Let's Get Engaged!

The secret for small business (or any-sized business) success is not just attracting customers or getting one sale, it's engaging them over the long haul.

Engaged customers believe they are part of something. They believe they are important to you and to your business.

Apart from having a family or social connection to your business, the only way a client will become engaged will be because you deliberately plan and provide consistent client experiences that demonstrate to them, over the passage of time, clearly and unmistakably, that they are a unique, valued and vitally important person in your life, personally, as well as your business.

It’s not that they love you or even the products or services your business provides.
It’s that you've convinced them that they are important to you.

Think about it in romantic terms. Would you ‘engage’ or commit yourself to a long-term relationship with someone if you didn’t believe that they truly cared about you—enough so that they care about you more than themselves and put your interests above theirs?

That’s what it takes to stimulate engagement!

Elizabeth Kraus | 12monthsofmarketing.com

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Getting the attention of deal-obsessed consumers

Monday’s marketing savvy newsletter is going to be all about the deal-centered consumer culture business owners are facing – be sure to subscribe, you’ll find the link on the right hand side of this page.

Elizabeth Kraus | Be InPulse branding, marketing and design

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Get Mental

A good discussion of market sentiment and investor psychology:

http://www.wallstreetallstars.com/psyche-diary/

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Bond Yields In Italy Ease Further

The market is flying in early trading on a further sigh of relief in Italy. The country's Senate passed a new austerity plan and that is being cheered in their markets. Bond yields in the country have eased back to 6.65% from as high as 7.40% earlier in the week.

This has helped Europe's stock markets rally, and has pushed the euro higher as well. With commodities taking their cue from the euro lately, most are higher on the day. Oil prices have rallied all the way up to $99, while gold prices are also higher near $1777.

In economic news, Consumer Sentiment for November (Univ. of Mich.) rose to 64.2 from 60.9 last month. That's a pretty big jump for consumer sentiment at a time when most media reports would have you believe consumer sentiment can only keep going down.

In corporate news, Disney reported better than expected EPS and its stock is nicely higher.

The S&P 500 was set to have second down week, but if today's rally holds it will end with a gain for the week. Not so for the Nasdaq, which will most likely have a second down week. AAPL continues to lag the market pretty badly which has weighed on the Nazz, but I think it will rally again into year-end.

The bond market is closed for Veteran's Day and yesterday the yield on the 10-year rose to finish at 2.05%.

As for the VIX, it is 9% lower today sitting just below the 30 level that I have been keeping an eye on.

Trading comment: I can't remember a time when the market was more driven by Europe and the euro than it is today. While sentiment in the stock market has improved this week, lots of credit gauges are still flashing caution signs. We are trying to stay balanced in our accounts. In recent weeks we have added to some stocks that have been acting better, but we also still have on some of our inverse etf hedges as the S&P 500 has yet to have a convincing close above its 200-day average for more than a day.

long AAPL, SH

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The REAL Repercussions of Discounting

Yesterday I shared an article across social media channels from entrepreneur.com, titled, Groupon, Other Deal Sites Not a Good Deal for Small Businesses which noted that not only were up to 80% of deal buyers already customers of the businesses whose offers they purchased, but more than half of them also said they'd have made the purchase without the discount. If you are determined to play the groupon game, do so with caution and set parameters to protect your business and its reputation.

Once posted, Darryl Manco (the owner of Dimension A Salon in San Francisco, CA and google-certified Internet Marketing Analyst who holds a masters in Internet Marketing) pointed me to an article he'd written which details what the real consequences of discounting are to most businesses. I asked if he would let me share this with you here on the blog and I'm so happy he agreed. His summary should open your eyes and make you think twice before significantly redefining your brand, your reputation and your business through discounting. Here's what he wrote:

The Real Repercussions of Discounting
11.10.2011  - Darryl Manco, Owner, Dimension A Salon


There seems to be buzzing these days among salons about doing the discount thing. Now, not all salons do discounts; however, for those that do, here are some concerns that should be weighted before diving in:


1) Diminishing ROI
    a. Erodes bottom-line return.
        i. Supply costs do not go down.
       ii. Fixed operation costs do not go down.
      iii. Variable operation costs go up.
      iv. Commission splits do not go down.
       v. Payroll costs do not go down.
      vi. Atrophy of brand reputation.

2) Target Audience Effect
     a. Traffic partner target audience assumptions.
        i. Business failed to clearly define their target audience.
           1. Failed understandings about psychographic traits.
    a. Broadened target audience’s focus is on the next best deal.
II. Brand reputation rot
1. Business is unable to satisfy unforeseen challenges due to misinterpreted target audience.
    a. Loss of exclusivity.
        i. Quality becomes compromised.
           1. Value collapses brand image.
           2. Business fails to roundup employee cohesion.
    a. Talent atrophy.

Salons that find reinvigoration in discounting are thus
redefining their brand’s worth.

Laura Reis (2010) affirms this by posing the question, “When was the last time a savvy consumer ventured into Bed, Bath & Beyond without a percentage off coupon?”

Yes, discount sites (aka traffic partners) can gloat that continuous discounting leads to increased abiding growth, but what they fail to disclose, is that price discounting does not lead to brand loyalty or even brand awareness.

This idea supported by Ellen Malloy’s (2010) belief that:

“Businesses risk the effect of devaluing their brand. This threatens the over all quality of the brand experience, and when over subscribed, leads to short-term demand spikes that momentarily increase revenue, but in the long-term overloads a business’s ability to meet consumer’s expectations.”

Words of wisdom to salons (or any businesses) that seek solutions:

• Examine how your ROI will be affected.
• Do masked business problems need addressed?
• How will discounting support the brand experience?
• If discounting becomes bulwark for the brand, than what does the brand in actually denote in the eye of the consumer?

Discounting may engender consumers to take advantage of a business’s brand, but will the business brand be able to respond to the seduction that discounting encircles? Discounting has all the properties to be addictive as well as cannibalistic, and befoul businesses as well as the consumers that it bewitched.

Resources:
Cohen, D. (2010, June 30). Groupon phenomenon bad for business?
Retrieved from [ reuters.com ]


About the author:

Darryl Manco is an agent of change for today’s beauty salon marketing frontiers. He holds a M.S. in Internet Marketing, and boldly participates in commanding his business, Dimension A Salon, with direct to consumer online marketing programs that impact ROI.

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Flight-to-Safety Trade Coming Off

The markets are higher in early trading, though off of their opening highs. Although Asian markets got clobbered overnight, Europe is higher this morning after a successful bond auction was held in Italy.

Italy held an auction of 12-month bills which was successful although they did carry a yield above 6.0%. The yield on their longer-term notes has fallen back below the 7.0% level, which the market is breathing a small sigh of relief over as well. In Greece, a new PM has been named.

In corporate news, tech bellwether Cisco (CSCO) reported an upside surprise and the stock is nicely higher. But AAPL is lagging and weighing on the Nasdaq, which is underperforming the S&P 500 so far.

In economic news, jobless claims were better than expected falling below the key 400k level to 390,000. The trade deficit also came in lower than expected (which is a boost to GDP).

The euro is bouncing a bit, which is helping some commodities. Oil prices are higher to 96.52, but gold prices are down big back near $1741.

Gold has benefited from the flight-to-safety trade of late. So have Treasury securities, with yields moving back below 2.00% on the 10-year. But today, the flight-to-safety trade is coming off a bit with gold selling off, bonds moving lower, and the dollar under a little pressure as well.

Trading comment: The Nasdaq is heavy today with growth stocks lagging the market. Yesterday's outsized selloff was a surprise to most people, as it was certainly a delayed reaction to the rise in Italy's bond yields and the concerns over European sovereign debt. Bond yields are beginning to rise in France too, so it doesn't look like this episode is about to go away very quickly. The troika needs to step up quick with the bazooka, or markets could grow increasingly spooked. I want to be bullish here, but I can't ignore the gravity of the situation in Europe, so I am keeping things small and balanced for the time being.

long AAPL

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Early Look: Delayed Reaction By The Market

As the S&P 500 closed above the 200-day yesterday, I was speaking to another trader and saying that the market doesn't seem to be overly concerned with the spiking Italian yields. His answer was that the market always has a delayed reaction and then wham! Prescient comments as today it looks like investors can no longer ignore spiking Italian yields.

Bond yields in Italy have surged above 7.40% today, a level many strategists cite as the market indicating dwindling confidence with the ability of leaders to get their arms around the financial conditions in the country. Italy is far bigger than Greece, so this is a different story now.

Asian markets were actually higher overnight as China's latest CPI reading cooled to 5.5% from 6.1% last month. That led to a rally across the board in Asian markets, but the enthusiasm did not spill over into this morning's market.

On the earnings front, disappointing reaction in GM. Also PSMT (the Costco of Latin America). On the positive side is SODA, which is bucking today's weakness.

The dollar is higher as the euro is getting hit. This is weighing on most commodities. Oil prices are down near $96, while gold prices are only off slightly to $1795.

The 10-year yield has plunged back below the 2.0% level, now at 1.96%. And the VIX, after closing nicely below that 30 level yesterday, is surging +15% back to 31.65.

Trading comment: The surge in yields in Italy, and most of Europe in general, is very troubling. Italy is much bigger than the other countries involved, and the EFSF has nowhere near the firepower currently to tackle the problem itself. I have been saying that I felt portfolio managers were in dip buying mode, unless there was another shoe to drop in Europe. I'm not sure yet if this warning sign is big enough to change the equation. We will have to see how the EU officials step up their response to this latest development and if it calms the markets. Until then, continue to manage risk closely and resist the temptation to make any outsized bets.

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