Month: August 2018

Corporate Social Responsibility in Banks – What Does It Mean?

Over the past few years, a rising emphasis has been placed on companies and financial institutions’ Corporate Social Responsibility. But what does Corporate Social Responsibility (CSR)” mean anyway? This is indeed one of the most frequently asked questions for all those dealing with CSR matters.

CSR is also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance. Different organizations have developed different definitions and there is large common ground between them.

A simple definition refers to CSR as how companies and financial institutions take into consideration the impact on society of their operational activities. Consequently, it requires a built-in, self-regulating mechanism whereby businesses would monitor and ensure their adherence to law, ethical standards, and international norms to produce an overall positive impact on society.

It is not surprising to see that CSR is subject to considerable amount of debate and criticism. Advocates argue that businesses benefit in many ways by operating with a perception broader and longer than their own immediate, short-term profits. Opponents argue that CSR diverts from the basic economic role of business; others argue that it is nothing more than superficial window-dressing;

Largely, the banking industry in the Middle East does not realize the central importance of having a defined CSR policy. Many banks do not fully understand the worth of CSR.

There are obvious and real gains on hand for banks which have well-designed and successful CSR strategies. They can promote their profile in the community they serve, enhance local, and cross-border economic performance, and enable community development, at the same time strengthening their profitability.

CSR focuses more on how companies and financial institutions can contribute through their core business, in addition to traditional charitable donations.

CSR and Project Finance

CSR practices are often implemented in banks’ core business, which are credit and investments. Project finance is one of the methods to get capital for investment opportunities.

Banks consider how to fairly balance the risk and interests of the various participating parties, including protecting the interest of those who are directly and indirectly affected – specifically the local community that reside within or close to the area impacted by the project.

It is recommended that banks recognize their responsibility to prevent or limit social and environmental harm that may have been caused by activities financed by them; they need to adopt appropriate analysis and verification procedures.

Banks have impact on the environment directly and indirectly. Lending and investments activities have an indirect impact on the environment. Therefore, banks should be encouraged to consider environmentally-friendly purposes in their credit decisions. To this end, banks may offer incentives to credit facilities for “green” investments such as improving a buildings’ insulation or more efficient lighting systems which use alternative energy sources. The bank may apply less stringent rules in relation to collaterals or offer discounted loans to such clients for these types of investments.

There are approaches that explore how banks are linking the traditional credit risk assessment with the borrower’s environmental risk assessment. In other words a bank can assess the environmental credit risk of the borrowing customer and then factor in the results of this assessment at some stage of the creditworthy assessment process.

Community involvement

Community involvement is the basis of all accomplished CSR policy initiatives and extends far beyond the standard charitable measures. Banks should introduce innovative schemes such as:

– permanent learning programs for disadvantaged sectors of society;

– sponsorship of young entrepreneurs;

– provision of academic scholarships and research proposals;

– support environmental issues such as recycling and waste management;

– community support programs;

– health support programs;

– financial support for art and culture;

Banks may also support non-governmental organizations engaged in drug prevention measures for the youth with a mentorship and parental training programmes. Bank employees can be mentors for pupils at the senior level of the compulsory school during one school year.

Awareness and Transparency

It is essential that there should be a transparent and strong commitment to adoption of CSR practices. This can be reached through explicit reference to CSR activities adopted by banks through the following means:

– dedicating sections of Annual Reports to CSR matters;

– publishing of Sustainability Reports and/or policy statements on CSR; and web-based information.

It should be noted that corporate sustainability for banks is much more than mere charity. In this context, banks are encouraged to improve the future of the people in all communities they operate through CSR programmes, which in turn will sustain their business in the future.

In Europe, a dramatic change has been in the type of CSR reporting which has changed from simply environmental reporting to sustainability (social, environmental and economic reporting which has now become typical among top listed companies). There has been an increase in the number of companies publishing CSR information as part of their annual reports.

Banks and the Environment

Just like other business sectors, the business of banking has a direct impact on the environment through consumption of paper, energy, waste management and means of transport used. Direct environmental impact can be reduced by keeping environmental order in banks themselves, through limiting the consumption of energy and paper, ensuring good waste management and requiring suppliers’ to conform to environmental standards. A bank can minimize the impact in a systematic manner through implementing an environmental policy; it can even go further and apply for environmental certification in accordance with ISO 14001.

The ISO 14001 is a standard for environmental management systems that is applicable to any business. It aims to reduce the environmental footprint of a business and to decrease the pollution and waste a business produces.

Good examples from the banking sector include Deutsche Bank, Barclays Bank and Alpine Bank of Colorado. They have constructed a comprehensive Sustainability Management System in accordance with ISO 14001 and permitted an independent certification agency to monitor their commitment in the field of sustainability by making sure they comply with the requirements of ISO 14001 standard.

Financial Inclusion

The market in which banks operate today requires new range of products targeting new customer segments including groups who are not yet fully integrated in society, and not dealing with banks such as temporary workers, low-income families, and micro businesses operating in poor areas of the country.

This situation represents for banks a challenge in terms of designing suitable products for these distinct segments, and the opportunity to develop a new type of business beneficial to all. Some good examples of responding to the challenge would be microfinance and financial education.

Banks are encouraged to promote financial education projects involving different target groups. This is achieved in two ways. Firstly, by concluding agreements with strategic partners which are recognized by the target groups in order to inform them better on financial services and products which they will use in their daily life. Secondly, by developing contacts with the local authorities towards certain target groups. These target groups include primary schools, secondary schools, higher education, universities, and the general public world.

Some initiatives involve surveys which provide insight into the challenges and opportunities related to financial literacy in the target groups of children, teens, students and young adults. Another consists of developing new products, educational materials and events intended to stimulate financial skills and knowledge. Perhaps the best example is an educational website with fun, online exercises for children, tips and advice for parents on how to educate children financially.

Conclusion

The key factors for a successful CSR policy can be summarized as follows:

– Continuous support of senior management and all staff

– Reporting CSR – internally and externally, on a long-term basis, with regular reviews

– Include CSR as integral part of corporate strategy of the bank

The advantages for banks in adopting well-designed CSR initiatives lie in the following areas:

– Encourages sustainable behavior by customers;

– Supports development of separate business models for various segments;

– Provides real benefits for the society as a whole;

– creates higher employee motivation, and superior performance levels;

– Makes banks more aware of their potential role in society;

– Creates positive publicity and/or increased brand recognition.

Hany Abou-El-Fotouh is Director Policy & Corporate Affairs / Board Secretary, CI Capital Holding – the investment banking arm of Commercial International Bank which is the largest private bank in Egypt. He provides advice and direction to the Board and management with respect to corporate governance practices and formulates corporate policies.

 

Where To Get Money For a Franchise Idea

How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you’d really like to get in on that…if only you had the money? If you’re like most who are seeking greater opportunity and wealth, this probably happens with you more often than you care to admit, except perhaps in strictly private conversations.

When the average person sees one of these opportunities, or comes up with a similar idea of his own, the problems of start-up capital may seem formidable. But in reality, they may not be. In fact, just about anyone with a good credit record and an “insider’s sense of business” can get the capital he or she needs, whenever it’s needed. The secret is in knowing how to put together a proper proposal, and to present it to the right per son. These are the “how-to” instructions we’re going to give you in this report.

The first thing you’re going to need is a complete business plan. This is a complete and detailed description of exactly how you intend to operate the proposed business. Your business plan should detail precisely the product or products you plan to sell; how you’re going to produce or manufacture the product; your costs (inventory costs if you’re purchasing them from a supplier); who is going to sell those products for you; how they’re going to be sold; the attendant costs; when you expect to recoup your initial investment; your plans for growth or expansion; and the total dollar amount you’re going to need to make it all work according to your plan. Your business plan must be detailed – complete with projected income and expense figures – through at least the first three years of business.

Now, assuming you have your business plan all worked out, put together and ready for presentation with your request for capital, let’s talk about your capitalization proposal.

First, keep in mind that whenever you ask somebody for money, whether it’s for a small personal loan or a large amount of money to finance a business, you’re involved in a selling situation. You have to prepare a “sales presentation” just as if you were getting ready to sell an automobile or refrigerator. Within this sales presentation you must have all the facts and figures; you must anticipate the questions and the possible objections of the prospective lender with answers or explanations; and you must “package” it as impressively as you would yourself for an audience with the president of IBM or General Motors.

The more money you ask for, the more “in-the-know” will be the people you want to borrow from, and so the more detailed and organized your proposal must be. This shouldn’t cause you too much worry however, because you can hire a CPA to help you put it together properly, once you’ve got the facts and have a business plan he can work from.

Look at it this way: The more money you request for your business, the more your lenders or prospective investors are going to want to know about you, your planning, and your business. They want to be impressed with the fact that you’ve done your homework; they want to see that you’ve researched everything and documented your facts and figures; they want to be assured by your presentation that investing in your business will make money for them. It’s just that simple at the bottom line. Unless you can instill confidence in them with your business plan and loan or investment proposal, they’re just not going to give much positive thought to your request for capitalization.

So you’ll need a balance sheet describing your net worth – the worth of what you own compared to the amount of money you owe. You’ll also have to prove your stability and money-management talents relative to how successful you’ve been in paying off past obligations. If you have had credit problems in the past, get them “cleaned up”, or at least explained on your file at your local credit bureau office. Under the law, credit bureaus are required to give you all the information they have about you in their files, and it’s your right to correct any errors or enter explanations regarding negative reports on your credit. Do this without fail because prospective lenders or investors will definitely check your credit history.

So, now you have your balance sheet prepared; your credit history organized in a light that’s favorable to you; your business plan (with costs and income projected over the coming three years), you’re ready to start looking for lenders or investors.

Almost all franchisors offer help in setting up with one of their franchises. Most will go out of their way to assist you in getting the financing you need. Some will lend you the entire amount, with payments coming out of the income they expect you to make from their franchise operation. Many will carry this loan themselves, while others will carry part of it and find you a lender to finance the remainder.

Franchisors have two objectives in mind when they offer franchises to the public: They are trying to expand their operation, thus increasing their profit, and they are trying to raise capital for themselves. Generally speaking, if you have a good credit history, and if they feel you have the necessary business personality to achieve success with one of their operations, they’ll do everything within their power to get you in a franchise outlet. Keep this in mind the next time you see an advertisement for a promising franchise opportunity requiring a substantial amount of cash outlay. You don’t necessarily have to have all the money. They want you, and they’ll help you!

Many people seem to be unaware that most of today’s largest corporations started on a shoestring – on borrowed money. Many people seem to feel that unless they’ve got it all “in hand” in savings, then they’ll just have to keep plugging away until they can save up enough to take the big plunge. Nothing could be farther from the truth. Just a quick bit of research will show that 999 out of every 1,000 businesses were begun on borrowed money.

Look to your family and friends for financial help. Approach them in a business-like manner; tell them about your idea or plans, and ask them for a loan. Agree to sign a formal statement to pay them back in three, five or ten years, with interest.

When you have your proposal assembled, you might even want to think of a limited partnership or even a general partnership arrangement as a way to finance your project. In any kind of partnership, each partner shares in the profits of the company, but in a limited partnership, each person’s loss liability is limited to the amount of money he initially invested. The truth is, in this kind of a situation, you’ll be doing all the work and sharing your gain with your partners, but then it’s a fairly sure way to obtain needed financing.

Another common method of obtaining business financing is through second mortgage loans on a home or existing piece of property. Say you purchased a home ten years ago for $35,000, and today the assessed valuation is $85,000, with a mortgage of $25,000 still outstanding. A lender may consider your home to be security or collateral for a loan up to $60,000. In many instances, this is the easiest and surest way of getting the money needed for franchise or other business investment. And, it makes sense; you’ve got “net worth” available that is doing nothing but sitting there. Take this equity and invest it in a worthwhile business, and you could double or triple your net worth each year for the rest of your life.

Deciding to obtain a second mortgage on your home in order to finance a business opportunity is without doubt a major decision, but if you are sure about your investment project, and are determined to succeed, you owe it to yourself to go ahead. You could incorporate yourself, borrow money from your family through a second mortgage on your home, and protect against the loss of your home through the Federal Home stead Act. The important point here is that all business opportunities involve risk and sacrifice. It’s up to you to determine the feasibility of your success with your proposed venture, then decide on the best way possible to proceed.

In every instance where you run into reluctance on the part of a lender to lend you the money you need, explore the feasibilities of “two-name” or “co-signed” loans. You can have the franchisor sign with you, or one of your suppliers, a business associate or even a friend. Oftentimes you can borrow or rent collateral such as stocks, bonds, time certificates, business equipment or real estate, and in this way give greater confidence to the lender in you r abilities to repay the loan. Whenever you can show a contract from someone who has agreed to purchase a certain number of your products or services over a specified period of time, you have another important piece of paper that most lenders will accept as collateral. Still an other possibility might be to get a bank or a firm that has loaned you money in the past to guarantee your loan. They simply guarantee that they’ll lend you money in the future if ever the need should arise.

Going straight to you neighborhood bank, applying for a business loan and walking out with the money is just about the most unlikely of all your possibilities. Banks want to lend money, and they must lend money in order to stay in business, but most banks are notoriously conservative and extremely reluctant to lend you money unless you have a “regular income” that “guarantees” repayment. If and when you approach a bank for a business loan, you’ll need all your papers in order – your financial statement, your business plan, credit history and all the endorsements you can get relative to your succeeding with your planned enterprise. In addition, it would be a good idea to take along your accountant just to assure the banker that your plan is verifiable. In the end, you’ll find that it all boils down to whether or not the bank officer studying your application is sold on you as a good credit risk. Thus you must impress the banker – not only with your proposal, but with your appearance and personality as well. In dealing with bankers, never show an attitude of doubt or apology. Always be positive and sure of yourself. However, don’t come on so strong to them that you’re either demanding or overbearing. Just look good, know your stuff, and project an attitude of determination to succeed.

Your best bet, in attempting to get a business loan from a bank, is to deal with commercial banks. These are the banks that specialize in investment loans for going businesses, real estate construction, and even venture programs. Look in the yellow pages of your telephone or business directories; call and ask for an appointment with the manager; and then explore with him the possibilities of a loan for your project. One of the “nice things” about commercial banks is that even though they may not be able to approve a loan for your business ideas, they will almost always give you a list of names of business people who might be interested in looking over your proposal for investment purposes.

A lot of commercial banks stage investment lectures and seminars for the general public. If you find one that does, attend. You’ll meet a lot of local business people, some of whom may be able to and interested in helping you with your business plans.

When you’re looking for money to move on a business deal, it does not really matter where the money comes from, or how it all comes about. It’s important that you get the money, and at terms that are suitable to you. Thus, don’t overlook the possibilities of an advertisement for a lender or investor in your local papers. Place your ad as well in national publications reaching people looking for investments. Other avenues to seriously consider are foundations that offer grants, local dental and medical investment groups, legal investment groups, business associations, trust companies and other groups or organizations looking for tax shelters.

Basically, it isn’t a good idea to go to a finance company or other commercial lender of this type for a business loan. The most obvious reason is the high interest rates you have to pay. These companies borrow money from larger money lenders, and then turn around and lend it to you at a higher interest rate than they pay. Herein lies the means by which they make money from granting loans to you. The more it costs them to provide the money for you, the more it’s going to cost you to borrow their money. The only element in your favor when borrowing from one of these agencies is that most will generally lend you money against collateral other lenders just won’t accept. Insurance companies, pension funds, and commercial paper houses are not too out of sight with their interest rates, but they generally will not even consider talking to you unless you’re requesting $500,000 or more. They’ll also pretty much require that your business proposal be backed by the best possible plan.

Finally, the bottom line is this: You must have a well-researched and detailed business plan; you must have all your documents and projections put together in an impressive presentation; and then, you will have to be the one who does the final selling of your proposal to the investor or lender. This means your appearance, personality and attitude, because – make no mistake about it – before anyone lends you any size able amount of money, they’re going to want to take a close look at you personally before they hand over the money.

Actually, the different ways of financing a franchise opportunity are as many and varied as your own creativity. The sources of obtaining money are virtually limitless, and available to anyone with an idea.

One word of caution before you jump into any franchise purchase agreement: The price you pay to participate in a franchise operation is not always the total cost involved in getting the business off the ground. With some franchise operations, you may find other costs such as down payments on the purchase of property, building construction costs, remodeling or site improvements, equipment, fixtures, signs, advertising, and training. Virtually all franchise deals require that in addition to the purchase price or the license fee of the franchise, you’re required to give a certain percentage of your gross business income to the franchisor, plus extra payments for promotion and administrative costs. Above all else, before you get involved in a franchise, or any business venture for that matter, make sure you’ve conducted a complete and thorough investigation of the opportunity presented. If it’s a good deal, then go with it; but if you have any doubts or feel as though you’re getting in over your head, back off and look around for something not quite so ambitious, or perhaps expensive.

There are a lot of good franchise opportunities, and some not so good. It’s important that you be sure of what you’re investing in, and that you can make money with it. From there, preparing the proper business plan and the necessary financing, while not always a snap, can be done. Now’s the time to do it! We wish you outstanding success with your franchise business.

 

Discovering The Best Suited Program For Affiliate Marketing Will Take A Little Digging

Affiliate marketing online is one of the hottest home based business choices you can find. Along with some fundamental coaching, you could simply set up an affiliate online business to get going in a couple of weeks. Affiliate programs are the most effective way for you to offer somebody else’s goods or services and even earn money from it. Marketing with an affiliate program is actually the best way to sell on the web with no need of getting hip-deep with products.

All you have to do is to advertise the service or product on the web (that includes web pages, emails, discussion boards in addition to paid advertising). The organization then accounts for the product; they will process all the payments, ship the item, and even handle just about any grievances. You provide the promotion and get the commission. As an example, lets say you own an Internet site providing people with information about Jazz Songs. You could potentially insert affiliate website links to items related to Jazz Music, Compact disks, download sites, and so forth, in your Internet site. Whenever your visitors select your links they’ll navigate to the website that you are marketing and advertising. Whenever they buy, you will be paid a fee. Not bad for just offering information and facts.

You will find affiliate marketing programs pretty much everywhere these days. A good method to uncover programs you’d like to join will be by simply performing a search concerning your selected subject. Discover what precisely your competition is doing for a place to start. The particular affiliate networks including Click Bank and Commission Junction are great areas to look also. Start looking just about anywhere you shop online. Search the sites for the phrases affiliate or maybe partners. You are going to rapidly see right now there are almost no stores on the Internet nowadays who don’t have some form of affiliate marketing program. If you are planning to build a site or even a blog, you should most certainly possess affiliate links.

After you register for the chosen affiliate program, you will receive your very own Identification number. Any time you insert your website link to the actual site you happen to be advertising on your site, you will use a URL address that includes your unique identification number. Everyone which buys something by using your individual link, racks up commissions for you. These kinds of commissions are paid out determined by the actual pay out routine of the specific program.

There are a variety of products that teach you the nuances of establishing your own affiliate Internet business. While this actually is one of the greatest techniques for getting up and running online, you also have to have the right information. With the information we have offered here you can get up and running, although, if you would like to bring in the big bucks you may have to invest a little money to get one of the more superior affiliate marketing courses that you could locate online. In terms of purchasing a guide or maybe a training course to be able to understand all of the nuances of affiliate marketing online, ensure that you will not find yourself investing way too much cash. Right now there are lots of courses that you can find on the net that will show everyone exactly how to begin, nevertheless you should not be forced to pay in excess of one hundred dollars to discover the knowledge which you will want.

While a good many programs contain all the information, there are several programs on the web which go in to in-depth detail about producing money with affiliate marketing. You might need to pay a tad bit more than you wanted to, but in the long run it will be well worth it.

 

Search Engine and Social Media Marketing: Essentials for Business Owners to Know

Let’s assume for a moment that you own a business and want to go about getting people to find it online via search engines. And we’ll also assume that you want to promote awareness about your business via social media venues such as Facebook, Twitter, Pinterest, LinkedIn, Google+, etc. It is all-too-easy to become immersed in the sea of acronyms and conflicting information related to search engine optimization (SEO), search engine marketing (SEM), and Social Media Marketing (SMM). Often, freelancers and self-proclaimed marketing “experts” even misuse the terms and take important concepts out of context. Add to it the fact that Google endlessly changes their algorithms that determine search engine rankings, and from one month to the next the applicability of the information changes. For the non-technical business owner whose goal it is to spend hard-earned money on a well-targeted campaign for online success, the whole mess of terminology and conflicting information can be exasperating– and perhaps even intimidating.

Let’s put it all into relatively plain language that any beginner can grasp. If a word or two eludes you, don’t worry too much. You’ll get the overall concept. Once you have the basics down pat, you can “graduate” to learning more about each topic in more detail.

Here we go:

Search Engine Optimization, called “SEO”, is a preparatory process of making your website “optimized” for the search engines to properly index the content. When we optimize content for the web, there are some “rules of thumb” that we follow, and there are some absolutes that we follow as prescribed by Google’s own “best practices” standards which Google is kind enough to publicly make available to anyone who cares to do it right. Doing it right is affectionately referred to as “white” hat SEO. Doing it wrong or with the purpose of manipulation and/or exploitation is labeled as “black” hat SEO, much as white and black were colors of hats used in old western movies to represent “good guys” and “bad guys” respectively.

PREPARING the site for proper indexing via proper SEO is the first step in effectively marketing the site. As recently as the year 2010, SEO and SEM were lumped together collectively under the term “SEO”, but since that time, the two disciplines have really come into their own respective realms of strategies, techniques, and methods. SEO is “passive” but essential to the marketing process. It’s very important that a website is optimized well, but not “OVER-optimized”, which is a term used to describe sites that are intended to manipulate search engine results.

Periodically Google makes changes to the rules that website managers (webmasters and marketing people) are to follow. Minor changes are often unnamed, but major changes are typically named to call attention to them, and to categorically address the types of changes being made so web professionals can “talk the talk” and be on the same page with respect to what types of marketing efforts are affected. Some of the Google names for their algorithm changes, for example, are “Caffeine”, “Panda”, and “Penguin”. Cute as these names sound, they each encompass a set of rules and criteria that are affected by the change. For instance, the most recent Penguin 2.0 change will impact over-optimized sites in the search engine rankings.

Optimization generally involves adjusting text and link characteristics of a website to include text position, keyword choices, site structure, page titles, keyword density, keyword dilution, and many additional considerations. That’s where the rules-of-thumb and absolutes come into play. Again, Google provides pretty clear guidance on what’s acceptable and what are considered no-no’s.

SEM is Search Engine Marketing. It’s the active process of promoting a site on the search engines. If a site is marketed without first being optimized to some extent, then the site is being promoted without being properly prepared, sort of like broadcasting a TV commercial without editing it to clean it up.

SEM comes in two basic flavors: subscribed and organic.

Subscribed SEM includes things like pay-per-click, pay-per-impressions, pay-per-placement, etc. Sites that use paid links to promote the site will take a hit with Penguin 2.0 if the links are determined to be spammy links.

Think of subscribed SEM as similar to term life insurance: you’re “covered” as long as you pay your premiums (assuming ethical link sources), but when you discontinue your monthly payments, your search engine presence from subscribed marketing sources simply goes away, just like a term policy lapses if you quit paying your premiums.

Organic SEM, on the other hand, is achieved by creation of additional, independent web content such as blogs, articles, online press releases, videos, directory submissions, landing pages (not “doorway” pages), proper page mapping, and many more elements of unique, original content. Each of the organic marketing content must also be optimized prior to employing them for marketing purposes. You can see where this can become a time-involved process.

Organic SEM is not a “busy work” effort to put a bunch of junk up on the web with keywords and links. It involves creating value-added content that is appealing and useful to people who do keyword searches for the topics you want your site to be found under, so there is dual relevance: Information for people, and keyword merit for search engines to sink their teeth into. The marketing content must be original, meaningful, and unique. The value of the organic SEM to your business is that there is a connection of links that point from one source to another, funneling traffic to your site and elevating your site’s rankings in search engines due to quality link merit as well as the resulting traffic component of the web content. Again, there are rules-of-thumb and some absolute “dos and don’ts” related to organic SEM. Think of organic SEM more like a whole-life insurance policy– There are costs to do the marketing, but over time the accumulation of the original, independent web content doesn’t go away, and the end result is often times PERMANENT (or relatively solid) staying power for your website and content-much like how in a whole life policy, the cash value eventually generates enough interest to cover the premiums.

The up-side to subscribed SEM is that it’s relatively instantaneous, though typically more expensive. The down-side is that it is short-lived for the money you spend. It goes away as fast as it started.

The up-side to organic SEM is that (if it is done properly) it is effective in producing long-term, residual results that drive a positive return on investment while saving money. The down-side is that it can take longer to get established depending on market saturation, industry type, geo-targeting, and several other factors.

BIG caution here: The SEO/SEM and SMM fields are ridden by fraud and deception. Since it’s essentially advertising, there’s no ethical guarantee that a service provider can legitimately make for specific page placement or results. If you think about it, that makes sense. There are only 10 organic spots on Google’s page 1 for a given set of keywords. So assuming that there are more than 10 companies worldwide (as well as other content that relates to your industry) that do what you do, and assuming that at least 11 of them are also paying for marketing, how can an SEO/SEM provider “guarantee” page 1 results for a particular search term? In short, they can’t– Not ethically, at least. But that doesn’t stop many of the THOUSANDS of freelancers and SEO companies out there from making “empty promises in the dark”.

Even subscribed marketing isn’t guaranteed. Someone else can potentially come along and be willing to pay more money for the spot you want. Regarding SEO and SEM, in a nutshell, it’s “buyer beware”. Everyone wants your money. Trust no one based on just their say-so. You need to be comfortable and confident in the relationship with the provider you choose, as well as the track record they’ve established with other clients. The proof is in the pudding, so to speak. Don’t make the mistake that many business owners do and make an emotional “buy” decision based on a sales pitch full of promises. Talk is cheap. Make sure whoever you are considering is able to show you meaningful results from a portfolio of other clients. Lots of people read a book and can “talk the talk”. Remember: this is YOUR business and YOUR marketing dollars… so the provider you pick needs to prove themselves to earn YOUR confidence.

Okay, end of sermon.

On to Social Media Marketing:

The old expression, “word of mouth is the best form of advertising”, has been a universal truth forever. People are much more inclined to buy based on the unsolicited or trusted advice of friends & family than they are from a paid ad intended to persuade or sway opinion. Our physical world has a parallel world online: banking, dating, shopping, etc. Think of Social Media Marketing (SMM) as word-of-mouth online. Developing an audience of fans, friends, and followers via Facebook, Twitter, Pinterest, etc. allows you to build RELATIONSHIPS with clients. That means creating a following of people who become interested in the “stuff” you post as it relates to their culture and their interests. The problem comes with many social media marketing companies (or at least that’s what they label themselves as, since it’s a big money-maker) who try to use social media as a point-of-sale. If every post, every pin, and every tweet is some kind of spammy, self-promotional solicitation that pimps your business to folks, expect your social media efforts to fail miserably.

Likewise, if you measure social media success simply by the number of “likes” and “follows” you get, you’re missing the mark completely. If you don’t know any better, the marketing company can pull the wool over your eyes pretty easily by citing the quantity of likes and follows as the determining metric for your success. The number of people who “like” you has zero correlation to dollar sales. Yes, it provides an indicator, but there is no direct conversion between a “like” and a dollar… period. And the number of likes, in itself, is as meaningless as the number of total hits your website gets. It’s the QUALITY of the hits that matters, not the QUANTITY.

Unfortunately in society today, “Sex, Drugs, and Rock & Roll” sells these days. In terms of marketing and general search engine traffic, then, if a website owner puts out ads and content that promotes “free sex”, for example, the site linked to will undoubtedly get lots of hits. But there will be zero buyers if the site isn’t providing or selling what the seeker is looking to find. Some unscrupulous marketers can artificially generate large traffic to the site via such unethical means (though not quite so exaggerated as the example I use here for illustration purposes). Nonetheless, without looking at the analytics data such as bounce rate, time-on-site, time-on-page, keywords used, etc. the raw traffic score is meaningless on its own.

We use other (different) metrics to evaluate SMM results as they pertain to ROI, but the analytics must be examined in a relevant context in order to make management decisions as to how to engage and employ ongoing SMM marketing efforts. Otherwise it’s just “busy work”. Right along those lines, many business owners just do “busy work” posting blogs and such themselves, thinking they’re doing something good for their marketing efforts (and trying to save a buck by not paying a qualified, experienced marketing person), but unless the content is optimized and strategically applied to their indexed web presence, it amounts largely just to wasted time.

Another Big Caution here: There are a lot of freelancers who enjoy dabbling around with Facebook and Twitter, and they think that they can get away with charging businesses a lot money to make small-talk online via social media. Well… They CAN-because even though they don’t know how to apply social media within a business context, neither does the typical business owner who pays the bill. So is it fraud? Or is it simply ignorance on the part of the marketing freelancer? At the end of the day, the results are the same: the business owner is out a lot of money with no ROI. Just because someone is comfortable and well-versed with making posts and tweets via social media, it doesn’t make them qualified to do your social media marketing. If they’re a self-proclaimed “expert” who posts a lot but who can’t apply SMM to your SEM efforts, they you’re essentially paying them to enjoy their own hobby. They may have the best of intentions, and they may believe that by generating lots of “likes” and “followers” they’re achieving something, but unless it dovetails into your other marketing, they’re just spinning your wheels. Consider these points:

  • As a passenger on an airplane, recognizing a “good landing” doesn’t qualify you to be a pilot.
  • As a tax payer, recognizing that the government’s deficit spending is bad policy doesn’t make you a budget analyst.
  • As a Facebook user, creating a page and writing content that gets a lot of “likes” doesn’t make you a social media marketing expert.

The last bullet point is true for many (if not most) of the solicitations from people who label themselves as consultants and offer to do your social media campaigns, too. They may feel that they are an expert based on getting “likes” and followers for their posts, so the thought may occur to them that they can make some money doing it for other people, and so they hang a shingle on their door to advertise themselves as social media marketers. But looking at one or two data points out of context does not qualify them to do the job any more than admiring a smooth landing makes them qualified to fly a plane– or even just land it. There’s so much more involved, just as there is with being successful online.

With regards to promoting your business, most of the unqualified freelancers and consultants charge much less, so the temptation to spend your money with them is much greater. Everyone loves a bargain, right? But if the money you spend is thrown away without obtaining the anticipated results, how much of a bargain is it? It would be much better to spend more money that produces a solid, positive, and compounding return on investment. The old expression, “To make money you have to spend money” is around for a reason. Spend your money wisely. Ask a lot of questions of any provider you consider hiring. If they seem to stumble, can’t put things in context with your overall marketing, or just end up “talking in circles”, don’t even THINK about handing your business over to them. They’ll fail. You’ll fail.

Again, Buyer Beware. Challenge your provider (tactfully, of course) to establish their credentials and credibility with you before you engage in a contract that might bind you for a year.

As you can see, SEO, SEM, and SMM are all different components of your business’s effective online marketing strategy, but they’re all related and they’re all essential. Hopefully now the wording and concepts make sense, and you can pursue delving into finding a service provider who competently integrates the three in a concerted effort to add customers and sales to your financial future.

 

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