If you’re struggling through the recession – and who isn’t? – and you’re wondering what type of compensation plan is going to help you keep your top executives and managers motivated and loyal, focus on salaries.
According to a worldwide survey conducted by NFI Research, 42 percent of business leaders said they would prefer an increase in salary during the next year.
The No. 2 and No. 3 answers weren’t even a close second and third. After a salary increase, respondents said they would prefer performance based bonuses (16 percent) and more vacation time (15 percent).
And it isn’t just the tough economy that’s influencing opinion. This year’s ranking of compensation methods mirrors results from two years ago.
“Salary is still king,” said Chuck Martin, CEO of MFI Research and author of “SMARTS (Are We Hardwired for Success?)”
Although, a nice bump in salary along with a fat performance bonus might make the recession a bit more tolerable.
While were on the topic of surviving the recession, the Service Corps of Retired Executives is offering monthly advice to small business owners as part of its “Accelerate Your Success” Campaign.
An online toolkit is available at www.score.org/accelerate, but here are SCORE’s “Five Tips on Planning for Profit Success”:
Evaluate your business. Now is a good time to revisit your business plan, which might not have been updated since you first developed it. Look at your customer base and how many new customers you’ve obtained during the past year. Review your costs, revenue and cash flow information. Find out which products are generating sales and which ones aren’t.
Assess your competition. Research companies that are about your size, provide the same product or service and serve your niche group. Compare how they serve their customers and you might find a key element to your future success. Find out what products and services are in demand. Focus on why customers choose one product over another.
Consider price points. If you do cut your prices, only do it for a limited time to encourage customers to “act now.” See if you can offer a range of products and services to appeal to different customer levels. For example, high-end offerings might appeal to corporations and wedding planners, mid-range options to other small businesses and special events, and low-cost options to everyday customers.
Update your products or services. Create packages or customizable plans that give your customers greater freedom and flexibility. Let them choose exactly what they want instead of getting the standard package that might include items they don’t need. Offer a new product or service as part of a bundled deal, or provide free samples or trials with purchase of popular items. This way, customers can test offerings they might not otherwise try.
Grow your network online. A quick and economical way to grow your customer base is offer your products and services online. Build a Web site. Start e-mail marketing to new and existing customers. Create a Facebook page, MySpace page and LinkedIn group. These are free and fast ways to go beyond your in-person customers to a much wider audience.
Mike Boyd is editor of the Colorado Springs Business Journal. He can be reached at Mike.Boyd@csbj.com or 329-5206.