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Social Media is supposed to have brought about this new era of transparency. But has it?

My business partner (Jeffrey) and I got into a disagreement regarding this the other day and I thought “Let’s see what the rest of our small world of FaceBook friends and blog readers think”.

Jeffrey, had found a forum post on a product review board on the Dell web site which slammed some new tiny computer that they had recently put out. He emailed me the link saying that transparency was not good in this case. Having read about Dell Hell in Jeff Jarvis’ What Would Google Do?, I was inclined to immediately disagree because Mr. Jarvis made a very good argument to the contrary – that publicly calling Dell out had resulted in him getting what he wanted and that his small set of the articles spread very quickly over the web, becoming a PR nightmare for Dell. Dell finally reacted and learned their lesson and made many other customer service related corrections as a result of this.

However, I have given it some more thought and I have to say I’m not totally convinced that 100% transparency (much less 75% or even 50%) is good for every business, especially small business. Dell is a very large company, many people had never even heard of the Dell Hell incident – I had not until reading his book. Despite the bad PR, Dell remained relatively unblemished. I’m not sure that I could say the same if it were to happen to my small business. They could lose 10s of millions of dollars, perhaps 100s of millions, and remain relatively unscathed. For small businesses that operate in a smaller market those results might be catastrophic.

So ponder on this:

• Would you publish a publicly viewable forum where anyone could write what they wanted about your company and anyone could read what had been written?
  • How would you handle negative commentary?
• How would you react to web site that are erected for the sole purpose of discrediting your company by having users share their negative experiences (e.g. www.dellhell.net)
• Is the concept of transparency more relevant/practical/necessary for big businesses and government than small businesses?
• Does this even matter for service-based businesses?

By the way, what do you think about the transparent canoe? Cool huh?

Instead of telling you what I think, I want to know what you all think. In a commodity type business, such as IT support, you look for any distinct advantage, any method of differentiation that you can to market your business. It’s tough because there are so many strategies. If you develop a new product or service that no one has in order to differentiate yourself, you will soon be copied and lose that edge. Re-bundle your services, same thing.

When I sat down with our customer advisory council about this, we were told our biggest distinction was our customer service. However, I am finding that difficult to market because I want the message to rise above the status of a platitude. When is the last time you went to a networking function only to hear people say the same old crap:

“We pride ourselves on customer service”

“We the most reliable, dependable, etc.”

blah, blah blah. It’s all talk unless you can prove it.

What I want to market, the story that I want to tell the world, is that we are the best at what we do. Something like:

“Everyone claims to have great customer service, but we can prove it!”

Some of the ideas I have had are:

• Promoting that we are the most recommended IT consulting firm on Linkedin.com (already using this)
• Customer Service Award from the Better Business Bureau or some other type of entity (we have a competitor that has done this

I’m not thrilled with the idea of awards because I think people today realize that many such awards are shallow victories. The chance of you winning an award these days seems to be more about who you know than actually possessing the merit to deserve the honor.

I need a way to prove that Carceron is the best at Customer service and I need a way to spread the word. Can you even market customer service?

P.S. If you have any other ideas around differentiation for a managed IT services business such as mine, I am all ears.

P.S.S. I’m not looking for a marketing consultant, so please don’t reply with a solicitation.

I’m sure that you have heard many variations of the advice that serves as this blog entry’s title like”outsource your weakness”. What’s not always clear when you hear these phrases is the context. Sometimes it applies to a person, sometimes to a business, sometimes both. I think it’s about evolution – a series of steps that starts out with you personally:

Step 1: Outsource Personal Weakness

I learned early on in business that I did not need to handle book keeping, and, a littler later on, tactical marketing (web sites, direct mail, etc.).  Reconciling bank statements, taxes, etc. are best handled by someone else, I quickly deduced. My undergrad training was in Psychology. I never took a single business class, so this was a no brainer. What’s been harder to let go of is marketing. My background in psychology has served me in understanding the clent and how to market to them in terms of messaging, but other tactical elements such as graphic and web design, collateral design, are all done better by the artsy types who can give your business a more polished look.

As Carceron grew, I began to realize that I wasn’t even the best computer technician and worked quickly to divest myself from that role to allow other, more capable, people run the day to day support operations of the business.

My next area to personally outsource? …Sales.

As I have grown the business, it was hard to see how tactical of a role sales really was until I had done it for a while. Now I realize that it is simply a numbers game. It’s about generating more leads (marketing and prospecting) and attaining better conversion rates (sales and sales training). I firmly believe that I could teach just about any good sales person how to sell what we do because the principals of selling are the pretty the same in any business. My training would give him the information needed to apply those principals..

In summary, you can outsource some of your personal responsibilities to outside vendors or employees. Evolving business owners and overwhelmed management alike must outsource their personal weakness in this way to get precious time back and/or to increase the quality of the area to be outsourced. This was the case of Jay, an operations manager for one of our clients. Jay ran the day to day operations of his company’s 16+ locations in addition to supporting its near 100 end users, while Carceron simply supported his server farm. Eventually he “cried uncle” and let Carceron take over all of their IT operations which gave him back 15-20 hours per week that he was spending on just supporting end users.

Step 2: Outsource Business Processes & Functions

As your business grows, you eventually see other areas to outsource to save money and/or improve quality. Some things make more sense than others. As a rule of thumb, don’t outsource anything that interferes directly with your client relationships… hold that sacred.

Here are some common areas of the business to outsource and why you should:

• Book Keeping: Save time, Accuracy, Cheaper than a full time employee (depends on the size of business and transaction volume)
• Payroll: Accuracy, IRS Compliance
• Human Resources: Compliance, Compliance, Compliance
• Marketing & PR: Social Media needs daily attention, a firm can do it cheaper than a full time employee
• Shipping / Delivery: What would it cost you to maintain a fleet of vehicle and drivers vs the cost of using a local courier or FedEx?
• Managed Services Provider (MSP): MSPs don’t get sick or take vacations, MSPs don’t need to be equiped or need benefits, MSPs cost about 1/2 the salary of a full time IT employee, click here to see a lot more reasons

Much of outsourcing is accomplished through the use of information technology which is an enabler towards issues like compliance, business process etc. Make sure that you understand the impacts on your IT infrastructure of anything that you plan to outsource before doing so.

You’ll also want to make sure that you have a good working relationship with all of your outsource vendors, constantly communicating your expectations.

Here are some other resources on outsourcing, well worth the read:

• 8 Reason Why Outsourcing Fails
• What causes outsourcing failures?

Off-shoring

When many people hear the word outsourcing, visions of call centers in a far away country pop up. Bare in mind that you can outsource without off-shoring. Put differently, off-shoring is 1 technique of outsourcing. When and why should you use this technique? In many cases it almost always comes back to saving money. Labor pools in other countries are generally cheaper and vast. It can also come about due to of lack people in country that have the necessary skills to carry out specialized kinds of work. This has been Microsoft’s argument for years – that University’s simply aren’t spitting out enough application developers (Watch the Bill Gates Testimonial to the Senate regarding this).  However, there are some trade offs:

• Language barrier: Many people get frustrated with call center operators where English is a second language. Also things can get lost in translation – this happens often for company’s that outsource software development abroad where misunderstandings about the scope of work often arise.
• External Politics: In the current state of this economy, where unemployment is so high, you risk a PR backlash by sending work overseas
• Internal Politics: Offshoring can have a direct impact on moral due to an “am I next?” mindset

Personally, I have not seen the need to offshore, however, I think it may become inevitable in order to compete unless legislation is passed to limit it somehow. As I am not an economist, I can’t say either way if that would be a bad thing or not. If we are of the mindset that we are now a global market place, would increased (presumably more restrictive) legislation help or hinder us? I simply don’t know…

• Why Offshore Outsourcing Projects Fail

#1 Protect Your Business From Disasters

#2 Document Business Processes

# 3 Backup Data Off Site

#4 Write a Business Continuity Plan

#5 Test Your Business Continuity Plan

Test Your Business Continuity Plan Once a Quarter

• Make drills as realistic as possible
  1. Do not announce drills except to key management (and to them only if you need to)
  2. Address how employees that are in the middle of dealing with a client issue should react
  3. Go through as much of the actions in the plan as possible

• Can you become fully operational as fast as you need to?
  1. Where are the kinks and holes in your plan?

#1 Protect Your Business From Disasters

#2 Document Business Processes

# 3 Backup Data Off Site

#4 Write a Business Continuity Plan

Write the Plan

First Response

• What are the first steps that you take when disaster strikes?
  1. Call local authorities (where are those numbers documented?)
  2. Call your insurance company
  3. Call your management team with the news and plan going for, who in turn disseminate this information to their staff
  4. Inform clients of the disaster and how long you anticipate being down
  5. Inform vendors of the disaster. Stop or reroute shipments as needed.
  6. Notify the post office and commercial couriers such as FedEx and UPS of alternate delivery locations

Communications

• Telephone
  1. Where will the main line forward?
  2. Do you have an employee contact lists stored off site? How quickly can you access that information?
  3. Do you have a client contact lists stored off site? How quickly can you access that information?
  4. Do you have a vendor contact lists stored off site? How quickly can you access that information?
  5. How can you replicate the phone system quickly after disaster? Some options might include:
     • Going with a managed PBX
     • Going with a call center that can route calls
     • Have your telephone line provider forward to a home or mobile phone

Email

• Setup email archival (see #3)
• Setup email sand bagging with an alternate MX record with secondary priority in the DNS zone for your company’s domain name. (the record that tells the Internet where to send email for your domain, i.e. mail.yourbiz.com – an usual alternate might be mail2.yourbiz.com). I strongly suggest professional help with this.
• How will user email client software (Outlook) connect to an alternate email source?

New Work Place

• Alternate Network Infrastructure (definitely seek the help of a professional IT person here)
  1. Do you have access to spare servers or can you lease some from a datacenter?
  2. What computers will end users use? Their own? How will they access data.
  3. How will information security be addressed in disaster mode?

Alterations in Business Processes

1. Address any deviations needed from standard business processes due to the event

#1 Protect Your Business From Disasters

#2 Document Business Processes

# 3 Backup Data Off Site

Server Image Backups

1. Use disk-based, sector level snapshot software, such as Acronis TrueImage for server backup.
2. Backup to external eSATA or USB hard drives which are rotated out to an off site location weekly. Keep at least 2 weeks (2 drives) off site at all times (because if you are transporting one and you get in a wreck, you still have the older one at the off site location – plus it never hurts to have a spare)
3. Perform restore checks on drives before taking off site. Make sure that you can restore individual files and mount virtual images

Online Backup

1. Supplement Server Image Backups with ongoing incremental Online Backup to ensure all data is current when you perform a restore. This would be just for files and small databases.

Off Site Replication

1. Setup another server in a co-location center or even the business owner’s home, to act as a file replication server. You’ll need to have a point-to-point virtual private network (VPN) between the locations. This will allow you to access all critical files within seconds of a disaster.

Email Archival Services

1. Enroll into an email archival service, such as Postini. Many industries are required to archive email anyway, such as financial planning firms. Notice that I said service, vs. archiving on a server – which obviously is useless if a disaster happens.

#1 Prevent Disasters

#2 DOCUMENT & DIGITIZE BUSINESS PROCESSES  & INFORMATION

Organizational Chart & Succession Plan

1. If any senior management are seriously injured or die, you’ll want a clear succession plan of who is in charge first and foremost.

Accounting

1. Document things like data entry standards, AR & AP processes, inventory control, payroll processes, tax procedures, compliance, etc.
2. Document and secure passwords to accounting software and vendor web sites.
3. Digitize all accounting related documents so that they can be backed up off site (especially a copy of all of your insurance policies)
4. Make sure that you have online bill pay (you paper checks are most likely destroyed)

Operations

1. Document specific business processes. If you sell product, document the supply chain. If you document services, document the service delivery process.
2. Document and secure passwords to operations software and vendor web sites.
3. Digitize all operations related documents so that they can be backed up off site

Human Resources

1. Document human resources processes specific to your business. Consult with a HR consultant to assist you with this.
2. Document and secure passwords to human resources software and vendor web sites.
3. Digitize all human resources related documents and records so that they can be backed up off site

Marketing

1. Digitize all marketing related documents so that they can be backed up off site. Since this will often be art work which can create large files, a once per month archive might be sufficient (unless you’re a marketing company)

Sales

1. Document your sales process(s) and any sales automation.
2. Digitize all sales related documents such as templates, contract and proposals so that they can be backed up off site

#1  PREVENT DISASTER

Earthquake

1. This is the hardest disaster to plan for and the most expensive. To prevent it, don’t work in an earthquake prone area. Odds are you won’t have the budget to “harden” your office like many data centers in earthquake prone regions.
2. Make sure that off site /online backups are in another state, several states from your home state.
3. If possible, run as much of the business as possible through cloud based services and applications that servers in safe regions of the country. This can mitigate a substantial amount of risk to the IT infrastructure and operational up time.

Fire

1. Have fire extinguishers checked and charged annually as needed.
2. Make sure that your have proper fire suppression systems in your server room. (Water is obviously not ideal, as are most common fire extinguishers)
3. If you carry a lot of inventory, consult a professional on the best plan of action

Flood

1. Make sure that no computers sit directly on the floor. At least 1’ high is recommended.
2. Server rooms should not have any overhead water pipes
3. Make sure that your office is on upper floors and/or on high ground (One of our former clients had a Vespa shop in Atlanta that was located in a shopping center that was at the bottom of a fairly steep hill and it had a river on it’s back side. When hurricane Ivan came through, the store was submerged in 5’ of water, submerging their entire network and inventory).

Tornado

1. Avoid locating sever rooms near the exterior wall of a building. Put them as close to the center as possible in whatever room as the most reinforced infrastructure (and no water pipes over head, see Flood above)

Physical Theft

1. Consult with a security company regarding ingress/egress control options such as card or biometric (thumb prints, hand scans, etc.) entry
2. Install digital video cameras. Be sure to secure the recording unit in a secret location and back it up off site (online backup is fine)

Data Theft

1. Consult with your managed IT service provider on how to safe guard your data using file permissions, encryption (especially for laptops) and auditing.
2. Disable users’ ability to write to external media such as burnable CDs, DVDs, and Flash Drives.
3. Implement 2-factor authentication (e.g. logging in with a password and thumb print)

Insurance

1. Review your commercial policy with your agent no less than once per year.
2. Make sure that you are protected from all reasonable scenarios and that your limits are adjusted as your revenue/profit increases.

Strategic Alliances, often little more than a business buzz phrase, can have a very real impact on your bottom line if executed correctly. Some of the benefits of Strategic Alliances include:

• The ability to compete against stronger competitors through the creation of synergistic partnerships
• Development and exploitation niche markets faster
• Increased activity throughout the entire sales pipeline – all the way from lead generation to closed business.

So what is a Strategic Alliance and how do you form one that works and lasts? I’m about to tell you:

First, let’s look at some definitions for “strategic”:

• Pertaining to, characterized by, or of the nature of strategy
• Important in or essential to strategy
• Of an action, as a military operation or move in a game, forming an integral part of the stratagem

Next, let’s look at some definitions for “alliance”:

• the state of being allied or confederated
• a connection based on kinship or marriage or common interest; “the shifting alliances within a large family”; “their friendship constitutes a powerful bond between them”
• an organization of people (or countries) involved in a pact or treaty
• a formal agreement establishing an association or alliance between nations or other groups to achieve a particular aim
• confederation: the act of forming an alliance or confederation

Finally, the definition for a Strategic Alliances, (as defined by Wikipedia)

A Strategic Alliance is a formal relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need.

I like this definition due to its emphasis on formality and “agreed upon goals”. One thing that I think is missing from this definition is that the relationship should also be mutually beneficial – as this is key to making the Strategic Alliance last.

Some Strategic Alliances Basics

The are many kinds of strategic alliances. Most center on revenue creation. Examples include:

• Reseller / Affiliate Model: You become a reseller of a certain product or service in exchange for sales and marketing support of said product or service.
• Outsource Relationship: Over time you come to realize that certain parts of your business are better handled by another entity outside your business because it is more profitable, efficient, etc.
• Business Development: Referral Partnership, Co-Marketing, etc.

It is the last type of Strategic Alliance, business development,  that I would like to spend some time on. This can be one of the easiest to form and at the same time the most powerful. Who should you strategicly partner with? The obvious answer is professions that you naturally get referrals from already. For example, I own an IT company, so I receive a great deal of referrals from an ISP broker and telecom hardware vendor that I have allied with. Another great example of a good strategic alliance would be composed of a CPA, financial planner & estate planning attorney.

It is important to formalize this relationship as much as possible to get the maximum results. Formalization should create a culture of accountability in the alliance which is critical to the success of it. Here are some ideas.

• Meet at least once a month and share sales pipe line reports
  • What deals are you working on now?
  • What deals have you recently closed?
  • Discuss referrals that have been passed around the alliance. (status, quality, etc.)
  • Create a list of specific prospects that you would like to get into and go over the list with your alliance. Use Linkedin and other business social media sites to make connections.
  • Are you have trouble closing any deals? If so, how can the alliance help?
    • Powerful Example: If the prospect does not have the budget for your project or service, is their anyone in the alliance that can create the savings through their product or services that essentially creates the funds for your project? I use my telecom broker in this regard. He can come in and save them hundreds to thousands a month, the savings from which cover most or all of the cost of my proposal.
  • Side Note: If, when I say “sales pipe line report”, your eyes glaze over, then you probably need a customer relationship management (CRM) system, such as ACT!, or Microsoft CRM. I recommend Alanna Galiano or Emerging Technologies to get your up to speed.A good CRM is essential to making this strategy work.
    
• Develop a joint Needs Assessment
  • If you already have a Needs Assessment, this is easy, just ask each member of your alliance for the top 3 questions that you should ask when conducting a Needs Assessment on your prospect that might generate a referral for them. For example: I always ask a few questions about their phone system to see if there is a possible referral opportunity to the telecom hardware company in my alliance.
• Joint Marketing
  
  • Create a “Partners” page on your web site and add logos with link backs to each of your partner’s web sites. Make sure they do the same.
  • Co-sponsor an event together, such as a conference or tradeshow. Obviously the event should contain target prospects that you are all are going after.
  • Find other ways to cross market:
    • Drop a brochure or coupon from an alliance member into your invoice mailings.

More Advanced Strategic Alliances

Want to take this concept to the next level?

Form an alliance around a business process or event. One idea that came from my friend, Bob Hill of Hill Corporate Partners, centers around office moves. Think about it. When someone want’s to move their office, they need the following:

• A commercial tenant rep, like Bob Hill, to find the new space
• An office furniture company to furnish the new office
• A moving company to move the stuff in the old office to the new one
• An IT company, like Carceron, to restore the computer network
• A telecom broker, like Elite Telecom Services, to get the telephone lines and Internet service going
• A telecom hardware company to setup the phone system for the new location
• A printer to handle change out of all collateral such as business, cards, brochures, letterhead, etc.
• And probably a CPA

You could market the alliance with an informational web site that is search engine optimized (maybe everyone chips in for some pay per click advertisement as well). Make sure that there is good quality content on the site. In the case of the office move, perhaps some check lists, Dos & Don’ts, etc.

Getting Started

If you don’t know all of the people that you need to form your alliances, I suggest joining a BNI or Corporate Connections referral marketing program. Corporate Connections chapters, like Synergy, are developing a strong, structured program for strategic alliance creation and development. Another venue might be Vistage. I am a director for Corporate Connections in the Atlanta market, so please feel free to contact me directly with any questions about that program.

What are some other ideas for an Advanced Strategic Alliance?

While I have written this in 1st person, I hope that I do not come across as being “bitchy”. This is a list of personal pet peaves that I suspect others share with me, coupled with common business sense.

1. Don’t hand me your business card unless I ask you for it. I promise to do the same. I meet a lot of people and if you’re someone that I don’t think I can help, or you can’t help me, or you can’t help someone I know, then what’s the point? We should be honest with one another. If you do force me to take a card, you’re getting added to my email marketing list and getting spammed – fair warning.
2. Don’t issue cheesy status updates to any of the various social media outlets (FaceBook, Linkedin, etc.). Make sure what you post is interesting enough to read. A good rule of thumb is the “So what” contest – if another person posted what you were going to post, would you say “So What?”. If so, it’s probably not a good post. I know the idea behind status updates and micro-blogging is to talk about what you’re doing right now – what they forget to add was “What are you doing right now, that is interesting to the people you are connected to?” Otherwise, I’m clicking the “hide” button. If my posts bore you, feel free to “Hide” me by all means. Here are some examples:
   • Good
     • I am at the Networking in ATL event at Sutra Lounge with Brandon Miltsch, owner of FireWolf (tells you where I am and who I am with, both of which might be of interest)
   • Bad
     • I’m going to ________   [mom's, bed, the toilet]
3. Don’t call me and try to sell me something the day after we have met. If I took the time to get to know you, I will have told you on the spot that we need to set a follow up appt to discuss your services or product. If I didn’t, and you want my business, then help me pay for what you want to sell me via a referral. This goes a long way. I promise to do the same (and already do).
4. Don’t send me invitations to cheesy FaceBook applications like “Snowball Fight” or Kidnap. These are annoying time wasters. ’nuff said.
5. Don’t hand me a brochure or any other kind of sales collateral at a networking function. Your business card will suffice. I assume that you have a web site if I need more information. If you don’t, I have a referral for you.
6. Don’t ask me to become a fan of or join a group related to something that is obviously not interesting or of benefit to me (e.g. cosmetics)
7. Don’t assume that I remember you if we’ve only met one time. Reintroduce yourself to me every time until we have had a 1:1 meeting, beers together or whatever. I promise to do the same. Again, I meet a lot of people (as you should be) and it is impossible to remember everyone after just one meeting in passing. (Exception: if you are someone important to the networking function I am at, i.e. chapter or associations president, etc.  – leadership has its perks)
8. Don’t connect to me on Linkedin with a free-mail email address as your primary contact email address. Freemail accounts are, for example: @yahoo.com, @gmail.com, @bellsouth.net, etc. (Exception: this only applies if you are a business owner. I understand the case for sales people to maintain control of their profiles with their personal email address? Also, this it is ok if you’re between jobs or retired)