PayCycle - America's #1 online payroll service

Where have all your customers gone?

Last night, during our family walk around the neighborhood, I stopped to chat with a neighbor, John.  John is a grandfather, retired, well-to-do. He was fretting about how he has 6 trips planned this year but is thinking about cutting down. Not because he can’t afford it. He just doesn’t feel right about sipping his margarita on a leisurely 10 day cruise at a time when everyone else is cutting back.  I tried to use all kinds of tricks to help him re-think his logic, to do his bit to revive the economy, keep the cruise business afloat, but to no avail.

I came home and called my brother in India, who works for an outsourced firm. 3000 miles away, he is feeling the effect of John’s decision and wondering whether he’ll wake up without a job tomorrow.  His company provides HR consulting services to large U.S. companies, such as cruise lines.

Wow! If large companies across the planet are reeling from decisions like John’s, imagine how hard small businesses are affected. The good news is, if you are a small business, you are not alone. Even though you may only have 5 or 10 people on your payroll, there are thousands of folks working on your behalf, to support your dreams, to make you successful.

PayCycle is a great example. We’ve taken a complex, mind-wrangling task, and made it super easy, and very affordable. We realize that you didn’t start your business to do payroll or get buried in paperwork. So that’s what we do, so you can focus on the more important stuff, like taking care of your customers or finding new ones.

And where are these customers? They’re hiding.  It’s your job to find them, show them what you have, and prove why it’s better.

Stay tuned if you want to learn more. Over the next few weeks, I’ll share more about the art of finding and keeping customers – for life!

The Power of Communicating with Customers – Often

“Knowledge is listening, wisdom is understanding.”  I saw this quote once on the window of a small business in my neighborhood during one of my early morning runs.  I was struck by the truth in this statement and how it can apply to both the individual and the organization.  I will leave the application to the individual for another venue and for those more qualified, but the application of this to an organization providing services to customers has had me thinking about the value of communicating with customers often.

 

PayCycle provides payroll service to small businesses via its Software as a Service (SaaS) architecture.  Otherwise known as cloud computing, the basic concept is that you don’t purchase PayCycle from a retail store in a box.  It is not a software program that is static and requires additional purchases to get  the newest features or updates.  With PayCycle, you pay a monthly fee to access a software program hosted with industry leading security.  Each month, the software is updated and for no additional fee, a customer gets all the benefits of the new features and updates.  This benefit coupled with the anytime, anywhere access, lower cost, improved security, and better customer service are features that are widely published on the web and touted by leaders in the SaaS category. 

 

However, one feature that I don’t hear discussed often is the dialogue a SaaS company can have with their customers to improve their product, marketing and support.  When I joined PayCycle over three years ago after a long career in consumer packaged products (Coca-Cola, E&J Gallo, Diageo), I was immediately struck by the conversation PayCycle was having with its customers every day.  At Coca-Cola we spent millions of dollars trying to glean consumer insights.  We were constantly looking for new insights into  why consumers chose Coca-Cola, fielding price sensitivity studies, trying to understand how consumers shopped their local grocery store or convenience store, who influenced their decisions, how brand perceptions and consumption habits changed over time and with the age of the consumer.  Hours and millions of dollars were spent with focus groups, in stores using the latest in GPS technology to track grocery carts traffic patterns, on syndicated data from a wide variety of demographic and psychographic sources.  But in the end, all these research methods paled vs. having random but frequent conversations with consumers and customers.   It was not because Coca-Cola did not try to have conversations with consumers and customers often, it was because the nature of their distribution model did not make it easy.  To speak to your consumers, you either paid them to participate in a focus group or tried to interrupt them in the aisles of their local market while they were attempting to complete their shopping and get home.  Both methods were flawed; focus groups required good recruiting and incentives and interrupting customers during shopping trips at the market was just that, an interruption that the consumer did not always appreciate.  At Coca-Cola we did a lot of listening to our customers to gain knowledge.

 

Our SaaS model enables PayCycle to have informed and contextually relevant conversation as opposed to random, uninformed listening sessions.  Before we have a conversation with our customers, we have the ability to review their actions within the product; a benefit  that simply doesn’t exist with retail or non SaaS products.  Therefore, we come to the conversation not as a stranger trying to learn about our customer, but more like a friend who already understands where you have been and can focus on helping you get to where you want to go.  It is not unlike the difference between a conversation with a stranger vs. a conversation with a friend.  Your friend knows your history and uses that to help you with your problems and questions.  A stranger has to gather a lot of information before they can ever provide the same value as a friend.  A stranger may not be able to gather their information effectively through questions.  But a friend who knows your experience is more likely to be able to help.  PayCycle is like that friend you never had in payroll.  We know where you have been and we can help you get to where you want to be.  PayCycle is able to understand a customer and therefore provide wisdom.

 

At PayCycle, customer conversations and stories are at the heart of our culture, product, support and marketing.  The daily conversations PayCycle’s customer support team has with our customers are funneled into our design meetings to ensure we have a good understanding of the customer need.  If a particular customer responds to a customer satisfaction survey indicating they are really dissatisfied, we call them.  The customer appreciates the call because they genuinely have a problem and appreciate the sincere effort of PayCycle to help them.  Imagine the look on a customer’s face when the CEO or CFO of PayCycle calls them to discuss PayCycle’s pricing with the customer.  We may not be able to solve the customer’s desire for a lower price, but the sincerity and honesty of our executive’s attention to this customers pain point creates an impression that cannot be measured.   I am sure that at the conclusion of the call, the customer at least feels like he or she was heard and that the company appreciates their time and attention to their needs.  Moreover, our executive team has gained valuable insight into our customer’s needs that will influence their decisions.  This is more wisdom we can impart on our product, our support and our marketing.

 

As a marketer, these customer conversations are invaluable.  During our busiest time of year,  January, our marketing team spends time on the sales lines answering questions from prospective customers.  The number of insights gleaned from this experience are too numerous to count.  From these conversations we have learned how our customers talk about our product, where they go for information about payroll services, where our website falls short or creates confusion about our product, how our competitors describe our service or are trying to compete with us, what problems they have and are trying to solve, and what benefits they are looking for in their payroll provider.  Since PayCycle does not have a direct sales force, the wisdom gleaned from these customer interactions are invaluable for our marketing team.  More importantly, the conversation is direct with customers and not through the lenses or bias of a sales person.

 

I am in awe of the wisdom at PayCycle at all levels.  I know it is because we have smart team mates, but I think it is more a result of the conversations we have with our customers – often.

Improving small business “fitness” during the recession

Just like cholesterol, not all expenses are bad for you. And not all profits are good for you, either.

Despite the steady flow of news about consumers and small businesses cutting back on their expenses, not all small businesses are thinking smaller.

And it’s not even true that everyone is simply cutting expenses. A lot of people are reallocating their expenses to be more effective. And that means opportunity for you to do the same and make your business healthier.

First, let’s talk about your expenses.

You should be sure you are spending effectively on things that make a difference to your customers. And it may be that you should be spending more, not less, on certain things that make you more effective as a small business.

This may seem surprising, so let me explain.

Years ago, it was widely believed that all cholesterol was bad for you. But now we know that there is good cholesterol and bad cholesterol. Good cholesterol actually improves your health and must be present at a certain level. Cutting good cholesterol is just as bad for you as increasing bad cholesterol.

Like cholesterol, there are good and bad expenses for your small business. And you can improve your small business “fitness” by increasing good expenses and reducing bad expenses.

The first step is to divide your expenses into three groups: good, bad, and essential.

On the good expenses list, include all expenses that increase your productivity, such as online services (generally more efficient), your laptop (makes work portable and efficient), and your internet access (essential for doing your research and communicating). Include those expenses that attract more customers at an acceptable cost, strengthen your ongoing customer relationships, and retain employees in whom you have invested time and training. And add those expenses that are important to the quality of your products and services. For this list, the real questions are 1) Are there opportunities to switch to more efficient, lower cost providers of key products and services, at the same or higher level of quality?; and 2) Are you actually spending enough on these good expenses?

If you blindly cut good expenses in an attempt to cut back everywhere, you may hurt your business. In particular, since so many people are switching, you should be careful not to stop investing in new customer acquisition. Maybe your old techniques are no longer working, but if you become invisible to new customers, you’ll miss out on the switchers who might choose you.

On the bad expenses list, include those expenses that have little or no effect on: company productivity or your ability to operate your business successfully; the quality of your products and services; your ability to attract or retain customers; or employee performance, retention and morale. Expenses that have no effect on these important areas can generally be cut significantly without hurting your business.

On the essential expenses list, include the remaining items that cannot be avoided. Many of these can be reduced, but they cannot be eliminated entirely or your business cannot function. Rent, phone, utilities, transport and general infrastructure costs are usually in this category. There may be some switching opportunities here. There are even some businesses that have discovered that they can reduce the expense of a physical location by bringing their service to their customers while maintaining a web presence for active customer communication. But your physical location may serve as an important reminder that you exist, so be careful about this.

The second important step in reaching small business “fitness” is to look for bad profits that might be hiding in your income stream.  In the same way that there are good expenses and bad expenses, there are also good profits and bad profits. Bad profits come from choices that take advantage of your customers, ultimately drive them away, and thereby undermine your business. These include things like excessive late fees, substituting poor quality materials, overcharging for services and parts, and other gotchas of one kind or another.

While these bad profits may appear to be attractive in the short term, especially when profits are hard to come by, they anger your customers and erode your customer base in the long term.  Ask yourself this question: Do you love your bank, credit card company, cable company and cell phone company?  If not, it’s probably because they have all become addicted to bad profits. Don’t do to your customers the same things these companies do to drive you away, with their endless extra fees for stepping over one line or another. If you don’t like these small-minded practices, chances are your customers won’t like them either.

By going through the process of thoughtfully increasing good expenses, cutting bad expenses, and eliminating bad profits, you can improve your level of small business “fitness”, and you may soon begin to see positive results.

In the long run, small business “fitness” is just like physical fitness. You have to work at it regularly to keep your business in shape. Bad expenses and bad profits will reappear over time, and you have to actively keep them under control to keep your business healthy.