Trends into Opportunities: More Competition for Employees and Customers

Robert Levin, Editor and Publisher, New York Enterprise ReportEditor’s Note: Robert Levin, Publisher of The New York Enterprise Report, is my guest in this special two-part column on trends affecting small businesses in 2007. In this first part, Rob examines two trends: the trend of the more competitive labor market and the trend toward greater competition for customers.

By Robert Levin

Trend #1: Increased competition for good employees

Situation: While I have alluded to the trend of a tight labor market for some time, it was at a session with leadership guru Larry King that I realized how vital it was for businesses to understand the impact. Unemployment, currently at 4.5%, is near historical lows, but the market for good employees — the ones that could really help you grow your business — is hyper-competitive.

Opportunity: In order for your company to grow, you must make employee retention and acquisition a priority. After all, you can’t grow if your “A” players don’t stick around and you have to spend your time managing a bunch of “C” players. Further, without capable people to manage your business, you will never find the time to lead your business. Here are some steps you can take within the next 30 to 60 days:

  • Identify your great and good employees, understand what motivates them and keeps them happy. Realize that many people are not just motivated by money. They are motivated by things like increased responsibility, recognition, time-off and working in exciting, fun and challenging places.When it comes to money, keep in mind that the average raise in 2006 was under 4% — hardly an exciting number. When it comes to your “A” players don’t think about raises in terms of percentages. Think about how much it would cost to replace someone as well as what that person could get by going back out into the market (because they are, or will be, getting offers).
  • Have a marketing plan for top employees (again, courtesy of Larry King). King added that as you come across talented people, keep them in a file.
  • Develop a program to mentor and train employees. Training programs are typically associated with big companies. However, small companies that implement a training program will become bigger companies.You have two choices when it comes to training: internal and external.Internal training tends to make sense when you have employees (including you) who can share wisdom on specific topics (e.g., from speaking to customers to being more productive).

    External training comes in many forms and is a great way to expose your staff to expertise that doesn’t exist within the company. These training activities can come from your local chamber of commerce and other business organizations (for example, The New York Enterprise Report has produced several events on topics like marketing, technology and sales) to industry specific. Another great resource for top-level training is the American Management Association. Budget for these investments and jointly determine with your staff which ones make sense.

Trend #2: Increased competition for customers, with more adoption and integration of CRM

Situation: Contact management programs such as ACT, Goldmine, and even Outlook have been within reach of small businesses for some time. But now full-fledged customer relationship management (CRM) programs such as Microsoft CRM, Maximizer,, and Sage, among others, are affordable to all but the smallest of businesses. In addition, the contact management programs that I have alluded to are now considerably more robust.

Combine all of this with the fact that small businesses as a whole have embraced CRM and contact management, and it kicks up competition a few notches. Why? Your competitors can be much better at selling.

CRM allows you to centralize data giving all companies a snapshot of prospect and customer activity. Customer data resides with the company, not with a salesperson. Second, CRM aggregates all of the interactions with customers including conversations, emails and marketing. This enables companies to have the pulse on the status of many more customers and prospects than they would without CRM. Third, CRM allows companies to easily segment customers by industry, where they are in the sales process, or any other classification that allows them to quickly execute a communication tailored as appropriate.

Opportunity: Invest in a CRM system and make sure to fully understand the capabilities as they pertain to your business. Then take advantage of them. Follow these three keys to CRM success:

  • Hire a CRM consultant or reseller who really understands your business and sales process. Don’t make the same mistake that I did at a previous company where I thought that the CRM system could be installed and implemented by myself and our IT department. We wrote off a $20,000 investment in a matter of days and lost credibility with the sales team.Find someone who has successfully done this before — and be sure to ask for references. For small businesses, figure that a CRM reseller’s services could be attained for $1000 to $10,000 to customize the software for your specific industry and sales processes. In fact, a good CRM reseller should show you how you can leverage the CRM system to improve your sales processes. You can find resellers by visiting the websites of the CRM software companies. Better yet, ask others in your industry who they use.
  • Train all of your employees on CRM and train them well. The training should be about the business processes, not the technical capabilities of the software (it is likely that you may not use the majority of the features of the software). Depending on the size of your business, training could be done in as little as 5 hours and as much as several weeks. At first, learning and using the CRM system may slow your sales team down a bit so try to schedule training during a slower period.
  • Lead by example by integrating and utilizing the CRM system into your day-to-day activities. For instance, your communications with customers should be logged into the system. Of course, let your staff see you participate in the training as well. Finally, ensure that all of your sales staff (even the superstars) are consistently using the system.

(Go here to read part two of this article.)

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About the Author: Robert Levin is the Founder and President of RSL Media LLC and publisher of The New York Enterprise Report. Dubbed “the New York area’s Chief Small Business Officer”, Levin was named Journalist of the Year by Small Business Administration (NY District). Read his blog at


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