From the September 1997 issue of Startups

When financial consultant Joe Ely drove an hour and a half without an appointment to see a banker on behalf of one of his clients, he found the banker wasn't in and wouldn't be in at all that day. "I needed a concession (on the exact legal description of a loan's collateral) from the banker, so it was the type of meeting where I didn't want an appointment," says Ely, whose West Lafayette, Indiana, firm, Douglas Jackson Pierce LLC, works with agribusinesses--farmers, ranchers and other businesses directly serving the agriculture industry. "I believed I needed to see the banker's body language, eyes and sense of ease (or unease) with the suggestion."

A waste of time? Not at all. "Even though the banker wasn't in, I left a handwritten note with my business card attached," Ely says. "My going there had communicated the importance of the deal, so the ensuing discussion yielded much better results."

This may be the Information Age, but a little face-to-face contact can still go a long way toward growing your business and solidifying business relationships. Business travel is a necessity, albeit an often expensive one, for most entrepreneurs. Unlike large companies that have the resources and negotiating clout to cut deals with hotels and airlines, entrepreneurs must approach travel with the same savvy they bring to other areas of their businesses. That means not only getting the best travel deals they can, but also making the most of the time and money they do spend on the road.

Whether they travel five days a week or twice a year, today's entrepreneurs have discovered ways to stretch their travel dollars, while keeping in mind that business travel is an investment that must be maximized. Here are some of the ways you can make the most of your travel dollars:

1. Determine whether the trip is necessary. A lot of work can be done via telephone, e-mail, fax and modem. Nevertheless, personal contact and one-on-one meetings are much more effective in certain situations. "I travel if person-to-person contact is mandated to make a client or resource familiar and comfortable with us personally, or if a problem needs face-to-face resolution," says Kim Baker, author of Desktop Direct Marketing (McGraw-Hill, $27.95, 800-338-3987). "This ranges from someone being unhappy with our work to getting our hands dirty resolving a problem with a project."

Scott Cole, president and CEO of Mass Music, an online music store in Davis, California, agrees that personal contact can be important in doing business. "If there are many issues that need to be negotiated, I find we usually get a better deal if I fly or drive to wherever the other person is," he says.

Projecting the return on investment you're likely to receive from making a trip can be a good way to make the Go/No-Go decision. Marvin Drobes of Diet Solutions: People Helping People, a Howell, New Jersey-based independent distributor of Herbalife nutritional products, has developed such a formula. "I only travel to meet distributors who bring in at least $20,000 per month in sales," says Drobes. "And I don't spend more on a trip than 50 percent of my monthly income from that distributor."

Following the principle of network marketing, Drobes has developed a network of customers who, in turn, have also become product distributors; Drobes earns a percentage of each sale his distributors make. When he travels to conduct sales training, give motivational talks and do product demonstrations, the increase in sales makes the expense worthwhile. Monthly sales in the visited sales territory tend to increase 15 percent to 20 percent for several months after one of his trips, he says.

2. Use your travel time wisely. When Ely worked for a consulting firm before he started his own firm, he noticed many of his colleagues didn't accomplish what they wanted on a trip. "All they could think about was going home as soon as possible," he says. It's a good idea to set goals and objectives for the trip and make sure you accomplish them before heading home.

Because the cost of travel can also be measured in lost work time, it's important to make sure you make the most of your travel time. Not surprisingly, cellular phones, pagers and laptop computers figure prominently in the arsenal of today's road warriors. In addition to these tools, Drobes also takes fliers, brochures and other sales materials on his trips and distributes them as he travels.

Cole prepares for a trip as he would for a major meeting. "I draw up an outline and a list of the points that need to be brought up and discussed during my meetings," he says.

Ely travels primarily by car and uses the driving time to rehearse his greeting and mentally outline his presentation. "I try to identify the three central points I'm trying to communicate during the meeting," Ely says. Then, at his destination, he parks and spends about five minutes going over his presentation one last time.

3. Remember, saving isn't everything. You may want to get the most return from business travel at the lowest possible cost, but be sure to maintain a balance when you're traveling. "Sometimes travel makes people so tired that loose-knit objectives, like `Sell the contract' or `Make personal (one-on-one) contact,' are more workable," Baker says. "I plan on no more than a six-hour workday to mitigate the effects of travel-related stress and too many hours waiting in airports."

By the same token, focusing only on saving money isn't necessarily the best way to get the most from your travel dollar. After all, you're traveling for valid business reasons, not to create unnecessary stress. Comfort and convenience will go a long way toward making you more effective on the road.

Smart Travel Tips

1. Check out fares using a couple of convenient airports, says Shel Horowitz, author of The Penny-Pinching Hedonist: How to Live Like Royalty with a Peasant's Pocketbook (AWM Books, $17, 800-683-9673). Horowitz cites his own experience of saving $700 on a fare by flying out of Boston rather than Hartford, Connecticut. "While the savings is not usually this pronounced, you can usually save at least $50 to $100," he says.

2. Consider using airline-ticket consolidators. But beware that consolidators, which sell unbooked commercial and charter airline seats, offer cheaper fares but no refunds. Most travel agents work with consolidators, or you can check out the Sunday travel section of your local newspaper for others.

3. Join a home-stay organization that allows members to stay for free in other members' private homes for an annual fee of about $60, suggests Horowitz. Most of these organizations have worldwide memberships, so accommodations can also be found outside the United States. Not all these organizations require members to offer their own homes for home stays. For more information, check out the Web site of Servas, one of the major home-stay organizations (http://www.exodus.it/associazioni/servas/default.htm ).

4. Look into local car-rental companies and car dealerships that may offer better rates than the national chains. Ask your travel agent for a list of these alternative rental agencies. Many car-rental companies also offer lower rates between Thursday afternoon and Sunday evening.

5. Ask for discounts. When you make hotel reservations, request the best possible rate, such as a weekend rate, even if you're staying on a weekday. If the hotel is not completely booked, you may get the lower rate, so it never hurts to ask.

6. Don't take the first rate you get. "Always call a hotel's toll-free number first, then the hotel itself," says Rick Cricow of Net Sales Inc., an online and mail order wholesaler of stickers and patches in Eugene, Oregon. He's found prices can vary a lot. "I've even shown up unannounced and gotten better rates than I would by making a reservation," he says. "You can call car-rental companies five times in 10 minutes and get a different rate every time," Cricow says. "Call them until you get a price you like."

7. Never use frequent-flier mileage for business travel. "Pay for the trip and let Uncle Sam help with the deduction," Cricow says. "Use free travel for upgrades or fun."

Ticketing Tactics

When booking airline flights, try using creative ticketing techniques to save money. You can use back-to-back ticketing to get a "Saturday stay" fare without actually staying over Saturday. For example, say you're planning two trips to the same destinations, Dallas and Seattle, on the following dates that don't include a Saturday stay:

Trip 1: Dallas to Seattle, October 7; Seattle to Dallas, October 10

Trip 2: Dallas to Seattle, November 13; Seattle to Dallas, November 14

Instead of buying two round-trip tickets for the dates above, mix and match your dates so each ticket includes a Saturday stay. While you'll still be on the same flights, the tickets actually purchased would be for the following:

Ticket 1: Dallas to Seattle, October 7; Seattle to Dallas, November 14

Ticket 2: Seattle to Dallas, October 10; Dallas to Seattle, November 13

Sales & Marketing

Tip Club Tips

By D.B. Frandsen

"Any type of networking is beneficial, but the best form of marketing is word of mouth," explains Holly Christensen, owner of Lexington Mortgage in Provo, Utah. Christensen knows, as most small-business owners do, that getting in the door is the first step to being able to show what you know and what you can do. Having referred leads can increase successful appointment rates by up to five times. To help her establish a regular and reliable source of referred leads, Christensen has organized a tip club, through which she gains up to 20 percent of her leads.

A tip club brings together a group of people on a regular basis (usually weekly or semimonthly) whose main interest is in obtaining and giving prospective leads. Members trade information on businesses in the area and recommend new products, ideas and services. But most important, they exchange referred leads with each other. The referrals can be anyone that another member of the group might be able to help.

There are several ways to locate tip clubs. Chamber of commerce offices may keep lists of them. You can also check with local associations, or just ask around. Anyone who needs referrals on a consistent basis is likely to be a tip-club member.

After you've found a club, evaluate it in terms of how well it will fill your needs.

  • Are there other businesses related to yours? Other members should benefit from your referrals as well as you from theirs.
  • How many referrals must each member give at the meeting? Many clubs require that each member give at least three leads per meeting. The three leads you provide could be for the same person or for three separate individuals.
  • When and where do they meet? Most tip clubs meet for lunch or breakfast. Meals are generally purchased on an individual basis by each member.
  • Does the club charge dues? If so, what do they cover?

Once you join a tip club, be a good member. Say "thank you" for the leads you're given, especially if a sale follows. Buy breakfast or some other gift or token of your appreciation for whoever gave you the lead. Always have relevant leads to give, and be loyal to other members of the club.

Can You Manage?

Service With A Smile

By Howard Scott

Do your sales clerks annoy your customers? Do they giggle, speak ungrammatically, chew gum, wear soiled outfits or not look your customers in the eye? According to a 1996 study by Decisioneering Group, a Paradise Valley, Arizona, consulting group focused on helping businesses understand and strengthen their relationships with customers, many retail clerks bother customers enough that they think about taking their business elsewhere the next time.

As a business owner, it's up to you to recognize these annoying ticks, and to alter your employees' behavior. But this is a delicate situation--one where you can't be so blunt that the clerk is secretly angry and will revert to that behavior when you're not around. You need to initiate a long-term behavioral change.

Richard Perkins, owner of One Hour Quality Photo Lab in Pembroke, Massachusetts, has come up with what he calls "the nonconfron-tational-meeting method."

"Because I have had problems when I challenge the person directly, I prefer a company meeting," Perkins says. "At the meeting, I'll discuss different business matters going on, then add that we are trying to improve our image, and I don't want to see certain behaviors. I'll post the guidelines in a letter so staffers can read it. In that manner, we correct the behavior."

Glenn Kidder, manager of Video To Go in Milton, Massachusetts, has a different approach. He eliminates most of the problems during the initial employee-training period, which includes a lot of role playing. "We cut out bad habits as we see them," Kidder says, "so that they don't get out on the sales floor."

Should anything come up, however, Kidder will pull a staffer aside and talk about the observed behavior in constructive way, making an effort to avoid personalizing the criticism. "I explain how a change in behavior will improve interaction with the customer. Putting a positive spin on the criticism, showing how they can benefit personally, is usually what turns the staffer around."

To make sure his employee guidelines are being followed, Kidder asks regular customers to give him follow-up comments on how they were treated when they came into his store. Other methods used include hiring a secret shopper, observing behavior on videotape and getting feedback from other staff members.

In modifying your staff's personal peccadilloes, use the following guidelines:

1. Avoid criticizing an employee in front of a customer or another employee; humiliation is counterproductive and unprofessional.

2. Phrase the comment in a positive way, saying how the suggested behavior will improve customer interaction. That way, you're giving a helpful tip instead of criticism.

3. If the staffer challenges the assertion, provide an explanation of how the behavior is annoying and ultimately detrimental to your business. Cite customer complaints. Point out that customers pay all your salaries, and must therefore be satisfied.

4. Offer gentle congratulations to the staffer when he or she complies. Acknowledging a job well done is important--and one of the cornerstones of good employee management.

Contact Sources

Kim Baker, kimbaker@aol.com

Decisioneering Group, 5725 N. Scottsdale Rd., #150, Scottsdale, AZ 85250, (602) 949-8566

Diet Solutions: People Helping People, P.O. Box 107, Howell, NJ 07731, (800) 243-6409

Douglas Jackson Pierce LLC, P.O. Box 2492, West Lafayette, IN 47906, (765) 497-0130

Shel Horowitz, P.O. Box 1164, Northampton, MA 01061, (413) 586-2388

Lexington Mortgage, 190 W. 800 North, #201, Provo, UT 84601, (801) 373-5944

Mass Music, P.O. Box 4567, Davis, CA 95616, (510) 791-2689

Net Sales Inc., Rick@yujean.com

One Hour Quality Photo Lab, 254 Church St., Pembroke, MA 02359, (617) 826-7670

Video To Go, 550 Adams St., Milton, MA 02186, (617) 696-1100