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4 Tips to Ace Your Annual Performance Review

Posted: 01 Aug 2019 12:25 PM PDT

  • Preparation for an annual review should be a year-long process of tracking accomplishments, overall work performance and shortcomings.
  • Find time during the review process to create a list of long-term goals to discuss with your manager.
  • Expect both praise and constructive feedback during your annual review.

The anticipation of one's annual performance review intimidates some employees. It's nerve-wracking to sit down with your boss to discuss your job performance. The performance review process is rarely complicated, but knowing that job security and salary changes are on the line can rattle even the most confident employees.

Luckily, there are ways to reduce the anxiety associated with annual performance reviews. Not only can you get past the anxiety, you can create strategies to increase your chances of getting a raise, promotion or bonus through a strong performance review meeting.

Prepare well in advance

The key to a successful annual review is preparation. Employees and managers need to enter performance reviews prepared. Both parties should be on the same page about each employee's accomplishments, goals, strengths and weaknesses. While both sides should be prepared, it falls on the employee to bring key data and accomplishments into the meeting.

Editor's note: Need a PEO service to help your business conduct employee reviews? Fill out the below questionnaire to have our vendor partners contact you with free information.

 

"Keep a log of all of the important things that happen month by month, good and bad," said Camden Rendon, talent acquisition manager for The 20. "I recommend keeping notes of challenges, wins, losses, strengths, and weaknesses throughout each month to then be able to go back and review at the end of the year. Once your annual review comes up, you are stocked with information about what you went through over the year."

Preparing for your annual review should be a year-long process. Take time at the end of every week, month or quarter to record your major accomplishments. If you helped improve a business process, list that. If you helped increase revenue, make a note and be sure to mention that during the performance review. The best way to enjoy a successful performance review is to prepare well in advance.

Tasia Duske, the CEO of Museum Hack, suggests treating the meeting like a job interview. In addition to preparing throughout the year, take time in the weeks or days leading up to the annual review to determine what talking points you want to discuss. Did you excel in one area of your job? You might want to make that a focal point of the discussion if you're negotiating a raise.

"You should do the work that most employees would consider overpreparing: Anticipate questions and feedback, make notes on your answers and practice in front of a mirror or a friend," said Duske. "Also develop specific asks: What do you want from your employer over the next 12 months? If you are interested in promotions in your role or pay, then help layout a plan to get there; the easier you make it for your boss, the easier it will be for them to give it to you."

Don't leave your chances of getting a promotion or pay raise up to chance. Specifically address those goals in your review. Consider drafting a plan of how you could work your way to a promotion. As Duske mentions, you're going to have a better chance of improving your job situation if you explain to your boss how you can get there.

Preparation is a two-way street, though. Annual performance reviews are doomed to fail if the employer doesn't come prepared. [Interested in a professional employer organization for your business? Check out our best picks and reviews.]

"I've been part of many annual reviews where the manager or employer did little to no preparation in advance, they just 'winged it,'" said Duske. "Compare this to a manager who spends an hour or more documenting the employee's successes and makes a custom plan for their advancement. The latter will inspire higher levels of performance, job satisfaction and retention going forward."

It's also a good idea for employees and managers to touch base a few times throughout the year to keep track of goals and performance. With expectations for jobs constantly at risk of adjusting, it's important to connect with your boss to ensure you're on the same page about goals and job duties.

"The needs of the business change and evolve and, therefore, many employees' roles have to change and evolve also," said Roy Trujillo, COO of TransPerfect. "Regular communication with one's manager is the only way to ensure that expectations haven't changed and to ensure that the employee knows what to concentrate on, what to improve, and what will be expected at the next review."

The potential nerves going into an annual review tend to subside if you're regularly checking in with your boss. The discussion points during an annual review meeting shouldn't be a surprise to employees or managers, said Amanda Ponzar, chief communications and strategy officer at Community Health Charities.

"Employees should know all year long how they are doing, with regular input on their progress against goals, as well as an opportunity to course-correct if needed," said Ponzar.

Be honest

While it's an easy tendency to want to focus on your strengths during an annual review, it's important for employees to be honest with their managers about their shortcomings. Don't make yourself out to be perfect. Managers will appreciate candor when it comes to your areas for improvement.

This doesn't mean your flaws should be the focal point of the meeting, but you need to be aware of your flaws and work with your manager to improve those weaknesses.

"The No. 1 way an annual review can derail is when the employer and employee are not aligned on reality," said Duske. "If you have had job performance issues, come to the meeting prepared to discuss these. If you bring up these issues before your employer does, you will show a strong level of self-awareness and confidence."

When preparing for your annual review, be honest with yourself about your weaknesses. What are the areas where you need to improve? How can you make improvements in those areas? Every employee has areas for improvement; be honest with yourself about what those areas are.

The best way to prepare for an annual review is to create a list throughout the year of your accomplishments, strengths and weaknesses. Don't avoid pinpointing your flaws. Honesty goes a long way before, during and after annual reviews.

Create an outline

This tip applies to both managers and employees. Before an annual review, come up with a plan. Find the areas you want to discuss and create an effective outline to do that without hurting anyone's feelings. Employees should enter these meetings with the expectation of receiving praise and constructive feedback.

Managers should create meeting outlines that keep employees thinking positively. This means emphasizing the employee's achievements and their areas for improvement. Give constructive criticism, but don't harp on weaknesses.

"Focus on the 4-1-1," said Michael O'Brien, the chief shift officer at Peloton Coaching and Consulting. "I recommend this framework for all my managers. It goes like this: Share four strengths, one area of improvement and ask, '[What's] one thing you need from me?' The employee can also use the 4-1-1 in this fashion. Share four value-added deliverables/strengths, the one thing they are looking to improve and the one area they need support from their boss. This process makes the review clear, concise and constructive."

Entering an annual review without a plan is a recipe for failure. Both parties should prepare for the meeting and come to the discussion with a plan. You may want to agree with your manager prior to the meeting about a potential outline. If you don't discuss the agenda beforehand, come up with a few key points you want to discuss, and make sure you get to them at some point during the meeting. It's a good idea to share long-term goals at some point in the meeting to discuss a plan for achieving those goals.

Understand the importance of a personal review

Employee reviews matter. A good review that showcases your strengths and accomplishments can lead to promotions and raises. A bad review can hurt your chances of gaining future promotions, or you can use a bad review as an opportunity to learn from mistakes. Proper preparation puts you in position to succeed during the discussion.

"Instead of getting defensive, ask clarifying questions to understand more about what the manager is saying," said Leigh Steere, co-founder of Managing People Better. "'This is helpful feedback. Can you give me some examples of what you'd like to see me do instead?'"

An employee's attitude and preparation are critical to the success, or lack thereof, of a performance review.

The bottom line

Performance evaluations require adequate preparations from both employees and managers. As an employee, take it upon yourself to prepare all year for your annual review. Take time every month to record your top achievements from that month. Preparing well in advance will position you for a successful meeting.

What the Current Economic Environment Means for Your Small Business

Posted: 01 Aug 2019 12:20 PM PDT

Fortunately, the 10 years since have seen a period of strong growth, with increasing rates of employment and consumer spending. Innovations in technology have also advanced swiftly in the past 10 years, leading to the rapid growth of startups in the areas of video streaming, transportation, e-commerce and more. 

Unfortunately, what goes up must come down – sooner or later. Even when the general business cycle is expansive, particular industries can face significant periods of contraction. According to the Q2 2019 Private Capital Access (PCA) Index, a study conducted by Pepperdine Graziadio Business School with support from Dun & Bradstreet, 49% of small to medium-sized business respondents feel the current business financing environment is restricting their businesses' growth opportunities.

The good news is that with preparation, a downturn doesn't have to have the same devastating effects as a recession. Businesses that plan for a rainy day may even gain a competitive advantage over those that are not looking ahead.

Top risks facing small business today

The first step in preparing for an economic slump or shift in the marketplace is understanding how your business may be at risk. Areas of vulnerability can become much bigger problems during a period of economic or financial uncertainty. Identifying these risks can help you formulate a plan of action to safeguard your business when the time comes. Common risks to small businesses include the following.

  • Financial risks. This is usually experienced in the form of unexpected expenses or a sudden reduction in cash flow. This could mean slow payment or nonpayment by vendors, a decline in consumer demand or an increase in interest rates on business loans and lines of credit. These are all typical side effects of a slowing economy. Of the small to medium-sized businesses surveyed for the PCA Index, 24% predict that an increase in the federal funds rate would restrict their ability to secure contracts, expand into new markets and grow their business.
  • Loss of competitive advantage. This usually follows when a product becomes outdated and is no longer desirable to consumers and/or when a disruptive company enters the marketplace and offers a replacement product that is more attractive. This can occur as new technology allows for greater personalization, ease of use or cost advantages.
  • Business interruptions. These can happen when an unexpected event such as new industry regulation, supplier complications or a natural disaster forces a company to slow or halt business. According to the PCA Index, more than half of respondents do not have cash on hand to cover emergencies resulting from severe weather conditions, such as damaged property or loss of business due to an unexpected closure.
  • Cyberthreats. The need for cybersecurity is a growing concern for businesses of all sizes. In order to stay competitive, businesses find themselves storing an ever-increasing amount of customer data. That data is valuable and is always at risk of being lost or stolen. Some small businesses lack the tools and technical expertise to properly store and govern the data they are collecting. Limiting access to sensitive information and making backup copies of important data can help protect your business from a cybersecurity breach.
  • Business reputation risk. Most businesses need a strong online presence to survive these days. However, with consumers demanding more transparency from companies, businesses may feel increasing pressure to reveal business information once considered proprietary about their privacy and data-collecting policies, business partners and ethical stances. Moreover, businesses and their affiliates are expected by the public to comply with government regulations and the modern zeitgeist on issues such as workplace equality, environmental sustainability and fair labor.

How to safeguard your business

You don't have to wait until something happens to protect your business. Being proactive can help make your business more robust, so that if and when the commercial environment suddenly changes for the worse, you may be able to reduce the impact on your business. The tips below can help safeguard your business against adverse economic conditions while keeping up with demand and retaining customer loyalty.

  • Diversify your investments, your client base and your marketing efforts. For example, many small businesses are overly dependent on a single large client – that big client going out of business could spell disaster. You can avoid such a fate by increasing the number of accounts you have while also diversifying the kind of clients you market to, the industries they're in and the ways you market to them. Simply put, don't put all your eggs in one basket.
  • Develop a plan in case of an emergency. Once you have identified what risks your business is likely to face, you can create a disaster contingency plan. What will you do if your income decreases? What will you do if you are forced to reduce or cease operations unexpectedly? Having a written plan of action in place can ease your business's recovery in many common scenarios. Further, make sure you have the necessary insurance in place to protect your business from liability and to protect your assets in such circumstances.
  • Build and maintain business credit. This can improve your chances of securing a loan or line of credit with favorable terms. If your income is reduced or you need cash fast in an emergency, you can apply for funds to pay suppliers, fill orders and keep customers happy. This can also help improve your business relationships by increasing trust and credibility for your organization. Having a solid business credit file means you may be better able to negotiate a deal with a creditor or supplier that will allow you to continue operating in difficult times while still meeting your financial obligations.
  • Protect your files and devices. Back up important files offline so that you have a copy in case your computer system is compromised. Limit employee access to sensitive information by employing passwords and encrypt devices that contain sensitive information. Make sure your paper files are stored securely as well. Finally, use two-step authentication to secure your cloud-based systems.
  • Factor environmental, social and legal considerations into decision-making. Also, always be conscious of the social context of your business decisions – especially when posting online. Try to be as in tune as possible with how your customers think and feel about social issues, and take them into account when making purchasing, partnership or policy decisions. Discovering how your customers would react could be as simple as asking them.
  • Never stop learning. Stay informed about current market conditions, new technologies affecting your industry and the activities of your competition. Keeping up with changing industry regulations and consumer expectations can help mitigate business reputation risk. This way, you're less likely to be caught off guard by events and you can plan ahead and adapt before the health of your business suffers.

The economy goes through regular cycles of prosperity and scarcity. When facing negative revenue shocks, the planning and preparation you make during the good times might be the difference between a survivable business setback or an unendurable calamity. You can begin securing your business against future disruption today.

6 Trends That Are Driving E-Commerce Growth

Posted: 01 Aug 2019 12:15 PM PDT

Nearly 50 years after the first e-commerce transaction – in which some Stanford students purchased marijuana from some MIT students via their universities' ARPANET accounts – the barriers to entry are lower than ever.

"Major shopping cart platforms offer beautiful, mobile-optimized sites," said Jake Stein, senior vice president of Stitch. "Facebook has made it easier than ever for very new companies to do brand advertising. SaaS [software as a service] products make it easy for brand-new retailers to send great emails, run A/B tests and make sense of the data they have at their fingertips. All of these products make it easier for new retailers to grow quickly from day one."

As a result, with so little overhead, it's not uncommon to see rapid growth within the first few months. To assume that growth will continue, however, is fallacious. According to Stein, nascent e-commerce businesses tend to follow an S-shaped growth pattern, in which rapid exponential growth while the company is still small will eventually level off.

One contributing factor is that successful e-commerce companies tend to target a specific customer niche, Stein said. "This hyperfocus allows them to acquire customers quickly and grow incredibly fast in the early days. But [as] they start to max out customers in that target niche ... growth often starts to slow."

Companies can combat this by expanding their product lines or distribution networks, however, they must also strike a balance. "To maintain that rapid growth, a company needs to continue to excel at customer acquisition but still retain that core market," Stein said.

One way to break that S-curve ceiling is to keep up with the latest trends in e-commerce.

E-commerce trends

E-commerce sales have continued to grow against brick-and-mortar sales in every country recorded, with the fastest growth taking place in emerging markets, where increasing mobile phone ownership is redirecting consumers online. Meanwhile, consumers worldwide are turning away from cash – the global share of transactions carried out in cash has fallen from 89% to 77%in the past five years, according to a 2018 McKinsey report. Investment in e-commerce is a pretty safe bet.

That's not to say that e-commerce businesses should remain complacent. "Being on top of e-commerce trends is pretty key," said Alberto Gil, co-founder of both Hockerty and Sumissura, two online made-to-measure clothing retailers. 

This also means staying on top of old developments, like implementing a mobile website. "You need to develop one version, test it and keep iterating it," Gil said. "These developments are not static projects. They change along with users and technology."

We've identified six developments to keep an eye on:

1. Search engine optimization

There's no point in investing in e-commerce if you can't get anyone to your site. Advertising and social media can bring traffic, but at the end of the day, most sellers are still beholden to the search engine algorithm.

"Search continues to be the biggest driver of e-commerce sales," said Bryan Osima, CEO of Uvietech Software Solutions.  "All businesses cannot be Amazon, that is universally known by online shoppers. And there's always going to be a ceiling, in terms of reach, that your marketing efforts – online and offline – will hit."

Successful e-commerce companies will strategize by staying on top of Google's algorithm updates, which most recently have been tweaked to prioritize trust and authority. First Mats, for example, invested by improving their customer reviews display. "A large number of positive reviews could tell Google that our e-commerce business is one that provides great products and excellent service for our customers, and [it] helped us to get a boost in the search engine rankings," said Richard O'Connor, marketing and strategy director.

2. Mobile optimization

According to a 2019 Pew Research Center report, 1 in 5 adults in the U.S. rely on smartphones to access the internet, while nearly three-quarters of the world are forecasted to be smartphone-dependent by 2025. With so many consumers ditching the personal computer, Google has responded with "mobile-first" indexing, decreasing the rankings of sites not optimized for mobile.

As a result, online sellers are doubly incentivized to improve their mobile interface, which, according to Gustavo Carvalho, founder of Copahost, can be a "big pain."

Part of the issue is the constant treadmill of new devices being released, all with different screen sizes and resolutions, "And Google demands you be constantly updated on it," Carvalho said. "Say you optimized your site for mobile in 2018, but in 2019 Apple released a new version of iPad Pro, with a bigger resolution. Your site will be automatically outdated and will need updates to fit this new gadget."

With 62% of Copahost's sales made through mobile devices, however, mobile optimization has been well worth the effort. For that reason, Carvalho suggests running your URL through Google's mobile test and working from there.

3. Subscription model

So far, online shopping has favored nonroutine purchases, like clothing or electronics, in which consumers can more easily research and compare prices than in a brick-and-mortar store. Credit Suisse has since forecasted in a 2018 trend report, however, that future e-commerce growth will instead center around what they call "fast-moving consumer goods," such as groceries and toiletries.

If it seems unlikely to you that consumers are going to wait even one day for their much-needed toilet paper to arrive, you're probably right – hence the rapid growth of subscription-based retail, which does all the thinking for the consumer.

Chances are, you've probably heard of some these companies in podcast ads, Dollar Shave Club and Hello Fresh being notable examples. In short, the subscription model capitalizes on the well-known marketing rule of thumb that it's cheaper to retain an existing customer than acquire a new one.

4. Video marketing

Video marketing is hardly new, but it's growing. Cisco's Visual Networking Index forecasts that by 2021, 80% of internet traffic will be video. 

Clothing retailers such as ASOS and H&M are now pairing product photos with short videos of models wearing the garment, which not only drives sales but leaves customers feeling more confident in their purchases and less surprised by the result.

For now, anyone can take advantage of the free marketing opportunities offered by Facebook Live, Instagram Live and Snapchat. The next stage, however, may be AI-engineered video marketing.

5. Omnichannel retail

Omnichannel retail, in which products are sold both in-store, online, and sometimes even in between (e.g., click-and-collect), offers more than just a way to transition from brick-and-mortar to e-commerce.

"Omnichannel commerce is here to stay," said Abhi Lokesh, CEO and co-founder of photo decor brand Fracture. "Given just how many ways people can shop, it's critical that businesses think through how to provide a frictionless experience to a customer who might start online on their couch on their laptop, wander into the business's store a few days later and check the status of their order on their smartphone."

One difficulty that must be addressed in omnichannel retail, however, is tracking how sales are made – for example, whether a visit to a brick-and-mortar store drives online sales down the line – which may create the need to invest in consumer research. "What we're focused on is building the analytics and business intelligence infrastructure that is capable of tracking a customer's interaction with us, no matter how long or convoluted their buying journey is," Lokesh said. 

6. Voice command

Thanks to personal assistant technology like Alexa, ultra-optimized consumers are now making purchases with voice dictation. So far, such purchases tend to be low stakes – the platform is not necessarily optimized for in-depth consumer research – meaning it may be better suited for repeat purchases than Christmas presents.   

Voice command still has yet to reach mainstream adoption. According to both Gil and Osima, however, it's on the list of trend forecasts to keep in mind. 

Additional reporting by Nicole Fallon.

The 411 on the EEO-1 Pay Data

Posted: 01 Aug 2019 10:15 AM PDT

  • Employers have until September 30, 2019, to gather information about employee hours and pay rates, broken down by job category, race, ethnicity, and sex of your employees back to 2017.
  • There is a help desk at the EEOC accessible via email (eeoccompdata@norc.org) or toll-free at 877-324-6214 that can help.
  • The change is a result of a court case that involved the Trump administration overruling an Obama-era rule.

Earlier this year, employers were required to submit EEO-1 Component 1 data on employees. That means you need to gather information on the race, ethnicity and sex of your employees, separated by job category. Component 2 would be employee hours and pay information. But, in 2017, the federal government said part two would be unnecessary. There was a lawsuit, which overruled that decision. Fast-forward to today, and you have a deadline looming for a lot of small business owners.

How we got here

While the Equal Employment Opportunity Commission (EEOC) is on the verge of receiving an avalanche of pay data forms from many American employers, many companies are scrambling to locate, organize, and submit the newly prescribed data regarding the gender, ethnicity, and job category of its workforce.

This is all due to a March 5, 2019, ruling in the U.S. District Court of Columbia in Texas Women's Law Center, el al., vs. Office of Management and Budget, et al., (Civil Action No. 17-cv-2458 (TSC). In vacating the Office of Management and Budget's (OMB) stay of the EEOC's pay data collection tool, the court ordered OMB's previously approved and revised EEO-1 form to be in effect.

That left employers wondering if the court ruling meant pay data forms for 2017 and 2018 were to be filed by the prescribed deadline for the 2018 figures, which was May 31, 2019. However, in the spring, the EEOC informed impacted employers they are to file EEO-1 Component 2 compensation data forms for both years by September 30, 2019.

How the EEO-1 changes impact small business

The immediate impact on the affected entities is not surprising. According to Arthur Tacchino, founder and chief innovation officer of SyncStream Solutions, a Pennsylvania company offering EEO-1 and Affordable Care Act (ACA) compliance solutions, many companies "are scrambling around to locate that info for 2017."

Meanwhile, company owners are not the only people scurrying to meet the new filing requirement. While the September 30 filing date is clear, "the EEOC is not even able to accept the info," yet, says Tacchino.

People seeking assistance in complying with the new ruling would be wise to send an email to the EEOC rather than searching for online help. That's because the EEOC opened a help desk in June accessible via email (eeoccompdata@norc.org) or toll-free at 877-324-6214.

According to the EEOC website, Component 2 EEO-1 file layout specifications and accompanying Excel files for 2017 and 2018 were made available July 11 in its More Info and Additional References section. Employers should have received system login information via USPS and email on July 15, 2019. Meanwhile, a secure file upload function and validation process are expected to be available by mid-August.

What you need to do now

The court ruling in Texas Women's does not require every American employer to provide the EEOC with gender, ethnicity and job category statistics for 2017. Rather, employers, including federal contractors who had 100 or more employees during the 2017 workforce snapshot period, must submit the data.

Companies, including federal contractors which employed 100 or more workers during the 2018 workforce snapshot window, must file the Component 2 compensation data forms for that year. A workforce snapshot is defined as a pay period falling between October 1 and December 31 of the reporting year.

Federal contractors with staffs numbering between 1 and 49, and private employers with 1-99 employees are not required to file either EEO-1 Component 1 data or Component 2 data forms.

According to Terese M. Connolly, a partner in the Labor and Employment department of Culhane Meadows PLLC in Chicago, the data to be reported applies to employees on payroll during that snapshot window who also report end of year.

The component of pay and hour data is an "added component" to the ruling, she says.

Moreover, when employers create their reports, they are to base their determinations of which employee's data should be included utilizing the definitions promulgated in the Fair Labor Standards Act, grouped by EEO-1 categories, says Connolly.

To report the requisite data on the EEO-1 form, employers will need to locate the information first. If a company outsources its paycheck services to a third-party vendor, that's where the search for the information should begin, says Connolly.

"It's a data compilation nightmare," she says.

The history of EEO-1 pay data

The seeds for the Texas Women's case were planted during the Obama administration. At that time, the EEOC planned on implementing new data reporting requirements of employers to begin in 2017. However, when President Trump took office, he decided to allow the OMB to determine if it wanted to implement Obama's promulgations. It did not.

The basis of the Texas Women's case was its desire to have the EEOC expand its data reporting requirements to study discrepancies in workforce statistics. The organization wanted additional data regarding the gender, ethnicity and job categories of employees covered by an EEO-1 filing to support its efforts to push for legislation that would fight wage discrimination. It also urged the EEOC to bring claims against Texan employers accused of wage discrimination, says Tacchino.

"A lawsuit was filed because they wanted the additional reporting requirements but Trump did not," says Tacchino. In rejecting the Obama plan, the OMB argued the Paperwork Reduction Act precluded the collection of the data. However, the District Judge spurned the EEOC's argument, ruling its actions had been "arbitrary and capricious."

Assuming the district court's stay is affirmed on appeal, meaning the additional reporting requirements remain in effect, Tacchino isn't sure the link between its stated goal of gathering employment data for discrimination analysis is compelling. He's not alone.

The U.S. Chamber of Commerce, the Society for Human Resource Management and more than a dozen other employer organizations have expressed disdain about the expanded requirements.

"They believe, and I agree, that the data being submitted is too vague for a true analysis. For example, they argue that the EEOC job categories are very broad, and it is conceivable that employees of very different job scenarios could fall under the same EEOC job category, but their pay may be justifiably different. This could create a false positive for pay discrimination. An analysis done by the EEOC can also not take into account other pay determining factors, such as education level, length of employment, and more. Because of this, the analysis the EEOC is proposing cannot truly be accurate," said Tacchino.

Connolly agrees. "Some people argue you may not get the desired information since proxy hours can be used."

Why You Need to Accept Mobile Wallets at Your SMB

Posted: 01 Aug 2019 09:15 AM PDT

  • The use of mobile wallets is on the rise.
  • A mobile wallet is defined as any smartphone capable of making financial transactions.
  • There are many types of mobile wallets from companies like Square and GoPayments. - Many smartphones now include mobile wallets as a built-in feature.

When Apple Pay was introduced in 2014, many people scoffed at the idea that a smartphone could replace cash and credit card transactions at the point of purchase. Today, mobile payments are on the rise. By next year, mobile payments are expected to increase to $250 billion by 2024, according to MarketWatch.

Several factors are converging to drive this growth: the proliferation of smartphones (about 96% of Americans use them); enabling technology; lifestyle changes; demand for improved customer experiences; and the need for fast, easy, and secure transactions.

Millennials are currently the largest audience for mobile payments – nearly half the people in this age range report using a mobile wallet.

Over the last few years, top technology innovators like Apple, Google and Samsung have advanced the mobile payment industry by introducing next-generation mobile payment apps, making mobile payments more accessible to more consumers. And companies like Paytm and Square have dominated the mobile wallet market.

Credit card companies are finally adopting the idea of mobile payments. Increased merchant support for the technologies across point-of-sale (POS) terminals is expected to fuel mobile payment growth in retail, according to Allied Market Research.

For small businesses, accepting mobile payments can improve customer experiences, streamline processes and reduce transaction costs, to name just a few benefits.

Some industry experts say that adopting mobile payment technologies is one way to future-proof your business. But does it make sense for small businesses to get on board now?

To help you weigh the pros and cons, here's an overview of mobile payments, potential benefits and the technology needed to support them.

What are mobile wallets?

As a broad definition, a mobile wallet involves any technology that turns your smartphone into a wallet capable of making financial transactions. This can also involve making credit card payments, relying on near-field communication technology (tap to pay), and often includes other incentives, loyalty programs, and coupons available to customers.

The clear advantage has to do with "contactless payment," which typically involves a near-field communication (or NFC) technology. Phones such as the Samsung Galaxy S10 use NFC so you don't have to swipe a credit card; you simply place the phone on a reader.

Mobile wallets work in the store for small business transactions, but they can also be used for online payments. It's a way to avoid carrying a real wallet or purse, and for customers to pay using one device. Mobile wallets do not technically use a credit card but use encrypted tokens.

Of course, the mobile wallets complete the transaction with your existing credit card. For example, Apple Pay can be linked to your bank card or a credit card.

With various digital wallet apps, a smartphone can be used to make payments, record and redeem loyalty rewards, replace paper boarding passes, convey personal identification, and transmit credentials that grant access to secured doors and rooms.

One important factor with mobile wallets: According to the Small Business Administration, small companies should definitely consider a marketing and sales strategy based on mobile wallets and their popularity. It's tempting to jump in as a retailer or other small business with the accepted transaction process, but including mobile wallets can help with long-term strategy and planning, and they can help you grow your business. 

How safe are mobile wallets?

Mobile wallets come with preinstalled security features designed to stop anyone else from using your account. Whereas credit cards are easy to scan or steal, mobile wallets are easier to keep track of and usually include encryption technology.

You can also set up security measures to prevent unwanted users from using the mobile wallet app – this can include a face scan, fingerprints, a PIN or a password.

Mobile wallets are harder to steal from because they are harder to replicate.

Usually, people hang on to their phones more than their wallets. If someone loses their wallet, all their cash is gone. If someone loses a phone, the lock on the phone and the app protects against theft. The downsides have to do with the phone dying right when you need it for a mobile payment, a bug that prevents the traction from working or user error.

Although there's been a lot of concern about security, mobile payments are more secure than other forms of payment. Customers don't have to worry about leaving a credit card behind at the terminal, and since the data for mobile payment is encrypted, the risk of data theft is reduced. This can build stronger trust between merchant and customer. If the phone is lost or stolen, it can be locked. Plus, many systems offer fingerprint identification to verify a purchase.

Mobile payments and digital wallets should be integrated with traditional payment forms. You'll want to continue offering all the forms of payment you currently accept in addition to digital wallets. As mentioned previously, mobile wallets should fit an overall sales plan.

How do mobile wallets make money?

Mobile wallet app companies earn a percentage (usually between 2% and 20%) from every purchase made through the mobile wallet app, depending on the purchased product. This happens through service tax and transaction fees. For example, Paytm.com has a 1.99% transaction fee and charges a .30% service tax.

The most common method of mobile wallets making money, though, has to do with business-to-business partnerships. Companies like Paytm can operate a bit like a bank, and you can expect the inevitable added charges for reporting, additional transactions, and added security.

There are additional revenue models as well. Mobile wallet providers might also partner with other service providers and vendors, offering deals and incentives. If you, as a small business owner, decide to sign up for a subscription to a credit card provider or a bank, or if you purchase tickets through a vendor that's a partner, the mobile wallet company earns a commission.

How do you accept mobile wallet payments?

Setting up mobile payments is generally fast and affordable. To accept mobile payments through digital wallets, you need a digital wallet provider, such as Apple Pay or Google Pay.

There are dozens of digital wallet companies from which to choose. Talk to your existing payment providers to see if they already work with mobile payments and digital wallets.

For online businesses, you'll likely need to add a module to your current shopping cart software to accept mobile payments. For brick-and-mortar businesses, you'll need a reliable internet connection and a POS terminal that accommodates mobile payments in addition to the other forms of payment your business accepts. The scanner or terminal cost should run no more than $500 or, depending on the mobile payment provider, can even be free.

Companies like Square, GoPayment, and ROAMpay can assist the small business by offering a terminal (sometimes for free or at low cost) to make a proprietary mobile wallet payment faster and easier. There may also be a small transaction fee associated with the terminal itself.

Mobile payments help a small business reach more customers. The business model for mobile wallets fits perfectly with the growth in smartphone use. We're relying even more on these devices as consumers, so small businesses can tap into that trend even more.

How to Improve Your In-House Customer Service Team

Posted: 01 Aug 2019 09:00 AM PDT

It turns out that the way you handle your customer support strategy has a dramatic impact on your customers' overall experience with your brand. It also influences what consumers say about you online and even affects the perceived value of your company. In other words, a product seems far less valuable if there's no competent service team to help consumers with questions. 

We are going to look at three ways you can enhance your customer service strategy and team:

  • Types of customer service teams, and how and why they work together
  • Why you should use chatbots alongside your live chat team 
  • The benefits of analyzing feedback forms

Understand the three types of customer service teams

Speed and accuracy play a massive role in the way people see companies. Now that we can communicate with people around the world in seconds, customer patience is all but gone. When a consumer has a question, they expect someone to respond to their concern in 10 minutes or less. 

The best way to improve your speed and accuracy is by connecting all of your customer service channels. Most businesses have three different teams that communicate with consumers. Marketing teams are responsible for finding and adding customers to the company lead list. The sales team is there to close the deal with leads and prospects. Finally, the support team is there to provide service to your customers after they've made a purchase. 

Cross-train service teams and share CRM software

Many companies struggle with finding a balance between these three important groups of people that work with your customers. Let's say someone contacts your business because they have a question about their purchase, but they accidentally get directed to your sales team. The customer has been on hold for five minutes and spends another seven minutes explaining their issue to the representative. 

If the sales agent can't help because it's a post-purchase customer, they will have to transfer the caller to the support team. The consumer is already frustrated. Now they will be placed on hold again and will have to explain their problem to another agent. This customer will probably remember this experience, and it could have a severe impact on whether or not they shop with you in the future. 

You can solve this problem using several different tactics. First, we recommend cross-training all of your customer service agents. Then, they can help consumers who get routed to the wrong department if they have a question that has a fast and easy answer. 

Besides training everyone to handle fundamental problems in each department, it's also helpful to work within one CRM system. Some businesses have separate chat channels that they use, specifically in sales and support. When a customer needs to be transferred to another department, it's nearly impossible for the agent using a different system to understand the purpose of the call without another explanation. If you use one channel for all your customer-facing teams, all notes and previous conversations are shared between them. When a customer calls in, all of their information on past calls and messages are available, which makes helping customers easier. 

Editor's note: Looking for the right CRM software for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

 

Add a chatbot for common questions and concerns

Stress is a major contributing factor when discussing your teams' quality of work and productivity. If you could reduce the burden of your support team while improving the user experience of your customers, you would, right? Chatbots are an excellent way to enhance the overall quality of your service and can have a positive impact on the way consumers interact with your brand. 

There's a common misconception that when businesses switch to chatbots, they get rid of their core customer-care team. The truth is that companies still need real people on the front lines helping customers. Instead of using a chatbot to take over your support, consider it as a resource that can quickly solve common concerns and questions your customers may have. This allows your team to focus on helping the customers who have complex issues. 

Chatbots can handle basic questions about product promotions and pricing, and can direct customers to your blog when they have questions that you've already answered. This incentivizes business owners to create content that provides value by educating and answering consumer questions. Also, consider that high-quality content can drive your traffic by over 2000 percent!

Once you start using chatbots to help customers with everyday issues, you should see a drastic improvement in your customer service team. Instead of dealing with 500 or more tickets a day, most of which are repetitive questions with a simple solution, your staff may have only to handle 50 complicated tickets per day. The reduced stress and additional time will help your support team focus on individual customers, while the people with common questions get instant answers. It's truly a win-win situation for businesses and consumers.

Analyze customer service feedback

Examining feedback forms is one of the best ways to improve your support team. Positive feedback is excellent, and your staff should feel good when someone submits a glowing feedback form. However, if you're looking to use this information to improve your service team, the negative forms provide the most value. You can learn what kind of barriers your customers are facing and how you can better bridge the gap between their initial purchase and success with your product. Depending on your business model, particularly those in the SaaS field, closing the gap may take years. 

If you're regularly checking customer satisfaction forms for areas of opportunities, you may begin to notice many people having the same thoughts or concerns. For example, you might discover that consumers feel like your marketing team doesn't explain the benefits of the product; this is an area for improvement. Similarly, you can find design flaws through these forms. If customers complain that it took them a long time to find the chat channel, you may have to consider the placement and fix your design. 

When you're aware of the common problems your customers are facing, you can prep your service team to address these concerns when talking to future customers. The result is a support representative that's confident, concise and helpful. 

Conclusion 

Improving your customer service team is an ongoing process. You'll never master it because it's continually evolving. For example, think of how phone-support teams were forced to switch over to online support after businesses recognized that this was a better way to reach their customer base. 

There's no doubt that this change made both the employees and business owners realize that things can change drastically in a few short years. Since you can never master support, the best you can do is continue to improve. You have to remain flexible and willing to adapt to both the needs of your customers and the blisteringly fast-paced growth of technology. 

It's hard to say where customer service technology will be in the next 10 or 20 years, but you have to remember that as long as you are willing to put customers first and strive to improve your support team, success is at your fingertips.

How Transparency Empowers Your Business

Posted: 01 Aug 2019 07:00 AM PDT

Transparency represents all of those expectations and more because it nurtures trust. According to one survey, 35% of professionals said they would look for new jobs if they could not trust their managers. When leaders are open and candid with their teams, they don't just earn people's confidence – they create an ongoing dialogue that proves they value everyone's input.

Despite the advantages of transparency, plenty of companies continue to operate opaquely. That sort of environment breeds anxiety and mistrust, and it can make it difficult for companies to pivot when necessary. If people have no idea why you are making changes, they naturally are going to resist those shifts. As long as you are straightforward about what's happening, they will do whatever they can to help the company succeed.

For too long, leaders were content to take an "out of sight, out of mind" approach to business functions. As long as everything seemed like it was working, they thought it was best not to disrupt the status quo.

But technology can be the key to shaking up the status quo that hinders growth and ultimately breeds resentment. Leaders should see technology as an ally in cultivating the sort of transparency that can help them build healthy, energized organizations that provide clients and customers with top-notch service.

Innovative companies take transparency to the next level

To use the financial industry as an example, firms such as Betterment and Wealthfront are thriving because of their innovation and transparency. Their founders developed business models around the concept of democratized investing, which clearly struck a chord with consumers. Unlike the industry's old business models, in which a money manager's incentives sometimes conflicted with his or her client's best interests, investment startups are lowering costs and breaking down existing barriers through the power of transparency.

Wealthfront, for example, offers automated investments in 11 different asset classes. The platform has each user fill out a brief questionnaire when creating an account, which enables it to identify risk tolerance. Wealthfront – and other industry disruptors – have clear and easy-to-find fee structures, relying on robo-advisors to help customers meet their financial goals based on mathematical rules and algorithms.

Entrepreneur Al Goldstein has staked his consumer lending startup on the exact same concept. He and his partners at Avant plan to serve 40% of American consumers with a hyper-transparent banking platform. Why? They have realized that this transparent business model is the way of the future.

Avant has disrupted the lending sector by using its proprietary software platform and machine learning to lower the risk of borrowers defaulting on loans. The company pairs customer data with machine learning, analytical tools, and algorithms to determine customized rates, amounts, and lengths for its loans – leveraging technology to change the lending game.

Amazon has applied a similar mentality to its offerings. The company thrives by promising consumers three things that never go out of style: more, faster and cheaper. All three qualities are tied to transparency and lie at the heart of customer loyalty. In one study, 94% of respondents said they are loyal to transparent brands; in the same survey, 73% of respondents said they would be willing to pay higher prices if it meant they were doing business with fully transparent companies.

Like these companies, you can use technology to build a transparent and open business model. By emphasizing transparency internally and partnering with vendors that prioritize it along with empowerment, you can create a strong and sustainable organization.

Build transparency into your company's DNA

Transparent, democratic leadership invigorates employees and improves customer experiences. Creating a transparent culture enables everyone to buy into the same vision and also promotes trust and accountability. Most importantly, it makes employees feel that they are valued contributors to something bigger than themselves.

Here's how to use technology to develop a culture of transparency in your organization:

1. Establish an open policy on financial data. Employees value transparency more than any other workplace attribute, so you should share what's happening in the company with them. Don't get hung up on your financial data ending up in the wrong hands; set guidelines for information that must stay in-house and trust that your team members will honor those rules.

Hold regular meetings to review company financials so that people feel motivated in good times and bad. If you only open up during a crisis, your appeal to their loyalty will ring hollow.

2. Encourage mutual communication. Great ideas can come from anybody and anywhere. Be open and willing to change if an employee offers a better idea. Use technology to share new initiatives and mistakes, listening sincerely to feedback from your team members and customers alike.

Netflix has a saying: "We help each other be great." One way the company supported its motto was by implementing more transparent compensation policies in response to employee input. Netflix's success with this approach provides a good example for companies that might be interested in adopting similar policies.

Your employees know what works and what doesn't, and they can improve the organization with fresh ideas.

3. Nurture creative thinking. When you share what's happening within the company, expect – and embrace – plenty of pushback as well as new ideas. The best innovations sometimes come from unlikely sources. By nurturing their creativity, you will encourage your team members to stay sharp.

You will also attract and retain high-performing people who seek new challenges. You can help your organization remain competitive and creative by providing a supportive environment in which people feel free to experiment, fail and iterate.

A truly transparent future

Fast-scaling companies such as Wealthfront are built on the concepts of transparency and democratized information. With more than $11 billion in assets under management at Wealthfront – and another $16 billion at Betterment – the idea clearly is catching on with consumers.

People value having their voices heard and feeling like they are part of something bigger than themselves. If you are more concerned with corporate processes and chain-of-command, it's going to be incredibly difficult to attract the best and brightest individuals to your team.

The companies in the best position to succeed are those that keep their teams stocked with high performers capable of fast decision-making. Freedom and responsibility backed by a culture of transparency and candor should be among your highest virtues.

The archaic cloak around businesses and employees is over – consumers don't need complicated business models with layers of fees baked in. Amazon, Wealthfront, and Betterment have shown us simpler value-added models that customers prefer. And as far as employees are concerned, they are the human extension of these organizations and need transparency to serve their overarching missions. If there are extra layers, extra costs, or unnecessary processes, transparency will seek out a better way.

Business environments change rapidly in this digital culture, but transparency will remain a constant. Employees are not willing to be kept in the dark. They want to know who they're working for, how the company is doing and how they can make a meaningful contribution. Using technology as a tool to keep your company an open book will empower employees, make customers happy and provide opportunities for your business to grow and improve.
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