One thing newbie investors are often confused about is a stock's market capitalization. A company's market capitalization is simply the value of the company as priced by the stock market. The market capitalization is taken by the price of the stock times the amount of shares outstanding.
For example, if there are 100 million shares of company XYZ and those shares are trading at $35 a share, then company XYZ has a market capitalization of $3.5 billion.
Stocks with a larger market capitalization are generally seen as 'safer' investments, since the company itself is larger. However, large-cap stocks also do not have as much growth potential as small cap stocks. For a $1 billion stock to triple, it just needs to become a $3 billion company. For a $200 billion company to triple, it needs to become a $600 billion company.
Stocks are generally classified as mega-cap, large-cap, mid-cap, small-cap, or micro-cap stock based on their market capitalization. There is no set definition for these terms. What some consider a small-cap others might consider a micro-cap. Nevertheless, here's a general guideline to give you an idea what market capitalizations fit these terms:
Mega Cap: $200 billion or more (very few companies fit this category)
Large Cap: $10 billion to $200 billion
Mid Cap: $2 billion to $10 billion
Small Cap: $250 million to $2 billion
Micro Cap: Less than $250 million
Tuesday, 2 February 2010
Friday, 8 January 2010
Choosing A Good Stock Investment Broker
If you want to invest in the stock market, you need to find a stock broker. Most people just use brokers that either their friends or family use or they see an advertisement on TV. Most of the time, these brokers are just fine. But with a little bit of research, you should be able to find the best stock broker for you. Here are the factors that you should consider when shopping around for a broker:
Place trades through the Internet
Some brokers allow you to place trades via phone, in-person, or through the Internet. Whatever the case is, the key is that you need to be able to place a trade online. Placing a trade online will generally cost you between $7-$15, whereas placing a trade over the phone or in-person can cost you anywhere between $25-$100. The difference in savings between making an $8 trade and a $10 trade is nowhere near the difference in making a $10 trade and a $50 trade. So whatever you do, make trades online.
Any advice or research they give is generally useless. Don't pay much for it
Some firms justify higher prices based on 'personalized research' or 'excellent investment advice.' Almost always, these perks are worth little. Again, if it's the difference between making $8 trades with no help and $10 trades with some help, go with the $10 trades if you want the advice or research. But don't be paying $50 a trade and up for research and advice. Chances are you are best served just investing in index funds or ETFs anyway.
Use a beginner-friendly broker
There are some brokers that are more geared for frequent traders and professionals, such as Interactive Brokers. There are others that are geared more for beginners, such as TD Ameritrade. For most novice investors, it is much much better to go with beginner-friendly brokers. The brokers geared for professionals offer lower trading fees and some advanced tools, but this will most likely just confuse beginning investors. Investment firms such as TD Ameritrade, Fidelity, etc. are very easy to use, and their trading costs are still relatively low as long as you use internet trades.
Place trades through the Internet
Some brokers allow you to place trades via phone, in-person, or through the Internet. Whatever the case is, the key is that you need to be able to place a trade online. Placing a trade online will generally cost you between $7-$15, whereas placing a trade over the phone or in-person can cost you anywhere between $25-$100. The difference in savings between making an $8 trade and a $10 trade is nowhere near the difference in making a $10 trade and a $50 trade. So whatever you do, make trades online.
Any advice or research they give is generally useless. Don't pay much for it
Some firms justify higher prices based on 'personalized research' or 'excellent investment advice.' Almost always, these perks are worth little. Again, if it's the difference between making $8 trades with no help and $10 trades with some help, go with the $10 trades if you want the advice or research. But don't be paying $50 a trade and up for research and advice. Chances are you are best served just investing in index funds or ETFs anyway.
Use a beginner-friendly broker
There are some brokers that are more geared for frequent traders and professionals, such as Interactive Brokers. There are others that are geared more for beginners, such as TD Ameritrade. For most novice investors, it is much much better to go with beginner-friendly brokers. The brokers geared for professionals offer lower trading fees and some advanced tools, but this will most likely just confuse beginning investors. Investment firms such as TD Ameritrade, Fidelity, etc. are very easy to use, and their trading costs are still relatively low as long as you use internet trades.
Friday, 1 January 2010
Know Your Role - How About Their Roles?
It seems pretty obvious that employees need to know what their own jobs require -- their roles, responsibilities and authority levels. We don't expect people to do their jobs effectively if they don't know what they are supposed to be doing. However, one area that people tend to ignore is how well employees understand what OTHER PEOPLE DO in their organizations. Why might that be important?
Recently, I was doing some training in customer service and defusing hostile customers for a fairly large organization. A constant theme kept emerging (and it's quite common). A customer would call in with some sort of difficulty or problem, and the person answering the phone would transfer the caller to someone else. Unfortunately, the next person taking the call was not the right person, or was unavailable, leaving the customer to leave voice mail, or once again, get shuffled to someone else. Often the frustrated customer would end up calling the first person back to holler at them.
How does this happen? Are employees stupid? Or perhaps can't be bothered? Probably not. They simply lack the information they need to provide good quality customer service to callers. And what's the outcome? First, angry customers. Second, stress and frustration on the part of staff caught in this shuffle. Third, some terrible inefficiencies for the organization itself, which impacts the bottom line.
The problem is that we don't educate staff in the "bigger picture". In this case, that bigger picture relates to what other people do, their various expertise, and the relationship of other employee's jobs to each other. Before we talk about specific "fixes", consider this.
It's very rare that employees work is independent of the work of other people in their workplaces. These days, getting jobs done has become more complicated, where the ability to get something accomplished often involves cooperation with others, or some degree of teamwork. Customer service aside, workplaces where people understand their own jobs and the jobs of others (like how the whole puzzle fits together) are going to be more effective and more productive.
Helping People Understand The Larger Puzzle
New employees should be oriented and educated not just about their own jobs, but about what other people do, and who to talk to when faces with different kinds of situations. They need to know who has decision-making power, and who has expertise they may need. That's far more important than knowing where the washrooms are (well, that's debatable!).
Workplaces are constantly changing. Responsibilities change, and so do job roles. Management should take an active role in keeping employees up to date about changes that affect not only their own jobs, but the jobs and roles of others. This is even more important in team based and project based environments. Regular staff meetings can be used to do this in an ongoing way, and need not be time intensive. Often, staff updates can take only a very few minutes.
Here's the most important part. And this applies to every employee. Employees tend to hesitate about asking too many questions, for fear of looking stupid or being perceived as a nuisance. They rely on the human resources department or their supervisor to tell them what they need to know. Unfortunately, supervisors don't always know what employees need to know, or haven't thought about it, and they can't read minds. So, it's important that employees take on responsibility for their own understanding of what other people do. Employees! Listen up! ASK! You can't do your job well if you don't know your own role and what other people do. You can't do your job if you don't know where to refer a customer with a particular problem.
Let's end this by listing some things that people should know:
The nice part about all this is that it isn't rocket science, but it is neglected. Human resources, managers and employees can all take responsibility and make sure that employees know and understand their own job responsibilities and roles, and those of others who fit into the completed "puzzle" of getting things done effectively and efficiently.
Recently, I was doing some training in customer service and defusing hostile customers for a fairly large organization. A constant theme kept emerging (and it's quite common). A customer would call in with some sort of difficulty or problem, and the person answering the phone would transfer the caller to someone else. Unfortunately, the next person taking the call was not the right person, or was unavailable, leaving the customer to leave voice mail, or once again, get shuffled to someone else. Often the frustrated customer would end up calling the first person back to holler at them.
How does this happen? Are employees stupid? Or perhaps can't be bothered? Probably not. They simply lack the information they need to provide good quality customer service to callers. And what's the outcome? First, angry customers. Second, stress and frustration on the part of staff caught in this shuffle. Third, some terrible inefficiencies for the organization itself, which impacts the bottom line.
The problem is that we don't educate staff in the "bigger picture". In this case, that bigger picture relates to what other people do, their various expertise, and the relationship of other employee's jobs to each other. Before we talk about specific "fixes", consider this.
It's very rare that employees work is independent of the work of other people in their workplaces. These days, getting jobs done has become more complicated, where the ability to get something accomplished often involves cooperation with others, or some degree of teamwork. Customer service aside, workplaces where people understand their own jobs and the jobs of others (like how the whole puzzle fits together) are going to be more effective and more productive.
Helping People Understand The Larger Puzzle
New employees should be oriented and educated not just about their own jobs, but about what other people do, and who to talk to when faces with different kinds of situations. They need to know who has decision-making power, and who has expertise they may need. That's far more important than knowing where the washrooms are (well, that's debatable!).
Workplaces are constantly changing. Responsibilities change, and so do job roles. Management should take an active role in keeping employees up to date about changes that affect not only their own jobs, but the jobs and roles of others. This is even more important in team based and project based environments. Regular staff meetings can be used to do this in an ongoing way, and need not be time intensive. Often, staff updates can take only a very few minutes.
Here's the most important part. And this applies to every employee. Employees tend to hesitate about asking too many questions, for fear of looking stupid or being perceived as a nuisance. They rely on the human resources department or their supervisor to tell them what they need to know. Unfortunately, supervisors don't always know what employees need to know, or haven't thought about it, and they can't read minds. So, it's important that employees take on responsibility for their own understanding of what other people do. Employees! Listen up! ASK! You can't do your job well if you don't know your own role and what other people do. You can't do your job if you don't know where to refer a customer with a particular problem.
Let's end this by listing some things that people should know:
- Who has authority to make decisions about specific issues (which people, which issues)?
- Where does the expertise lie to deal with particular issues?
- What procedures should be used to involve people who need to be involved in a particular issue?
- When a particular person who needs to be involved is unavailable, is there a backup procedure (someone else to contact)?
The nice part about all this is that it isn't rocket science, but it is neglected. Human resources, managers and employees can all take responsibility and make sure that employees know and understand their own job responsibilities and roles, and those of others who fit into the completed "puzzle" of getting things done effectively and efficiently.
Thursday, 10 December 2009
Improve Your Debt Management Skills
If you are struggling with debts, and would like to feel in full control of your finances, you should consider improving your debt management skills.
Why?
Improving your debt management skills could allow you to:
• See exactly how many debts you have.
• See exactly how much you owe, and who you owe it to.
• See exactly how much you are required to pay towards your debts each month.
• See if you can actually afford to service your debts each month.
• Get a rough idea of when you should be debt free.
How?
Improving your debt management skills can actually be pretty easy.
The first you thing you should do is create a budget. This should help you see exactly how much money you are earning / receiving each month, along with exactly how much money you need to spend each month. Knowing these two figures should give you a rough idea of whether or not you will be able to afford to service your debts each month (providing you know how much they will cost you).
To find out the exact amount of money you have available to pay towards your debts each month, you should do the following:
Total monthly income minus total monthly essential expenditure (mortgage/rent payments, secured debt payments, utility bills, food, etc.).
The amount you are left with is called your 'disposable income' - and as mentioned, this is the money you will have available each month to pay towards your unsecured debts, as well as spending on non-essentials and saving for the future, if you can afford it.
Creating a budget is just one of the ways you could improve your debt management skills.
When?
In general, the sooner you take action to improve your debt management skills, the better. The earlier you address your problems, the easier they should be to tackle. If you simply leave your debts to grow and don't take action against them, they will probably get worse.
Why?
Improving your debt management skills could allow you to:
• See exactly how many debts you have.
• See exactly how much you owe, and who you owe it to.
• See exactly how much you are required to pay towards your debts each month.
• See if you can actually afford to service your debts each month.
• Get a rough idea of when you should be debt free.
How?
Improving your debt management skills can actually be pretty easy.
The first you thing you should do is create a budget. This should help you see exactly how much money you are earning / receiving each month, along with exactly how much money you need to spend each month. Knowing these two figures should give you a rough idea of whether or not you will be able to afford to service your debts each month (providing you know how much they will cost you).
To find out the exact amount of money you have available to pay towards your debts each month, you should do the following:
Total monthly income minus total monthly essential expenditure (mortgage/rent payments, secured debt payments, utility bills, food, etc.).
The amount you are left with is called your 'disposable income' - and as mentioned, this is the money you will have available each month to pay towards your unsecured debts, as well as spending on non-essentials and saving for the future, if you can afford it.
Creating a budget is just one of the ways you could improve your debt management skills.
When?
In general, the sooner you take action to improve your debt management skills, the better. The earlier you address your problems, the easier they should be to tackle. If you simply leave your debts to grow and don't take action against them, they will probably get worse.
Thursday, 3 December 2009
Bankruptcies Hit Retirement Communities
The recession is hitting elderly people where they live, literally. Financial problems have been mounting at a number of assisted-living and continuing-care communities, forcing some facilities into bankruptcies and inflicting new worries on residents and their families who thought their life plans were comfortably set. In recent weeks, Erickson Retirement Communities, which manages 19 continuing-care retirement communities in 11 states, declared bankruptcy. Sunrise Senior Living Inc. posted a quarterly loss of $82 million and announced plans to sell off 21 of its assisted-living communities. Nationally, smaller retirement communities are raising their prices, changing the way they operate, selling themselves off to bigger chains, or getting out of the business altogether. Many companies say they can't make a profit—or even succeed on a nonprofit basis—in an environment that combines the high cost of caring for elderly residents, restrictive Medicaid budgets, tight credit markets and fewer residents willing and able to pay top dollar for their care.
When a facility fails, it can have myriad effects on the residents. The good news is that no one gets kicked to the curb–at least not right away. "Nobody has ended up on the street, which is a primal fear when you're dealing with these places," says Jason Frank, an elder-law attorney in Baltimore. "But their fees can skyrocket, and they can become unaffordable. Then they can kick you out for nonpayment." In some cases, residents may find that the sizeable deposits they made to get their apartments in the first place have disappeared. (Continuing-care communities like Erickson's typically charge deposits of $150,000 or more, and assure residents that they can stay on the campus for the rest of their lives regardless of how their needs change, and that the deposits will be refundable to themselves or their heirs when they leave or die. But residents typically also have to pay monthly fees for care, and those fees can continue to increase. Assisted-living facilities like Sunrise generally require no deposits but charge a monthly pay-as-you-go-plan.) That's what happened to the 170 people who lived in Covenant at South Hills in Lebanon, Pa. Their deposits went up in smoke when their facility was sold in bankruptcy to Concordia Lutheran Ministries, which did not take on that liability. Several are now suing B'nai Brith Housing, the original operator of Covenant.
Erickson executives say that their bankruptcy filing will have no impact on residents. "We've refunded every single deposit in our 26-year history," says Tom Neubauer, the firm's executive vice president of sales. "People moving in are completely unaffected by all this." Erickson's corporate organization is complex, with each community (and that community's deposits) owned by a separate nonprofit entity that is not part of the bankruptcy filing.
But residents could face disruptions. Newer communities that haven't been completely built out yet may not have their assisted-living and nursing-home wings, so residents who need higher levels of care may end up being transferred to other facilities. Should various nonprofits not be able to resell units at the same price as the original buyers paid, those original buyers might not get their deposits back. And residents who run through their personal savings and their deposits paying for ever-higher levels of care will have to depend on an optional "benevolent fund" to cover their expenses.
Erickson has a solid reputation and good track record for keeping residents for the rest of their lives, but anyone shopping for retirement housing now should think thrice about the financial risks of their arrangements. "You've got to keep your eyes open," says Eric Carlson, director of the long-term-care project for the National Senior Citizens Law Center. "If you look at the agreements, sometimes what you're being promised is not that much. The provider may be reserving the right to force you to leave for various reasons." Often there's a generic "can't meet your needs" clause in the contract.
He recommends that refundable deposits be set aside in escrow accounts, and that anyone signing a long-term-care contract run it by an elderlaw attorney first. (They can be found at the National Academy of Elderlaw Attorneys.) His organization also has an online checklist of questions that should be asked before moving into a retirement or assisted-living community.
Carlson also says he generally prefers the financial advantages of the pay-as-you-go models, but even consumers who choose facilities that only charge rent on a monthly basis may not be saving their nest eggs for long. Sunrise has raised prices as it has gone through several quarters of financial trouble. It can cost $6,000 or more a month for quality assisted living, and $9,000 for nursing-home care. At those rates, it's not hard to run through life savings in a hurry, and then not every assisted-living facility will keep you. Many don't take Medicaid or other subsidies, and some facilities that had taken Medicaid have switched to no-Medicaid policies. That leaves those residents who have no assets with no place to live. Nationally, discharge-related complaints about nursing homes and assisted-living facilities have doubled in a decade—to 12,237 in 2008, according to the U.S. Administration on Aging. It's now the second-most-common complaint at nursing homes, behind "failure to respond to requests for assistance." And it's the third-most-common complaint at assisted-living facilities, behind problems with medication administration and disappointment with the food.
Complicated state rules can then force newly impoverished residents to go into nursing homes for at least a month so they can qualify for Medicaid, and then back out into another assisted-living facility, says Beverley Laubert, the long-term-care ombudsman for Ohio and president of the National Association of State Long-Term Care Ombudsman Programs. She and her colleagues are called in when facilities declare bankruptcy or force residents to relocate because of policy changes, but usually they can't force facilities to keep residents. Instead, they spend much of their time helping residents who thought they'd found their final homes look for new places to live in a market where, now, nothing is certain.
When a facility fails, it can have myriad effects on the residents. The good news is that no one gets kicked to the curb–at least not right away. "Nobody has ended up on the street, which is a primal fear when you're dealing with these places," says Jason Frank, an elder-law attorney in Baltimore. "But their fees can skyrocket, and they can become unaffordable. Then they can kick you out for nonpayment." In some cases, residents may find that the sizeable deposits they made to get their apartments in the first place have disappeared. (Continuing-care communities like Erickson's typically charge deposits of $150,000 or more, and assure residents that they can stay on the campus for the rest of their lives regardless of how their needs change, and that the deposits will be refundable to themselves or their heirs when they leave or die. But residents typically also have to pay monthly fees for care, and those fees can continue to increase. Assisted-living facilities like Sunrise generally require no deposits but charge a monthly pay-as-you-go-plan.) That's what happened to the 170 people who lived in Covenant at South Hills in Lebanon, Pa. Their deposits went up in smoke when their facility was sold in bankruptcy to Concordia Lutheran Ministries, which did not take on that liability. Several are now suing B'nai Brith Housing, the original operator of Covenant.
Erickson executives say that their bankruptcy filing will have no impact on residents. "We've refunded every single deposit in our 26-year history," says Tom Neubauer, the firm's executive vice president of sales. "People moving in are completely unaffected by all this." Erickson's corporate organization is complex, with each community (and that community's deposits) owned by a separate nonprofit entity that is not part of the bankruptcy filing.
But residents could face disruptions. Newer communities that haven't been completely built out yet may not have their assisted-living and nursing-home wings, so residents who need higher levels of care may end up being transferred to other facilities. Should various nonprofits not be able to resell units at the same price as the original buyers paid, those original buyers might not get their deposits back. And residents who run through their personal savings and their deposits paying for ever-higher levels of care will have to depend on an optional "benevolent fund" to cover their expenses.
Erickson has a solid reputation and good track record for keeping residents for the rest of their lives, but anyone shopping for retirement housing now should think thrice about the financial risks of their arrangements. "You've got to keep your eyes open," says Eric Carlson, director of the long-term-care project for the National Senior Citizens Law Center. "If you look at the agreements, sometimes what you're being promised is not that much. The provider may be reserving the right to force you to leave for various reasons." Often there's a generic "can't meet your needs" clause in the contract.
He recommends that refundable deposits be set aside in escrow accounts, and that anyone signing a long-term-care contract run it by an elderlaw attorney first. (They can be found at the National Academy of Elderlaw Attorneys.) His organization also has an online checklist of questions that should be asked before moving into a retirement or assisted-living community.
Carlson also says he generally prefers the financial advantages of the pay-as-you-go models, but even consumers who choose facilities that only charge rent on a monthly basis may not be saving their nest eggs for long. Sunrise has raised prices as it has gone through several quarters of financial trouble. It can cost $6,000 or more a month for quality assisted living, and $9,000 for nursing-home care. At those rates, it's not hard to run through life savings in a hurry, and then not every assisted-living facility will keep you. Many don't take Medicaid or other subsidies, and some facilities that had taken Medicaid have switched to no-Medicaid policies. That leaves those residents who have no assets with no place to live. Nationally, discharge-related complaints about nursing homes and assisted-living facilities have doubled in a decade—to 12,237 in 2008, according to the U.S. Administration on Aging. It's now the second-most-common complaint at nursing homes, behind "failure to respond to requests for assistance." And it's the third-most-common complaint at assisted-living facilities, behind problems with medication administration and disappointment with the food.
Complicated state rules can then force newly impoverished residents to go into nursing homes for at least a month so they can qualify for Medicaid, and then back out into another assisted-living facility, says Beverley Laubert, the long-term-care ombudsman for Ohio and president of the National Association of State Long-Term Care Ombudsman Programs. She and her colleagues are called in when facilities declare bankruptcy or force residents to relocate because of policy changes, but usually they can't force facilities to keep residents. Instead, they spend much of their time helping residents who thought they'd found their final homes look for new places to live in a market where, now, nothing is certain.
Tuesday, 24 November 2009
Gear Up for the Holidays
You can't claim to have lived in New England until you've gotten through a winter. The same could be said for e-commerce sites. Whatever track record you've had the rest of the year, the real proof that your online business is viable comes some time after the holiday crunch. Did you handle the high volumes without sacrificing customer care? Did you not only deliver the goods for current customers but also attract new ones? Did you, your staff and website emerge intact? Is your accountant smiling?
If the answer to these questions is generally "yes," then you should be smiling, too. But here's my advice: Think of the holidays as a stress test for your organization. You won't always be dealing with these kinds of volumes, but the best practices you embrace now will pay dividends the rest of the year.
In that spirit, here are some tips for the holiday season.
Use incentives to keep a steady flow
One of the most important safeguards against getting overwhelmed is to level out the volume spikes that can catch your organization off guard. The steadier the flow of traffic to your site, the better. Conversely, if 90 percent of your customers place their orders on Dec. 22, you're going to look unprepared no matter how much preparation you've made.
Begin by working out a set of incentives that will get your customers buying early. Possibilities include free gift wrapping, free shipping, two-for-one offers, coupon codes for later purchases, and, especially popular in today's economy, merchandise discounts and promotions. Then make sure your customers are aware of the offers by highlighting them on your home page. You can also e-mail your most valued customers, as long as you don't wear out your welcome. Finally, monitor the results to see what your customers are responding to. That knowledge will help you rev up sales during slow periods throughout the year.
Clearly communicate the true cost
The trend in e-commerce sites is to eliminate as many hidden costs as possible. Transparency is especially important during the holiday season, when customers have even less patience for unhappy surprises. Customers report that hidden shipping costs are the most frequent irritant--especially when those costs are unexpectedly high and only appear at the final stages of checkout. That ploy can lead to shopping cart abandonment--the merchandise is at the "register," but the customer has departed.
Instead, let customers know as soon as possible in the process what shipping will cost. Most of us know what it costs to mail a package, so keep those costs in line with customer expectations--or go one better and offer free shipping as an option. Some customers will always want more expedited shipping, but all will appreciate the opportunity to get standard shipping for free. And again, that's true not only during the holidays, but throughout the year.
Take customer support seriously--but let's chat
The time has long passed since the days when an e-commerce site could hide from its customers by not responding to queries. Phone calls are usually best, but not every online company has the resources to handle them, especially during the holiday crunch.
What to do? Resist the urge to bring in people who can answer the phone, but lack the expertise to truly represent your store. A badly handled call is worse than an unanswered one. Instead, consider online chat. The medium isn't as personal as the phone, but skilled representatives can conduct five or 10 chats at once--and customers will quickly recognize whether the people at the other end know what they're doing. Of course, e-mail can also be effective as long as you're diligent about responding quickly--an e-mail black hole is worse than no e-mail at all. And what if you're truly underwater from customer queries? Apologize, get a number and a good time to call--and call back.
Use "heat map" technology to track what clicks
Here's another place the holiday stress test can serve you well in the coming year: tracking what people actually do on your site. Companies like CrazyEgg, and Clickdensity offer services that can show you how people are navigating your website, with the ability to experiment with new designs that are more effective. While the holiday season is no time for a major redesign, you can make quick fixes, and then use this invaluable data to make bigger changes later on.
Improve checkout
One reason people have flocked online for their holiday shopping is that when they're ready to check out, they're always first in line. So make sure you've exceeded customer expectations during those final, crucial mouse clicks. The key is to reduce the number of hoops customers must jump through, while giving them different options to pay. For example, the checkout process should securely retain customer data so that people don't have to re-enter their information with each purchase. You should also offer a variety of payment options so that shoppers can use their preferred payment method, including a buy now, pay later plan, which is especially important in these cash-strapped times.
When your customers check out, they should also feel safe. Over the past few years, many people became online shoppers only after they overcame their fear of making online transactions. Once they had a good experience, they returned online for more. In that sense, every successful online transaction is a win for our industry as a whole. So do your part: Make sure your customers are feeling safe by giving them a truly secure method of paying.
If the answer to these questions is generally "yes," then you should be smiling, too. But here's my advice: Think of the holidays as a stress test for your organization. You won't always be dealing with these kinds of volumes, but the best practices you embrace now will pay dividends the rest of the year.
In that spirit, here are some tips for the holiday season.
Use incentives to keep a steady flow
One of the most important safeguards against getting overwhelmed is to level out the volume spikes that can catch your organization off guard. The steadier the flow of traffic to your site, the better. Conversely, if 90 percent of your customers place their orders on Dec. 22, you're going to look unprepared no matter how much preparation you've made.
Begin by working out a set of incentives that will get your customers buying early. Possibilities include free gift wrapping, free shipping, two-for-one offers, coupon codes for later purchases, and, especially popular in today's economy, merchandise discounts and promotions. Then make sure your customers are aware of the offers by highlighting them on your home page. You can also e-mail your most valued customers, as long as you don't wear out your welcome. Finally, monitor the results to see what your customers are responding to. That knowledge will help you rev up sales during slow periods throughout the year.
Clearly communicate the true cost
The trend in e-commerce sites is to eliminate as many hidden costs as possible. Transparency is especially important during the holiday season, when customers have even less patience for unhappy surprises. Customers report that hidden shipping costs are the most frequent irritant--especially when those costs are unexpectedly high and only appear at the final stages of checkout. That ploy can lead to shopping cart abandonment--the merchandise is at the "register," but the customer has departed.
Instead, let customers know as soon as possible in the process what shipping will cost. Most of us know what it costs to mail a package, so keep those costs in line with customer expectations--or go one better and offer free shipping as an option. Some customers will always want more expedited shipping, but all will appreciate the opportunity to get standard shipping for free. And again, that's true not only during the holidays, but throughout the year.
Take customer support seriously--but let's chat
The time has long passed since the days when an e-commerce site could hide from its customers by not responding to queries. Phone calls are usually best, but not every online company has the resources to handle them, especially during the holiday crunch.
What to do? Resist the urge to bring in people who can answer the phone, but lack the expertise to truly represent your store. A badly handled call is worse than an unanswered one. Instead, consider online chat. The medium isn't as personal as the phone, but skilled representatives can conduct five or 10 chats at once--and customers will quickly recognize whether the people at the other end know what they're doing. Of course, e-mail can also be effective as long as you're diligent about responding quickly--an e-mail black hole is worse than no e-mail at all. And what if you're truly underwater from customer queries? Apologize, get a number and a good time to call--and call back.
Use "heat map" technology to track what clicks
Here's another place the holiday stress test can serve you well in the coming year: tracking what people actually do on your site. Companies like CrazyEgg, and Clickdensity offer services that can show you how people are navigating your website, with the ability to experiment with new designs that are more effective. While the holiday season is no time for a major redesign, you can make quick fixes, and then use this invaluable data to make bigger changes later on.
Improve checkout
One reason people have flocked online for their holiday shopping is that when they're ready to check out, they're always first in line. So make sure you've exceeded customer expectations during those final, crucial mouse clicks. The key is to reduce the number of hoops customers must jump through, while giving them different options to pay. For example, the checkout process should securely retain customer data so that people don't have to re-enter their information with each purchase. You should also offer a variety of payment options so that shoppers can use their preferred payment method, including a buy now, pay later plan, which is especially important in these cash-strapped times.
When your customers check out, they should also feel safe. Over the past few years, many people became online shoppers only after they overcame their fear of making online transactions. Once they had a good experience, they returned online for more. In that sense, every successful online transaction is a win for our industry as a whole. So do your part: Make sure your customers are feeling safe by giving them a truly secure method of paying.
Monday, 9 November 2009
What is a Debt Management Plan
The economic downturn has led to debt taking centre stage in the media and news coverage. But debt certainly is nothing new. Consumers often depend on their credit cards, purchase household items with a credit line and take out loans and mortgages. So debt is, for many, simply a part of life.
Traditionally, when debt becomes too difficult to manage, individuals find themselves bankrupt. And while most of us know what bankruptcy is, far fewer of us are fully aware of other alternatives, such as debt management plans.
A debt management plan is, effectively, an informal agreement made between the debtor and the creditors. More of than not, this is negotiated with the assistance of a Debt Management company. The way it works is for the company to establish what you can realistically afford to pay off your debts each month. You must have some form of income and be able to pay at least something. They will take into account your income and living expenses to work out what you can afford to pay off your debts each month and then approach your creditors. Often, the debt management company will attempt to negotiate your outstanding balances down one way or another or to freeze interest. However, because the approach is informal in nature, the creditors are in no way obliged to accept any offer. If your creditors do agree to the offer, you will simply make one monthly payment to your debt management company. They will then divide this accordingly between your creditors for the duration of the debt management plan. This is often five years, at the end of which time your debts are considered to be settled.
Because of this effective timeline of being out of debt, the debt management plan is proving particularly popular. However, if you debts exceed £15000, you’re unlikely to be eligible and may instead have to look into the more formal, legal alternative of the IVA.
Traditionally, when debt becomes too difficult to manage, individuals find themselves bankrupt. And while most of us know what bankruptcy is, far fewer of us are fully aware of other alternatives, such as debt management plans.
A debt management plan is, effectively, an informal agreement made between the debtor and the creditors. More of than not, this is negotiated with the assistance of a Debt Management company. The way it works is for the company to establish what you can realistically afford to pay off your debts each month. You must have some form of income and be able to pay at least something. They will take into account your income and living expenses to work out what you can afford to pay off your debts each month and then approach your creditors. Often, the debt management company will attempt to negotiate your outstanding balances down one way or another or to freeze interest. However, because the approach is informal in nature, the creditors are in no way obliged to accept any offer. If your creditors do agree to the offer, you will simply make one monthly payment to your debt management company. They will then divide this accordingly between your creditors for the duration of the debt management plan. This is often five years, at the end of which time your debts are considered to be settled.
Because of this effective timeline of being out of debt, the debt management plan is proving particularly popular. However, if you debts exceed £15000, you’re unlikely to be eligible and may instead have to look into the more formal, legal alternative of the IVA.
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