How Can You Market Your Business Properly?

Although newer and newer innovations are coming out on the business front to help companies operate in this rather volatile business environment, there is still a substantial amount of confusion relating to how to market your business properly. Production isn’t as hard as it used to be – there’s a standard procedure to making a product or delivering a service…it’s become an automated procedure (even for the customized services). Taking the finances down hasn’t changed much either – there is, again, a process to complete the entire accounting and financial procedure very feasibly. So, it’s evident that marketing has undoubtedly become one of the more variable components of every modern-day business.

Before explaining how marketing has changed, it’s key to understand what marketing is in the first place. In my personal opinion, marketing is the process of pulling in consumers’ interest in a particular product and service you are selling, attempting to intellectually, emotionally, and mentally stimulate them to increase their loyalty to the product and the brand of the company itself. Essentially, marketing should always end up with a call to action, something that wakes up the consumer and tells them to do something very plainly – in most cases, this involves actually purchasing the product or service. This definition of marketing isn’t the most “up-to-date” because of all the new technological inventions and innovations (like address validation software which uses postal code map technology) that are coming out in the business environment, but it is the most fundamental one. People will definitely utilize at least a portion or “the gist” of this concept for years to come.

Now, let’s move on to the big question – how can we properly market the modern-day contemporary business. First off, let’s establish that it’s not an easy task – it requires substantial research and analysis before even proceeding. You have to understand exactly what product you’re selling and the benefits or advantages of purchasing said commodity. If you blindly believe that this product will yield you positive results because of its “alleged” quality and value, then you probably won’t be successful. It’s all about understanding the value-add from the perspective of the consumer. Spend a bit of primary research time testing out the product with a sample consumer base – what parts of the product to they like? Dislike? Any other comments that they input should be taken down and referred to at a later basis – these will all be useful in marketing the good or service to them.

These are just tips to understand how marketing should actually take place – companies run into this process blindly with no real goal. However, with the proper procedure, it’s possible to break down each step of the marketing process to maximize your ROI.

Blogging

I was informed recently that my blog has been listed as one of the must-read blogs in the field of economics. While I don’t know much about how this ranking was done, it did boost my ego quite a bit and I thought I would post the link:

http://master-degree-online.com/top-100-graduate-blogs-by-university-personnel/

When I started blogging some time ago, I did not know how much I would enjoy it. While my schedule has become quite busy, particularly since taking on the role of director of the Financial Literacy Center, I am trying to keep up and write as much and as often as I can. Both the financial crisis and the financial reforms have offered a lot of material to reflect upon and to write about, so I am not short on topics, even though I write exclusively on subjects related to financial literacy.

But I am posting this short blog to thank my readers for their support and also to encourage them to continue reading. Have a good rest of the summer to all. I am getting ready to go to Italy, one of my favorite vacation places, and I will write more from there.

Financial education: What works?

I am just back from Denver, where I attended a conference titled “Implications of a Quarter Century of Research in Personal Finance,” organized by the National Endowment for Financial Education and Tahira Hira from Iowa State University. A group of researchers met over three days to discuss what we have learned so far on this important topic. I headed a team that addressed the question, “What learning strategies, interventions, and delivery methods hold the most promise for effective financial education outcomes?”

As we reviewed the many papers that have been written on this topic, we faced the difficulties commonly encountered when looking at the existing work. Navigating the bulk of existing literature and figuring out the common findings is a challenge, but our analysis of that extensive literature led us to what we called a “cautious optimism” about the effects of financial education. Along with this optimism, we are mindful of several difficulties inherent in evaluating financial education interventions. First is the issue of self-selection: i.e., are the people who attend financial education programs those with an existing interest in the subject, and is it their interest or the content of a program that motivates them to make certain financial decisions? Second is the dearth of details regarding program content, frequency, delivery method, and goals (to improve knowledge or change behavior or to satisfy a legal requirement) of the programs that are reviewed in the literature. This lack of information makes it hard to evaluate what makes a program effective (or ineffective). Third, one has to be mindful of the size of the intervention. Small interventions, for example, providing information on a particular issue cannot transform naïve investors into Warren Buffetts.

The team identified places where financial education seems most effective and methods to make financial education more effective. The most effective place for financial education was concluded to be the workplace; important methodology was judged to be that relating to adult education and to informal learning.

There are many (some obvious) reasons why the workplace is an ideal venue in which to provide financial education. First, this is where many adults are and also where many important financial decisions are made, e.g., how much to contribute to a retirement account, how to invest retirement wealth, whether to annuitize retirement wealth, and the list goes on. There are also benefits to employers in making sure that workers save for retirement and avoid financial problems, as financial problems and/or worries can affect worker productivity and morale. One benefit to both employers and employees, which in my view is not discussed enough, is that financial education can make people aware of and able to take advantages of benefits an employer offers (for example, employer matches of retirement contributions) or better understand and take advantage of tax-favored assets.

Financial education has normally been conceived of as being delivered in a classroom, but one has to think more broadly and creatively about adult education. In contrast to young students, adults have a rich set of experiences that shape how they view their financial situation. Additionally, financial education can be made more effective with reference to theories of learning that offer important suggestions and insights. One such theory is Mezirow’s transformative learning theory. This theory has been around for over 30 years and has been used as a framework to help make sense of learning and teaching in numerous disciplines—health and medical education, intercultural relations, psychology, environmental sciences, higher education, instructional technology, archaeology, human resource development, just to mention a few. I mention the importance of theory here because, in my view, one of the reasons why financial education has not been as effective as it could be or has not been given the attention it deserves is because it is not considered within a rigorous and theoretical framework.

Even within such a framework, it is possible to incorporate different ways of learning, including informal learning. Informal learning is increasingly becoming recognized as significant to workplace education. Instead of having employees participate in traditional workshops or training sessions, employers are creating conditions in which workers can learn from each others. Financial educators, policy makers, and program planners will do well to recognize that financial education efforts can be successful outside of the formal settings that are the traditional venue for financial education.

As I have mentioned in previous blogs, to run a successful conference you need to have good people, good papers, and good food. Having provided, I hope, a little glimpse of the energetic discussion that went on throughout the meetings in Denver (as well as the informal learning that occurred outside of the meeting rooms!), let me turn to the topic of food. Our meals were a blend of French and Italian cuisine. We went to a wonderful French bistro one night where we tried pâté, saucissons, onion soup, and a wonderful pistachio-crusted trout. The Brown Palace hotel, where we stayed, provided us with succulent breakfasts. At a lunch one day we had gourmet pizza. Some were surprised by this lunch choice. Not me. Give me pizza, and I am happy!

Some comments about "Greater Foools"

I am happy to post on my blog a comment by Nan Morrison, President and CEO of the Council for Economic Education, on the article "Greater Fools" published in the New Yorker.


James Surowieki’s financial page piece “Greater Fools” unfortunately quite accurately diagnoses the depths of America’s struggle with financial literacy and its costs to society. And without significant changes, our children may face an even worse fate than their parents. Nellie Mae reports that on average, incoming freshmen now bring an average of $1,585 in credit card debt to college.
Yet despite the extent of this problem, according to a CEE / State Farm survey, only 21 states require an economics course to be taken in K-12, and only 13 states require a course in personal finance. Even fewer require testing of these concepts. But requirements need trained teachers, and to make matters worse, as a society, we are not preparing teachers to deliver this vital content with confidence. In a recent survey by the National Endowment for Financial Education (NEFE), less than 20 percent of teachers reported feeling competent to teach basic personal finance topics. Furthermore, even many teachers of high school economics have taken two or fewer semesters of economics in college.

In our eyes, the real question is “How, as a society, can we improve our economic and financial literacy and what benefits might we see in future generations as a result?” Our answer at the Council for Economic Education (CEE) – equip and enable teachers to educate our children in basic personal finance and economic concepts in school from kindergarten through 12th grade. Why? Good habits are built early, just like brushing your teeth.

America is about economic opportunity – our kids need to be financially fit and economically literate to grasp that opportunity. As consumers, investors, entrepreneurs, and voters we all make decisions that involve finance and economics every day. If every parent, school and state, made economic and financial education a priority in schools from K-12, perhaps more Americans would be able to ensure their financial well being in a changing and complex world. Improving our collective economic and financial literacy is vital to our economic growth, job creation, and prosperity. Many in government, education, and financial services, across our nation support those goals, as they are good business and good citizenship well as essential ingredients in a stable financial system.

Nan J. Morrison
President & CEO, Council for Economic Education

Greater Fools

James Surowiecki’s recent column in The New Yorker magazine discussed the dangers of financial illiteracy in America. It is great that such a prominent and widely read magazine has featured a piece on the issue of financial illiteracy. I do not know about you, but I love The New Yorker: not only is it great reading, but it makes me dream of all the things I could do if I were living in New York! In this blog, I want to write in more detail about something that I discussed with James Surowiecki and which he reported in his column.

Of the changes that we have witnessed in the financial markets in recent decades, we have seen not only an increased complexity in financial products but also an increased reliance on the expertise (or lack thereof) of consumers. For example, individuals have been bombarded with credit card offers. One could easily sign up for a sizeable collection of credit cards and, in so doing, borrow a large amount of money. While some consumers have been targeted more than others, many are receiving printed checks in the mail. These types of offers make it very easy to borrow; and it is the individual who has to be savvy about how to use the credit cards and checks that come in the mail; the offers will keep coming, and the amount one can borrow will keep increasing, irrespective of how much one can afford.

Subprime mortgages have worked in much the same way. While banks and mortgage lenders would normally do background work in order to assess how much to lend their potential borrowers, subprime mortgages were available to almost anyone who wanted a mortgage, regardless of their ability to afford the loan they were taking on and without much or any look to proper documentation. For some, the offer came in the mail together with the credit card offer!

In other words, we have opened the doors and made credit available to a much larger number of individuals than was the case several decades ago. Moreover, while not infinite, the amount people can borrow is very large. And perhaps most importantly, it is often up to the consumers to decide what and when it is enough.

This is why financial literacy is so important and why, in my view, developments in financial markets should be accompanied with initiatives to provide the knowledge required to make good use of any such developments. One cannot trumpet how great it is to be able to buy a house at age 25 if young workers do not even know what interest compounding means. Similarly, dispensing credit cards to people who have little understanding of how fees work can be counterproductive at best and catastrophic at worst.

I have a similar view toward assets. Some have been lamenting the high proportion of unbanked individuals, in particular among certain segments of the population. I believe financial access is incredibly important, but we cannot simply give everyone a checking account and think we have improved people’s lives! Not knowing how to use a checking account to prevent overdraft fees and returned checks can quickly turn the benefits of this simple asset into a nightmare.

As we pass new legislation about financial reforms, we should keep in mind the many advantages that advanced financial markets can bring to the economy but also be mindful that without financial knowledge, people now have a much greater opportunity not only to increase wealth, but also to destroy it. As I have argued in many previous blogs, it is not enough to regulate supply, we also have to think about demand and how to empower consumers with the knowledge necessary to make proper financial decisions. We should not be talking only about banks, we should also be talking about the borrowers!

On a side note, James Surowiecki’s column was published on July 5, which also happens to be my birthday. Without knowing it, Surowiecki provided me with a very nice birthday gift by writing so proficiently about a topic I care so much about. Only a trip to New York would have made it better!

Read James Surowiecki’s column here: http://www.newyorker.com/talk/financial/2010/07/05/100705ta_talk_surowiecki