Category Archives: Uncategorized

Project Completed: Hand Painted Sign Repair

Hand-painted signs can be the most expensive signs to have made. Each color is a separate cost, and the time it takes to cut and prepare the surface can be substantial. You also need to plan for at least two coats of paint to survive in the harsh Kona sun, UV rays and wind.

One of our recent projects was a repair and re-painting of the On the Rocks sign. It reminded us of the challenges of using wood in Hawaii, as the original sign has suffered a lot of sun and termite damage–inevitable in Hawaii.

It took a lot of work, but the result was very satisfying.

old signOld Sign

 

new sign

Refurbished Sign

Veteran Parking at Lowe’s – Mahalo!

I was picking up a few things at Lowe’s last night and noticed a few spaces dedicated to parking for veterans. I’m not a vet, but do feel great admiration and respect for those who have served our country. It’s nice to see Lowe’s provide some recognition of our vets. Well done!

veteran parking at lowe's

Some of our Favorite Office Software Tools at Kona Impact

We spend a lot of time at our keyboards at Kona Impact. Most of the time is spend designing web and print graphics, designing website, doing online marketing and, of course, communicating with our customers.

Here are our favorite office software tools

Gmail – Several years ago, we decided to move all of our mail systems to Gmail. Instead of going through our KonaImpact.com server, all our email goes to and is stored, on Google’s Gmail platform. We’ve had no downtime, few deliverability issues and Gmail works great on all our devices. This has made our email systems more reliable and has reduced costs.

Google Docs – Another Google product we love. This online word processing program works flawlessly and allows us to share and edit documents from anywhere. Almost all of our word processing is done on Google Docs now.

Google Sheets – We do a lot of data analysis for our customers, and almost all of our data is initially imported into Google Sheets, an online spreadsheet. From these spreadsheets, we make lots of nifty charts, graphs, and analyses.

Timeleur – This is one of the ways we keep track of our billable time. It’s an eight-sided device that we flip to identify the task on which we are working. The device sends a Bluetooth signal to our computers and keeps track of how we spend our time. It’s a great tool for the time tracking that we need for client billing.

Dropbox – We’ve been using Dropbox for years. When we go out and take photos of a site or site, our phones automatically uploads the photos to our Dropbox account, which then syncs them to our office computers. Dropbox is also great for sharing large files with clients and for putting some files to work offsite.

Adobe Creative Cloud – This subscription-based suite of tools is used for hours a day by all of us. Our photo editing is done on Photoshop, our graphics and layouts usually happen in Illustrator and InDesign and we create and edit PDF files in Acrobat. Simply put, there are no other suites of tools that offer the integration of useful tools.

Evolution or Revolution for your 2019 Marketing?

The end of the year is a time that many business owners reflect on the past year and look forward to the next. It’s a great time to seriously consider making changes. What should we do more of? What should we do less of? What opportunities are we missing?

There are two broad approaches to change in marketing: gradual change or radical change. This is what I call the “evolution or revolution” debate. The basic question is this: should we change by improving what we have, or do we need a complete replacement of our current efforts with something new?

The first step is to take an honest look at what you are doing.

At one extreme might be the business that has no online presence, is still advertising in phone directories or other unused print media, and has no regular outreach (email marketing) to clients. This is time to seriously considering a revolution. Get some help, and, more importantly, be willing to change.

At the other extreme might be the company that is doing well, and has a decent online presence, an infrequent newsletter or email campaigns and some planned marketing program. Should this business start over, and give up the proverbial “baby with the bathwater?” Most definitely not, as, with some modifications, these tools and efforts can become much more effective.

Radical change, completely re-doing a website, for example, can result in drastic negative consequences for the business. We’ve seen this many times when a company has gone from a professionally-designed and written website to a do-it-yourself website that may look good, but for numerous reasons, performs very poorly on the search engines.

Here is one example of a website–the green line–competing very well with another with a similar product line (the blue line)–and then doing a radical re-design/re-launch (around Sept 26). The online visibility plummeted to almost 0 (no visibility) and has only recovered to half the level it was previous–all during the critical holiday shopping season. This radical change resulted in a new website, which, by all measures, has performed worse than its old one. This radical probably cost the business several tens of thousands of dollars in sales.

radical change is not always good

It is, of course, hard to know if a radical change will bring about a new set of issues, which were not understood when the change began. Unfortunately, many business owners believe that change itself is good, and must be better than what exists currently. Many don’t envision replacing one set of problems, with a whole new set of problems. It happens, a lot!

At Kona Impact, we have spent over a decade helping companies in Hawaii plan and implement marketing programs. At times, we tell clients that we’d love to take their money, but are reasonably certain, that they won’t see improved business results if do. We’d rather sleep well at night, knowing that we helped a business make choices that will be best for their business, even if it means a lost project for us.

Our goal at Kona Impact has always been to give our customers the best information we have and help guide them to solutions that will be best for their business. At times, a revolution in order, but most of the time, it’s best to work with existing systems and improve them.

 

Coffee Marketing 101

We live and work in the heart of the world-famous Kona coffee region.  Needless to say, a big part of our economy is connected to the coffee industry. Kona Impact has several coffee clients. It is the only coffee we drink.

A lot of farmers are great at farming, and less effective at marketing. This is not a problem if they sell their coffee to processors. If they want to realize more profits, however, they often try to market at least a portion of their coffee.

Here’s a list of some things we have learned about coffee marketing.

  1. Coffee is a flavorful product. Having consumers taste and smell the coffee is essential. Without a taste, it’s just coffee in the consumers’ mind. Do not expect a huge number of people to buy your coffee without tasting it. Get out to the farmer’s markets. Do in store taste testing. Have farm tours. Get your coffee in the mouths of consumers.
  2. Some people buy Kona coffee because it is made in America. Hawaii is the only place in the U.S. with commercial coffee growing. Try to tap into the “made in America” consumers.
  3. Some people buy Kona coffee because it comes from family farms. Connect with consumers by sending a personalized note or a picture of your family with orders. Use newsletters to let people know what is happening on your farm.
  4. Some people buy Kona coffee because it is organic. These people value organic certifications and the farmer’s commitment to avoiding herbicides and pesticides. Words like “compost”, “mulch” and “sustainability” are buzzwords.
  5. Your bag counts! Go with the standard bags and labels and you will look like every other farm. Spend twenty or thirty cents more for some nice looking bags and labels and you’ll sell a lot more.
  6. Repeat orders and coffee clubs are essential. You might only win four or five new customers a month, but over a year, that’s sixty new monthly orders—sixty pounds a month! These are orders for which you do not need to spend money on marketing. They are golden. When you get a customer, do everything possible—awesome coffee and customer service—to keep them.
  7. Never ever sell a bad bag of coffee! If the roast if off, give it to family and friends. Never sell a bad product!
  8. Coffee marketing is not about price. See all of the above. If you have these things right, you can demand a premium for you product. Racing to the bottom for pricing will make you busy….and broke!

Signs of Trouble for Entrepreneurs Starting New Businesses

Kona Impact has worked with thousands of entrepreneurs over the years. We often see these entrepreneurs at different stages of their businesses, from day 1 when they get an idea and are ready to run with it, to the waning days of business as they begin the steps to liquidate their assets and close up shop. These, of course, are extremes: most businesses we work with are well-established and doing well.

That said, we get to see many businesses start and close. While they all have a myriad of reasons for failing—often a handful—here are some to the common ones we see:

1.  Inability to get beyond a logo or business card. We see this several times a year: a person who obsesses over a logo, or worse yet, a business card, so much so that they lack perspective on what really matters at that point in the business: big picture planning. Yes, branding is very important—it’s what we do at Kona Impact—but those who believe that creating a logo is creating a brand or a business are just not focusing on the right thing.

2.   Not doing the math. We see this all the time with emerging businesses. If you want to see widgets, you need to understand your total costs of production, your facilities costs, labor costs, marketing costs, taxes and figure out a reasonable salary for yourself. Whether its t-shirts, cosmetics, coffee or tubas, you need to have a very solid grasp on costs and projected sales levels to figure out if you have a chance of making any money from your business.

3.  Believing 100% in social media or 0% in social media to grow your business. You do need a website and online presence that you own and control. Using Facebook, Instagram or other social media platforms are important, but not sufficient for most businesses.  Plan on your marketing efforts using what you own—a website—and what you use to reach targeted markets—Facebook, Instagram, Pinterest, etc.

4.  Not having sufficient funds for a year. Many recommend six months’ worth of reserves to get a business going: based on the experience of many of Kona Impact’s clients, this is too little, as many businesses take longer to grow than most people realize. The worst thing I see is businesses that have a good idea and a solid chance of prospering running out of funds too early.

5. Not going “all in”. If you are looking for a hobby, go surfing, take up gardening or join a club. If you want to run a business successfully, be prepared to spend every day—including weekends—focusing on developing and running your business. If you don’t, I guarantee you that your competitors will. If you aren’t going to play to win, don’t waste your time. Keep your money and time.

Businesses fail for many reasons. Some are just bad ideas, and others are viable ideas with poor execution. Some just start at the wrong time in the economic cycle and are doomed from the beginning. Others fail because the owner finds a better opportunity and moves on. We often find that it is a combination of factors. As such, a burgeoning entrepreneur needs to focus on what she can control and reduce the risks to success as much as possible.

Lessons Learned from the Grumpy Barber

I found out yesterday that my local barber is leaving the island soon. I’ll miss him as much for his excellent haircuts as his grumpy, opinionated personality. Even though I could have easily labeled him as rude, out-of-place, and genuinely disagreeable (at times), I challenged myself to look at each haircut as a time to step outside of my routine and enjoy the banter.

I’ve seen him kick people out of his shop for using cell phones, asking (what he thought were) stupid questions and women: they would not do women’s hair. He has many 1-star reviews on Yelp detailing his unique personality. He also has a lot of five-star reviews.

You would think that this would have hurt his business; it didn’t. In fact, I believe it helped his business: a no-nonsense haircut with a side of strong opinions was what made him special, unique. I’ve never been there when there were not at least a few people waiting. He was busy, always busy.

In this time of political correctness and exaggerated outrage over the most trivial matters, I think his barbershop offered a chance to enjoy, at least for 20 minutes, banter and conversation that wasn’t overly filtered. I think that’s part of what drew the mostly older patrons to his shop: guys would get a chance to complain about the world and not be made to feel self-conscious or wrong.

This is a good lesson in branding. If the market is full of homogeneous, cookie-cutter providers, a person or business with a bit of personality can carve out a good niche. There is room for a place that breaks the mold and dares to be different, authentic. I think we are lacking a lot of authenticity in corporate run businesses that teach their employees to “follow the manual” and to avoid any sort of non-prescribed behavior or words in the workplace.

Would I like to work side-by-side with my barber? Heck no! Twenty minutes once a month is enough. Do I enjoy stepping into a world of authentic conversation for a brief time when I get my hair cut? Absolutely.

grumpy barber

How to Develop a Win-Win Relationships with Kona Impact

Here is something most business owners understand to some extent: a solid relationship with a supplier is invaluable, especially in times when many businesses are working near or at capacity. You need your supplier just as much as your suppliers need you.

A little non-secret in the business world is that suppliers turn down business all the time. It might be evident in not receiving return phone calls or emails. Some businesses have better tactics and try to refer the clients they don’t want to deal with other suppliers. Others just claim “too busy” when new projects come in from dispreferred customers. I know one local business that has stopped answering the business phone line altogether.

At Kona Impact we usually do not turn down business from new clients, even if we believe we will make very little from their account. We know businesses grow, and we find helping people at that stage of their company very gratifying.

We have over the years done our best to transition some of our customers to other suppliers, or, to be frank, anywhere but us.

win-win business relationship

How can you develop a win-win relationship with a supplier like Kona Impact?

A big part of the answer is in the question: “develop a win-win relationship.” Start with the belief that a supplier must benefit from the relationship, which includes making a reasonable profit, working with clients with a reasonably agreeable personality, getting paid on time and all the other markers of a good client.

Here are some the things you should never do as a customer:

  • Order something for which you don’t have the money to pay
  • Order anything you do not plan to pick up when completed
  • Bad-mouth a previous supplier. If you do it to them, you’ll do it to us. Red flag.
  • Start a project you don’t need to be finished for a long time. If that’s your intent, be sure to pay a hefty deposit.
  • Use the old, “give me a good price on this, and we’ll give you more business in the future” ploy. Doesn’t work for us; if you won’t let us make money now, you never will.
  • Change the scope of the project without expecting a new, often higher, cost

Here are some things you should do as a customer:

  • Communicate clearly what you have in mind. If you don’t know, or can’t explain, there is no way we can figure out what you want
  • Ask us for a price quote right away. We’ll have some questions, for sure, but don’t use our time to fish for ideas if we’re unlikely to do business. We’ve been doing this for over 12 years, so we have a good idea what projects will cost and will gladly share that with you.
  • Provide comprehensive feedback for each draft. Take some time and give us all your feedback at once. Trickle-in feedback is very detrimental to achieving a good result. If you have five sisters, six aunties, four uncles and business partner who are giving you feedback, good luck, but when it comes to communicating with us, speak with one voice and only after you gathered all the information you think you need.
  • If you’re going to “disappear” for any extended period of time, let us know and offer to call the project done and settle any remaining amounts for the project. We get it that life and business goals change; just have the courtesy to communicate

Every business transaction can help to build a productive relationship or create reasons for the supplier or buyer to start looking for a new partner. It’s a two-way street, and in the best of all possible worlds, results in a lasting, productive win-win relationship for all.

 

 

The Lifetime Value of a Customer as a Marketing Cost Guide

Marketing expenses are often looked at very narrowly: how much did I spend on a promotion, and how much did I make on the promotion? Minus out expenses and you’ll have a very crude measure of how much return you received on your marketing investment.

That narrow focus, however, is not going to give you a complete picture of your marketing costs.

I’ll give a few examples of how to use the lifetime value of a customer analysis to figure out the true value of marketing costs.

Let’s look at a new restaurant opening in town. They spent $5,000 on a combination of print and radio ads to promote their Grand Opening on a Saturday. Their revenue on Saturday is $6,000, of which 10% is profit, so they spent $5,000 to make $600. Ouch.

Now, let’s look at the same data and expand our analysis. Let’s stipulate that the average guest of a new restaurant spends $50 ($10 profit) and will return to the restaurant 5 times in the next year. Some will never return and some will visit more frequently, but let’s assume 5 as an average. That means the value of a new customer is now $250 ($50 profit). If the restaurant adds 100 new customers due to the $5,000 ad spend, the gross sales add to a year’s revenue is $25,000 ($5,000 in profit). If we add a second year of 3 average visits, you’ll add another $15,000 to the top line (revenue) and $3,000 (profit) to the bottom.

Now, add the people that came before and after the grand opening because of the advertising, as well as the word-of-mouth recommendations from the people who ate at your restaurant, and you can see that the $5,000 ad spend might have been a great investment—if you look at the long-term value of customers

lifetime value

One of our favorite analyses is to use pay-per-click data for advertising. Let’s look at tea subscription business. We’ll assume 50% margins on the tea.

We’ll go with $.50 per click for keywords related to your product. In my experience, you can expect about 1 in 25 or even 1 in 50 of the people who visit a good website to make a purchase. So, you’re looking at between $12.50 to $25.00 for a sale. If your average sale is $40, you’d be looking at marketing costs between 31.25% and 62.5%, which means you would make almost nothing or lose money on each sale. Ouch!

But, let’s expand our analysis to look at the lifetime value of customers. For our sake, we’ll limit it to one year. If you have a Tea Society Club and 25% of your new customers purchase a subscription for a package a month at $40, you now have a value of each customer somewhere between $40 and $480 ($40/month for a year). Realistically, you’ll have many people stop their subscription, so go with half the total potential and assume $240, which would translate into $125 profit. Would you trade $25 for $125? Of course.

The 75% of the purchases that did not join the Tea Society are also worth something. Let’s say, on average, they order twice more a year—an additional $80 each, in addition to their first $40: $120, $60 profit. Again, $25 for $60 profit? Yes, in my book.

Unfortunately, my entrepreneurs look at advertising costs very narrowly; what did I spend, and what did I make at that time? That would be the right way to look at things if you are promoting a concert or a limited-availability product. That said if you are trying to win new customers, especially if you have a product that is consumable, taking a broad approach to examining your marketing costs will help you make better decisions.

As a side note, any college student will tell you they are inundated with offers for credit cards. They might receive 5-10 solicitations a week. Why would a bank spend so much to win a customer that has little credit history, few assets, and a limited income? The answer is simple: people seldom change credit cards, so the lifetime value of a credit card customer is huge. It’s very worthwhile to spend a lot on these young, future high earning students.

We Serve Everyone….Except…

There have been a few stories in the media recently about businesses refusing services to people they don’t like. One news story was about a  cake baker in Colorado who won a favorable ruling in the Supreme Court, giving him the right not to make a cake for a wedding for two gay men. Another story in the news was about the spokesperson for President Trump being asked to leave an upscale restaurant because the staff/owner did not like some things about Trump.

My reaction as a business owner is, fine, ok, we have a right to serve who we want, though not serving someone because of race or other protected statuses will get you into a boatload of trouble (as it should).

Every business has customers or clients who are not welcome in the store or on the premises. But, this is almost always due to the behavior of the customer and usually (I would hope) not about one’s race, gender, sexuality or political affiliation.

Kona Impact has made things for the Tea Party (a far-right group) and Occupy Kona (a far left group). We have had atheist, Muslim, Jewish, Jehovah Witness, Mormon, Evangelical, Conservative Christian and Liberal Christian customers. We have several gay customers. We have done projects for an “adult” retailer in Kona, as well as projects for bars and CBD businesses.

We have turned down two businesses–an “escort” and pitbull breeder that breeds fighting dogs–in the past 12 years for the same reason: these businesses are illegal and, truth-be-told they, not the kind of business I could honestly put my full effort and energy into.

My thinking is simple: if a person comes to us for services, I do not care about the circumstances of that person’s life or business. I don’t care if he or she has beliefs or a lifestyle different from mine; I just want to give them the best possible product or service and get paid. If I refused a customer based on who he or she is, I am 100% certain I will not change that person and he or she will find another provider. I will have gained nothing.

I know that the baker in Colorado felt his moral, religious, opposition to gay marriage was a good reason to deny service to the gay couple. This is fine; he can serve who he likes (though he should not expect to be welcomed in his community with such bigoted views). I would not patronize an establishment I knew to have such policies. Likewise, I would avoid the restaurant that rejected the Trump staffer. That is my choice.

I do tend to look at business as business. I am not trying to change the world by selectively serving customers based on who they are. I will, and have, refused clients based on their behavior. Rude or disrespectful to my staff or me? Adios! Pay invoices late and only after great effort on my part? Find a new provider! Gay, Jewish, Occupy Kona member who sells CBDs? My door is open!