Rafe VanDenBerg is the President of Business Development Xcellerator, Inc. a consulting and training firm that helps companies generate more profit and growth from their sales and marketing efforts. He can be reached through his firm’s educational website at www.bdxi.com or by calling (208) 938-4356.

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T R E N D S

Mini-medical plans are taking off 

Mini-medical or “mini-med” plans have become more popular over the last three years as employers struggle to control rising employee heath care costs. Mini-meds cover basic medical services, such as a limited number of doctor visits per year and prescription medicines. However, coverage maxes out each year at levels as low as $5,000 to $50,000, and many plans severely restrict hospital stays and even X-rays.

For some organizations, limited coverage is enough — at least some of the time. The American Association of Healthcare Consultants estimates that 85% of employees file less than $1,001 worth of health insurance claims each year. While the coverage doesn’t cover catastrophic expenses, some employers are saying it’s better than nothing.

Industry observers predict that limited medical plans will shake up the industry over the next few years. Many large carriers have begun targeting smaller businesses and several organizations — such as Aetna and Cigna — have begun acquiring mini-med providers. At this point, the only thing that could limit their growth would be government action, such as state-mandated coverage or a change in national policy.  

Source: Trend Letter, April 2008  

The new era of working by task, not time 

Since the Industrial Revolution, jobs have been structured around units of time — a 40-hour workweek, an eight-hour day. However, that time-based standard may be shifting to compensation by task, fueled by the preferences of the newest crop of workers from Generation Y.

“Many younger employees find they can complete tasks faster than older workers, perhaps partly because of technical proficiency, but even more, in my view, because they work differently,” said Tamara Erickson, an author and expert in workforce issues. “They spend less time scheduling and are comfortable coordinating electronically. They resent being required to log work hours and stay in the office after their tasks are done, and the idea of face time really annoys them. They love to work asynchronously — anytime, anywhere.”

Another reason the workforce is moving toward a task-based definition of jobs is the fact that many knowledge workers are already effectively paid by task, not time, and taking advantage of flexible work arrangements. As virtual work continues to spread, this may be a fairer approach to employee compensation.

At Best Buy’s headquarters, more than 60% of employees are now judged only by task or results. Productivity in the involved teams has increased by 35% while voluntary turnover has decreased.

Task-based pay requires that management articulate expected results and tie accountability to getting the job done.  

Source: Harvard Business Review, Feb. 2008  

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N E W S

People really do get what they pay for 

Price has a powerful impact on the psychology of consumers, and lowering your price may create unintended results. In a study published in the Journal of the American Medical Assn., researchers found that people given identical pills got greater pain relief from the one they were told cost $2.50 than from one supposedly costing 10 cents.

“We all know that we expect more from products with high prices and good names, and we wanted to see if these things could change how we react to pain medication,” said MIT behavioral economist Dan Ariely, who led the research. “The answer seems to be yes.”

This isn’t the first study to show a relationship between price and perceived quality. In an earlier experiment, Ariely found that people given inexpensive energy drinks felt more tired and worked out less than those who received identical energy drinks that cost more. In addition, researchers at Caltech reported in January that expensive wine was experienced as being more pleasant-tasting than identical wine that supposedly cost less.

Source: Los Angeles Times, March 5, 2008 

Employees that play together stay together 

Employees who socialize together also tend to work better together. Fat paychecks, pensions and health insurance are not enough to recruit and keep employees these days. Companies are finding that adding a bit of social context to work is crucial to keeping employees happy and productive.

Some companies are even creating employee clubs. Many are small and informal like a softball or basketball league or require little from the company other than the use of a meeting place, server space and office supplies. Workplace specialists say clubs are a way to build camaraderie and help people get to know fellow employees away from work. Companies benefit, too. Clubs help create loyal employees, reduce turnover and improve morale while costing very little.

A Towers Perrin survey released last October reported that operating margins rose nearly 4% over three years among companies where employees felt supported and involved. At workplaces where that was not the case, profits fell 2%.

Twenty years ago, most companies tied high morale to accomplishments on the job. Today, managers realize they need to think more broadly about what makes workers happy.  

Source: New York Times, February 16, 2008 

Loosening up the tightwad customer 

We all have a friend who can’t seem to save, constantly splurging on new shoes or the latest gadgets. But, contrary to persistent media coverage of overspending and under-saving, a recent international survey of more than 13,000 shoppers suggests that chronic under-spending is far more widespread than originally thought. In fact, the study reveals that tightwads outnumber spendthrifts by a 3-to-2 ratio.

Researchers found that tightwads save, not because they care more about the future than spendthrifts, but because forking out the money is too painful of an emotional experience.

Demographic comparisons revealed that annual income differs little between tightwads and spendthrifts. Females are no more likely to be tightwads than spendthrifts, but males are nearly three times more likely to be tightwads than spendthrifts. Respondents under the age of 30 were only slightly more likely to be tightwads than spendthrifts, but respondents over 70 were five times more likely to be tightwads than spendthrifts.

Tightwads are most sensitive to marketing designed to reduce the pain of paying. In one experiment, participants were asked whether they would be willing to pay $5 to have DVDs shipped overnight. The cost was either framed as a “$5 fee” or a “small $5 fee.” Spendthrifts were unaffected by the manipulation, but tightwads were 20% more likely to pay the fee when it was less painfully presented as “small.”  

Source: Journal of Consumer Research, April 2008 

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T I P S

• Ask for a little more in your next negotiation. When researchers from Duke University and the University of Chicago asked 266 MBA students to negotiate a deal, they discovered that each side underestimated how much the other was willing to bend by a wide margin. What’s more, each party thought it got the better end of the negotiation. Based on the findings, the researchers recommend leading with an aggressive opening bid, and giving ground only grudgingly.

Source: www.businessweek.com

• Increase word-of-mouth buzz with this tip from WOM expert Andy Sernovitz: Post signs throughout your company that say, “Would anybody tell a friend about this?” It’s a magic question that raises the bar across the organization. Whenever you see the sign, you’ll look at your product and say “It’s fine. It’s good. But what can we do to make customers tell their friends ‘You’ve gotta try this.’” Each department should come up with their own way to answer this question.

Source: www.rimmkaufman.com

• A catchy slogan can send a powerful message to prospects wondering why they should choose you over your competition. But writing an effective tagline can be challenging. Here are some tools for developing a memorable slogan: Start brainstorming by asking team members to complete the worksheet at www.reliablegrowth.com/public/tagline_worksheet.pdf. Next, visit Marcia Yudkin’s tagline generator at www.yudkin.com/generate.htm with the goal of creating several taglines. If you need inspiration, the University of Texas at Austin’s Advertising Department has an online ad slogan archive that includes well-known slogans like Maxwell House’s “Good to the Last Drop.”

Source: blog.fastcompany.com

• If you advertise with Google AdWords, a slow loading site could cost you. Google announced it will start using page-load time when calculating your “quality score.” A low quality score can affect an ad’s position and minimum bid. Go to each ad group’s Keyword Analysis pages to find out if Google is already measuring your landing page load time. To speed up load time, Google suggests the following: Use fewer redirects. Use fewer, smaller and more highly compressed images. Do not use interstitial pages. Minimize the use of iframes. Contact your web-hosting provider to discuss other ways of improving your website’s load time. On the positive side, these same techniques will provide a better experience for your visitors and, therefore, should translate into higher revenues for your company.

Source: www.seroundtable.com

• If you lost your iPhone, Blackberry, digital camera or notebook computer and a Good Samaritan found it, would they know how to get it back to you? If you are like most people, the answer is, “No.” Be sure to label all portable devices with your name, address and phone number. Don’t forget the chargers for your portable devices, too. Chargers are one of the items that are frequently left behind at hotels.

Source: www.businessknowhow.com

• The problem with trying to hire top-notch sales talent is that they are rarely, if ever, looking for a job. Therefore, you may need to target who you want and go after them directly. To do this, talk to partners and people in the industry and ask who the best salespeople are. Ask the same question to customers and prospective customers. From there, contact your best leads and praise them about the good stuff you’ve heard. Tell them you would like to talk with them about an opportunity and ask if they’d be interested. Any good salesperson isn’t going to walk away without at least learning a bit more. In fact, CareerBuilder.com’s 2006 passive job seeker revealed that 61% of employed salespeople are not looking for a job, but would be open to a new opportunity if they came across one.

Source: www.sellingpower.com

• Have slow payers become a problem for your business? Here are some ideas that should help: First, billing notices are not nearly as effective as calling clients on the phone to ask for payment. Also, consider requesting a credit card to have on file for future payments. Credit card payments will require an extra 2% or higher fee, but you can make adjustments to your terms to recoup that cost. If your terms require payment in 30 days, shorten it to 15 days. This sends the message that getting paid in a timely manner is a priority to you. Finally, consider offering a small discount to those who pay early.

Source: www.em4b.com

• While offering a “free gift with purchase” is often a good sales tactic, be careful about what you choose to give away. Research at the University of California, Berkeley, discovered that these promotions can make consumers denigrate the perceived value of the gratis product. It can also make consumers expect to pay less for the giveaway if they purchase it in the future, or they may be hesitant to buy it at all. Therefore, be careful when giving away a product that you usually sell or when partnering your product as a bonus gift for a joint promotion.

Source: www.marketingprofs.com

• Providing educational content is a powerful way to sell. Most buyers seek out information to help them with their purchasing decision and then slowly build trust with the provider of that information. Fortunately, creating education-based information products has never been easier. Today’s rich set of multi-media software and web-based applications makes the creation of teaching tools a snap. Here are some idea starters: Create online videos showing prospects how to do something. Create voice recordings of your best customers telling their stories about how you helped them. Take your best presentations and create virtual copies that can be viewed online. Post an audio “tip of the day” to your blog.