on. This flexibility for rapid change is an inherent advantage of small over large business. However, no matter the pressure for immediate profits, do not compromise on core values.

4. Don't let fear of failure hold you back
Failure is an opportunity to learn. All things being equal, venture capitalists would rather invest money in an individual who tried and failed founding a company than in someone who never tried.

5. Make timely decisions
It's okay to use your intuition. Planning and thought are good. But procrastination leads to missed opportunity.

6. The major company asset is you
Take care of yourself. Your health is more valuable than the most expensive machinery or computer software for the company. You don't have to choose between your family or your company, play or work. Maintain your health for balance and energy, which will, in turn, enhance your mental outlook.

7. Keep your ego under control
Don't take profits and spend them on expensive toys to impress others. Build a war chest for unexpected needs or opportunities. This also means hearing out new ideas and suggestions no matter how crazy they sound.

8. Believe
You need to believe in yourself, in your company, and that you will be successful. This confidence is contagious with your employees, customers, stakeholders, suppliers and everyone you deal with.

9. Encourage and accept criticism graciously. Admit your mistakes.
You need to constantly work on convincing your employees that it's OK — even necessary —to state their honest opinions even it if conflicts with the boss's opinion. Just stating it once or putting it in a mission statement won't cut it for most people.

10. Maintain a strong work ethic
Your employees will follow your lead. It will also help you beat your competition by outworking them, particularly when your product or service is very similar.

11. Rebound quickly from setbacks
There surely will be plenty of ups and downs as you build the business. Learn from the setbacks and move on. You can't change the past.

12. Periodically get out of your comfort zone to pursue something important
Many times you will feel uncomfortable in implementing a needed change in technology, people, mission, competing, etc. For the company and you to grow personally, you sometimes have to step out of your comfort zone.

Many organizational and leadership shortcomings can be overcome or mitigated with the good attitudes described above. All can be learned except passion, which comes from within. Take time out of your hectic schedule to periodically reflect on these attributes. You may be inspired to act.


Mastering Distraction in 18 Minutes

There is a better way to focus your time on what you value the most - and say no to the rest. It begins with a mere 18 Minutes.

Do you ever get to the end of a busy day only to realize that next to nothing has been taken off of your “to do” list? What if you could take back some of the hours in your day? What would you do differently? The problem is that many business owners don’t know what to do about their lack of productivity. Or, like everything else, they put off their commitment to get things under control. In 18 MINUTES: Find Your Focus, Master Distraction, and Get the Right Things Done, author Peter Bregman delivers a series of quick-hitting chapters that teach us how to navigate through the never-ending chatter of emails, text messages, phone calls, and endless meetings that prevent us from focusing our time on those things that really matter.

Below, Peter has answered some questions:

Q. In 18 Minutes you encourage your readers to focus on things that matter to them; things that have specific meaning. You suggest exploring what matters, what’s working well, what people feel neutral about, and what alienates them. What choices do you feel a solopreneur has if certain aspects of managing his business don’t appeal to him?

A. One of the great advantages to being a solopreneur is the ability to structure the business to match - almost perfectly - what I call the 4 elements: the particular strengths, weaknesses, differences, and passions of the solopreneur. And with the accessibility and availability of outsourcing, that’s never been easier. The first thing to do if an aspect of your business doesn’t appeal to you is to ask whether it’s essential to the business. If it’s not - or if you can change the business to make it less important - then get rid of it. If it is important and it doesn’t appeal to you, outsource it if at all possible. 

All of us succeed - this is especially true for solopreneurs - when we work at the intersection of the 4 elements. If you can structure your business so it allows you to leverage your strengths, embrace your weaknesses, assert your differences, and pursue your passions, you will be playing the game you know you can win.

Q. Peter, your book is filled with insightful messages intended to help the reader find the path to happiness and fulfillment. Do you believe that individuals who are productivity-challenged are simply on the “wrong” path?

A. Any of us can be productivity challenged, even when we are in exactly the right place, doing the right things, with the right other people. In fact, sometimes I become productivity challenged precisely because I have too many right things to do. It’s an interesting dynamic I’ve recently discovered - When everything is important, working on a single task becomes psychologically difficult because it means we are choosing not to work on all the other things that we know are also important. So we end up watching TV or eating ice cream or buying running sneakers instead of doing the work that’s important to us. It doesn’t make any sense and yet it’s a dynamic I’ve found myself in and watch other people struggle with all the time. 

There’s another dynamic at play: the more important your work is to you, the more likely you are to procrastinate on it. This is because you have more at stake in work that’s close to your heart. Failure might leave your very identity in question. Maybe you can’t be a writer/solopreneur/online marketing maven/technologist after all. And so you don’t get started. All these are examples of being productivity-challenged while being on the right path.

The solution is in creating a system that gets you to focus on the most important things - that’s what my six box to do list and my 18 Minute process are all about.

Q. You suggest that the secret to thriving in life is to do fewer things – the things that are most important. How does a busy solopreneur determine what to choose?

A. I suggest that everyone choose five things that they most want to focus on in a year. Five things that put you at the intersection of the four elements - Strengths, Weaknesses, Differences, and Passions - and that are most meaningful. I specifically discourage people from trying to find their mission in life. If you have one, great. But if not, it can be paralyzing to try to find it. So simply focus on what you want to spend your time doing in the next year. I ask three major questions in my book - What is This Year About? What is This Day About? What is This Moment About? It’s critically important to answer the first question before the second. Otherwise we’ll spend our days frantically working but not getting us where we want to go. Once you place yourself at the intersection of you strengths, weaknesses, differences, and passions then you will naturally be working on the things you’re good at, make you happy, and have meaning to you. Choose those things to spend your time on.

Q. You have a “3-day rule”- nothing stays on the to-do list for longer than 3 days. Do you find that there is any specific psychology behind allowing things to stagnate on our lists for days, weeks, even months?

A. Yes. Many of us are afflicted with a disease called FOMO or Fear of Missing Opportunities. So we add things to our list and, even though we are unlikely to accomplish many of them, we keep them there. Unfortunately, that quickly transforms our to do list into a guilt list; a list of everything we think we should be doing but can’t get to. Which then makes it hard to identify the things that are most important to us. The answer to this is to make more intentional choices about what we are going to do and what we are going to ignore. It’s hard to say “no” to something we’d like to do - but if it doesn’t reasonably fit into the areas we most want to focus on in a year, then it’s a distraction and we need to pass it by.

Q. Peter, many people are faced with email overload. Can you suggest a few steps to address/manage this problem?

A. One thing is to delete liberally - If you have an inkling that something is not critical, don’t read it. Also, be very careful what you reply and to whom. You can either keep a conversation going or politely close it - choose carefully which you want to do for a particular email. Finally, I find it is much less efficient - and far more distracting - to answer email as it comes in. Instead, choose email times and go through them all at once - you’ll be much better at making decisions and responding if you’ve cordoned off the time.

Q. Entrepreneurs are notorious for losing focus. With so much information coming at once, how can one avoid constant distraction?

A. It’s hard. It helps to resist the temptation to multitask. Because multi tasking simply doesn’t work - it slows us down and makes us lose focus. Apple’s new operating system has integrated full screen views into many applications - so, if you want, you can make the thing you are working on the only thing that appears on your screen. That’s a great tool to fight distraction. Another thing is to avoid interruptions. Use a timer and decide how long you are going to work on something and then, no matter what, don’t change your focus until your timer goes off. 

Researchers watched people work and noticed, on average, that people were interrupted four times each hour. But here’s the interesting part - they often didn’t go back to what they were working on before they were interrupted. And here’s the really, really interesting part: the more challenging the work was that they were doing before they were interrupted, the less likely it was that they would return to it after the interruption. In other words, we’re most likely to lose focus on our most important work.

Q. Lastly, many solopreneurs work from home. What are some important factors in creating a workspace that is conducive to high productivity levels?

A. Put a lock on your home office door. I have three young kids so that helps tremendously. I also find it’s helpful to define times during the day when you aren’t going to work - breaks, lunch, errands - which creates a boundary around your work time. This way you can stay focused, knowing exactly when that break is coming up.

Also, know your rhythm. I do my best writing in the morning - so if I cordon off a few hours to write before I even look at email, I know I’ll be productive. Once you know your rhythms, schedule your day around them. That’s the key to all of this really - especially solopreneurs - know yourself well and build things around you so that you can bring the best of who you are out into the world.

Source: - Marla Tabaka

What to Ask a Potential Merchant Services Provider

With 87% of U.S. businesses currently accepting credit cards as payment for products or services, it is not surprising that merchant processing has become such a highly competitive industry. If you are a merchant it is likely that you receive phone calls from processing companies on a regular basis. But take caution and complete your due diligence before signing on with a new company. Ask yourself the following questions:

  • Are the rates only for a promotional period of time?
  • What fees will I pay? Look at both start up and ongoing costs.
  • Does the business have a local sales representative?
  • How long has the company been in business?
  • Do they have other clients that are in my industry?
  • Am I required to sign a contract? For how long?
  • Am I required to purchase equipment through the processor? Will my existing equipment work on the new processor’s network?
  • Who do I call when I need help? Is there a local representative available? 

Coulee Bank is aligned with a reputable merchant service provider and may be able to save you money. Coulee Bank professionals will make sure you understand all of the costs involved in switching from your processor.    

Regardless of your choice, beware of companies that rely on high pressure cold calls. These callers prey on the complexities of merchant processing. Coulee Bank has received several recent reports of highly misleading tactics relayed by our customers. Some common approaches:

  • Your business is out of compliance and is facing fines. 
  • Your merchant processor is out of compliance and you could lose your processing ability
  • I work for Visa/MasterCard so I can provide you with lower direct rates than a processor
  • I am an independent auditor working on your behalf/assigned to contact XYZ merchants.
  • I work with your current processor to get you rebates on your merchant fees

If the caller uses one of these tactics, ask for his/her name, company, and contact information. Consider asking for the information in writing. But most of all don’t disclose anything about your business until you are comfortable the caller is from a reputable company. When in doubt, contact your banker to discuss the situation.