Business Up Front - October 2000

Business Up Front

Making Scents of Your Computer

An Oakland-based company called DigiScents recently announced an ambitious company goal – "to integrate scent with all media." Its "iSmell" device plugs into the serial port of a computer and emits various odors on command. Company officials explain that, just as a computer monitor can display millions of colors by mixing different proportions of primary colors, their device can generate billions of odors by blending proportions of just 100 to 200 "scent primaries." The marketing possibilities are endless – Web customers can smell the flowers or candy they’re ordering, digitized party invitations can carry the aroma of food or wine, and hate mail can be programmed to smell rancid (or worse). DigiScents’ ScentWare SDK enables a game developer to program smells into computer games - what kid wouldn’t like to smell a dank cave, the gunpowder of an explosion, or Donkey Kong’s bananas? Parents beware: also on the list of available scents are burning rubber, underarm sweat, and the stench of alien flesh roasted by laser weapons.

Poor Customer Service Is Expensive

A recent poll of 300 consumers responsible for household purchases found many respondents had recently switched companies due to frustration with customer service problems. Mobius Management Systems, a company whose software supports customer service operations, said people responding to its poll had switched from one firm to another rather than argue about a matter they felt was not handled properly. Mitchell Gross, Mobius president and CEO, said "(Customer service) can mean the difference between keeping a customer for life, or losing one in an instant." Poll results:

60% of those surveyed had recently changed banks

36% had changed insurance providers

40% had changed telephone companies

35% had changed credit card providers

37% had changed Internet service providers

Other poll results:

80% of consumers would rather speak with a live customer service representative than an automated system

94% did not want to be transferred to another representative more than once

80% wanted to be able to speak with representatives on weekends

84% are frustrated when they cannot get immediate access to their current account information.

New Generation of Women Seek Equity Capital

A new generation of women entrepreneurs is tapping into equity markets, including venture capital and private investment, according to a study by the National Foundation for Women Business Owners (NFWBO) and Wells Fargo & Company. Equity investors – those who fund businesses in exchange for a share of the firm’s ownership – report they are receiving more proposals from women-owned enterprises than ever before, but investment in these firms still remains virtually an untapped market. Equity capital for America’s 9.1 million women-owned businesses is most likely to come from informal or individual investors (family members, friends or "angel investors") rather than from institutional investors.

"The movement of women-owned firms into the equity capital markets is a new phenomenon," said Nina McLemore, NFWBO chair and president of Regent Capital, an equity investment firm. Two-thirds of the women interviewed who had received equity capital had done so only in the last four years. The report found that women entrepreneurs who have equity capital differ from other women business owners in several ways. They own newer businesses, are younger in age, more highly educated, and more likely to have been senior managers or executives just prior to business ownership.

Six Common Myths About Employee Retention

Employers facing the difficult task of keeping quality employees often fall prey to common misconceptions about employee retention, according to a recent poll of senior executives conducted by Drake Beam Morin, a leading workplace consulting firm. The poll identified the following prevalent myths:

1. Show me the money. Although increased compensation is a very powerful tool, it is not the only thing to take into consideration. Career development and challenging work opportunities are often greater incentives than money.

2. Recruitment is a separate issue. Not so. An effective retention strategy begins with selecting the right people – those whose skill sets and attitudes fit the organization’s needs and values.

3. Training will only make employees more marketable. Providing employees with the latest in learning opportunities may indeed raise their value in the job market. However, it also helps to motivate them and enhances their performance in their current positions.

4. Retention? We’re in the middle of a merger! Significant corporate change may cause employees to become fearful and uncertain about their future. It is important to take the time to discuss the changes, cement employees’ commitment to company goals and integrate them into the new organization.

5. We can’t hold on to good people. The notion of "holding on" may indicate a problem in the company’s attitude. In today’s job market, employees need to be viewed as free agents, not fixed assets. Companies need to meet individual needs so employees want to stay and grow with the firm.

6. Once they leave, who cares? Valuable lessons can be learned from exit interviews to help improve future retention rates. The exit interviewer should be a neutral party who can elicit thorough and honest feedback.

Playing Music at Work? Be Prepared to Pay the Piper

Restaurants, clothing stores and other establishments that play music for their customers may not realize they are legally responsible for obtaining permission from the composers of each song they play. "Because businesses use music to attract customers or improve ambiance, music can help generate profits," according to Tom Annastas, vice president of BMI, a performing rights organization representing more than half the music performed in the United States. While increasing their own bottom line, businesses should also make sure that songwriters are compensated for their musical efforts, according to Annastas. Purchasing a music tape or CD only allows an individual to play the music for his or her own enjoyment, not for commercial use. Negotiating with each individual songwriter would be practically impossible, which is why most nations have performing rights organizations to give legal access to songs and arrange compensation for their creators.

"Penny Wise, Pound Foolish" Department

Progressive Auto Insurance recently conducted an online survey to see how much time people were willing to devote to saving money. The results were startling. "We’ve found people will go to unusual lengths to save small amounts of money," said Michele Strub-Heer, Progressive’s West Region general manager. "Yet they will not take a few minutes to look into what could be substantial savings on auto insurance." Consumers in Las Vegas who took the time to do price comparisons would find the cost of an identical auto insurance policy can vary from company to company by an average of $633 every six months, according to Strub-Heer. "If you can spare a few minutes to compare rates-by phone or online- it’s quite likely you’ll find a company with a lower price and perhaps better service," she said.

Survey results:

55% of consumers would open windows instead of using air conditioning on a hot day

70% said they use the phone book over directory assistance to save money

40% said they would shop for up to two hours if they could save 50% on underwear.

39% of men said they would spend up to two hours shopping for an outfit for a special occasion

However…46% said they had never shopped around for auto insurance and have simply kept the same insurer year after year.

When asked how much time they would spend shopping for auto insurance, 36 % said they would spend less than an hour.