Category: Management Notes

Hundreds of startups are launched every year. But only a few of them are able to make it to the second year. One of the top reasons behind startup failure is cash crunch or unwise financial management by new entrepreneurs. Money, like time, is a finite thing and must be allocated extremely judiciously. Startups are already lean on capital and hence entrepreneurs should be very cautious with regards to financial management. Are you a first-time entrepreneur entangled with the complexities of finance? Well, the post below offers the top tips for a sound financial management for your new venture.

Underline the different types of business costs

Your business plan must have a dedicated section for finance and accounting. The said section will clearly outline the different expense areas associated with running a business. The major expense areas for any business are legal costs, marketing costs, staffing costs, business insurance and ongoing production expenses. If you are planning for a brick & mortar establishment, you should also count in establishment & infrastructure costs. When you have a clear picture of all the expense areas of your business, you have a better idea on where to and how to exactly allocate your capital or funding.

Create an organized budget & adhere to it

This is undoubtedly one of the key money-management tips for first-time entrepreneurs.

After you have underlined the different expense areas for your business, the next step is to set budget for each. When you will set the budget, create 3 columns for each individual expense area- Primary, Urgent and Extra/Avoidable. This categorization will enable you to allocate your funds more strategically to ensure the key areas receive the most attention. It will also prevent you from draining your treasury unnecessarily for extra or avoidable expenses. The main idea of a budget is to create organization in your management.

Having a budget is not enough. You should also make sure to stick to it. Check your budget at the end of every month and find out discrepancies between the estimated amount and actual expenses. It will help you to understand whether you are going the right track or need to modify your expenses.

Educate yourself

Finance is a serious department in any business and you must keep yourself well-informed about every aspect of it. One of the best steps to smart financial management in business starts with the knowledge of major financial terms. You should gather sound idea on the crucial terms like budgeting, interest, soft inquiry, State tax, subsidized & unsubsidized loans and so on.

Go through articles and columns on finance allocation, expense areas and financial management in your business. Find out finance-related articles that are specifically written for your industry and market. You should also check out webinars and podcasts to enhance your knowledge further.

Learn how to save

Finance management is not only about sticking to your budget. You should also learn to save. It will help you to beat sudden emergencies and also leverage your opportunity to boost your resources further. Here are some great money saving tips for businesses:

• Go for a shared working space (if your business permits) to save on rent
• Try virtual networking & communications with both clients & employees to save space & costs
• Hire talented dynamic interns instead of an entire pool of highly experienced professionals
• Outsource some of the jobs to save on overhead and staffing costs
• Try open-source & cloud software programs to save on business software costs

Keep check on accounting department

One of the major reasons behind cash crunch in a business is unregulated invoices and late payments from clients. You must ensure a well-regulated and dynamic accounting department to prevent such issues. A smart accounting team lays the foundation of sound financial management for a business.

Improve your credit score

Make sure to check your credit score every month. Being a startup owner, you are certainly aspiring for sound funding from investors. Well, investors generally prefer businesses with high credit scores. Better scores affirm responsible and credible operations. So, if your credit score needs a boost, talk to a financial advisor on improving your score for wider funding opportunities.

Responsible and smart financial management is crucial when you are planning to make it big with your business.

To achieve the maximum level of profitability and success, an HR professional will align each employee’s work with the strategic goals of the firm and also ensure that the staff is well aware of the required actions and behaviors by setting clear-cut performance expectations in job descriptions. Take a look at some of the key HR objectives that apply to SMEs and startups:

1) Develop a Competency Model

The main objective of an HR department is to hire the right people for the right jobs keeping in mind their skills, expertise, and education. This objective is achieved by setting clear job descriptions, establishing job competency models for each department in the company and benchmarking roles against similar jobs in the industry.

In order to ensure smooth running of the business, HR professionals will take into account studies and data related to staffing, transactions, and costs and then create a competency model accordingly.

2) Define Organizational Dimensions

HR strategies are developed according to the aspects of the organization. It is also interesting to note that the prevailing culture of the company not only has a critical impact on the HR strategies devised but also represents the management style and values of the organization. Defining the organizational dimensions will give you an idea on how the organization is going to be more or less – will it be an organization that expects employees to ‘do more with less’ or will it be overstaffed in order to give way to innovation and experimentation?

Some other key factors that directly impact the HR strategies devised are the nature of business done by the organization, the chain of command and the structure of the organization itself. In order to effectively hire and retain staff to achieve strategic goals of the organization, human resources systems, policies, and practices are also taken into account.

3) Define Role of Mission, Vision, and Values

The mission, vision and values of the small business or startup play a crucial role in shaping the HR strategies and objectives for the future ahead. The mission of the organization will help you understand why the business exists and who it serves while the vision statement basically provides insights on what the organization hopes to achieve and where it sees itself in the future.

The values of the organization are beliefs that serve as a driving force behind the operations and actions of the organization. All three – the mission, vision and values of the organization directly impact the type and number of employees needed to meet the organizational goals.

4) Perform Workforce Analysis

A workforce analysis is considered a key part of the human resource strategy and focuses mainly on the organization, its culture, people, and the systems that have been implemented. Doing a workforce analysis is helpful in analyzing the current situation of the company in terms of the elements discussed above and where they ideally want to be in the years to come.

Identifying the gaps in these areas will enable the HR professionals to come up with specific objectives designed especially to bridge these gaps.

5) Evaluate Implemented Strategy

All HR strategies are guided by evaluation based on specific, measurable factors. A small business or startup will consider a wide variety of factors for developing, implementing and evaluating the effectiveness and performance of its HR strategy. Usually, doing an evaluation will give you accurate facts and figures on employee turnover, number of vacant positions, customer complaints, and employee grievances along with the satisfaction and dissatisfaction levels of both customers and employees.

HR Role in Management

Hiring employees: A human resource manager has to recruit employees for various departments. But not all candidates are competent for a vacant post. This is why the manager needs to create his/her own hiring process. If you are a hiring manager, you can easily automate and make your own hiring process with a recruitment software and you will be able to effortlessly source eligible candidates through posting jobs, screening the applicants, setting the interviewers and so on.

On-boarding of the hired: Not only does the HR manager recruit new employees but inducts them with the organizational culture and the ground rules. The preparation of a great onboarding and induction process may need a great amount of time but once it is applied, you will notice that the newly recruited staffs are getting on the same page with the older ones swiftly.

Communicating with the employees: The company directors can abruptly change a policy (for example, the ground rules, office time and other stuff). The human resource manager disseminates this information properly among the company workers through announcements and SMS notifications.

Optimizing compensation costs: The compensation experts in the HR department conducts extensive wage and salary surveys to develop a pragmatic compensation scheme. They ensure the company status remain intact compared to the industry standard or the employees working in similar companies when it comes to compensation costs or employee benefits.

Managing attendance: Attendance management is a key function for every human resource department. To this end, the HR manager has to deal with the recording of check ins and check outs, calculation of total worked hours, overtime and many more. Fortunately, an attendance management software can be deployed to minimize this pain point with ease.

Settling disputes among employees: There is barely an organization where no conflicts take place. In fact, conflicts can take place between the management and employees or even among the employees. However, the HR manager works as the middleman between the management and employees to solve any issue that arises within the company and thus maintains a sound relationship.

Providing work safety: There are three Department of Labor agencies in each country who are responsible for the safety and health-related issues of the workers. The HR personnel ensures the compliance of the government laws and regulations so as to provide a hygienic and congenial work ergonomics. This way, the human resource manager reduces the number of injuries, casualties, and fatalities of workers while they are maneuvering dangerous apparatuses, hazardous equipment and lethal chemicals in the workplace.

Managing company assets: It is a quite common scenario for some business enterprise that distributes laptops, cars, bikes, and other stuff to its employees for varied purposes. However, it is very important for the HR not only to allot these assets but also to take back those assets and record that information in the company database. This can easily be done by an asset management software.

Juggling with diversified methods: Every organization is unique. So, there is no “one size fits all” solution out there for every organization of the world. Thus, the HR has to juggle with multiple methods of managing his/her employees and finally has to determine which one works best for his/her organization. For example, some employees can be motivated by the ‘X’ theory while the others can easily be encouraged by the ‘Y’ theory.

Looking after the company database: It is none but the human resource manager who takes care of all sorts of important company data and information. He always has to maintain an updated database which includes job responsibilities, personal data, performance evaluation or assessment of the employees. However, employing a document management software can reduce the strain of maintaining an enormous amount of company papers. This type of software can help the HR manager share and get the desired papers instantly using the advanced search options when it is required.

Maintaining public relationships and company image: The human resource department actively organizes business meetings, seminars, symposium, giveaway ceremonies, and others in order to build a sound relationship with the target audience, government, and fellow companies within the industry. This act of engagement with the company stakeholders really upholds the company image.

Managing payroll and incentives: Frequent changes in federal and state taxes and employment law make it literally complicated and time-consuming for the HR to adjust those changes over and over again. If this payroll process can be automated by a payroll management software then this complication can effortlessly be solved with the minimalistic efforts.

A marketing plan for a new venture is not the same as a plan for an existing business as it begins with distinguishing
business planning through the vision, strategy, tactics and standards, as well as from a business plan including several sub-plans such as a financial plan, a marketing plan, and other plans when relevant: human resources, logistics, legal, and others.

Consequently, marketing planning of a new venture, often called strategic planning, is only a part of any new venture marketing plan.

When starting a small business and in any business start-up, entrepreneurs have to rely more on subjective assumptions and qualitative marketing research by interviewing potential customers, relevant business partners and other stakeholders.

The following information can be collected to some extent and analyzed effectively by using “realistic” assumptions all in order to lower the level of uncertainty when launching a new venture and perhaps increasing the self-confidence of the entrepreneur:

• Current macro environment: influential business trends as well as innovative trends.
• introduction of the prime market in questions and possibly a secondary market.
• Basic competitive trends: NOT your upcoming competition!
• basic consumer behaviour trends: NOT your upcoming segmentation!
  opportunities and threats that do not depend on your venture – only a partial SWOT.

Managing operations in the incubation phase and entering the growth phase is much easier for a company with multiple products in different phases of the curve than for one that has only one product that it’s trying to commercialize. Not only does the multiple-product company already have a reputation, but also, the products in the growth phase can help fund and fuel those products trying to survive incubation.

The products in saturation can also provide a base upon which to introduce new products. A new company trying to get its first product into the market doesn’t have these advantages. There are special challenges facing a new company trying to get footing in the marketplace.

Operation on a shoestring

Though all businesses face financial constraints, the situation is often more critical in a new business attempting to introduce a new product into the market. Unlike established companies, a start-up doesn’t have a recurring source of revenue upon which to support its development efforts. New companies typically operate on money raised directly from investors or on their own personal cash.

Above all it’s important for a new company to stay flexible. Because of the inability to afford a large staff, the company’s founders often have to take on multiple roles. They must handle not only the financials but also the design, production, and marketing of their product. This requires workers to be flexible and have a wide breadth of knowledge.

Transition to growth

If you’re a start-up, perhaps one of the greatest challenges you face is the transition to the growth phase of your product. This transition requires you to meet several needs:

• Documented processes: As the complexity of your organization increases, so does the need for defined and documented processes. These processes are necessary to promote smooth operations and planning.
• Organizational structure: While in the incubation phase, you probably didn’t have any policies or procedures in place. You may not have needed them because your staff was small, and everyone was up to speed on what was going on. However, with growth comes the need to add staff, giving rise to the organization chart, complete with a need for a reporting structure.
• Systematic planning: In the beginning of your new venture, you may have done things by the seat of your pants. Your staff may have acted on any opportunity that came along as quickly as possible. But as your enterprise matures and grows, planning becomes essential because coordinating the organization becomes more difficult.

• Task specialization: As you grow, the need for specialized individuals increases. Dedicated resources to such tasks as operations, marketing, and sales become increasingly important, and your firm may establish separate departments. This task specialization makes seeing the big picture more difficult and requires more coordination across the organization.

These changes can be difficult for those involved with a start-up. Larger companies often have different groups that take over product management as a product transitions from one phase to another. This is often necessary because the skills required in each phase tend to be different.

Every day we interact with various economic activities like – getting courier delivered at the requested address, making phone call to friend, relative, or client, having coffee at coffee shop, or taking metro to commute office. Such activities are called services because they involves deed or act and offered by one party to another for sale. 

Services differ from goods in many ways. The way a product is produced, distributed, marketed, and consumed is not the way a service is. Hence, a different marketing approach is necessary for the marketing of services.

Today, in this post we are going to explain – What services are? What are the characteristics of services? How services are marketed?

According to American Marketing Association services are defined as “activities, benefits or satisfactions which are offered for sale or provided in connection with the sale of goods.”

According to Philip Kotler and Bloom services is defined as “any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.”

Characteristics of Services

1. Intangibility: Services are cannot be touched or hold, they are intangible in nature. For example– you can touch your Smartphone. But, you cannot hold or touch the services of your telecom service provider.
2. Inseparability: In case of services the production, distribution, and consumption takes place simultaneously. These three functions cannot be separated.
3. Variability: It is impossible to provide similar service every time. You’ll experience some change every time you buy a particular service from a particular service provider. For example Yesterday you had a coffee at CCD. Today, you are again at CCD to have a coffee, but you have got different place to sit today; the person served you coffee is different today; other people having coffee are also different today. Hence, your experience of having coffee today is different as compared to yesterday.
4. Perish-ability: You can store goods, but it is not so in the case of services. Services get perished immediately. 
5. Participation of customer: Customer is co-producer in production of services. For delivery customer involvement is as important as is of the service provider. For example if you went to a parlour for haircut, how it cannot be possible without your presence and involvement.
6. No ownership: In the sale of services, transfer of ownership not take place. It means to say that consumer never own the services.

Marketing of Services

A different marketing approach is necessary for services marketing, because services differ from goods in many respects.

Customer Service in a service firm is highly interactive in nature. Customer interacts with the firm physical facilities, personnel, and tangible elements like the price of the service. The success of any service firm depends on how its performance is judged and perceived by the customer. Today, Service Firms are becoming highly competitive, so, it is essential for service firms to provide high quality services for their survival.

An expanded marketing mix for services was proposed by Booms and Bitner (1981), consisting of the 4 traditional elements product, price, place, and promotion and three additional elements physical evidence, participants, and process. These additional variables beyond the traditional 4 P’s distinguish ‘customer service’ for service firms from that of manufacturing firms.

In order to be able to make a clear and relevant classification of services, we would first need to understand the concept of the word itself. Services usually refer to processes and not physical products. To understand more, read this article on difference between goods and services. Some services may include people whereas other services (like online services) may including objects which are managed by people.

Examples of services which include people can be a hair salon, education, theater, restaurants, and public transportation. On the other hand services that include objects include repairs and maintenance, dry cleaning, banking, legal services, insurance, etc.

1. Classification of service based on Tangible Action

Wherever people or products are involved directly, the service classification can be done based on tangibility.

(i) Services for people: Like Health care, restaurants and saloons, where the service is delivered by people to people.

(ii) Services for goods: Like transportation, repair and maintenance and others. Where services are given by people for objects or goods.

2. Classification of services based on Intangibility

There are objects in this world which cannot be tangibly quantified. For example  the number of algorithms it takes to execute your banking order correctly, or the value of your life which is forecasted by insurance agents. These services are classified on the basis of intangibility.

(i) Services directed at people’s mind: Services sold through influencing the creativity of humans are classified on the basis of intangibility.

(ii) Services directed at intangible assets: Banking, legal services, and insurance services are some of the services most difficult to price and quantify.

The most intangible form of service output is represented by information processing. The customer’s involvement in this type is service is not required. Generally, customers have a personal desire to meet face to face but there is no actual need in terms of the operational process. Consultancy services can be an example of this type of services where the relationship can be built or sustained on trust or telephone contact. However, it is more indicated to have a face-to-face relationship in order to fully understand the needs of the customer.

A more general classification of services based on the type of function that is provided through them can be as follows:

• Business services.
• Communication services.
• Construction and related engineering services.
• Distribution services.
• Educational services.
• Environmental services.
• Financial services.
• Health-related and social services.
• Tourism and travel-related services.
• Recreational, cultural, and sporting services.
• Transport services.
• Other services not included elsewhere.

7 Important Characteristics of Services

(i) Perish-Ability

Service is highly perishable and time element has great significance in service marketing. Service if not used in time is lost forever. Service cannot stored.

(ii) Fluctuating Demand

Service demand has high degree of fluctuations. The changes in demand can be seasonal or by weeks, days or even hours. Most of the services have peak demand in peak hours, normal demand and low demand on off-period time.

(iii) Intangibility

Unlike product, service cannot be touched or sensed, tested or felt before they are availed. A service is an abstract phenomenon.

(iv) Inseparability

Personal service cannot be separated from the individual and some personalised services are created and consumed simultaneously.

For example hair cut is not possible without the presence of an individual. A doctor can only treat when his patient is present.

(v) Heterogeneity

The features of service by a provider cannot be uniform or standardised. A Doctor can charge much higher fee to a rich client and take much low from a poor patient.

(vi) Pricing of Services

Pricing decision about services are influenced by perish-ability, fluctuation in demand and inseparability. Quality of a service cannot be carefully standardised. Pricing of services is dependent on demand and competition where variable pricing may be used.

(vii) Service quality is not statistically measurable

It is defined in form of reliability, responsiveness, empathy and assurance all of which are in control of employee’s direction interacting with customers. For service, customer’s satisfaction and delight are very important. Employees directly interacting with customers are to be very special and important. People include internal marketing, external marketing and interactive marketing.

The following are the characteristics of services:

1. Intangibility:

Services are intangible and therefore cannot be touched, handled, smelt or tasted (physical senses). This is because service itself is an activity. A service however, can be experienced. A service also gives a certain amount of satisfaction to the consumers. On account of the intangibility, there is no ownership created in case of services. A service can only be generated and used and can never be owned.

2. Perishability:

A service has to be consumed simultaneously with its production. A service cannot be stored like a tangible commodity. Services are perishable in terms of delivery and time. An empty seat on a plane never can be utilized and charged after departure. Revenue once lost is lost forever.

When the service has been completely rendered to the requesting service consumer, this particular service irreversibly vanishes as it has been consumed by the service consumer. Example – after the passenger has been transported to the destination, he cannot be transported again to the previous location at the previous point of time.

3. Inseparability:

Commodities once produced can be sold at a later point of time but in case of services it is not possible. Examples – In the cases of services of a doctor to his patient, teacher to his student, the simultaneous presence of both-the producer of the service and the consumer of the service at that point of time is absolutely necessary.

The service provider is indispensable for service delivery as he must promptly generate and render the service to the requesting service consumer. Therefore the service provider, the service itself and the service consumer are inseparable.

4. Simultaneity:

Services are generated and consumed during the same period of time. As soon as the service consumer has requested the service (delivery), the particular service must be generated from scratch without any delay. The service consumer instantaneously consumes the rendered benefits to satisfy his wants. Therefore the production and consumption of services are always simultaneous.

5. Variability:

Each service is unique. Services lack homogeneity. Example – a doctor treats two patients with similar ailments on the same day. The level of satisfaction in the minds of these patients after the treatment will never be the same. The difference is caused by factors such as the mood of the doctor, the fatigue level of the doctor, the way the service is perceived by the individual patient etc. There will a difference in the service even if the same doctor treats the same patient on two different occasions.

This is because the moods of the doctor and the patient do not remain the same on both the occasions. No two units of service are identical even if they are generated by the same person. Factors like quality control, standardization etc. which can be very successfully implemented in case of production of tangible goods cannot be applied in case of services. Services always vary with each other.

6. Ownership:

No ownership is created in case of services. At the time of creating a service or delivering a service, the service provider does not own the service. He only owns the physical infrastructure necessary to create the service. Similarly at the time of consumption or after the consumption, the service consumer does not own the service. He only consumes the service.

After the consumption, the consumer has only the experience but the service itself would have become non-existent. A service cannot be owned by anybody because it is basically an intangible product.

Accounting procedures may baffle you, and legal statutes may daze you, but if you’re like many small-business owners, the one facet of your business that you can comprehend and that sustains your interest is marketing, perhaps because it involves the relatable yet always surprising realm of human behavior.

Unfortunately, most of what you read focuses on marketing a product, not a service. If your specialty is a service, the question that probably drives you most is What factors affect consumer behavior in the service disciplines? Along with that, you are probably curious about whether consumers follow the same decision-making process while they shop for a service as they do when they shop for a product.

Dive Right In to Consumer Behavior Theory

• Understanding how consumers shop for financial services, health care, lawyers and home service contractors, all of which provide fascinating insights about consumer behavior in services in general.
• Revisiting the five steps in the traditional decision-making process.
• Reviewing suggestions for positioning services in the marketplace.

Contradictions Riddle Consumer Behavior

Brace yourself for some beguiling truisms about the significance of consumer behavior. Given what you already know about marketing, these observations shouldn’t come as much of a surprise:

• Consumers know exactly what they want.
• Consumers sometimes know little about what they want.
• Consumers can make careful, methodical decisions.
• Consumers can make impulsive decisions.
• Consumers say they would use online tools to expedite their search for services.
• Consumers don’t use online tools even when they’re available.

Smart Phone Usage Transformed Marketing

Rather than feel perplexed by these truisms, they should remind you that sometimes you must trust your instincts to guide you. Those same instincts fortified you to start a small business in the first place.

Also as you think about the most effective ways to market your service, it may help to keep certain facts about the factors affecting consumer behavior in mind. This information shouldn’t surprise you, but it should inform your most important marketing decisions.

Most Americans own smart phones, not just cellphones. In fact, 95 percent of people ages 18 to 34 and 67 percent of people ages 50 and up own smart phones.

People rely on their smart phones more than desktop computers or tablets to make searches for services. Since 2016, these digital searches have been one of the most dominant factors affecting consumer behavior, for both products and services. Beyond making purchasing decisions on the go, this insight suggests that consumers aren’t particularly interested in comparison shopping.

Consumer Behavior With Financial Services

If you sell banking, financial or insurance services – or any service, for that matter – you’ll want to bookmark Accenture’s 2019 Global Financial Services Consumer Study for a later read. The company surveyed 47,000 customers across Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America and developed four customer personas that could arguably benefit anyone who wants a crash course in consumer behavior theory.

“The differences between these personas are striking and highlight how traditional demographic segmentation, such as age or wealth, can miss important nuances of how consumers view their financial providers,” the report says.

Four Personas May Sound Familiar

The personas identify:

Pioneers: Pioneers are the risk-takers who are tech-savvy and crave innovation. They are the ones most eager to engage with banking, financial and insurance providers on their smart phones.

Pragmatists: Pragmatists view technology dispassionately. For them, it’s a means to an end rather than an all-consuming passion.

Skeptics: These people are wary of technology and financial providers. Ironically, more than one-third are age 35 and under, which means they can be a tricky target group to engage.

Traditionalists: This older-than-55 group still values personal connections, tends to avoid technology and is losing faith in service providers.

Assess Conclusions About Consumer Behavior in Economics

Despite these differences, the study discerned five findings about consumer behavior in economic matters:

• Consumers expect providers to provide solutions to their needs.
• Consumers appreciate personalized service, such as offering a discount for a safe driving record.
• Consumers expect their online experiences – desktop, tablet and smart phone – to be fully integrated.
• Consumers trust their financial providers, and this feeling appears to be increasing.
• Consumers are more likely to share their personal information as long as they get something for it in return, such as a better deal.

The report distills a great deal and says a mouthful about consumer behavior in economics and marketing in general – when it concludes: What brings customers together sets them apart.

Consumer Behavior With Health Care Services

Any small-business owner whose interests even occasionally enter the health care field can benefit from the findings of a survey of 4,530 adults conducted by the Deloitte Center for Health Solutions. Certain factors affecting consumer behavior underscore most of the findings: Consumers are more practical than ever, focusing on issues such as cost and convenience, perhaps because these commodities elude them.

The study found that:

• Consumers are relying more on quality ratings, though a gap exists between their expressed interest and how often they use this tool.
• Consumers are amenable to new health care services, especially at-home diagnostic testing.
• The number of people who wear devices to track their health information has more than doubled since 2013. Moreover, many of these people are willing to share the information with a health care provider – an insight that could present an opportunity for a niche marketing campaign. 

Ailing Consumers Want a Seamless Experience

These findings about consumer behavior in health care services led researchers to suggest that business owners, marketers and other people vested in the patient journey should:

• Offer online tools when they’re needed most, or when consumers search for a caregiver, look for alternatives, and shop for testing or diagnostic services. 
• Create a seamless and communicative experience among the patient, caregiver and other members of a care team.

Consumer Behavior With Legal Services

You might conclude that people who shop for legal services tend to fit the traditionalist persona identified in Accenture’s financial services study. This is the commonality that binds many of the findings in the Legal Trend Report, which is billed as “the most comprehensive and the most granular analysis of lawyer activity ever published.”

The findings paint a picture of consumers who know what they want and are determined to find it, even if they rely on traditional means of communication to do so. Nearly 70 percent of the respondents say they prefer a law firm that promptly answers their first phone call or email.

Legal Consumers Are Money Conscious

Once that initial line of communication is open, the factors affecting consumer behavior include:

• A free, initial consultation. Nearly 65 percent of the respondents referred to this offer as a deal-breaker.
• Fixed fees was cited by nearly half of the people in the poll.
• Finances and customer service. In this category, 28 percent of people say they choose a firm if it accepts credit card payments, while 27 percent say that pleasant text message exchanges weighed heavily in their decision-making process, and nearly 20 percent say the firm’s website lured them. 

The significance of this last consumer behavior cannot be overstated. Although consumers are shopping for legal services online and presumably are nudged into filling out and sending online contact me cards, they prefer to pick up the phone or send an email instead.

Consumer Behavior With Home Services

Consumers make more than 5 billion Google searches a day, and many of them are for contractors who specialize in home services such as electrical, plumbing, roofing and carpentry work.

By now, the owners of these companies know that their business must have a website that clearly explains the scope of their services. Research shows that 63 percent of consumers search for a home service company by scanning websites, and 30 percent of consumers won’t consider a business that doesn’t have one.

Consumers Are Impatient With Websites

However, the factors affecting consumer behavior with regard to home services don’t end there. More consumers than ever are conducting searches from their smart phones, and they’re in a big hurry to find what they’re looking for. Consider:

• Nearly half of consumers expect a webpage to load in 2 seconds or less, and they’ll abandon a website and move onto another if it doesn’t.
• Google says that for every 1-second delay, conversions – turning a visitor into a potential customer – drop by 12 percent.
• Nearly 85 percent of consumers will abandon a site where they’re prepared to make a purchase if the connection is not secure.

Word-of-Mouth Still Matters

Despite their dependence on technology, consumers shopping for home services still rely on one of the oldest forms of marketing: word-of-mouth. Small-business owners in this field should know that:

• Recommendations can increase conversions by up to 5.5 times.
• Converted customers acquired through word-of-mouth boast a retention rate that is nearly 40 percent higher than customers acquired by other means.
• Social media reviews and comments can influence the behavior of nearly 70 percent of consumers. 

Word-of-Mouth Affects Consumer Behavior

Word-of-mouth remains one of the most influential factors affecting consumer behavior throughout the entire, five-step decision-making process. It’s a point worth remembering as you market your service and lead potential customers through the process, both online and in person.

A fundamental consumer behavior theory is that most consumers follow this progression for services and products before signing a contract or making a purchase:

• Recognize a need or problem
• Gather information about how to fill that need or solve that problem
• Compare and contrast worthwhile alternatives
• Make a decision
• Evaluate the wisdom of the decision

Develop Your Brand, Develop Yourself

It’s a lot of information to digest, although the parallels among consumer behavior in services can be so striking that they should leave an indelible mark on your memory and your marketing decisions. In addition to following your gut instinct, other tips about marketing services should assist your best efforts:

• Assuming that people do business with people they know, like and trust (and check out via word-of-mouth), go out of your way to develop a rapport with potential customers.
• Develop a keen understanding of your customer’s needs. If you do this and find a way to address these needs, you have likely found a customer for life.
• To a certain extent, you are the product,so you must sell yourself too, touting your own features and benefits.

Start thinking of yourself, not only your company, as a brand_._ Everything you do everything you say, how you dress, how you conduct a business meeting – and everything else you embody are part of your brand. It helps if you clearly differentiate your brand from others. If you’re uncomfortable drawing a direct contrast and citing competitors’ names, then be sure to explicitly state who you are, what you stand for and why you’re decidedly different and better.

Perhaps no better definition of personal branding exists than the one offered by Amazon founder Jeff Bezos: “Your brand is what people say about you when you’re not in the room.”