Friday, October 5, 2012

Search Engine Optimization (SEO) Challenges #1

One of my primary businesses, Brock Health Administration, sells Private Health Services Plans.  Our primary source of new business is over the Internet.  That means we need to have a website that is Google friendly for searching by customers.  This process is called Search Engine Optimization, or SEO.  I will write a few articles on this topic from different angles.  But for the purposes of this post I just wanted to voice my challenges at getting this done.

To start, SEO is not a fixed solution that you buy and you’re done, like a new desk or lampshade.  It is a dynamic moving target. To be successful it needs to be continually monitored and adjusted.  It is a maintenance task and it is tedious.  It requires a passable technical understanding of computers, websites and specifically Google advertising and search engines.  It also requires a general grasp of marketing and human psychology.  And finally you need to clearly understand your product or service offering and your potential market audience.  That’s a tall order for what could be considered a tedious clerical maintenance task.  Juxtapose the skills against what you should pay a resource to do it.

For a brand new website starting at zero you can hire a light-weight firm to lay the groundwork to get you on the search engine map.  I am bombarded by many emails from firms in India that do this for a modest fee.  They are probably a cheap starting point to get in the directories, have some keyword density on your pages and make you Google friendly.  But to take it to a serious level you need to bring in the heavy artillery of social media, blogs, tweets, YouTube, AdWords and so on.  Someone needs to understand your business and manage this on a daily basis.  I am bright enough to know I don’t have the time nor inclination to do this.  I need to hire someone.

I had my site optimized about 4 years ago by a good firm in Toronto (Convurgency) for a one-time fee.  Now our business has grown and I need the next level. Unfortunately, I think there is a gap in service offerings, representing an opportunity for somebody. 

There are plenty of charlatans, wannabes, techies and light-weights in the market but few have all the characteristics needed to succeed.  

I have tried the casual part-time contractor for a few years.  It was probably the best of several bad options.  She was technically savvy with current social media and knew marketing but didn’t have a deep grasp of our business model nor the time to do the tedious task for extended periods.

I tried technical folks on different occasions but they seem to have limited patience with the tedium and little sense of advertising.

I did run into one fellow that sung all the right tunes in his pitch to me but was a zero on business delivery and follow-thru.  After 3 months and $4,500 in retainers I got 2 blog posts and a list of alt-tag changes for the site.  This was Matt Clark of Damang Media out of Calgary… a complete disappointment.  I’m posting their very light weight blog below as I figure I paid enough for it, I should at least give it some air-time!

If you compare it to our website, you can see it is an attempt to read our existing website to “learn” our business remotely and then write a short summary.  I surmise the plan is to fool some of my potential customers for some of the time.  Unfortunately that seems to be the new conventional wisdom especially for younger business people and as The Brief Case keeps spouting – it is not where I want to go.

I think it also speaks to one of the shortcoming of the younger vendors.  They know the technical and advertising stuff but they have no sense of running a business to deliver value to customers.  As I said earlier, this is a great business opportunity for someone with some ambition and enthusiasm to learn the various components and then execute it!

MY TWO THOUSAND DOLLAR BLOG POST:

Content Format:    word doc
Content Type:       Blog Posts
Target Keyword:   employee health plans
Word Count:          437
Page Title:             Benefits of Private Health Services Plans

You have probably heard about health services plans before even if you aren't entirely sure how they work. But as you look at your business, you don't really know if these employee health plans would benefit your company or your employees at all. Let's walk through some of the benefits of these plans to see if enrolling in a private health services plan could work for you and your employees.

First, a little history. Canada introduced these plans in 1986 as a tax relief measure for businesses. Using the private health services plan, companies could provide employee health plans and deduct the expenses. At the same time, the reimbursements to employees are tax free, too, lightening the tax load for business and employee alike.

Benefits of a Private Health Services Plan
1. Tax Relief — The primary benefit of a private health services plan is the tax relief for employees and businesses. The entire cost of the plan, funded by your business, is 100 percent deductible. Secondly, the reimbursements your employees receive are not considered taxable income so they aren't hit with any additional tax burden either.

2. Healthier and Happier Employees — Benefits packages that include employee health plans make your compensation package more attractive and allow you to hire and retain higher quality employees. They also will have access to more efficient healthcare and have more choice in providers and services. This all combines for healthier, happier employees who will stick around longer and have lower rates of absenteeism.

3. Clear Budgeting — You may have shied away from private health services plans in the past out of concern unforeseen costs or hidden fees would make budgeting a nightmare. However, these plans actually provide for some budgeting stability. First, there are no premiums to budget for. You only pay when a claim gets submitted. Secondly, the costs are a fixed percentage of each claim. You will know exactly what you will pay for each covered service so you can anticipate actual costs.

4. More Coverage — The other option for employee health plans is insured plans, but the private health services plan actually covers more services than those plans. With more coverage, your employees will receive more and better care. The services covered under private health services plans includes:
  • Medical care
  • Dental care
  • Vision care
  • Laboratory services
  • Hospital services
  • Medications
  • Medical equipment
  • And other expenses like ambulances, prosthetics and wheelchairs

With all these benefits, maybe it's time to give the private health services plan another look. You can increase employee happiness and save your business money by adding employee health plans to your business model.

Tuesday, June 19, 2012

What Goes Around Comes Around

Well it’s been awhile. I would like to say I’ve been putting a focus on my business activities and doing something really intense. Unfortunately (for this blog perhaps), I’ve actually just been an idle layabout in Bermuda, Belgium and Britain from Christmas to April. One of my business associates made me feel better by saying if I was making a blog entry every day I wouldn’t have time to be out generating the experience of what I’m writing about. Maybe it is disparaging to journalists to say they spend their time making commentary about what someone else is doing… or, in other words, living by remote sensing if you will. I’ll let you sort out the philosophy of why I haven’t been posting in a while.

So to the subject of this post… I did go back to my consulting business at the beginning of May with the consequence of heads-down “experience gathering” since then. During a time of intensity, not only are my regular business activities confined but my philanthropic endeavours get curtailed. I am a firm believer in the adage “What goes around – comes around.” My interpretation of that is whatever, action, thought, or image you portray or send out is a mirror image of what other people will send back to you. We’ve all heard the analogy of a smile. You can try it yourself by walking around your own office or facility with a smile and people will smile back at you. It is human nature and we all respond the same way.

Of course, extending it to business or financial activity is a bit harder to prove. I see conventional operators in a recession who are cutting costs to the point of penny pinching. In fact, you could say some get downright cheap. They forestall advertising and marketing campaign and especially philanthropy. I am not a religious person, as you may know, but it has to be almost a religious belief for this to work. On a number of occasions when I have been financially challenged, I have done some generous financial things for people. And I have done it with conviction. And in all cases, I end up getting relief from unexpected quarters for my own financial challenges. There are a number of motivational speakers and organizations that try to explain and encourage this magical concept. I don’t try to explain it, I just have a pragmatic knowledge that it works for me.

So for those sceptics out there that want to have feet firmly planted in both camps, here is a compromise solution. You can be generous without breaking the bank. I can’t call it unconventional thinking but you will feel good regardless!

The concept is not new; it is micro-credit loans to the third world. There is an organization called Kiva to which I was introduced about a year ago. You get to make donations to small business people who are struggling to get going under harsh circumstances. This particular site is very well done. You get to read about and select the candidate to whom you want to make a loan. These loans are made up from $25. Now many of us are crying about the problems we have as a small business person in the industrialized world. I will tell you, a quick look though the list of thousands of potential borrowers and you will feel like a rich and famous entrepreneur.

It is particularly gratifying to make loans to other businesspeople and help others along their entrepreneurial journey. I prefer groups of people to individuals as I like the idea of collaboration. I also prefer women to men as they seem to be more innovative with their objectives. I like to see ideas that have potential to grow as business; buying assets rather than retail stock. Naturally, those are just my preferences and there are plenty from which to choose.

Check out my member page on Kiva and have a look at the stellar repayment performance of these loans for me. While the loans are overseen by Kiva (a San Francisco enterprise), they are administered locally by lending organizations in the particular countries.

The terms for most of these loans are about a year or so. As the money is repaid, you get to loan it out again. Whenever my account gets to $25 in repayments I make another loan. Many times I add enough additional cash to make up a second new loan, so my loan portfolio grows. It makes you feel good inside.

You’ll just have trust me that being generous and helpful to less fortunate entrepreneurs will result in positive benefits for you; financial and otherwise. What you send going around truly does come back around to you!

Thursday, January 26, 2012

Contracting Rates Through Agencies

Establishing appropriate consulting rates is always a challenge. As you know I own Brock & Associates, a minor IT consulting firm in Calgary. I've been in the racket since 1991. This is a common issue for new consultants.

As a first time consultant you will likely use agencies as your primary channel for marketing your services. Invariably, the agency will ask you for your expected rate. That is because there are so many factors to determine a "correct" rate. They need to know your preferences to be able to effectively market your services. However, as in any negotiation, the person who puts a price on the table first is in the highest risk position. That is why the recruiter prompts you for your price first. Theoretically then if you are too low they can take more of the pie from the customer or if you're too high they put your resume at the bottom of the pile so they don't waste time on trying to sell you. I said theoretically. In reality if the agency is reputable and experienced they will behave better than that.

You will soon find out if they are not reputable. If so, you won't be using them in the future. If they are that shortsighted they don't stay in business long. That is why most agencies that have been around awhile must be somewhat reputable.

On a tangent thought: All good agencies are actually very well aware of market rates. They must be by necessity. When they submit their allotted maximum of candidates to the client (usually around 3) they are competing with all the other agencies in town. The submitted rate is your rate + their gross margin rate. If the submitted rate for their candidates is too high they will never win any business with the client. If they are too low, all their consultants will be bailing out to other agencies and they wouldn't have any "resources" to sell. It is always important to remember we are simply btheir "inventory" of products to be bought and sold! Imagine they are a shoe store we are just their stock of shoes. If they have no shoes... they have an unprofitable shoe store.

I mentioned the theoretical scenario, but the reality scenario is a bit different. If the rate you initially respond to the recruiter is too low, the recruiter would raise a flag. I say that because the agency margin with the client is determined from the base rate. For example, suppose your "correct" rate band should be about $60-$70/hr. The agency gross margins generally vary from about 12% to 20% of your rate. So 20% of $70 is $14/hr maximum profit to the agency for a perfect fit candidate. So if you quoted a crazy low rate of $40/hr in the first place, their margin would only be $40 * 20% = $8/hr. There is a big difference in their profit on this deal between $14/hr and $8/hr... so it is in the agency's self interest to say... "Oh $40 is too low; I think I can get you $55". They wouldn't necessarily put you all the way up into you "correct" band for two reasons.

i) It gives this agency a bit of a price edge in presenting you to the client. If you are a good resource (meaning comparable in skills & experience to resources submitted by another agency) but you are $5 cheaper, then the client will take you and a deal gets done. So that's good for you.
ii) The are lots of contractors out there that believe they are entitled to a "pay raise" every so often (and I strongly disagree with this practice... I'll explain in some other post). That $5 left on the table allows the agency to give that $5 raise and still be acceptable to the client.

Of course, this all changes once you have some credibility with a particular agency. They can begin to trust you when the following becomes evident:
i) You're reliable, you do good quality and you don't screw the client in any way... Don't forget the agency has to work very hard to have a good collection of customers so they can sell you (and other people) to this client in the future. They want to know you won't screw up that relationship on them.
ii) You aren't a prima donna; always looking for unjustified rate increases. They need to be out knocking on doors to find new clients or helping existing ones. That is the next deal for consultants like me and you. They shouldn't be wasting their time having to deal with a client about some naive twit who thinks he's worth another $10/hr right now. Incidentally, agencies don't mind asking for a justified rate increase now & again. Reasons such as changing market conditions, increased skills, changes in job description are a few examples. Just be reasonable with the agency. Their clients can be idiots about rates too and they have to manage that relationship as well.
iii) when the recessions come and the markets collapse, you will understand that your rate must go down too. It is referred to a rate band for a reason. In recessions you're at the bottom of the band. In a boom, you can be near the top of the band.

So if you ever quote a rate to low in your intial discussions and you are offered a position at that rate, my suggestion is:

1/ Finish the contract, be very happy with the rate you suggested. (at least outwardly)
2/ In the meantime while you're on this first assignment, put some effort in finding out varying rates for different jobs in your field in your market. I know this isn't easy... people don't blab their rate to everyone. You need to be paying attention to any clues that come your way. Be a detective (in an honest fashion with integrity... not a sneak) Just like we expect agencies to know the rates... you should also be aware of your rate band. After all, you are a consulting firm; it just happens to be a very small one!
3/ Presumably your first underpaid asignment will only have a 3 month term. If you think your rate is too far below "correct", you should just go to your agency at about the 2 month mark and ask them to start looking for your next assignment for you. Tell them this: "You always see assignments through to the end, but want to expand your skills & experience at another client" i.e. Use a little advertising with your request... DON'T tell them you're unhappy with the rate because you would be complaining about your own misstep in the first place! It is always good practice to never complain about things... just work to improve them.
4/ In your new search you can then quote a price from your "correct" band.
5/ Alternatively, you can stay at the assignment for a year at a low rate and then approach the agency for a rate increase after a year. This is not my preferred strategy.

As an aside, I still sell myself as Project Manager on occasion. My rate band in Calgary currently is about $90 to $120. I consciously sell myself at the low end. I have been in client sites where some circumstance will happen and the client just machine guns all the contractors at the high end. It is called the "Tall Poppy Syndrome"... all the high ones are cut down to size. Remarkeably, all the consultants with their heads down below the threshold "high rates" are left alone. And if you haven't figured it out yet... your utilization rate is significantly more important than your bill rate. The concept goes by a few other metaphors such as "Slow & steady wins the race" or "a bird in hand is worth two in the bush".

I think that is enough unconventional thinking for this post.