Author Archives: brian

Value Vs. Price and Buying Local in Hawaii

I had two interesting conversations within minutes of each other last week—one with a client and one with another small business owner in Kona who was not a client.

I was helping the person (who was not a client) re-hang a banner that had fallen down. I noticed that it was of very poor quality, both in terms of printing and materials. In fact, the reason it had fallen down was that it was not hemmed and only had plastic tabs in the corners, which had ripped.

I asked the person where he got the banner, and he quickly answered:  “I got it online. I am a small business owner, and I need to save money.” I asked him what he paid for the banner including shipping and the cost of her time to set up and design the banner. He looked perplexed and said, “I paid $75, including shipping. My time was free.”

A few things came to mind immediately:

  1. How can he expect people to buy locally at his store if he is unwilling to do so himself? After all, what he sells can be bought online, and, I would suspect, that his products can be bought more cheaply online. He wants others to do what he is unwilling to do.
  2. His time is not free! If he spent an hour with the design and order process, that’s an hour he could not spend doing something else. Is his time worth $30, $50 or $100 an hour?
  3. If he had talked to us about his banner needs, we would have come very close to what he paid online. Kona Impact also would have had it done in one business day, and if it didn’t turn out right, he could have resolved the issue quickly.

About 30 minutes later, a client stopped by to pick up some things, and, as we do when time allows, we spent a few minutes “talking story”. This business owner is very successful, has probably 100 employees and lives a very comfortable life.

She never asks about price; instead she is very focused on getting the projects done quickly and to a high degree of quality. She is very focused on moving forward and growing her businesses, and she knows what she knows and knows what she doesn’t know. She is great at delegating.

The guy is clearly a price shopper; he only looks at the price tag and makes his decisions (however erroneously) based on cost. Value, personal connections, community and his own time are far less important to him. For certain, there are many people who approach business the same way.

Cheap Work Aint

The woman is a value shopper. She understands that price is part of the equation, but time, quality, durability, community, personal relationships and developing reliable suppliers are also important.

The woman, I’m certain, is a very wealthy; the man, I’m certain, is not.

If you’re purely a price shopper, give us a call, because you might be surprised.

If you’re a value shopper, definitely give us a call, as we’ve based our business on providing value to our clients. Whether it is same or next day service or sharing our local knowledge and connections, we strive to provide our clients with superior products and services.

Kona Impact | 74-5599 Luhia Street | 329-06077

Holiday Schedule

The Kona Impact office will be closed on Thanksgiving Day and Friday, November 28. We will re-open on Monday, December 1.

Enjoy your time with friends, family and loved ones.

Online Marketing Email: What is a Scam and What Isn’t?

If you have a website you have, not doubt, received many email offering you website design, search engine optimization, search engine marketing and social media marketing services.

If your own and operate many websites like we do at Kona Impact, you will receive tens of these email a day, as well as a handful of cold calls and other pitches.

How do you know what is a genuine and useful service?

Here are a few that should definitely avoid:

  1. Search engine submission. The value of this is almost nothing. It used to be that we had to tell the search engines to review our website. Nowadays there are only three search engines of value: Google, Yahoo and Bing, with Yahoo and Bing sharing data. They control well over 90% of searches, so take a few minutes and go to the Google , Yahoo  and Bing and you’ll have done what you need to do.
  2. “Guaranteed #1 on Google.” This cannot be guaranteed and any company that does is lying. Note: you can buy ads on the search engines, but you will only be shown as long as you keep paying.
  3. “We reviewed your website and found several problems…” Chances are they have not reviewed your website, and chances are your website does not have any or many critical errors. All websites have some technically incorrect code or design elements, but the true issue is: do these “errors” affect usability in important ways?” Chances are “no.” The content on your website most likely can improve and this is where hiring professional help can make a difference.
  4. Link building. Links to your website are a major factor how Google and the other search engines judge and rank your pages. That said, almost all (ok, all!) link building schemes are highly suspicious and can have the unintended consequence of lowing your ranking or getting your website removed from Google.
  5. “We have uncovered a secret formula for higher rankings” If you had a secret so powerful would you tell anyone? The fact is there are hundreds of elements to how the search engines rank websites. We know many of them and have a very good idea what is very important and what isn’t. Someone who claims to have proprietary information is lying.scam alert

We advise most of our clients not waste their time responding to spam email because 99% of them are for services that do not work in the long term.

What we recommend is that people go online and search for companies that offer the services for which they are interested. If a company ranks well on Google for “social media marketing” it is likely to be good at what it does: help businesses be found. Compare companies and ask a lot of question. Go over their websites and make sure you know what you are and aren’t getting. One thing you’ll find is that most spam email does not have an established company behind it.

And, of course, if something looks too good to be true……you know the rest.

If you are in West Hawaii and need some reliable, honest help with your online marketing, give us a call: 329-6077.

What is the best material for signs?

Most of our signs are printed and mounted on some material. Banners and posters are the exception: they are printed on the material on which they will be displayed: banner material and some sort of paper.

Other signs, however, are printed on vinyl or adhesive-backed paper and mounted to a substrate. Use will determine your substrate.

Here are some of the sign substrate options.

Foam Core

Foam core is a 3/16” material that is ideally suited to temporary indoor displays. Many academics and companies use foam core displays for conventions, trade shows and conferences. We typically print on an adhesive-backed paper and mount that to foam core.

The benefits of foam core include:

  • Lightweight
  • Inexpensive
  • Rigid, making it ideal for displays on easels, and, flat surfaces

The downside of foam core include:

  • Easy to dent and ding – Doesn’t travel well
  • Low resistance to water and humidity

Gator Board (sometimes Gator Foam)

Gator board comes in many widths, but the most commonly used is 3/16”. Like foam core it is used a lot for indoor displays and wall graphics. Like foam core, we usually print on adhesive-backed paper or vinyl, and then mount that to the Gator board. It is an excellent alternative to foam core, especially when a more durable material is desired.

The benefits of Gator board include:

  1. Relatively lightweight
  2. Rigid and resistant to environmental factors like humidity
  3. Does not dent or ding easily

Gator board does have a few minuses:

  • Relatively more expensive than foam core
  • It can break in extreme circumstances

PVC

Extruded PVC, a solid, yet flexible material makes for an excellent substrate because of its ability to last a long time outdoors. It comes in 1/8”, 3/16”, ½” and 1”. It’s an ideal material for outdoor signs and indoor signs that need to last a long time.

The benefits of using extruded PVC include:

  • Long outdoor life
  • Will not rot or separate
  • Easy to drill through and mount

In a high-heat and high-sun environment, PVC can warp if not mounted solidly to a building or sign frame.

Aluminum

Aluminum is the most costly common sign substrate. It can be difficult to work with, requiring a dedicated workshop. At Kona Impact, we do have a workshop facility to cut and prepare aluminum substrates.

Aluminum comes in many gages: we typically use 040, a flexible, yet hard aluminum material. We also work with thicker aluminum substrates and do have aluminum with an enamel finish. These are ideal for relatively small building signs.

Aluminum’s down side is cost, but it is a great material cut vinyl signs and long-term building signs.

What about wood?

Wood is generally a horrible substrate for signs. It’s not smooth and requires a lot of sanding and special paints to make suitable for any kind of vinyl material. Latex paint is usually made to be cleaned, which means it is not made for things to stick to it. Wood is also porous and will absorb moisture, which will cause it to warp. If you need another reason: termites.

At Kona Impact, we want our signs to look great and last as long as our clients want to use them. There is always a balance between cost, quality and durability. Want the highest quality and durability, and you’ll pay the most. Signs are no different from most goods in that regard.

We encourage businesses to give us a call and discuss their sign needs. We can usually present a range of materials and for a range of budgets. Give us a call at 808-329-6077 to get started.

Local Marketing 2014: Reaching the “Unreachables”

Local Marketing 2014: Reaching the “unreachable”

I was having a chat the other day with a few friends about how much some us have become “unreachable” by traditional local advertising.

We went through a list:

Phone book? None of us would admit to open a phone book in years.

Radio? We all listen to streaming radio like Pandora or Amazon Prime, public radio or audiobooks. None of us listen to commercial radio stations.

Newspaper? Only one out of five of us subscribe to the local newspaper, and the one that does reads it in a matter minutes, just skimming for the sports scores and reading the comics.

Television? All five have unplugged from cable TV. That doesn’t mean that we are not watching TV; we all use some form streaming TV: Netflix, Hulu and others.

This is a pretty resounding rejection of the main sources of media of our fathers. We all grew up with TV, radio, newspapers and yellow pages, but none of them have any impact on us now.

So, if you’re a looking to sell your services or products to people in your community, how can you reach them?

Here are ten ways that we use in Kona, Hawaii with varying degrees of cost-effectiveness:

  1. Locally-optimized websites. If you don’t have a website optimized for local search, you’re missing a huge opportunity.
  2. Lots of positive local reviews. Encourage your satisfied clients to review you on TripAdvisor, Yelp! or Angie’s List. Solve the complaints of your unsatisfied customers. If you get a back review, learn from it!
  3. Postcard marketing. Everyone still reads their mail!
  4. Storefront and business front signage. If you have traffic going by your business’ window, you have a marketing opportunity.
  5. Vehicle advertising. Whether its magnet or cut/printed vinyl, your vehicle will be seen hundreds of times a day; make it work for you.
  6. Community involvement. Rotary, Lions, paddling clubs, etc. are how people meet and make connections. Get involved and people will notice!
  7. Farmers markets, Village Stroll, community events. Do what you can to get your name and products in front of buyers. If you sell coffee, your sales will increase if people can taste it!
  8. Hit the pavement! Get out and drop off flyers or samples to potential customers.
  9. Local advertising on Google, Facebook and Bing/Yahoo. You can limit your ad displays to your local market. Many businesses overlook the power of local online advertising.
  10. Hire a blimp. (OK, this is not a serious suggestion; just want to see if you were still reading!)

If you’re business is still stuck in the 1990s for marketing, it’s time to take a look at some new ways of reaching new customers. For certain, the number of people unreachable by traditional marketing tools is going to grow considerably in the future. Savvy business owners know this and have begun to change their marketing mix.

If you need help with your marketing mix, give us a call at 329-6077. We’ve helped hundreds of local businesses get found and grow.

local marketing

Advice for New Businesses in Kona, Hawaii

The previous blog was on Start-Up Business Mistakes. This blog focuses on some things new start-up businesses in Kona, Hawaii should consider in the business planning stages.

  1. Avoid the highly competitive business sectors. Fishing charters, manta night snorkel tours, burger restaurants and massage therapy are very over-represented in Kona. Find a different take on these ideas and you might have a business.
  2. Find a high margin business that doesn’t require you to compete on price. Most business owners vastly underestimate their costs and overinflate their sales projections. Solar, up until recently, has been a high margin business that did not compete on price. Now, with many new entrants into the area the past few years, that may be changing.
  3. Market your business creatively. Spending a boatload of money on radio or newspaper ads will only reach a relatively small percentage of the local population. Work on word-of-mouth advertising, community engagement and online marketing.
  4. Plan for a tough first year. Make sure you have enough to survive at least six months, if not a year, before you begin. Your expenses will be high; you can count on this.
  5. Be realistic. Someone else has thought your idea before you. Why did they not pursue the idea? Or, have they pursued the idea and failed? It might just not be that great of an idea. I can remember one water activity business we worked with at Kona Impact that was just boring. After 5 minutes doing the activity, I was bored. It was just a really bad idea and not something that people would spend their money or time on. They were in and out of the market in six months.
  6. Consider buying an established business. Look at the financials, talk to customers, clients and suppliers. Paying a premium for an established profitable business might be a good idea, as a lot of the risk will be gone.
  7. Location matters. Restaurants in alleys and off the beaten path pay much less rent, but suffer from very poor visibility. Parking, especially in the Alii Drive area, is troublesome, so much so that many locals avoid trying to shop in that area. The Old Industrial area is inexpensive, but it’s a ghost town at nights and on weekends. South Kona is lovely, but the population and wealth Is in North Kona. The Waikoloa resort area has high rent, a lot of visitors, but your business will be tied to the visitor industry and the ups and downs of seasonal fluctuations in visitors.

At Kona Impact, we know that business is hard on a good day and incredibly frustrating on a bad day. After nearly 3,000 projects in the Kona community with hundreds of companies, we have a good sense of what works and what doesn’t work. If you would like to put our experience and knowledge to work for your business, give us a call at 329-6077.

your success is our goal

Kona, Hawaii Start-Up Business Mistakes

Anyone who has been in business in Hawaii knows that doing business here can be difficult. This is probably true of almost everywhere, but Hawaii does offer some unique challenges. They include local customs, unique market conditions, isolation, high costs, permits and the permitting processes, taxes, insurance requirements and many others.

Here several things that many Hawaii entrepreneurs often miscalculate, disregard or completely overlook when starting businesses in Kona, Hawaii.

It’s Not a Huge Market

The population of Hawaii Island, which is called the Big Island for obvious reasons, is only about 175,000 people with the population in Kailua-Kona only about 12,000. There are approximately 1.5 million visitors to Hawaii Island a year with two-thirds of these coming to the Kona side, which includes the main resort area of Waikoloa 30 miles north of Kailua-Kona.

The take-home lesson is that we don’t have a large resident population, and the tourist population is big, but when you consider where they go—mega resorts on the Kohala coast—many of their dollars are not spent at locally owned businesses.

Everything Will Cost More

Gas today (8-13-14) is $4.30/gallon; a gallon of milk is $5.50. New vehicles often have a “local area markup” of $5,000, and a basic starter home on the Kona side will set you back at least $400,000. Many people come here from the Mainland to start a business and completely underestimate the costs of getting a business going and living here.

Traditional Marketing Options Don’t Work

There is no Kona television station, only one newspaper and the radio stations (like everywhere else I suppose) are highly fragmented. Roadside signs are mostly prohibited. Like everywhere else, the yellow pages have ceased to be effective long ago. Add to these, the trend for many households to stop cable TV subscriptions, and you have a residential population that is very hard to reach. If you are marketing to tourists, you will have to work with booking agencies and concierges who will take 20% (or more) of the booking revenue.

Mother Nature Can Change the Game Overnight

Kailua-Kona has an inactive volcano, which last erupted 200 years ago, on one side and an ocean on the other side. A large part of our oceanfront retail area suffered significant damage from the tsunami coming from Japan in 2011. In 2006, we had an earthquake that caused a lot of damage. In August of 2014 a storm just below the level to be called a hurricane hit the east side of the island causing substantial damage. So, you have dangers from lava, earthquakes, hurricanes and tsunamis that can become overnight game changers for local businesses.

Kona Impact has been helping start-up businesses in Kona, Hawaii navigate these often treacherous waters for years. We offer a complimentary initial consultation and specialize in developing design and marketing solutions for businesses of all sizes.

hawaii flag and man

KonaCoffeeFarmForSale.com

At Kona Impact we deal with maybe 250 businesses a year. Most of the businesses are well-run and provide a good living for the owner. We look at many of them and say, “good for them.”

A few businesses we work with every year, however, are businesses we would like to own. Some are just widely innovative and create a good lifestyle for the owner. Others are very profitable and do well for the owner.

One business that is innovative, provides a good lifestyle for the owners, and is profitable is Pele Plantations. They have taken a beautiful piece of land in South Kona, built a gorgeous custom home on it and have developed an innovative Kona coffee business that can be run from their farm. Few opportunities exist where you can live in paradise, grow gourmet Kona coffee and run a successful business from a very nice home.

If you have any interest in owning a home, farm and business in Hawaii, check out, Kona Coffee Farm for Sale.

Kona Coffee Farm for Sale

How Much Should I Spend on Online Advertising?

I had a good conversation with a client about this the other day. He asked, “How much should I plan on spending on online advertising?”

It may seem like a fairly basic question, but it’s not. It’s an excellent question, one that goes to the fundamental issues of business and marketing.

One answer is that you should spend a million dollars on advertising if you can sell a million and one dollar’s worth of product. This, however, does not take into account the cost of the product and the opportunity costs of doing something else with your money.

The answer I like to give is this:

What is the lifetime value of a customer for you? If you are selling a consumable product, organic mac nuts, for example, you might expect the average customer to buy a few times a year for a few years. Factor in single purchases and client churn (how many you lose a year) and you might find the average new customer is worth $100, on average, in lifetime orders. Some will re-order frequently, and some will order only once.

Then figure out your lifetime profit for an average customer. That is, for the $100 in sales, how much do you make after you subtract all of your costs (this is a very hard number to get right!). You might be left with $50 for a very high margin product like mac nuts or $5 for a commodity like pencils.

The next step is to run some test campaigns on the pay-per-click platforms: Google, Bing/Yahoo and Facebook. Write solid, targeted ads and let them run for a few weeks. Make sure you have tracking installed on your website to be able to identify the source of your sales.

After a few weeks you’ll have some data about customer acquisition costs. How much does each new customer cost?

Let’s imagine that you have the following numbers:

  • $500 in sales directly attributed to pay-per-click ads
  • $50 per customer, 10 new customers
  • 30% profit on sales
  • $15 profit per customer on first order, on average
  • $75 lifetime value of new customer
  • $100 spend on pay-per-click ads

So, in the single transaction, the net profit way of looking at the advertising, you would have spent $100 to make a $150 profit (10 sales @$50 each with $15 profit each). Not bad, but not spectacular either, as you probably have more expenses than you realize.

But if you look at the lifetime value of a new customer, the numbers look much better:

10 new customers x $75 lifetime value of the customer x 30% margin: $225 return on $100 investment.

So, if you had these numbers, it would make sense to increase advertising dramatically, as you are getting a 225% return on your advertising dollars.

online-advertising-spending

The key is to keep monitoring your advertising and make sure that the customer acquisition costs and the lifetime value of a customer do not change for the worse. Our experience at Kona Impact is that the cost of each new customer gained through pay-per-click is fairly constant, and if we fine-tune our ads, the cost can go down.

So, the answer to the question about how much you should spend on online advertising needs to take into consideration advertising cost, customer acquisition costs, profit margin and the lifetime value of a client.

The take away lesson is that a data-based approach will help guide you to the best decisions for your business. It should be noted that no other advertising medium—TV, radio, print—allows you this level of accountability and data.

The Kona Impact staff has been running online advertising campaigns for over 15 years. If your business is on Hawaii Island and you would like some proven methods to help your business grow, give us a call at 329-6077.

Support Good

Support Good

Kona Impact is as busy as it has ever been, with multiple marketing and design projects going on all the time. We’re busy, which, of course, is a good thing. That said, it sometimes makes us too busy to take a step back and see the bigger picture of life.

Life goes on around us: we see homeless people milling around the area near our office; we witness an occasional fit of rage at the intersection where cars and pedestrians nearly collide on a daily basis; sometimes we see children smoking cigarettes and other stuff out back.

The world is full of things that do (or should) make us feel a bit of dissonance between our mostly comfortable lives and the plight of others who struggle to establish or maintain a good path in life.

The other day, I was thinking of a very simple bumper sticker for my truck: Support Good. It’s a simple statement, but it makes sense: focus on what is good in life and support it however you can. It might be with time, treasure (money) or talent. It doesn’t have to consume your life, but just the act of making a few positive steps can make a difference.

Kona Impact as a business has been fortunate, because we have a lot of tools and talent that can support good. In the past month or so, we have supported the following groups through donations of resources and time:

Aloha Performing Arts Center (APAC) with a new, donated, website

Kona Parade Association with parade signage far below cost

Deep and Beyond with no cost printing

Habitat for Humanity with no cost printing

Kona Historical Society with signage

Hawaii Island HIV/AIDs Foundation with free signage for their Taste of Life benefit

Hospice of Kona with sign donations for Camp Erin

Truth be told, Kona Impact is asked almost daily for donations of time, materials or money. We can’t support every group, nor do we want to. Our giving is very strategic in that we support organizations that meet these four criteria:

  1. Extremely well run. We want our resources to go to groups that are efficient and run very well. We know the leadership of each of these groups and know them to be stellar in the execution of their goals.
  2. Local. We never give money to off-island causes as a matter of policy. We want our donations to make the lives of people in Kona better.
  3. “Needy” groups. By this, we mean we tend to support groups run on a shoestring budget. Habitat and Hospice are the exceptions to this rule.
  4. Impact. We know that donated marketing services and products are multipliers for these groups. They help them raise more resources, improve their awareness in the community and recruit volunteers.

As we move into the second half of 2014, we look forward to keeping busy with paid accounts, while at the same time continuing to support good in our community. We are always optimistic about what the future brings for business in Kona and our community. Kona Impact has always been a business that had dual goals: helping businesses grow, while at the same time strengthening what is good in our community to ensure that it is a vibrant and comfortable place to live.

Support good.