7 motivational tips for small businesses and start-ups

motivation tips for small businessesWe  all have days when simply getting out of bed and facing what lies ahead feels like a mammoth effort. As a small business owner you may find that when business is booming it is far easier to leap up and get on with the day than it is when things aren’t so rosy. So, how do you motivate yourself to carry on when times are tough?

‘In the midst of Winter I finally learned that within me there lay an invincible summer’ Albert Camus

Being your own boss and starting your own business can be hugely rewarding however, the reality is that running your own business is often a long journey filled with ups and downs. The challenge is to stay focused and motivated when there is an economic downturn, when sales are slow, when your work life balance is proving a challenge and the stress of wearing to many hats and juggling too many balls becomes exhausting.

Small business owners have the added pressure of carrying most (if not all) of the responsibility on their shoulders alone so it’s completely understandable that there are days when you just don’t want to face the day. We look at some tried and tested motivational tips to help you when you need a little bit of inspiration to get you going again.

 

7 top tips for when you need a bit of  extra motivation

networking1. Be social.

The reality of being your own boss and running a small business is that you can end up spending hours alone. There are  few if no colleagues around for you to  share a bit of light-hearted banter or talk through any concerns. As humans we are naturally social  and so it can be really de-motivating not having anyone about to talk to.  It is essential that you put time aside to socialise with others. Have a think about ways you can get together with people in the same situation as youself. Feeling part of a community is important so  why not try signing up to small business discussion groups. There are plenty of online forums that will enable you to join in on discussions with like-minded individuals.

Many towns have local small business networking groups that get together on a regular basis to network and chat. Business mentors can work really well too – and it can be an excellent way to bounce ideas around with someone and get an objective and experienced opinion.  Realising that you are not alone and  that there are other people in a similar situation to you who will have experienced much of what you go through as a small business owner can make a real difference to how you manage your business ups and downs.

time management2. Improve your time management skills.

Unfortunately the nature of running a small business or start-up is that you are likely to be juggling all sorts of roles – from accountant to marketer and strategist to administrator. This means that trying to balance all these disparate tasks  can sometimes feel like an impossible mountain to climb. Good time management skills can help you learn how to prioritize your workload and  focus your time and effort in the right place. Feeling in control of things is a far more productive than feeling so swamped and out of control that you can’t see the wood for the trees.

exercise and motivation3. Take a break

Don’t feel bad about taking a break from your business. This could be anything from taking time out for a 20 minute coffee break  or a whole day out with your nearest and dearest. Having a break can help you see things in a different light and approach problems with fresh eyes. Exercise is also a great way to get you motivated and lift your spirits. Many studies show the link between regular exercise and improved motivation. So if you are having a bad day, get out and do some exercise and see if it puts a better spin on the day.

self help books4. Read some self-help books.

Ok there maybe a few cynical raised eyebrows here,  but self-help books aren’t all Bridget Jones-esque ‘Men are from Mars women are from Venus’ type fare. There are some really excellent books out there that stand the test of time and are used by prominent business folk  for inspiration. Indeed, ‘How to win friends and influence people was first published over 75 years ago and has sold over 150 million copies and Feel the Fear and Do it anyway has been riding high in the best seller chars for over 25 years.  Take a look at this article from Entrepeneur.com that lists some of the most popular motivational books for entrepreneurs.

positive thinking5. Think positively and celebrate successes

Of course it’s not always possible to look on the brighter side of life, but in order to succeed in a challenging environment  it pays to remain as positive as possible in your outlook. Seeing the glass as half full rather than half empty can give you the push you need to carry on when times are tough. It is important that you learn to accept mistakes and see them as part of the learning process rather than as pure failure. We often waste valuable time lamenting on our perceived failures rather than learning from them and swiftly moving on.

And when you do succeed or do something well then sit back and acknowledge that achievement – celebrating success is a great motivator.

facing fears6. Face any fears straight on.

There are always tasks we don’t want to do, phone calls we don’t want to make and problems we don’t want to deal with. However the more time that we put off dealing with lingering problems, the bigger they become and the more likely you will start feeling unmotivated.  I promise you 9 times out of 10 you will feel a whole lot better by simply taking a deep breath tackling  the problem straight on.

ecommerce boss7. Remind yourself of why you want to be your own boss.

When you’re having a bad day, week or month and business is tough, it is often easier to focus on all the things that make being your own boss challenging. Therefore, it is really important that you don’t lose sight of the reason you became your own boss. Remind yourself of all the benefits running your own business can bring. For example:

  • Not having a manager to answer to
  • Making your own decisions
  • Creative control
  • Sense of satisfaction and reward
  • Setting your own working hours
  • Tax benefits
  • Working directly with your customers

Try writing a list of all the things that you love about being your own boss and stick it up somewhere where you can look at it whenever you need to remind yourself of why you have chosen this path! I’ll leave you with an appropriate and inspiring quote from The Chimp Paradox:

“Don’t be disheartened if you have set-backs: instead learn from them and always celebrate any successes. Remember you always have a choice. The choice you make and how you choose to deal with life will determine your success and happiness. So what are you going to do today that will make you happier and more successful?” Dr Steve Peters, The Chimp Paradox

We’d love to hear your thoughts and experiences in this post, so do please leave a comment.

 Man in bed image courtesy of graur codrin / FreeDigitalPhotos.net

Runner image courtesy of Sura Nualpradid / FreeDigitalPhotos.net

Coffee cup image courtesy of Stuart Miles / FreeDigitalPhotos.net

Books image courtesy of Danilo Rizzuti / FreeDigitalPhotos.net

Positive thinking image courtesy of winnond / FreeDigitalPhotos.net

Fear / Courage image courtesy of Stuart Miles / FreeDigitalPhotos.net

Ecommerce man image courtesy of stockimages / FreeDigitalPhotos.net

 

EU Consumer Rights Directive 2014: Guide for Small Businesses

EU Consumer Rights DirectiveOn the 13th June 2014 the new EU Consumer Rights Directive came into effect. Since it was passed in October 2011 it has provoked a fair amount of controversy amongst UK retailers. But, whether for or against, the new legislation is now in place and the reality is that it will have an impact on your business practice.

So, if you are not exactly sure what the new EU Consumer Rights Directive is all about and what  it means for your business, then read on.  We’ve  put together a brief overview of the key factors most likely to have a direct impact on small businesses.

What is the EU Consumer Rights Directive?

In a nutshell, the new directive was implemented with the aim of ensuring all consumers have equal rights across the EU, regardless of how they choose to shop – whether in a high street shop, through the post or  downloading electronic content. In particular, this has meant stronger rights for people when they are shopping online.

As we mentioned at the beginning,  the new legislation has been controversial and not necessarily  welcomed with open arms amongst many UK retailers indeed, as The Guardian notes in an article earlier this year 40% of small businesses actually want to leave the EU. However, the  EU Commission argues that the new legislation will  actually help businesses enter new markets and make it easier for them to trade across the European Union through the introduction of a single set of common rules for all 27 member states.  According to statistics from the EU Commission:

  • Only 25% of EU traders sell across borders
  • 40% of traders in the EU see the cost of complying with differing  national consumer protection rules as a big obstacle to trade

What does the Directive mean for you as a small online businesses?

If you read around there is a general consensus on the key factors that are likely to have a direct impact on SME’s and will therefore require you to make some changes to your current practice.  We’ve outlined the key changes below:

  • Pay Now button: Your order confirmation button will now need to make it very clear to the customer that by clicking on the button they are actually entering into an agreement and acknowledging their obligation to pay. Buttons need to be clearly labelled as something like ‘Pay Now’ so the customer is in no doubt that they are agreeing to an order and have an obligation to pay. Buttons with wording like ‘Buy Now, Confirm. ‘Check out’ are no longer adequate. And, if you don’t make this clear, then the customer may well be eligible for a refund.
  • Total Costs upfront: You must make clear to customers the total cost of goods at the point of sale, before they place an order. This includes all shipping costs, taxes or duties – there should be no surprises for the customer once they have committed to the order – if there are any additional charges not previously pointed out then they will not have to pay them.
  • Refunds issued within 14 days. The amount of time you have to issue a customer with refund has been reduced from 30 to 14 days (this is from the point of returned goods being received).  You are now also liable to refund standard shipping costs back to the customers. Make sure you factor this into your budgeting – if you are not already offering it then it is going to have an impact on your profit margin. Businesses are now also entitled to offer only partial refunds to a customer should the returned item be ‘diminished in value’. The new legislation states that the customer should take be expected to take reasonable care of the goods they are returning.
  • Cancellation rights extended to 14 days. Consumers previously had the right to cancel their order up to 7 days from receipt of their goods. The new legislation extends this to 14 days from receipt of goods. You are also obliged to ensure that a customer is made aware of this before placing their order. In addition you must also make sure you provide a downloadable cancellation form that customers can use (should they so wish) if they wish to cancel their order and return their goods.
  • Order confirmation. An order confirmation needs to be sent to customers via a ‘durable medium’ – this essentially means in a way that the customer is able to access and reproduce any time he or she requires it. An email is fine so is a printed receipt or even a personalised account page.
  • Digital downloads. New rules have also come into place for electronic downloads. The new legislation requires sellers to provide more detailed information about the downloadable content they are providing. For example if there are limits on the number of copies a customer can make or if there is any relevant software or hardware compatibility information. Your customer also has the right to cancel their order right up to the point the download starts. You need to make sure that you have made the customer fully aware (prior to purchase) that their right to cancel is only applicable until the download commences.
  • Opt-in tick boxes: Most of you are probably already undertaking this as part of the Privacy and Electronic Communications Regulation Act, but essentially you must make sure you have no ‘ pre-ticked’ opt in boxes. Your customers need to be able to actively tick the sign-up box and opt-in.

 

What actions should you be taking?

As this is just a short blog, we’ve just focused in brief on the key factors that as a small business you will need to take into account.  Some of the changes you will need to make are minor tweaks such as changing the text on your order confirmation button to ‘Pay Now’. Others will be involved and require you to amend your terms and conditions and even re-train support staff in the new legislation. You may well wish to look at the EU Consumer Rights Directive 2014 in more detail, therefore we’ve added some relevant links in at the end of the article.

As a starting point, we would suggest that you review your current processes and systems to make sure you are in compliance and work through the following checklist so you make sure you’ve covered.

Budgeting. Make sure you have factored in any additional costs into your profit and loss. For example refunding standard shipping costs on returned goods will have an effect your profit margin.

Terms and Conditions: there are a number of changes that will need to be made on your terms and conditions with regard to changes in the cancellation period, shipping, returns and refunds and partial refunds policy.

Order confirmation page: you need to make sure that your order confirmation page reflects the new legislation. The total cost of goods (shipping, takes, duties etc.) must be made clear at the point of sale, your call to action button must clearly show the customer they are entering into an obligation to pay so should read ‘Pay Now’ or ‘Order with Obligation to Pay’ (as suggested in the new regulations) and your terms and conditions are accessible. So there are no misunderstandings, it is a good idea to get customers to acknowledge that they have read T&C’s prior to placing their order.

Delivery information: Update your delivery information and Terms and Conditions to reflect the new mandatory rules that unless there is a previously agreed delivery date, items must be delivered without undue delay and within 30 days from the day the product was purchased.

Paperwork: Make sure all your supporting paperwork has also been amended to update the new regulations.

Customer services and support staff: Make sure your customer services and any relevant support staff are fully briefed on these new regulations as they will have to deal with queries about cancellations, refunds, delivery etc.

Website. Once you have been through all the changes make sure you update your website to reflect all the changes. For example, amend the text on  your order confirmation button to ‘Pay Now’, make sure your sign-up boxes are not pre-ticked and enable the customer to ‘opt-in’, your Terms and Conditions are updated to incorporate the new legislation and is easily accessible on the website so customers are aware of their rights prior to placing their order, check there is a link in place so customers can  download the  cancellation form, FAQ and Delivery and Returns information is up-to-date and easily accessible to customers.

 

Further information

Key Facts on the new EU Consumer Rights Directive

Implementing the Consumer Rights Directive 

EU Commission: The Directive in Consumer Rights 

We’d love to hear your thoughts and experiences on this topic, so please do leave a comment.

 

 Image courtesy of taesmileland / FreeDigitalPhotos.net

 

Building an E-Commerce Startup: What You Need to Know

There was never a better time to start your own business than the present day. With the internet boom and all the various avenues it has brought with it, would be entrepreneurs are spoilt for choice.

It’s even better for retail entrepreneurs. No more shelling out big bucks for your retail store. No unnecessary expenses on utilities, rent and overheads. No need to employ large sales teams on the shop floor to assist shoppers. Last, but most importantly, no more being limited by the population of a locality to grow your business.

Amazon

With the birth of Amazon and eBay in 1994, e-commerce in the form we know it today was born. It has evolved to a nearly unrecognizable level from its humble beginnings, but the basic idea remains the same – get customers to visit your website, let them browse around for the things that interest them, allow them to make a purchase and pay for items that they finally settle upon; all online.

So if you have a bright idea for the next Amazon in the making, put on your listening ears. Here’s a step by step roadmap to launch a successful e-commerce startup.

1. Think Through Your Idea. Do concept testing.

The one thing that gives a startup a definite edge over competition is an innovative concept. While established businesses can afford to buy market share by spending huge money on marketing, a great idea often attracts attention by pure word of mouth and can be the USP of the business.

If you think you have hit upon such a game-changing idea, get more opinions on it. Test your idea with your target audience and see if they are equally gung-ho about it. Use survey tools like SurveyMonkey or Qualtrics to do your concept testing by yourself before you unleash your business idea on the world.

2. Figure Out Source of Funding

Before you can plunge headlong into building your business, figure out where the money for the venture is going to come from. Today, startups have a variety of choices when it comes to getting funding for their business.

Figure Out Source of Funding

  • Bank Loans: There’s always the tried and tested route of taking a bank loan to get started. The amounts are often not very large, but it’s a lot easier to obtain than a lot of other funding options.
  • Venture Capitalists: Approach venture capitalists or angel investors for seed funding for your e-commerce startup. Even Google started small with VC funds and grew into the internet behemoth it is today. You will need to come up with a clear business plan, an airtight revenue model, timelines for when your business will breakeven besides loads of enthusiasm to make a pitch to a potential VC and secure your funding.
  • Crowdfunding: Another option you should consider is crowdfunding. With this option, you present your business case to the public at large through a crowdfunding site and invite the public to contribute funds towards your business idea. In return the donors or investors get a share of equity in your business, a fixed return on their investment or even a special gift as a thank you for their donation. Pick from sites like Angels Den, Crowd Cube or Indiegogo to get your business idea off the ground.

3. Legal Eagle – Get Your Paperwork Done Correctly

There’s some level of paperwork involved while setting up any new business. An e-commerce venture is no different. While the intricacies of the legal requirements may vary from country to country, largely you will need to take care of these three priorities:

  • Copyright: Once you have established that your business idea is one worth pursuing, you need to take measures to prevent someone else from copying it and getting to market before you. If it is a never before seen product or service idea, copyright it to protect it from me-too copycats. This step however, is a matter of choice, not necessity.
  • Registration and Ownership Structure: Next you need to register the business as a legal entity and get your taxation details set up. Since you have figured out your funding sources already, spell out the ownership structure of your business (sole proprietorship, partnership, public limited company etc.) right at the beginning in order to prevent problems later on.
  • Domain name and Web Hosting: Every startup, especially and e-commerce startup needs a place on the web to host its website. Buy a domain name and get a web hosting service for your business from any of the hundreds of services out there. Take your pick from HostGator, GoDaddy or FatCow to build your website on. Make sure the domain name you buy is unique, relevant and is the same as or matches your brand name.

4. Pick A Good Platform To Build Your Site

Shop around, do your research, speak to existing e-commerce business owners and understand which platform will be best suited to build your e-commerce venture on. Spend some time and effort in this process, as the platform you build your website on, will decide how stable your website is, how fast you can process transactions, how versatile and multi-functional you can make your site and more.

Pick A Good Platform To Build Your Site

You have multiple options to pick from. There are the free to use, open source options like WordPress, Drupal or the e-commerce favorite – Magento, or you can choose to go with plug and play e-commerce platforms such as ShopIntegrator.

Your final choice depends upon how flexible you want your site to be, what your budgets are, and the extent of e-commerce functionality you’re looking to offer over the long run.

5. Use Conversion Optimization Principles For Your Website At The Design And Development Stage

A lot of e-commerce sites get into optimizing their conversions retroactively – after they see sales slumping or traffic bouncing off at alarming rates.

Avoid this situation altogether by building your site from the ground up using the best conversion optimization and SEO guidelines in the book. Some conversion optimization fundamentals that you must keep in mind at the time of developing your site are:

  • Good Copy: Invest in good writing and functional copy that engages readers while it communicates facts. Pay special attention to headlines. A great headline captures users’ attention and also tells search spiders exactly what the page is about to raise your page rank on SERPs.
  • Page Meta Data: Take care to include accurate and descriptive title tags, meta descriptions and alt tags on images for each page on your site. Each of these help search engines discover your site more easily and improve your page rankings
  • Clear Navigation and Site Structure: A clear breadcrumbs based navigation structure, intuitive categories and sub-categories and logical link architecture helps not just search engines but also allows users to find products on your site with ease. Better showcasing of products = better chance of a sale.
  • Call to Action: Every page out to have a clear call to action that stands out from the rest of the page. Use contrasting colors, arrows or ample white space around the CTA to make it jump out at the visitor.
  • Social sharing: Include social sharing icons alongside every product listed on your e-commerce site. People like to share interesting things they find online with their friends. Play into this need and get your pages to become more popular online
  • Quick and Easy Checkout Process: This is of prime importance for e-commerce sites. Make sure your customer does not get distracted by other interruptions on your site once they add items to their shopping carts. Create a simple, linear checkout flow with minimal steps to avoid shopping cart abandonment and improve conversions. Take a look at some of ShopIntegrator’s shopping cart and checkout options for inspiration.

Here’s a great guide to conversion optimization best practices for further reading at your leisure.

6. Keep Costs Low

As you start out on your journey towards a new business, it is important to keep your expenses under control. Technology now allows you to use free or low cost apps for doing stuff that large organizations employ teams of people to do.

Keep Costs Low

Some free / cheap apps that you can consider to get your everyday business done for free are:

  • Dropbox for Storing Data that can be accessed anywhere. You get 2 GB of free storage post which you can pick from one of their paid plans based on your storage needs.
  • Asana for Project Management and collaborating with your team on projects smoothly. They have a free option for teams under 15 members. For bigger teams you’ll have to go paid.
  • Free Conference Call for using Conference Services for absolutely free
  • MailChimp for Email Marketing offers a great free account that can be upgraded eventually as your email database grows bigger.
  • Natural HR is a free Human Resource Management tool that you can consider for recruiting, onboarding, training and payroll management.
  • Streak a free CRM tool that works from right inside your email inbox.
  • Shop Integrator is a complete Store Management & Shopping Cart solution with a free online retailing option where payments can be made by PayPal or offline checkout. The free version also supports 7 storefront languages and includes a tax manager.
  • Free Press Release allows you to submit press releases for free that get distributed to news sites, blogs, search engines and social media.

7. Hire Good Talent

A big mistake that a lot of entrepreneurs make is taking too much onto their plates and getting burnt out eventually. While it helps to have a business partner or involve your family in the business to keep costs down, it is not a long-term fix. Do what you are naturally good and delegate the rest.

Hire talented people who share your vision and can help take the startup forward.
Check out LinkedIn profiles of professionals who work for your competitors and reach out to them with interesting offers. That’s a free and effective way of hiring capable talent. Another free avenue is to tap into your college network for references of talented professionals whom you can approach.

Only once you have exhausted your free options and networks should you venture into paid recruiting platforms that cater to your particular industry. LinkedIn offers job posts by industry, so do leading career portals like Monster and CareerBuilder.

8. Manage Your Cash Flows

Managing money is often the Achilles Heel for many new startups. Multiple expenses are a given in a newly set up business. Besides capital expenses, there are running expenses like payroll, tax payments, utilities, business travel, business entertaining and more.

Keeping track of each expense often becomes too cumbersome and things quickly spiral out of control.

Manage Your Cash Flows

Stop spending from personal accounts, and open a dedicated bank account for your business. Get a corporate credit card that can be swiped for everyday business expenses. Invest in an accounting software that will link your bank account, credit cards and all expenses together and keep the paperwork sorted in one place. Apart from managing income and expenses, most expense management tools also take care of invoicing and payment receipts from clients, payroll and taxation as well as overall book-keeping for future records.

You can use a free app like Wave Accounting for this, or if you want to go bigger, you can upgrade to apps like Xero or QuickBooks.

In Closing

Setting up and running a business was never easy. But with technology on our side, we can now predict our performance and correct our course before it’s too late. Even when mistakes occur, it is easier to bounce back on an e-commerce platform than a real world retail set up.

So go ahead, take these fundamentals of building an e-commerce startup, add your own creative flair to them and create your dream enterprise to rival the e-commerce behemoths of the day.

(Image source: 1, 2, 3, 4, 5)

 

Data Protection: a guide for small businesses and start-ups

data protection, data privacy laws

For small online businesses and start-ups collecting data for marketing and sales communications is essential and therefore good quality data is highly valuable. However, there are specific rules and regulations in place that govern how you collect, keep and use data. It is important you familiarise yourself with these since, the last thing you want is to upset customers or face any hefty fines.

This is post provides a basic overview, but I have added in a list of  useful links at the bottom that will enable you to examine the regulations on more depth and look up specifics relevant to your business.

In the UK there are two key acts you should be aware of  concerning data collection, processing and dissemination.

1. Data Protection Act 1998

2. Privacy and Electronic Communications Regulation Act

These basically concern how you:

Obtain ‘personal data’

from your data subject (eg. customer, visitor to your website, prospect). Your data subject should be understand why they are handing over their data and how it will be used.

Process and store personal data 

(modify, keep secure and delete data)

Use personal data

 

1. Data Protection Act 1998

“Data Protection Legislation is enacted to protect the individual, to protect their privacy and prevent the misuse of their personal data” (Chaffey et al, 2009 p.141).

The Data Protection Act 1998 (DPA) effects how you can collect and use data. In the UK, any company that holds personal data on file needs to register with the data protection registrar.  Some small businesses are exempt from registering – you can find out whether you are exempt by taking the ICO’s (Information Commissionaire’s Office) online self assessment questionnaire .

The Information Commissioner has an excellent overview and checklist specifically for small businesses Data Protection Checklists for Small Businesses and SME’s.

There are 8 key principles of the 1998 Data Protection Act which can be summarised as follows.

  1. Personal data shall be processed fairly and lawfully. Essentially this is a code of practice  that the Information Commissioner suggests to ensure fair and legal data processing. A quick summary of the code includes the following: companies should have a person ‘data controller’ who has overall responsibility for data protection. If you are a small business or sole trader this is likely to be you. Any communications should clearly detail how a ‘data subject’ (e.g a customer) can get in contact with the data controller or their representative. The ‘data subject’ must have given consent prior to any data processing.  Sensitive personal data should be treated with particular care (eg. ethnic origin, religious or political beliefs)
  2. Personal data shall be obtained for only one or more specified and lawful purposes.  You must make it clear at the point of collection how you intend process and use the information. For example whether you are using it for further communications and whether the data will be passed on to any third parties.
  3. Personal data shall be adequate, relevant and not excessive. This is really a balance between what information you need as a company to better understand your customers and not taking advantage of your data subjects rights.
  4. Personal data shall be accurate and where necessary, kept up-to-date.  It is essential that you keep your data accurate (think about how the data is inputted – many mistakes can come from inaccurate keying in) and up-to-date. So if a data subject contacts you with any changes to their personal details, those changes should be implemented quickly.
  5. Personal data shall not be  kept longer than necessary. If your relationship with the data subject ends then you must delete their data. This is a slightly woolly area so I would suggest you use your common sense – for example if you have held the data for years but feel there is a possibility that the data subject will buy from you then the information is still useful. However if the data subject has had no contact for 10 years then perhaps you need to think about deleting it – don’t forget a clean, up-to-date database is likely to be better performing anyway.
  6. Personal data shall be processed in accordance with the data subject’s rights. This concerns the protecting the rights of the data subject with regard to how their data is processed. Examples include,  an individual can request to view personal data held by an organisation (which must be supplied within a 40 day period), data processing should not cause distress ( for example sending out mailshots to someone who has passed away) and unsolicited phone calls or email.
  7. Appropriate technical  and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss, destruction or damage. This is about ensuring that the data you hold is protected by the necessary security measures that will prevent any unauthorised access to the data.
  8. Personal data shall not be transferred to a country or territory outside the European Economic area unless that country ensures an adequate level of protection. Essentially this means that you cannot transfer data to countries outside Europe if they do not have appropriate data processing laws in place – such as anti-spam legislation and regulations surrounding privacy and electronic communications.

 

data protection, marketing consent2. Privacy and Electronic Communications Regulations Act

In 2002, to further support 1998’s Data Protection Act, specific regulations were introduced to protect consumers with regard to controlling the distribution of electronic communications (eg email and SMS).  There are regulations specific to the type communications you are looking at so it is important to take a look at the Act in full. However some key points of importance here include:

 

 

  • Having an Opt out / unsubscribe  option in all communications. Customers should be able to unsubscribe from future communications quickly and easily. For example, you should always include a clear unsubscribe option on all your communications and ensure this is followed up by suppressing any such opt-outs on your database.
  • Contact details must be provided. You must by law, have a contact details by way a recipient can get in contact – such as a valid address or phone number.
  • The sender must be clearly identifiable. Essentially you should in no way attempt to conceal or disguise your identity.
  • For unsolicited electronic communications the recipient must have given prior consent.  Often you see this implemented at the at the sign up stage with a simple tick box where the recipient can choose to Opt-in (he/she proactively consents to receive further information) or Opt-Out ( he/she refuses the offer to receive further information). For example:

Would you like to receive further communications by email Yes 〈  〉  No 〈  〉

As we mentioned earlier it is worth reading the regulations as there are slightly different rules for individual subscribers, company subscribers and existing customers, so check what is applicable to your business. For example existing customers you can use what is known as a ‘soft opt-in’ which differs from the formal ‘opt-in’. This is where you can send emails or SMS messages if you have:

  1.  obtained their contact details from a sale (or sales negotiation) of a product or service
  2. you are only marketing to them about similar products or services
  3. you gave them the option to opt-out of the marketing when you first collected their details and give them the opportunity to opt-out (unsubscribe) in subsequent communications.   

Also, this guide focuses on regulations within the UK, so if you are outside the UK then you need to look at the  regulations for your own country for example in the US there is the CAN-SMAM Act 2003. A useful summary of spam and privacy regulations for individual countries can be found at SpamLaws.com .

Finally it is also quickly worth mentioning the CAP UK Advertising codes. This code stipulates a number of rules of best practice concerning advertising, sales promotion and direct marketing.  Such as being responsible, non-offensive and not misleading. It also has more specific rules pertaining to specific industries and advertising to children. Again, it is something worth taking a look at.

Hopefully this should give you a brief overview of  key data-protection and privacy regulations in the UK. Outlined below are some useful links that will provide you with further, more-in depth reading.

Useful references

ICO.org. Getting it right. A brief guide to data protection for small businesses

Information Commissioner – Data Protection Principles :

ICO Marketing Guidance for Privacy and Electronic Communications

Direct marketing, Data Protection Act and Privacy and Electronic Communications Regulations

Guide to Privacy and Electronic Communications

The Data Protection Act 

Committees of Advertising Practice (CAP),  UK Advertising Codes

Email Marketing – When to use opt-in and when to use opt-out

Spam Laws Guide to different countries regulations

 

We’d love to hear your thoughts and experiences on this post, so please do leave a comment

 

Building a marketing database: tips for small businesses and start-ups

database marketing, build a marketing databaseGrow your online prospects with a marketing database

Building and maintaining a marketing database is an absolute essential for any successful business – small businesses and start-ups included.  A good database should be the cornerstone of  your marketing communications, enabling  you to open up better, and consequently more productive communications with your customers and prospective customers.  It will help you effectively target your marketing communications to your customers – be it to gain new business, engage,  cross-sell, upgrade, inform, entertain or create loyalty.

When you are just starting out creating a marketing database your primary focus should be centered around:

  1. capturing and gathering useful information about your customers and prospective customers
  2. getting permission from your existing and prospective customers to contact with further communications.

This permission-based approach enables you to target your communications appropriately to achieve better response.

“The permission marketing concept suggests that communications requested by customers have a greater impact and higher response rates than the many unsolicited communications which bombard us each day through print, mail and TV.” Dave Chaffey, Smart Insights

So where to start?

Database marketing has become so sophisticated (think Supermarket loyalty cards like TESCO’s Clubcard) that many small businesses and start-ups can be put off getting their database started. Worries over how  complex databases are to set up, the cost of sophisticated contact management software, concerns over outsourcing and maintenance can inhibit new businesses getting their database off the ground. However when you are just starting out you should just be focusing on what you need now and what you can afford.

There is absolutely nothing wrong with starting out with a simple excel spreadsheet. You can always decide to move to a more sophisticated contact management system or outsource to a database company at a later date. So don’t be put off building yours just because it isn’t going to be an all singing, all dancing database. Building a basic database with key customer information is still a worthwhile and cost-effective activity that will provide a solid foundation of prospects and customers for you to build upon as your business develops.

What information should you capture?

There is all sorts of interesting information you can capture about your customers, enabling you to learn more about their behaviour and needs. From basic demographics (age, gender, income) to  purchasing history such as products or services they have bought  from you or shown an interest in, lifestyle interests and so on. You can then use this data to segment your audience into related groups and target your communications more effectively.

However, when you are initially setting up your database focus on what information you actually need now.  This will depend on your business and what type of communications you are intending to send out – for example is it just email communications  or are you sending out direct mail promotions?  Spend some time deciding what customer information is going to be the most value to you. Basic  fields to start populating your database with  may include some or all of the following:

  • Email address
  • First name
  • Surname
  • Salutation
  • Job Title
  • Company name
  • Company Address
  • Home address
  • Mobile
  • Prospective customer / customer / lapsed customer
  • Date record was entered

 

How to encourage people to hand over their personal details and give you permission to contact them.

Once you’ve set up your database you need to think about how to get your customers and prospective customers to hand over personal information and give you permission to contact them with further communications. You may have a few loyal customers willing to pass over personal information just by asking for it, however the reality is that most people are only going to provide it if there is something in it for them.

The likelihood is that you’ll need to entice customers in with an incentive to reward for them for taking the time to handover their personal details. Long forms can be really off-putting so I would  suggest you consider focusing on getting their email address first – you can then get more detailed  information from them at a later date  – once you’ve built up more of a relationship.  If you need your customers to complete longer forms then think about an incentive that will motivate them to do so – of course you’ll get a higher uptake if you offer something relevant to your customer base and the industry you are in. For example:

  • 15% off plus free delivery and returns when you sign up to email newsletter
  • Download free whitepaper or ‘how to guide’
  • Free entry to a webinar
  • Free gift or e-voucher
  • Enter a competition

Quality data is worth its weight in gold so offering an attractive incentive is going to be cost-effective in the long-term.

Managing and maintaining your database

Having a up-to-date, useful database is essential. There is absolutely no point having a marketing database full of contacts who are completely disinterested in your business as not only will you annoy people by sending them irrelevant information, you are wasting money maintaining their records and skewing your response rates.

Keep your database clean, relevant and up to date and it will be far more efficient.

Make it easy for people to unsubscribe from your emails and make sure you remove them or suppress them from your database as soon as they request it.   Email database addresses decay by an average of 22.5% over a year  so this it important to keep information as up-to-date as possible. And of course the longer time goes on the more likelihood your data becomes inaccurate and this is when errors are most likely to occur.

And finally, don’t forget to make sure your are up-to-date on data protection laws, your contacts have opted-in and you are following good practice with regards to data privacy.

We’d love to hear your thoughts and experiences on this post, so please do leave a comment.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net