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Marti DenUyl

About Marti DenUyl

Posts by Marti DenUyl:

How to Write a Refund Policy

A refund policy defines the processes and rules for when customers want their money back and want to return the products or services they purchased from you. It’s often required by your credit card or shopping cart company as part of maintaining PCI (Payment Card Industry) compliance. Plus, it’s just a good, fair business practice to post one.

As a business owner, you can set your own refund rules. The important thing is that they are communicated clearly to the customer in advance of their purchase. 

A good refund policy answers the questions that customers have when the item they purchased from you does not work out. It reduces conflict and ambiguity, and improves customer service. It also helps your employees work with customers’ expectations, by allowing them to refer to the posted policy that a customer can see with their own eyes.

Here are some of the components you’ll want to address in your refund policy:

Items to be returned: Which items can be returned and which can’t? Some products, after opening, like food, simply can’t be returned safely. You might still honor a refund of money even if the item can’t be returned or re-sold. 

Condition of items: You may want to stipulate for some returned items that they are in a condition to be re-sold. That means the customer may need to return packaging as well as the item in order to qualify for a refund.   

Time limit: How long from the date of purchase do customers have to return the item and ask for a refund? Common time limits range from 7 to 30 days. 

Shipping: If shipping cost is involved, who will pay it? 

Processing time: How long will it take to receive a refund once the item is returned? 

Money: How will the money be returned? Will it be on the credit card used? What if it is cash or a check? Or will you give store credit only? 

Requirements: Will customers need to fill out a form, request refund approval, or use a specific shipping return label?  What instructions do you need to provide them for proper return requests and processing?  

Fees: Will there be a re-stocking fee, cancellation fee, return processing fee, or any other fee that reduces the amount of the refund? 

The first step is to decide the answers to all of the above questions. You might be tempted to have a “no returns, no refunds” policy, and this could be the right thing in many cases. However, the refund policy is a chance to build trust with the customer, and a rigid one could cause lost sales. Often a “no questions asked” refund policy can increase sales in the long term. Only a very tiny percentage of people will take advantage of it. 

Once you have determined the answers to your refund policy, you can write up the policy. Post it on your website and near your cash register or checkout areas of your store.

Next, make sure you have a smooth process in place for handling returns on a timely basis. Most stores have a separate checkout area or customer service desk to process returns so that they don’t slow down the regular check-out lines. Employees should be trained on how to talk with the customers, how to accept the returned items back into inventory for resale or return back to the vendor, and how to use the cash register or shopping cart system to process the returns.

You can even turn returns into a positive experience for everyone. If an item is the wrong size, it may be able to be converted into an exchange for a different size so the sale is not lost. A great sales person can also provide upsell opportunities for new or similar items to the returned item. Proactively, your store can sell warranties at the time of purchase for selected items. 

The more customers you have, the more chances there are of having a customer who asks for a refund. Be prepared with a clear, fair, well-documented refund policy.

How to Keep Your Customers Coming Back

Measuring and encouraging customer retention is important for businesses in many industries. There are a couple of great measures to see how you are doing in this area. We’ll explain those and provide some tactical tips in this article.

Measuring Customer Retention

The most common metric to measure customer retention is the customer retention ratio. The best report to run to gather the data for this is a Revenue by Customer Summary Report. Each customer should be listed in a row of your spreadsheet, and each year’s revenue for that customer should be listed in the columns. 

From this report, you can get the following numbers. Let’s use 2020-2021 as our measurement period.

A = How many customers you had with sales in 2020

B = How many customers you had with sales in both 2020 and 2021

The formula is B / A, which will give you the retention ratio. The formula A – B will give you a count of how many repeat customers you lost.

C = How many customers you had with sales in 2021, but not 2020

Answer C will tell you how many new customers you gained in 2021. This doesn’t inform customer retention metrics, but it does help to know how many lost customers you replaced.  

Now dollarize your figures.

D = 2020 total sales of customers you had with sales in both 2020 and 2021

E = 2021 total sales of customers you had with sales in both 2020 and 2021

The formula E / D measures the percentage increase or decrease in sales of your repeat customers, so that you can see as a trend whether they are buying more or less from you. A lot of factors go into being able to influence this number, including upsell and cross-sell opportunities over time, sales communications, your business model, and products offered to repeat customers. 

One final measure is customer lifetime value, which is easy to pull. Run your Sales by Customer Summary Report for all of the years that you have in your accounting system, then sort by highest revenue. Your most valuable customer over the years included will be listed at the top of the report. 

Want to compare how you’re doing with other businesses? Industry-standard value ranges for each of these metrics vary greatly and are beyond the scope of this article. However, your best competitor is yourself, and learning how you can improve your own results year after year can be time very well spent.

Encouraging Customer Retention

No matter what industry you’re in, the best thing you can do to improve customer retention is to maintain an email list of customers, so that you can communicate with them on an ongoing basis. Letting them know when you have sales, new products and services, and even new staff members can go a long way toward building long-term relationships.

Other ways to promote customer retention include:

  • Your business model – a VIP membership or subscription model with perks and special access and bonuses can work for numerous businesses to maintain customers
  • Rewards programs
  • Special events
  • Special gifts
  • Thank you notes
  • Special discounts or exclusive offers
  • Social media presence, especially groups and active engagement where questions are encouraged and answered

Anything to make your customers feel special will work to increase retention. Think about what you can do to increase customer retention, and make a plan to execute your ideas. If you’d like to find out more about calculating these metrics, please reach out.    

Why Are You in Business? Crafting Your Mission, Vision, and Values Statements

Most large businesses have developed mission, vision, and values statements to help guide them and inform stakeholders about the company’s strategic direction. Going through this strategic exercise is a wonderful idea for even the smallest business as well. 

A company’s mission statement lists its core purpose and desired impact for employees, customers, owners, and other stakeholders. A vision statement defines what the company wants to be. A values statement describes what the company stands for. 

It’s a perfect activity for business owners to answer and remember why they built the business in the first place. It also serves to correct and re-align the trajectory of the business. 

Mission Statement

Start by asking what impact you want your business to have on the outside world. Here are some mission statement examples that are frequently quoted:

  • Harley-Davidson: More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul.
  • Disney: The mission of The Walt Disney Company is to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world’s premier entertainment company.
  • Nike: Nike exists to bring inspiration and innovation to every athlete* in the world. Our purpose is to move the world forward through the power of sport – breaking barriers and building community to change the game for all. *If you have a body, you are an athlete.

Notice how each one is short and simple to understand. They focus more on the big-picture benefits they bring to customers and less on how they will get there. 

To write your own mission statement, ask yourself what your business’s purpose is and how you will impact your customers’ lives with your products and services. 

Vision Statement

A vision statement is big, bold, and futuristic. What do you want your company to be? 

Here are a few examples:

  • Harley-Davidson: Building our legend and leading our industry through innovation, evolution, and emotion
  • Deloitte: We aspire to be the Standard of Excellence, the first choice of the most sought-after clients and talent.
  • Amazon: Amazon strives to be Earth’s most customer-centric company, Earth’s best employer, and Earth’s safest place to work. 

What do you want your company to become?  That’s your vision statement. 

Values Statements

Values statements are typically a set of adjectives or statements that answer what the company stands for. They can be in the form of leadership principles, core values, or a similar format. These days, they often include values on environmental, social, climate, global, human rights, diversity and inclusion, sustainability, and many other current issues. They can take the form of additional strategic statements on each one of these issues. 

Sample values statements can be found in the company’s annual report as well as the About or Company section of their website.  

Here are some examples: 

  • Harley-Davidson Principles:
    • Communication – Communicate with purpose, structure, facts and inspiration
    • Agility – Accelerate, innovate and thrive in a rapidly changing environment
    • Impact – Focus on impact, not process, and be outcome driven
    • Simplicity – Pursue the simplest path to achieve each outcome
    • Speed – Don’t let perfection get in the way of process and pace
    • Culture – Be fair, honest, positive and creative. Strive to win and have fun.
    • Courage -Take risks and go against the norm
    • Judgment -Think strategically and make informed decisions
    • Focus – Focus on a short list of meaningful opportunities that build desirability
    • Lean – Maximize impact with limited resources
  • Coca-Cola Behaviors We Focus on:
    • Curious
    • Empowered
    • Inclusive
    • Agile
  • Merck Values:
    • Patients first
    • Respect for people
    • Ethics and integrity
    • Innovation and scientific excellence

Your mission, vision, and values statements will help you communicate the qualities of your business. It can help in hiring to see if a candidate’s individual values align with the core corporate values, and with customer acquisition when prospects see what your company is about. It can also help you remember your roots and why you work so hard every day.

We’d love to hear from you when you write up your mission, vision, and values statements. 

Online Payment Systems: They Are Not All the Same

Collecting money from customers is a key function in any business, and the more automated this process is, the better. The payment function varies by type of business, but more and more, there are online options available for collecting money over the internet. Here are few tips on what that looks like. 

Your Website

The perfect place to collect money from a customer is your website. Or is it?  Actually, it’s not, but wait, let me explain first. 

A typical website is not as secure as it needs to be to collect credit card information from customers. You almost always need an additional app for that. But what you can do on the website is add a link (usually behind a button) or an entire webpage (a sales or product page) to your site that seamlessly takes the customer to a secure site – a shopping cart with a payment gateway — to enter credit card details.  

So, the only way your website gets involved is that it has the link or button that provides the bridge to the payment site. 

The Payment App

The payment system needs to handle three functions:

  1. A shopping cart task, where the item is priced and added to a basket.
  2. A checkout page, where billing information and credit card information is collected.
  3. A behind-the-scenes settlement function, where the money is taken from the customer, held in a merchant account, and then sent to your business.

In the first step, you need shopping cart software to handle the function. Common retail solutions include Shopify, WooCommerce, and Magento, to name a few. But these don’t, by themselves, get you paid. They just process the transaction in a secure environment.  

The second step requires a payment gateway application. The most common stand-alone gateway is Authorize.net, and you typically would connect this to your shopping cart. The third step is handled by your merchant account, and sometimes, a separate processor is involved too. From your merchant account, which is connected to your gateway, you typically get a reconciliation of the daily settlements that hit your bank account. You would also handle customer complaints and disputes with them.

In recent years, the second and third steps have often been combined into the same vendor. Companies like PayPal, Stripe, and Square act as the gateway, the processor and the merchant account, all in one, which is really nice, and so much more streamlined than a decade earlier.

Some vendors go a step further and combine all three functions into one vendor.  PayPal is the quintessential example. Together, WooCommerce and WooCommerce Payments team up to provide an all-in-one solution. 

Getting Paid in Service Businesses

A shopping cart is standard for online retail businesses, but what about service businesses? Service businesses that package their services and charge in advance can use a shopping cart just like retail.

If the service business bills their customers after the fact, then the payment setup is connected to invoice distribution instead of a shopping cart. In this case, you would need to find out which solutions work with your specific billing system, or if there is an add-on you can use to extend your billing system’s capabilities. For example, QuickBooks users can sign up for QuickBooks payments, and Xero users can use Stripe.

When the invoice is sent to the customer, it will include a payment link the customer can use to pay. These service business payment solutions are fairly industry-specific; for example, you might have noticed medical and dental offices use different solutions than personal care service businesses. 

Different Choices

When you are selecting a payment system for your business, some people simply look at the credit card fees to make a decision. While that’s important, don’t stop there. Here are some final tips on what to look for and look out for:

  1. Understand exactly what each apps’ capabilities are so that you have all of the pieces of the process fully covered.
  2. Applying for a merchant account is just like applying for a loan, but the process has been extremely streamlined in the last decade or so.
  3. Make sure you can get the reports you need, including settlement details, refunds (full and partial) and void processing, failed payments and retries, and dispute resolution, to name a few.
  4. Put business processes in place to deal with all of the items mentioned above.
  5. Make sure the app can handle the type of billing you need to do, including cart items, recurring payments, after-the-fact invoicing, sales tax, and shipping parameters.
  6. Find out how long it is between collection and bank deposit; this can range from 1-6 days.
  7. Watch for a high failure rate on customer transactions. If this is the case, it could be that the gateway and merchant account are rejecting perfectly good business because the merchant account’s acceptance rules are extremely strict. This can happen with merchant accounts tied directly to banks, and the best thing to do is avoid them and look for a different option.
  8. Expect any new provider to hold the first few days of transactions for longer than normal. This is a temporary safety measure and should clear up quickly.

Adding an online payment system is smart business and can save a ton of accounting time. Just make sure to choose the best payment system for your specific needs. 

5 Ways to Rejuvenate, Refresh, and Revive Your Entrepreneurial Passion

Most entrepreneurs would agree that owning a business is an incredible privilege, and they would likely never want to go back to working for someone else. However, we all have our days! And sometimes those rough days can turn into weeks. If we’ve temporarily lost a little bit of our entrepreneurial passion, how can we get that back?  Here are some tips. 

Customer Reviews

Reading reviews left by customers about your business can help you see things from your customers’ eyes. If the reviews are positive, they can help you see the impact your business has made on them which can boost your motivation. If the reviews are glowing, then this task alone can fuel your rejuvenation. After all, you have a lot more people you can make a difference with!

If you don’t have reviews, ask for them. The first time you do this, it can be an amazing experience. 

Personal Self-Care  

Make sure to allocate enough time for personal care. No one can work 24/7 and survive without burning out. Try soothing activities like yoga, meditation, or a spa day if you just need some tranquility. Make it a regular habit, and you’ll be better balanced when you go to work.

Goal Reset

If you’ve been skirting by the last few years on incremental or unchallenging goals, it might be time to give yourself a BHAG – big hairy audacious goal – as mentioned in the book Built to Last. This is an ambitious, long-term goal that can help to propel the entire company into a mission to reach it. 

If you feel your employees could use some rejuvenation as well, schedule a goal-setting retreat for the entire company. Everyone will come back with renewed energy and a new purpose. 

Education

The thing about being an entrepreneur is you never stop learning. New skills are required every time you reach a new level in your business. Changes in technology, science, and government compliance trickle down to small businesses, requiring changes to your business processes on a constant basis. 

Take a new class or read a book to learn something that will improve your business. You’ll be full of ideas that you can implement to make your business better. 

Delegation

We all have tasks in our businesses that we love to do and tasks that we do not love to do.  If you’re doing too many of the “don’t love” tasks and not enough of the “love this task,” this can take a toll on your attitude. If you have staff, delegate the things you don’t love – and find staff that really love to do them. That way, you can focus more on the good stuff for yourself. 

New Project

Is there a project that you’d love to do but has been on the back burner forever? Making it a priority may just be the reset button you need. Sometimes things that are urgent get done while things that are important but not urgent have to wait. Change the priority of those projects that are important and you will feel lighter. 

Vacation

Last but not least, maybe you just need to get away for a while, then come back with a new perspective. For that, a good old-fashioned vacation, complete with air fares and hotel rooms, is the ticket. 

If you’ve been working hard lately and it’s been grinding you down, try one of these tips to relax, refresh, and rejuvenate your passion for your business.   

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