Editor’s Note: Most articles about using social networking websites are enthusiastically positive. Today I thought it would be great to examine both sides of the coin, with two articles with opposing viewpoints. One article points out the positive advantages of social media. The other article, below, is from John L. Mariotti, whose position on social media is, well, not so positive. And I think John’s viewpoint represents the view of the vast majority of businesspeople today — they aren’t ready to drink the Kool-aid on social media sites just yet (maybe never). — Anita Campbell, Editor

By John Mariotti

In spite of the fact that I have always been an early adopter of new technology — or communications-based tools, social media turns me off. When I think about why, at least 10 reasons come to mind.

I have signed myself onto a couple in their early stages — at the urging of friends — and that’s when I realized why I wouldn’t have anything more to do with them, at least until they get much further down their evolutionary trip and improve measurably. Here’s why:

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Editor’s Note: This guest article, by Ivana Taylor, presents one side of the debate over whether social media is worthwhile to businesses. Ivana believes that business leaders with foresight need to fit social media in as one component of the marketing mix. But, for a different point of view as to why some are not drinking the social media Kool-aid, please be sure to read the other side of the story, also. — Anita Campbell, Editor

By Ivana Taylor

Let’s face it, when it comes to getting and keeping profitable customers there are only four basic components that we can manage:

• Product (your offering — the unique combination of product, service and experience)
• Price (the value that your customer perceives translated into money)
• Distribution (putting your offering within arms reach of the customer)
• Promotion (communicating your offering)

That’s all there is to the marketing mix.

And when we skillfully and creatively combine these ingredients in the perfect proportions, Voila! We have a tasty stew of happy customers, happy employees and enough profits to go around as well as to invest in the future.

Of course, it can’t be that easy, right? Some of us go wrong by becoming entrenched in traditional marketing strategies. And the rest of us go to the other extreme and become paralyzed by the overwhelming number of tools and Internet applications that seek to bring us together, yet separate us from real face-to-face contact.

Social media has been one of those magical and mysterious technical terms that seemingly everyone under 30 has been all a-twitter about. And those of us over 30 have been curious and more than a little suspicious about.

The challenge that traditional marketers have is in understanding how to use this new “ingredient” in their marketing mix. Is it like a “meat” or just a “spice?”

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Five years ago this month my friend Michael Thomas and I started a company that included the word “CRM” in it.

Thinking back on it now, I don’t know what the heck we were thinking. Most small business folks back then didn’t even know what CRM was. The ones that did, well, let’s just say they didn’t have a positive word to say about it … in fact the words they did use are on that list George Carlin put together back in the day. And based on the looks on some people’s faces after saying our company name, I even feared for my own safety.

But now, in 2008, I’m not afraid to say my company name out loud. In fact I can say it and know that a growing number of my small business peers understand its importance to growth of their own companies. Because 2008 is shaping up to be the year small businesses begin fully embracing customer relationship management as a business strategy.

That’s because CRM is going social.

Small Businesses Know CRM means more than CRM

Traditionally CRM is usually broken into three main components:

• marketing automation,
• sales automation, and
• customer service.

But a great deal of the focus has been on things like contact management, opportunity management and activity management. And many of the CRM applications concentrated on meeting the challenges that were inherent with these areas.

As small business people, we understand the operational productivity gains that come out of having a centralized database for tracking activities, opportunities and customer information. This also can help us be more responsive to customer inquiries, close more deals (more efficiently), and more accurately predict when opportunities turn into cash. This is truly good stuff that can make our lives easier.

But what we understand more than anything is a need to leverage the web to find more leads, and to let the web help us quickly determine good leads from dead ends. More importantly we need to create a Web presence that makes it as easy as possible for those who could use our services to find us.

This means creating a customer profile that helps us identify key pieces of information, helping to determine good customers from bad ones. Then reaching out to those customers to find out what’s on their minds, what social networks (if any) they frequent, what topics are important to them, and how they like getting information.

Chances are, if a good number of our customers spend a decent amount of time on Facebook, we can increase our opportunities to engage others like them by building a Facebook presence. Or if we find many of our customers are on Twitter, it might help us increase opportunities to touch base with them by following their tweets. Maybe just knowing their favorite blogs or podcasts will give us insight that could lead to more opportunities to reach more like them.

Social CRM adds a whole new dimension to the traditional view of customer relationship management. The focus is undoubtedly on people and not technology. It’s about joining the ongoing conversations our customers and prospects are already engaged in — not trying to control them. It’s about using any tool available that will allow us to meaningfully engage with more people like them. It’s realizing people like doing business with people they like — and understanding we love doing business with people we trust.

My small business brethren know this better than anyone, and have literally put the “social” into CRM. Which is why I’m not ashamed to say my company name anymore.

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About the Author: Brent Leary is a Partner of CRM Essentials. Brent also hosts Technology For Business $ake, a radio show in the Altanta, Georgia, USA area about using technology in business.

Like most small business owners, I’m always looking for ways to build and grow my business so that I can make more money, while doing more of what I love, and less of what I hate. And that generally means that I eat up any business book that promises to get me there.

There’s just one problem with that. I tend to read these business books, the way a couch potato watches workout videos; I enjoy the experience and sometimes think that just by watching these buff people break a sweat, I might actually get in shape. Well, you and I both know that doesn’t work when it comes to getting yourself in shape. And that doesn’t work for getting your business in shape either.

What works is Michael Ports new book “Beyond Booked Solid.”

If you’re still looking at ways to leverage your strengths and uniqueness into a turnkey process that will consistently bring in revenue while you sleep from clients you love, then Michael Port’s new book “Beyond Booked Solid“ is for you. His website says this about the book, which I found to be actually very descriptive:

” “Beyond Booked Solid” gives you the strategies, techniques and tips you need to build a bigger, better business. It will inspire you to take action and help you stay accountable so you build the best business that’s best for you. And by the way, growth (a bigger better business) can mean many things — bigger revenues, bigger profits, bigger operations. It’s up to you what it will mean to your business. Growth is a very different challenge from booking yourself solid.”

This is an interactive and personal book that’s written in such a conversational tone that you will often feel like you’re having your own private session with Michael right there in your office or living room.

Before I tell you about “Beyond Booked Solid, ” let me give you a little background. As you might have guessed from the title, “Beyond Booked Solid” is actually a sequel to “Book Yourself Solid: The Fastest, Easiest and Most Reliable System for Getting More Clients Than You Can Handle, Even if You Hate Marketing and Selling.” That’s a mouthful — but doesn’t it just resonate with so many professional consultants and service providers?

Where “Book Yourself Solid” puts the focus on getting and keeping clients, “Beyond Booked Solid” is designed to take you out of the day-to-day delivery of services, and put you in the mode of building a turnkey system that gives all those clients you’ve accumulated more of what they love you for.

This is the book for you if:

• You’re currently trading your personal time for money
• Your business depends on YOU to deliver the service
• You want your business to serve you - instead of the other way around
• You can’t balance your work and personal life for fear one or the other will suffer

Here are just a few of my favorite things from the book:

• A downloadable Beyond Booked Solid (BBS) toolkit which includes the amazing BBS one page report that will get your head and your focus out of business planning mumbo-jumbo and get you thinking about what’s most important to get your business where you want it to be.
• Exercises at the end of the chapters that give you the opportunity to crystallize what you’ve learned and start applying the concepts to your own business. One of the first exercises you’ll do is to define your objectives clearly. Michael gives you a fill in the blanks sentence and you do the rest:

” In one year, I want my business to _________. In three years, I’d like to achieve_________ in my personal life. You will find that the very process of articulating your your dreams will open up new ideas.”

I’ve decided to read the book through once, and then go back to do the exercises. I’m still in that process and what Michael recommends is true; the very act of writing your thoughts down and maybe even sharing them with others in your business circle will generate ideas and opportunities that are guaranteed to get you beyond where you are today.

With the kind of technology we have today, if you’re not thinking of ways to systematize your business and put your content, experience, skills and experience to work on more levels than one, then you’re possibly leaving money on the table. You may not choose to do all of the things that Michael Port recommends. But getting through this book is bound to build your business and create more balance in your life.

Have you ever contacted your attorney to prepare what you think will be a simple contract, only to get snared in a situation that feels like an episode of the Twilight Zone?

You know what I’m talking about. You’re imagining it as a simple 2-page contract, only to have it turn into the 17-page, 9-point font “contract from hell.”

Over at the Build a Solo Practice website, I have a 2-part guest post where I talk about a (sometimes) sore topic we small business owners face.

Contracts are necessary to protect our interests.

But sometimes they can be unnecessarily complex from a business person’s perspective.

So I gave my feedback to lawyers about writing business-friendly contracts, pointing out some features that make a contract into a “contract from hell.” Among them: writing in legalese. It is terribly frustrating to non-lawyers.

And, by the way, I am NOT ganging up on attorneys. Some of you may know that I used to be an attorney. The practice of law is a worthy calling, and without the law our society could not function. And we could not build businesses unless we were assured of the rule of law to protect those businesses.

It’s just that I have experienced the situation from both sides. I’ve been an attorney in the past. These days I’m just the client.

And thinking back, I now realize there were times as an attorney when I prepared contracts that could have been more user friendly. The process could have been a lot more efficient. That’s especially true early in my career, before I knew better. Of course, I learn best from making mistakes.

Go read the articles (Part One and then Part Two). Then share your experiences. Tell us your idea of the contract from hell.

More importantly, from your perspective, tell us: what is the ideal contract? How long should the ideal contract be? What should the back-and-forth collaboration process with your attorney be like?

And when you’ve had good experiences working with your attorney, what made them good?

Many observers say that a big trend in financing new companies comes from accredited investors who invest as part of angel groups. However, if we take a look at the information on the angel investment activity of angel groups that are members of the Angel Capital Association (ACA) – the organizing body that many angel groups belong to – the numbers belie that argument.

The ACA is made up of 133 U.S. angel groups, or about half of the groups that exist in the United States. In 2008, these groups invested in an average of 4.5 new companies each, or a total of 599 new companies. If we assume that the groups that are not members of the ACA invested at the same rate as those that were members – a generous assumption since the biggest angel groups tend to be members – then we are left with angel groups investing in about 1200 new companies every year.

Approximately 600,000 new employer businesses are created in the United States every year, which means that no more than 0.2 percent of new employer businesses founded every year are financed by angel groups.

The ACA reports that about 8 percent of the companies in which angel group members invest generate a return of 10 times the investors’ money or more, the success benchmark often discussed by sophisticated investors. Putting these numbers together, we find that angel groups invest in about 96 companies per year that generate this desired return.

That means that less than 2 in 1000 new employer businesses founded every year will both get an angel group investment and generate a 10X or more return for those investors.

I draw three conclusions from these numbers. First, for angel group members, finding successful new businesses to fund is really a search for a needle in a haystack. Second, angel groups are not a very important source of financing for most start-up companies. Third, the importance of angel groups to the economy lies in the quality of the companies that they back, not the quantity.

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About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of seven books, including Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By and Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures

What do Stephanie Kwolek, Alice Parker and Beth House have in common?

They are just a handful of the hundreds of women inventors who have succeeded in making our lives easier.

• Stephanie Kwolke invented a material 5 times stronger than steel called Kevlar which is used in bullet-proof vests.

• Alice Parker invented an improved gas heating furnace which provides us with central heat.

• Beth House was the 2007 Grand Prize Winner of the Whirlpool Mother of Invention Grant with her award-winning invention for bottle nipples that fit standard water and juice bottles you’ll find in the grocery aisle.

Today, May 11th (coincidentally Mother’s Day) Whirlpool, the appliance maker that brings us products that make our everyday lives easier, kicks off the 4th annual Mother of Invention Grant competition.

In the past three years Whirlpool has assisted 15 female inventors in bringing their ideas closer to market. Winners are awarded grant money and just as important, valuable advice and suggestions at the Whirlpool Business Boot Camp which discusses launching an idea, creating work/life balance, sales challenges and engaging investors.

Mothers are encouraged to submit their invention idea between May 11, 2008 and July 31, 2008. Visit the Whirlpool Mother of Invention microsite for information, an application, and details on past winners. As always, read the official rules carefully.

This is just another example of a powerhouse company reaching out to assist inventors and entrepreneurs in achieving their dreams. Hats off! Good luck to all mother inventors who participate.

If you are an online vendor selling through affiliate programs to New York residents, and you sell more than $10,000 to New York buyers through online affiliate sellers, you now are subject to New York taxes on such sales.

If you recall, I had written about this law before it was passed a few months ago (at the OPEN Forum).

It had been a pet project of former Governor Eliot Spitzer. But after he was ’spitzered” and resigned in disgrace, I had hoped the proposal would languish and maybe even die.

No such luck.

This is one of those cases of protectionism where trying to protect one group hurts another. This has been positioned as helping brick-and-mortar sellers. Unfortunately, it hurts online sellers, many of which are small businesses. Dawn Rivers Baker hits the nail on the head:

The lobby for Main Street independent retailers — folks like the American Booksellers Association — is doing the happy dance, pleased with the victory and not feeling especially guilty about the false pretenses.

“Since 1999, the very start of our nationwide fight for e-fairness, this campaign has been about leveling the playing field for Main Street bookstores, who have had to contend with out-of-state online retailers that have skirted sales tax laws by offering consumers tax-free shopping,” said Oren Teicher, ABA COO.

Level playing field, my foot.

Those Main Street retailers never have to worry about more than one taxing jurisdiction, no matter where their customers live. Remote booksellers have to calculate the tax owed for all the different jurisdictions, which means they have to find out what county their customer lives in and what the sales tax is for that county, and that’s what they’d have to pay.

Amazon.com is fighting the law hard, because it makes so many sales through affiliates and will have to collect and remit sales taxes. Amazon.com has sued the State of New York, on the grounds that the law is unconstitutional. So we have not yet seen the end of this issue.

I hope Amazon prevails, because they will fight the fight for small businesses that sell through affiliate programs and for whom this law could be extremely burdensome. I have two reasons for being opposed to this law:

(1) I think this law will not have the effect that the brick and mortar sellers want. Online selling is not going away. People buy online for convenience and for wider selection, and not just based on price or whether the seller collects sales tax. Protectionism is always a poor substitute for free market forces.

(2) I see this as a slippery slope. Today, New York. Tomorrow, all 50 states. There are reportedly about 7,500 taxing authorities in the United States. What a nightmare if small vendors had to comply with all of them. Hmm, I think that’s why we have the interstate commerce clause of the U.S. constitution that prevents placing undue burdens on interstate commerce.

More at the Wall Street Journal. And there’s more at the Tax Foundation.

Perhaps you recall the 3-part series I wrote, “Help, My Logo is So 1999!” In that series I invited you to weigh in and vote on your favorite logo designs. (I had used the Logoworks by HP design service and wrote a review of it.)

I am pleased to announce that based on your feedback, we have a winning logo design. It’s logo revision #8:

Revision #8 got almost double the votes of the next closest design, which was #2.

Now the most interesting part about #8 is that it was a throw-in by the Logoworks designer who worked on my account. It goes to show that sometimes giving your designer some creative license can pay off.

I am also thrilled to announce that we have a winner in our giveaway of a Logoworks by HP Gold logo design package valued at $399.

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Let’s not pretend that as small business owners and employees we don’t have to eat, drive cars or heat our homes. Rising prices hurt us because we are people … consumers … above all else.

But as businesspeople, the situation can be even worse if you happen to be in one of those businesses that use the commodities and materials experiencing record-high prices right now.

Think of food (restaurants); gasoline (businesses with fleets and delivery vehicles); and high heating costs (landlords and real-estate related businesses).

I had asked the question last week whether inflation was the real worry, rather than recession. But after digging into the question a little further, it appears that the question of high prices is more complex than simply inflation.

Last night I attended the Charles Schwab Town Hall meeting, and heard Chief Investment Strategist Liz Ann Sonders suggesting that there is a bubble taking place in commodities, spurred partly by speculators. That seems to be contributing to the rising prices of certain categories such as food and gasoline. (She mentions commodities speculation in this Wall Street Journal interview, too.)

And it does look strange. Consider this: while the prices of food and fuel have skyrocketed, the prices of some things keep coming down.

For instance, we have been very fortunate that technology keeps coming down in price, year after year. I don’t think the prices of computers and software have ever been lower. It’s not a question of inflation across the board. It’s really a matter of some things being at record highs, and others being at record lows.

That’s the topic of my column this week at the OPEN Forum. I include some interesting statistics showing just how far technology prices have come down, and I also point to a fascinating interactive chart at the New York Times showing the differences in prices for a variety of categories. Some things have gone up, and some things have gone down.

Consequently, some small businesses are being hurt more than others in the current environment. If your business happens to depend heavily on commodities — say you run a pizza shop and depend on flour and cheese — you are being hit hard. But if you are in a business that relies primarily on technology, then your costs of doing business may be low.

What do you think is happening? Weigh in with your opinion about: Technology Prices Defy Inflation (So Far)

Remember in high school or college the couple that seemed to have a never-ending, on again, off again dating relationship? One week they’re on, the next week they’re off. The next week they’re on, the following week they’re off.

Well, in speaking with tens of thousands of entrepreneurs and business owners, I’ve found that many have the same on again, off again relationship with their marketing. They do a few things to stir up business, then neglect the marketing and go to the “fulfillment” side of the business. When things start to slow down, they say to themselves, “I’ve got to do some marketing to pick things up” and they invest in marketing. The cycle goes on and on, with good times and bad times, ups and downs, but no real long-term progress occurs.

Does this describe your marketing relationship? If so, stop yourself, snap out of it. Because this on again, off again marketing style is certain to hold back the growth of any business.

If you’re serious about growing your business, and I assume you are, you need to come to grips with three fundamental small business marketing truths:

1. You are a marketer, not a provider of product x or service y. You are a marketer.
2. You are a marketer of information about the problems your product or service solves. You’re not a marketer of product x or service y.
3. Your marketing must be “always on” not on again, off again. “Always-on marketing” is what you need to really grow your business.

Let those three truths sink in. I can promise you that the entrepreneurs and business owners who are most successful have adopted these three marketing truths. Get out of your on-again, off again marketing relationship and apply these marketing truths to your business. When you do, I promise you your business will grow faster.

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About the Author: Clate Mask is the President and CEO of Infusionsoft. He loves to turn small businesses into big businesses. In addition to running the day-to-day operations of Infusionsoft, Clate also writes at the Infusion Blog about marketing and entrepreneurship topics.