June 21, 2011
by Bob Meyer, Editor of BarterNews
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From the desk of Bob Meyer...
Of U.S. Businesses Operate From Home
The Census Bureau says that 51.6% of all U.S. businesses are
operated primarily from a home. Most are small, with 93.1%
having annual revenue of less than $250,000. Of those, 57.1%
have revenues of less than $25,000 and 62.9% have no
Question On Last Week’s Groupon Article
A reader had a question regarding last week’s article
“Astute Entrepreneurs Know That Joining Groupon Is NOT The
Way To Go,” regarding Groupon’s pricing. The question was:
What percentage of the normal selling price does the
retailer end up with?
Here’s an actual example of a company that offers a tour of
San Francisco’s Chinatown. Groupon sells a tour voucher for
$12 (half off the normal $24 tour price). Then Groupon takes
a 50% cut — $6 from the voucher cost. Bottomline, working
with Groupon will earn the retailer 25% of the normal retail
Customers Are Tradable Asset
A business can look at its customers and by ascertaining
their value (to other businesses) can construct barter
deals. For example, an enterprising business owner trades
with airlines for travel by providing access to his client
list. He also trades with marketing people for advice and
sales techniques, in return for giving them “profile” (new
leads) from his customer base.
Cards May Soon Be Used To Pay Everyday Bills
Would you like to use those gift cards received at Christmas
to pay for utility, car, or mortgage payments? Within the
next two months it will be a possibility.
New software from ChargeSmart, a San Francisco-based online
bill payment portal, and Plastic Jungle, one of the largest
gift card exchanges in the U.S., have created a system where
consumers can basically turn their gift cards into cash (up
to 92% of the full value of the card) to pay household
bills. It’s estimated that there’s an aggregate of about $30
billion in balances on unused gift cards.
Guru Says U.S. In Bad Financial Shape
The U.S. is actually in worse financial shape than Greece
and other debt-ridden European countries, says Bill Gross.
Gross is the CEO of Pimco, the world’s largest bond-trading
organization, and makes that bold statement in reference to
all the money now owed to cover future U.S. liabilities like
Social Security, Medicare, Medicaid, pensions of government
workers, the military, etc. Add it all together and Gross
says the total is nearly $100 trillion.
Entrepreneurs Are Waiting In The Wings
According to the Bureau of Labor Statistics, entrepreneurs
started 505,473 businesses in the last 12 months. It was the
weakest growth since the tracking of numbers started in the
1990s. The weak economy and uncertainty is creating the
wariness among entrepreneurs.
Changing America … Back To The 1950s
Recent census data show that the number of Americans ages 25
to 34 living with their parents has jumped to about 5.5
million -- a figure that accounts for roughly 13% of that
age range. Compounding this full-house phenomenon, the
grandparent generation is “doubling up” too, as the
sociological literature says.
A recent Pew Center report, “The Return of the
Multi-Generational Family Household,” chronicles the trend:
during the first year of the Great Recession, 2.6 million
more Americans found themselves living with relatives. All
told, 16% of the population was living in multi-generational
households in the 1950s.
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IMS Barter Platinum
Sponsor For Upcoming IRTA Convention
IRTA is proud to announce that International Monetary Systems,
one of the strongest barter companies in the world, will be the
Platinum Sponsor for their upcoming convention on September 19
through 21. The International Reciprocal Trade Association’s nation
convention will be held at the Aventura Spa Place Resort in Riviera
Chairman of the Board Donald Mardak commented, “Our continued
sponsorship of IRTA conventions is a testament to the meaningful
advocacy work the association does day-in and day-out to preserve
and protect the barter industry. We are delighted to help IRTA with
their 32nd annual convention, and look forward to an informative and
fun convention at the beautiful Aventura resort.”
register for the 32nd IRTA International Convention
more information on IRTA call Executive Director Ron Whitney at
(757)393-2292 or e-mail
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ECCO’s Symposium On Civil &
Defense Offset, International Law
European Club for Countertrade and Offset, organised a symposium in
Paris, France, where members and guests of ECCO discussed offset and
aspects related to international law with a group of experts.
Viviane de Beaufort, a European Union law expert and co-director of
the European Centre for Law and Economics (C.E.D.E.) in Paris,
delved deeper into issues influencing Europe’s competitiveness. Her
presentation entitled “Opening Up Of International Government
Procurement,” offered a balanced look at the current offset arena
and asked the question how reciprocity can be guaranteed.
Francois Riegiert from the World Trade Organisation (WTO) presented
the basic principles of the WTO, focusing on non-military (civil)
Here is a
brief look at legislation related to civil offset:
Countertrade is banned as a quantitative restriction (Article XI,
The General Agreement on Tariffs and Trade, GATT 1947).
Exceptions are included in Article XII: Restrictions to Safeguard
the Balance of Payments.
XVIII: Governmental Assistance to Economic Development deal mostly
with imports and exports.
agreements were signed by Canada, European Union, Hong Kong China,
Iceland, Israel, Japan, Korea, Liechtenstein, the Netherlands
(Aruba), Norway, Singapore, Switzerland, Chinese Taipei and the USA.
cornerstone principles of the GPA (Government Procurement
Agreements) are non-discrimination and transparency.
explicitly prohibits the use of offset as measures to encourage
local development, or improve the balance-of-payments accounts by
means of domestic content, licensing of technology, investment
requirements, countertrade, or similar requirements.
Notwithstanding this, Article V of the GPA states that developing
countries may negotiate, at the time of their accession, conditions
for the use of offsets provided these are used only for the
qualification to participate in the procurement process and not as
criteria for awarding contracts.
XVI of the GPA states that a developing country may at the time of
accession negotiate conditions for the use of offsets, such as
requirements for the incorporation of domestic content. Such
requirements shall be used only for qualification to participate in
the procurement process and not as criteria for awarding contracts.
shall be objective, clearly defined and non-discriminatory and may
include precise limitations on the imposition of offsets in any
contract subject to the GPA. The existence of such conditions shall
be notified to the Committee and included in the notice of intended
procurement and other documentation.
Poulain, policy officer at the European Commission: Director General
Trade, Government, Procurement and IPR Unit, talked about the
treatment of offset under the international commitments undertaken
by the EU on government procurement, including the GPA and bilateral
free trade agreements.
presentation “Treatment Of Foreign Bidders / Goods In Government
Procurement Legislation: A Comparison Between The EU And The US
Regime” resulted in interesting discussions.
Katharina Vierlich-Juercke, legal officer at the European
Commission: Director General Internal Market, focused on defense
government procurement in Europe and the new Directive 2009/81/EC.
Directive has been adopted in view of developing a true European
Defense Equipment Market (EDEM) and the European Defense
Technological and Industrial Base (EDTIB). The plan is to implement
the Directive on 21 August 2011.
On 6 and 7
September, ECCO will be hosting a symposium focusing on offset in
the UAE (United Arab Emirates), and taking the EU debate further.
The event will be in Paris.
following symposium will be 14 to 15 December 2011 in either Paris
information or to become a member of ECCO
(Part 2 of 2)
Listening To Your
Customers Necessary For Significant Feedback
By George F. Brown, Jr.
second goal of a solid program for hearing messages from customers
involves learning what customers believe are the characteristics of
a best-in-class supplier, one that has the potential to become the
subject of future supplier success stories. Best practice approaches
aimed at achieving this objective focus on identifying the metrics
that customers will use in evaluating their suppliers, with those
insights then translated into internal action plans designed to
ensure that targets are met.
Blue Canyon Partners, our own research has identified three clusters
within such metrics are concentrated — ones related to the
relationship between the supplier and the customer, ones related to
the supplier’s implementation competencies and their ability to meet
customer expectations, and ones associated with the supplier’s
ability to bring high-value innovations (in service as well as in
product) to the customer.
Gaining these insights is a challenge, especially in business
markets. There are two characteristics of business markets that make
it so. First is the fact that the 80/20 rule almost always holds in
business markets — a major share (e.g., 80%) of any suppliers sales
are concentrated with a relatively small number (e.g., 20%) of
while the three clusters of important metrics almost always apply,
how they should best be implemented can differ significantly from
one major customer to the next. A solid program of customer
listening must be customized to ensure that insights specific to
major customers are gained, and not amalgamated together, as doing
so can yield an outcome that is right on average, but missing the
mark with each individual customer.
second characteristic of business markets is that it takes insights
from many touch points to gain an effective overall picture of the
customer relationship. This is far different from consumer markets,
where each individual consumer can give a solid picture of their own
perspectives. (Did I enjoy the sandwich or not? Did I like the movie
or not?) In business markets, a supplier’s relationship with a
customer is shaped by the collective experiences of many business
functions: design, engineering, manufacturing, logistics, sales,
customer support, purchasing, finance, etc.
Only rarely does any single individual know all of the details
relevant to each dimension of the supplier’s relationship with their
organization. It takes a lot of listening to understand the metrics
that matter to a major customer organization, yet that effort is
required if a solid portrait is to be developed and this second goal
achieved. But, like the first goal of gaining insights about the
opportunities and challenges that lay ahead in the future,
achievement of this goal is of enormous value.
third goal is to identify performance improvement opportunities
through which the supplier can remedy deficiencies that are
determined as important to the customer. In too many instances, this
is the only goal that is addressed by the Voice of the Customer
program. It is important, but ranked third of the three goals in
terms of long-term impact. Elements of a customer-listening program
oriented towards this goal should focus on both products and
services. It should enable a firm to learn what it can do better
along all the dimensions of its interactions with customers.
While this third objective inevitably has a backwards-looking
characteristic, we have found in our own practice three important
ways in which Voice of the Customer initiatives can address this
goal without the overall effort degrading into a focus on “past
sins.” The first insight is that topics in this category should only
be surfaced after discussions about the future environment and the
characteristics of best-in-class suppliers have been completed.
second is that it is important to distinguish between generic wishes
for “better,” from situations in which current performance is bad
vis-à-vis competitor performance or some other meaningful benchmark.
The third is that it is important to learn whether customers will
reward a supplier for improvements in metrics where they say they
have seen countless examples of satisfaction studies which point to
areas for improvement in which the sponsors have then invested, with
no payoff whatsoever from the gains that resulted from those
investments. Avoiding situations in which investments in product or
service improvement that aren’t rewarded by customers is as
important as learning of improvement needs that are necessary and
that will be recognized and rewarded.
Every firm must eventually select a few targets on which to focus
investment and management attention. A successful result of Voice of
the Customer programs must be held in narrowing the focus to those
programs where improvement will make a difference.
of the ways in which firms have successfully worked with their
customers to narrow the list has involved queries designed to learn
what the customer would do differently if a certain change were made
to product characteristics or service performance. If the answer is
“nothing,” then the change should be carefully scrutinized.
the other hand, if the customer can explain with clarity how they
would be able to make changes that leave them better off, then the
change has the potential for value creation and capture
contributions to both firms. Economics rules in ranking the
opportunities for investments in product or service improvements; if
the impact isn’t real, the investment probably shouldn’t make the
short list that commands scarce resources.
Effective programs for gaining customer insight can make a major
contribution to a firm’s business success, enabling them to develop
and implement customer-written plans for growth and profitability.
While listening to customers is hard, the payoff can be tremendous.
Firms that focus on the future, that work to gain insights about how
to be a best-in-class supplier, and that cull out those areas where
performance improvement will make a real difference will find that
their customers have much to say about the pathway to CoDestiny
George F. Brown, Jr., is co-author with Atlee Valentine Pope of the
CoDestiny: Overcome Your Growth Challenges by Helping Your Customers
Overcome Theirs. He is also the CEO and cofounder of Blue Canyon
Partners Inc., a strategy consulting firm working with leading
business suppliers on growth strategy.
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